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HP pledges to rank among top 2 firms in China
By Zhu Boru (Business Weekly)
Updated: 2004-07-26 10:29

Hewlett-Packard (HP) is betting the combination of its high-quality consumer electronics products and the massive size of China's market is expected to make it one of the top two IT (information technology) companies in the nation by the end of 2007.

"Due to China's fast-growing consumer electronics market, HP expects to become one of the nation's top two IT companies," said Ken Koo, vice-president of HP China's Imaging and Printing Group (IPG).

Either IBM or China's leading IT firm, Lenovo, will be the other company in the top two, Koo predicted.

"HP is still a newcomer to China's consumer electronics market, and facing vast business opportunities, we are ready to increase our investment in China," Koo said.

HP's sales of digital products in China last year reached 12.23 billion yuan (US$1.48 billion), up 77.4 per cent year-on-year.

Meanwhile, the personal computer sector in China grew 15.4 per cent.

HP last week unveiled its Photosmart R707, its first digital camera (DC) in China.

The camera, designed for home users, was launched in the United States a month ago.

"HP will launch more DC models in China later this year, hopefully with our global product launch," said Kristy Sheng, HP China's general manager, responsible for IPG's consumer segment marketing.

"We want to offer our latest line-up in China."

HP has participated in the drafting of China's first national DC standards, Sheng said.

The final draft, which has been presented to authorities for approval, is "likely to be rolled out in October," Sheng said.

That will help HP expand in China's DC market, by offering its qualified products, she added.

Digital imaging, which includes DCs and digital videos, and digital home entertainment are two of the major businesses HP China will focus on over the next few years, Koo said.

HP's digital projectors for home users will be marketed in China by year's end, and digital displays are expected to be available in China next year, Sheng said.

Digital display, a new concept created by HP, is similar to liquid crystal displays and plasma display panels, she explained.

HP also has a full line of IT products aimed at home users -- including colour printers, scanners, multiple-in-one printers and media centres based on home PCs (personal computers).

Therefore, Koo said, HPis capable of offering a complete, all-round digital life -- from creating, transfering, editing, saving to sharing -- that users can easily enjoy.

Chinese consumers are less familiar with HP's products for home use, and that situation cannot be corrected quickly, Koo added.

HP, he added, can gain the upper hand by providing products that guarantee users will enjoy the all-round digital life.

"Our successful entry into home PCs has proved the powerful potential in the consumer electronics market," he said.

HP, which returned to China's home PC market last year, has eaten away at domestic PC vendors' market share, Koo said.

That, Koo added, was made possible by HP's all-round digital solutions.

HP plans to continue integrating its consumer electronics products into solutions based on specific activities in life, such as sitting in a room and and travelling, Sheng said.

"We expect to be ranked in the top five, in terms of all consumer electronics products we offer in China," Koo said.

"In digital imaging, we must become No 1, as HP is best at digital imaging."

HP is negotiating with several major Chinese handset makers to co-develop camera cellphones that send pictures with bluetooth, a short-distant wireless communication technology, Sheng said.

HP's personal digital assistant, iPAQ, which can be used as a handset, will have camera features, she said.

Sheng did not elaborate.

Statistics from Beijing-based data tracking firm CCW Research indicate digital camera shipments in China surged 125.3 per cent, year-on-year, in 2003, to reach 892,000 units.

For the industry. Same for the rest.

More than 1.7 million units will be shipped this year.

An estimated 200,000 units of expensive projectors were shipped last year, compared with 120,000 units in 2002.

The data tracking firm expects projector shipments will reach 533,000 units next year.

About 10,200 LCD TVs were sold in China in 2002, indicates statistics from Beijing-based data tracking firm Sino-Market Research Ltd.

The figure jumped to 62,000 units last year. Shipments are projected to reach 156,000 units this year.

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