Tuesday, December 26, 2006

The Ghost of Christmas Future

NEWS: Mark Hurd, CEO of Hewlett Packard, appeared in the NY Times as the ghost of Christmas future. He predicted that “managed home” products, which blur the line between PCs and consumer electronics, will be the coming thing. HP is currently number one in PC sales, so Mr. Hurd's vision of the future must be taken seriously.

HP has three new products that, according to HP, are designed to capitalize on Mr. Hurd's vision.
  1. The Media Smart TV is an LCD TV that “pulls in” content stored on networked devices. It is priced at a $1,000 premium over comparable HP LCD TVs. See the CNET review.
  2. The Media Vault is a network attached storage device positioned/marketed to store music, movies, photos and more. (It is comparable technically to the $200 Western Digital device I recently recommended here). See the CNET review.
  3. The iPaq Travel Companion is a Windows Mobile PDA. It has a 3.5-inch, QVGA touch screen with 240x320 pixel resolution. It also has onboard WiFi for internet access and GPS for navigation. It is designed to provide information and entertainment to travelers. See the CNET review.

ANALYSIS: According to Mr. Hurd, “Consumers keep telling us they want something that is insanely simple.” He believes the new Media Smart TV to be “insanely simple.”

IMHO, smart and simple are a contradiction in terms. Besides, I certainly don’t expect to pay $1,000 more for an insanely simple TV. Since most of the TV I watch comes through the signal decoder box, the DVR or the DVD player, all I really need is a monitor. That is my definition of an insanely simple TV.

Network attached storage devices have been around for years. Price per unit of storage has plunged to the point where homeowners can afford to have them and should have them for a host of reasons. Prices will continue to fall dramatically over the foreseeable future. It is hard for me to imagine that the Media Vault will be a big deal for HP.

The idea of combining entertainment and navigation in one device for travelers is the “inspiration” for the iPaq Travel Companion. This might be attractive to people who have to drive a lot. But the communications capabilities of this device are limited. Business travelers will want to be sure to pack a Blackberry and cell phone in addition to this device. Or a Blackberry, cell phone and an iPod instead.

HP is right that managed home products are the coming thing (see this). However, these three products are non-starters. As the NY Times says, “The problem for Hewlett-Packard is that to keep pace with market changes, the company that Mr. Hurd describes as “the world’s leading I.T. infrastructure company” may have to recast the PC part of itself as a consumer electronics company like Sony, Samsung or that other computer maker that has made the shift, Apple. And that will not be easy.”

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