HP’s New Entertainment Push Is TV-Centric
Hewlett-Packard Co. has finally figured out what most interior decorators already knew: The TV is the center of most people’s family room.
The computer and printer maker today is expected to introduce a line of television sets equipped with hard drives and the ability to connect to wireless networks as it tries to extend its reach into digital entertainment.
HP and other computer makers have tried for years to persuade couch potatoes to use their PCs to store, manage and play their video and audio collections. Despite their sleek designs and bounty of features, entertainment PCs have yet to catch on.
So HP instead hopes its new televisions -- which go on sale next year and will be able to access the Internet to download movies, videos and TV schedules -- will shepherd in a new way to watch TV and movies and browse personal photos and home videos.
“By trying to smarten televisions up, they’re trying to hedge their bets against the PC not being key to the puzzle,” said Stephen Baker, a senior technology analyst with NPD Group. “They’re also trying to do some differentiation in the television market ... and provide something that’s not just another television. Playing in the market with the same thing as everyone else is not going to work for them.”
The stakes are big.
Palo Alto-based HP estimates that U.S. consumers spend $42 billion a year to upgrade their televisions with technologies such as high-definition and flat screens. At the same time, the way entertainment is stored and delivered is changing in the Digital Age.
The spread of high-speed broadband Internet access makes a wealth of online content available, and digital recording devices give people more flexibility to watch what they want when they want it. That requires electronic gear a little more sophisticated than a rabbit-ear antenna.
“We’re not building a PC into a TV, but we’re enhancing the functionality of the TV to give more access to your content,” said Steve Nigros, senior vice president of HP’s Imaging and Printing Group.
HP is not the only one. Traditional consumer-electronics makers such as Sony Corp., Toshiba Corp. and Royal Philips Electronics are expected to offer more-sophisticated televisions. And HP’s archrival, Dell Inc., recently began selling televisions.
New HP Chief Executive Mark Hurd views entertainment as a key driver of the company’s growth. Tech companies overall are spending heavily to develop more entertainment applications. Chip giant Intel Corp., for instance, last month announced technologies designed to make it easier for PCs to play music and video.
The TVs, which HP plans to announce today at a trade show in Indianapolis, will be sold under HP’s Pavilion brand. They initially will be 32- and 37-inch flat-panel liquid crystal display TVs. Pricing has not been decided. HP’s 32-inch TV currently on the market retails for about $2,100 and the 37-inch model for about $3,000.
The new TVs won’t be able to surf the Web, but they will be able to connect to certain Internet sites to buy or rent movies and download other video content. With their wireless connectivity, they will also be able to send and receive movies, videos, photos and music to and from PCs elsewhere in the home.
“It’s kind of the next stop,” said Rob Enderle, principal analyst at Enderle Group, a technology consulting firm. “We’ve only been watching TVs with a small window of their capabilities.”
Televisions have remained largely unchanged as receivers of signals even as the devices that connect to them evolve -- such as DVD players and digital recorders such as those made by TiVo Inc.
HP’s aim is to provide an end-to-end experience in which consumers use HP devices at every step -- HP cameras at the front end, with images delivered over HP networks and displayed on HP screens.
“They say: Print to paper, or print to TV. So they see the TV as just another medium to print on,” said Tim Bajarin, president of technology consulting firm Creative Strategies. “These guys are trying to show innovation and trying to drive a stronger position within the world of consumer electronics and televisions by laying the groundwork for next-generation TV sets.”
To date no company has been able to tie together the devices that make up the typical family entertainment system. Sony comes the closest, but its disparate divisions of computers, consumer electronics, movie studios and record companies historically have not coordinated efforts smoothly, Enderle said.
“If HP can complete the link, they’ll have a sustainable competitive advantage over other players,” he said.
TiVo and Sony did not respond to requests for comment. A Dell spokesman said the company does not comment on the plans of rivals.
Bajarin said he expected Asian television manufacturers to launch similarly equipped televisions in the near future. But he doesn’t see a day when every TV will have a hard drive.
HP does not have much brand equity in televisions. Its sets are sold online through its website and through regional electronics retailers such as Good Guys Inc. and Ken Crane’s Home Entertainment.
“Here, they know the technology, they know the integrators, the suppliers,” said NPD’s Baker. “They have a lot of strengths. Their biggest weakness is the last 12 inches: getting on retailers’ shelves.”