`INFORMATION APPLIANCES' TURN HP ON
In early 1989, Hewlett-Packard Co. Chief Executive John A. Young asked some managers to look into the future of personal computers. What they saw was a world of portable and specialized devices communicating by wireless networks. These "information appliances" would be easy to use and tailored for particular applications.
But nothing like that was on HP's drawing boards. After an early entry -- and retreat -- from the laptop PC market, HP was thinking strictly desktop.
Alarmed, Young began pushing HP to cram computers into smaller packages. "These technologies are going to drive the computer industry of the '90s," he says. HP won't stop making its bread-and-butter minicomputers and workstations. Young says they will form the "digital backbone" needed to make handheld computers most useful. But a big chunk of the industry's growth, he believes, will come from the new varieties of computer.
HP is not alone in making information appliances, but its first foray into the market is a clear winner. Introduced last April, the 95LX is a palm-size PC that runs the popular Lotus 1-2-3 spreadsheet. About $50 million worth of the $700 devices have been sold. And 1,200 makers of software and peripherals plan to offer other add-ons. One designed for pilots and surveyors, for instance, lets the 95LX pinpoint its location anywhere in the world. TV TOY. Young promises a flood of variations. Some possibilities: A 95LX containing the blue book of used-car prices or a local Multiple Listing Service for Realtors -- both updatable via radio. A portable version of HP's gas chromatograph could consult a remote data base of known substances to identify industrial gases.
Last month, HP made an even more audacious move away from the computing mainstream: It announced plans to build a wireless, interactive-television device for TV Answer Inc. in Reston, Va. The box allows viewers to play along with game shows, order food, and do their banking on a TV set. HP expects in the first year to sell 1.5 million of the PC-like devices.
To some, a toy for couch potatoes seems like a mighty big stretch for techie HP. "Consumers have never attached an HP peripheral to a TV set," notes Gary Arlen, a communications consultant in Bethesda, Md. Still, HP has been selling calculators to consumers for years, increasingly through mass merchandisers such as Circuit City Stores Inc. And HP's reputation for quality, argues Carolyn Griffin Osgood, an analyst at market researcher International Data Corp., makes it "just the right company to get into consumer electronics."
Young has no delusions about making HP into an American Sony, however. "We are not going to make an HP Walkman," he promises. But an HP Blue Bookman, perhaps?Robert D. Hof in Palo Alto, Calif.