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3/28/2007
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HP Thinks Small With New Wave Of Business Computers

With entry-level configurations costing as little as a few hundred dollars, HP is targeting emerging markets around the world as well as small and home businesses in North America and Europe.

With its sights on toppling No. 1 Dell, Hewlett-Packard on Wednesday introduced low-priced computers that will compete with its PC rival's product line in the important small-business market for servers, notebooks, and desktops.

With entry-level configurations of the new products costing as little as a few hundred dollars, HP is targeting emerging markets in the world, such as Latin America and some Asian countries, as well as small and home businesses in North America and Europe. HP unveiled its latest lineup in San Francisco at a news event with small and mid-sized business customers.

Chips from Advanced Micro Devices power the lowest priced machines. HP's new ProLiant ML115 is its least expensive tower server at $499. "We are hitting an aggressive price point with this," said Krista Satterthwaite, group manager of server marketing at HP, in an interview before the launch. "We haven't hit a price point like this before with servers."

The entry-level configuration includes a single core Athlon chip, an 80-Gbyte hard drive, and 512 Mbytes of memory. "This falls under the my-first-server kind of customer," Satterthwaite said. "It has true server features for a desktop price." An Intel-powered version, called the ML110, sells for $599, but is currently available for $539 under a promotion.

While Dell managed to remain the top PC seller worldwide last year, No. 2 HP closed the gap, shipping 11.6 million PCs in the fourth quarter, 21% more than the same period a year ago, according to iSuppli Corp. The computer maker's growth rate was more than three times the industry average.

On the other hand, Dell, which is undergoing a major reorganization as the result of an ongoing sales slump, shipped only 9.6 million PCs in the quarter, down 8.6 % from a year ago. Dell was the only top five PC maker to report a decline in fourth quarter shipments -- both sequentially and year over year.

In lowering prices, HP is hoping to continue its gains against Dell. Price is what sells in countries like China, India, Russia, and Brazil. "We are making a bigger push in emerging markets than we ever had in the past with this product, because we feel its a good fit," Satterthwaite said. SMBs, according to HP, represent 42% of the worldwide market for X86 server shipments, and sales to that segment outpace the overall market.

For the small-business notebook market, HP introduced the Compaq 6515b and the 6715b, which are available with an AMD Turion 64 X2 dual-core chip. Both include integrated Wi-Fi and Bluetooth wireless technologies, as well as support for wide-area networks that include either EV-DO or HSDPA cellular technologies. The WAN support, however, won't be available until May.

The major difference in the machines is screen size. The 6715b has a 15.4-inch screen and weighs 5.7 pounds, while the 6515 has a 14.1-inch screen and weights five pounds. Both start at $649.

For security-minded small businesses, HP is offering encryption software in all business-class notebooks that customers can choose to install. The software encrypts data in the hard drive, making it inaccessible if the computer is lost or stolen.

For the low-end business desktop market, HP introduced the Compaq dx2300 micro tower PC with Intel Core 2 Duo processors. The offering is a refresh of HP's DX2200, launched in April of last year. With Windows Vista business edition, 1-Gbyte of memory, and a 160-Gbyte hard drive, the dx2300 costs $799. For companies that need less, the PC is available for $499 with Windows XP Pro, an Intel Pentium 4 3.2Ghz chip, and an 80-Gbyte hard drive. HP is also offering the Smart Data Protection Service for online backup at an additional subscription cost.

For small businesses in need of networking and storage, HP also introduced the ProCurve Networking 1400 and 1700 series switches, and the StorageWorks Media Vault Pro. Pricing was not immediately available.

HP also launched online services for small businesses, including a Total Care package of support, and financing services. In addition, the company introduced the Small Business Connection portal, which offers online classes, product supporter forums, articles and tips.

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