Compaq Lines Released By HP

Products Pitched To Business Users

Copyright 2002 The Chronicle Publishing Co.
The San Francisco Chronicle...05/29/2002

Benjamin Pimentel

Hewlett-Packard unveiled Thursday its first new products since its megamerger with Compaq Computer, highlighting the Palo Alto firm's bid to become a bigger provider of technology products to the corporate world.

HP's offerings, intended for business customers, included new commercial PC desktops, a notebook and a supercomputer.

The new products all originated from Compaq's premerger portfolio, in line with product road maps that company executives released when the new HP was formally launched three weeks ago.

HP is hoping to become a more dominant technology player in the corporate arena, rivaling IBM, through the $ 19 billion merger. Part of the strategy is to fully adopt product lines in which Compaq had a clear market advantage, such as supercomputing and commercial PCs.

HP introduced two high-performance technical computing machines based on Compaq's Alpha server line, including the HP AlphaServer SC20 supercomputer.

Supercomputers are high-tech systems used mainly in such fields as weather forecasting, aerospace and biological sciences. Worth $ 1.1 billion in 2000, the supercomputer industry is projected to grow to $ 2 billion in 2005.

HP also announced new commercial desktop PCs and notebooks based on Compaq's Evo line.

"These are our core offerings to our corporate customers," said HP spokesman Mike Hockey.

However, analyst Daniel Kunstler of J.P. Morgan said HP's announcements were consistent with what the company had said it planned to do after the merger.

HP had opted to keep other Compaq products, including the former Houston computer-maker's Proliant industry standard server line.

However, in the consumer PC market, the firm decided to keep both HP and Compaq brands, largely in order to maintain its market position in retail stores, analysts said.

HP is facing stiff competition from such leaders as IBM, Sun Microsystems and Dell Corp. as the technology market continues to reel.

HP has weathered one of the most acrimonious corporate battles in years, after former director Walter Hewlett's unsuccessful bid to block the Compaq merger.

In another development, a Minnesota appellate court overturned a lower court's decision to dismiss a civil lawsuit claiming that HP misled consumers by selling printers with cartridges only half-full of ink that were labeled "economy cartridges," according to Bloomberg News.

HP, the world's leading printermaker, must now defend the practice in court. E-mail Benjamin Pimentel at bpimentel@sfchronicle.com.