Reuters - HP aims to transform market with touchy-feely PCs

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HP aims to transform market with touchy-feely PCs

Tuesday, Jun 10, 2008 5:35PM UTC

By Georgina Prodhan, European Technology Correspondent

BERLIN (Reuters) - Hewlett-Packard, the world's biggest computer maker, launched a new generation of PCs on Tuesday that respond to users tapping or stroking the screen, potentially bringing user-friendly computing to the masses.

The TouchSmart All-in-One is designed around music, photos and video but has a full set of PC functions, and is the most persuasive product yet in HP's turnaround of a PC business that was once defined by run-of-the-mill products and low margins.

The starting price of $1,299 for the TouchSmart, which will go on sale in 17 countries in July, is comparable with that of other premium models that are less distinctive and easy to use.

The way icons or documents on the screen can be enlarged, diminished or scrolled through by a fingertip brush of the screen is reminiscent of Apple's iPhone, although HP has been developing touch technology for a quarter of a century.

"No new product has been more significant as this new TouchSmart PC we just showed you," said David Roman, head of marketing communications for HP's Personal Systems Group, at HP's main annual product launch held this year in Berlin.

Todd Bradley, the group's executive vice president, told Reuters: "We don't think about this as a niche. We think about it as a global product that will inspire demand and drive desirability," he said, but declined to speculate on what size the market for such PCs might reach.

Crawford Del Prete, executive vice president of global research at IDC, said: "I think the price point is getting compelling for a premium PC. I think it would be even more attractive if they could get it under a thousand."

He pointed out, however, the risks HP was taking by making large investments in an unproven market.

"It requires a set of marketing expertise and it requires a significant amount of investment," he added. "An Apple or someone else could do this but it's not for the faint of heart, it's not for people who don't want to invest in the product."

HP's touchscreen technology works on top of Microsoft's Vista operating system, and product managers said there were no current plans to develop versions for other operating systems, such as open-source Linux.

HP's launch came a day after Apple announced a new version of its ground-breaking iPhone, the original version of which sparked intense interest in touchscreens and a host of imitators.

IDC's del Prete said: "I don't think Apple's impact can be underestimated."

Rob Enderle, chief analyst with technology research firm the Enderle Group, said HP's products launched on Tuesday, which include 17 new notebooks and a professional display monitor that can show a billion colors, could put it out of rivals' reach.

"Todd Bradley took a unit that many thought was a liability to HP and turned it into one of HP's top performers and into segment leadership ... to a point where it may not be possible for a competitor to catch it," he said.

The new TouchSmart PCs will launch in countries including the United States, Japan, China, India and Britain on July 13. The models sold in Europe will be about half as expensive again as their U.S counterparts, partly due to extra features.

Del Prete said the HP TouchSmart could appeal to social groups such as families or students sharing an apartment who wanted a PC that could also double as a group messageboard or second television set.

When invited to compare the touchscreen interface with the early days of PCs, when users unfamiliar with using a computer mouse would commonly jab at the monitor with a fingertip, del Prete said: "Now you point at the screen and something happens."

(editing by Elizabeth Fullerton)