HP PCs go back to the future

Just a week after Apple demonstrated its unique ability to marry design, engineering and ergonomics with a computer that anybody would be proud to have on their desk, Hewlett-Packard attempted something similar, without the same success.

HP's concept PC, on display for the press at an event in Ireland on Tuesday, does away with most of the latest thinking in PC design. The only nod to ergonomics -- a lightweight, 18-inch flat panel monitor -- is grounded in a case almost twice its width that is propped up like a picture frame with no tilt or swivel mechanism. This table trestle approach pitches the monitor at almost the perfect angle to reflect light from ceiling strip lights directly into a user's eyes.

Stereo sound is a thing of the past, with just a single speaker in the retro-looking monitor cabinet, which also houses the CD drive. The PC box itself does not house any removable media drives -- just the hard disk -- in anticipation that the IT manager of the future may want to lock the PC itself away in a back-room. An HP representative was unable to explain where an IT manager would find monitor, USB (for the CD drive), mouse and keyboard cables to stretch across an office, or how such a mass of cabling would be managed for a large number of employees. She seemed unaware that similar solutions, using a single cable for each workstation, are already widely used in trading floors around the world.

But HP's major concern right now is not to build the latest in ergonomic PCs. "Right now we're concentrating on getting PCs out to our customers," said Sean Gallagher, European business operations manager, in an interview with ZDNet UK. HP has been concentrating on the distribution side for three years now, said Gallagher. According to analysts it has been much more successful in this part of its business than would-be suitor Compaq.

"HP has superb supply chain management for a company that sells indirect," said Brian Gammage, principal analyst with Gartner Group. "It is the only (PC) company on a similar level to Dell. They invented the run-rate portfolio programme," said Gammage, referring to HP's Top Value programme under which distributors can get guaranteed stock of PCs with a limited number of configurations.

Other manufacturers have started copying HP's distribution model: IBM with its Top Seller programme, and Fujitsu Siemens with its Value For You programme, for instance. But with HP, "we are looking at the most efficient responder to Dell," said Gammage.

"Distributors say HP can replace Top Value PCs within two days, but Compaq takes two weeks. Compaq's European PC business is bleeding money, but HP's decision several years ago to concentrate on the supply chain has enabled it to absorb some of the squeeze in the PC market. HP is still losing money but less than the others."

This smooth supply chain management by HP could have repercussions in the event of the merger with Compaq going through. "I suspect that the balance will shift against Compaq," said Gammage. According to recent research from Gartner, Compaq's European PC market share for the second quarter of 2001 was 13.7 percent, compared to HP's 7.4 percent.

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