HP takes aim at Lenovo/IBM with mobility push

Hewlett-Packard (HP) on Wednesday declared its intention to become the leading vendor in notebook shipments by the end of 2005, specifically targeting IBM's notebook customers as that business becomes part of Lenovo Group.

"The IBM/Lenovo announcement is a great opportunity for HP. We want to reclaim the worldwide number one position in market share for HP notebooks," said Ted Clark, senior vice president and general manager of HP's Mobile Computing Global Business Unit.

The company backed up those statements Wednesday with the launch of new products in five different categories of business notebooks, which Clark called the largest commercial notebook launch in the company's history. The new systems range from lightweight ultraportable notebooks to full-featured desktop replacement models and come with a variety of security, reliability, and usability features as well as Intel's new mobile chipset technology.

HP said it is clear that IBM's sale of its PC division to Lenovo has caused IBM customers to openly question their relationship with the company, and HP has already been actively involved in discussions with current IBM customers, Clark said.

"Every time there is disruption in the marketplace, it creates opportunities," said Margaret Franco, business notebook marketing director, in an interview following HP's news conference.

HP needs to capitalize on those opportunities with products that offer business customers more than just the advances in mobile technology delivered by Intel, which almost all notebook companies will also adopt, said Dan Forlenza, vice president of business notebooks in the Mobile Computing Business Unit.

The new notebooks emphasize reliability features such as the HP Mobile Data Protection System, which improves the stability of the notebook's hard drive with better cushioning. This feature is different from similar hard-drive protection technologies available from IBM and market leader Dell Inc. in that it protects users against everyday usage rather than catastrophic events such as the notebook falling off a table, Forlenza said.

HP also wanted to make the new products more usable for mobile professionals when they are in the office. It introduced docking stations that offer one-button release and make it easier to connect notebooks than with previous models, Forlenza said.

All the new PCs will be available by the end of March, with a few of the models available immediately. More information on all the new notebooks can be found on HP's Web site.

The company's goal with its new mobile technology is to attract new users without having to sacrifice the profitability of its PC division, Clark said.

HP Chief Technology Officer Shane Robison echoed that sentiment earlier this week when he said HP's competitive advantage is its research and development arm, which generates many of the new features that make their way into notebooks such as the ones launched Wednesday. Those premium features differentiate HP from its rivals, and users are willing to pay extra for features they can't find from other vendors, he said in an interview.

The PC business is notoriously lean, and only Dell has been able to generate consistent profits over the last few years. One of the reasons behind IBM's sale of its PC group was a desire to exit the low-margin business. HP recently merged its PC group with its highly profitable printer group in the hopes that some of the printer group's strategies would improve the PC business.

With PC growth expected to fall to single digits over the next two years, the only way for companies to grow faster than the market is to take share from their competitors, said Sam Bhavnani, an analyst with Current Analysis. HP faces several challenges in the retail segment of the market, where resurgent competitors such as Gateway Inc. and Toshiba Corp. compete aggressively for the shelf space needed to display new products, he said.

HP's event focused mostly on the commercial market, but the company will unveil new consumer notebooks for the retail market fairly soon, an HP spokeswoman said.

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Tom Krazit

IDG News Service
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