HP unveils its iPod, entertainment media center

MIAMI - Hewlett-Packard Co. (HP) is hot about what it considers a consumer revolution in digital media, and on Friday the company's Chairman and Chief Executive Officer Carly Fiorina selected a chic club here in Miami Beach to unveil a raft of consumer electronic devices, including HP's version of Apple Computer Inc.'s iPod, and pledge her company's commitment to this market.

"We believe we have just begun to scratch the surface of what is possible," she said. "We have leadership positions and intellectual property at every stage of the value chain so we see this as a huge growth opportunity for HP for many years to come."

The market for digital entertainment devices and services worldwide stood at $500 billion in 2003 with growth year-over-year expected in the 6 percent to 8 percent range, Fiorina said. HP estimates its addressable market in 2007 will be around $360 billion, she said.

"This is a journey not just for this company. It's a journey the whole world is taking," Fiorina said, standing on the stage of the Barton G. club and restaurant on Miami Beach's famed Ocean Drive boulevard, during a press conference Friday morning.

"The most significant and noteworthy point from today's announcements was that HP is making a statement that it's not a computer company anymore, but that it's a digital media company," said Phil Leigh, president of Inside Digital Media Inc., a market research company based in Tampa, Florida.

This is the right way to go for HP, because as computing devices for consumers get faster and more powerful, users aren't looking for flashier word-processing applications, Leigh said. "The applications of the future are digital media applications," he said.

As HP pushes into consumer electronics it will face a new type of customer, said Tim Bajarin, an analyst with Creative Strategies Inc. in Campbell, California. These customers aren't as comfortable and knowledgeable about technology as the traditional HP customer, creating a new challenge for the company: to provide world-class support to this type of user, Bajarin said. "This is especially true of older consumers who aren't technically-savvy, and who tend to call up tech support often," he said.

Among the products Fiorina presented were HP's version of the iPod, branded as the Apple iPod from HP, and the new HP Digital Entertainment Center, a device designed for living rooms and for managing digital music, movies and photos. Also announced was a new brand of printer ink called Vivera that Fiorina said will extend the life of printed digital photos, a new notebook PC that can play DVDs without fully booting up its operating system and plasma and LCD (liquid crystal display)flat-panel television sets.

"Behind me and in the room next door and upstairs you're going to find really as many innovative products as there are P. Diddy sightings in South Beach this weekend," Fiorina joked, referring to the MTV Video Music Awards show, taking place in Miami on Sunday. Fiorina also announced a broad sponsorship deal with MTV to reach its viewers, who are predominantly between the ages of 12 and 34 and thus savvy and heavy users of digital consumer products.

HP is aiming the products unveiled at Friday's event at the back-to-school season and upcoming holiday season, according to Fiorina.