Hewlett-Packard Unveils Reclining PC to Battle IPad

Hewlett-Packard Co., the largest maker of personal computers, unveiled a redesigned touch-screen desktop that can tilt back, to discourage business customers from switching to Apple Inc.’s iPad and other tablet computers.

The TouchSmart 9300 Elite, which houses all of its electronics behind a 23-inch screen, can recline to a 60-degree angle, said Randall Martin, a chief design strategist at Palo Alto, California-based HP.

The desktop computer can become almost flush with the tabletop, making it easier for people to gather around and engage with the touch-sensitive screen. HP is adapting the consumer version of the TouchSmart to be more useful for retailers, hotels, health-care workers and other businesses that interact with customers, Martin said at a technology demonstration in San Francisco last week.

“Their initial thought with the TouchSmart was that it would be a great consumer product, but there has been great interest in this in retail, hotel services and things of that nature,” said Tim Bajarin, president of technology consulting firm Creative Strategies Inc. “They’re figuring out ways to enhance the experience for both markets.”

The TouchSmart Elite, designed for businesses, will be on sale in May. The price has not yet been announced. A consumer version of the reclining TouchSmart starts at $900.

PC Shipments

Makers of desktop PCs increasingly are competing with Cupertino, California-based Apple and other tablet-computer designers for business customers. Daimler AG’s Mercedes-Benz said in October it was distributing iPads to its 355 U.S. dealers for customers to sign documents on the screen and for sales representatives to order on-the-spot financing options from showroom floors.

Global personal computer shipments rose 2.7 percent in the fourth quarter, missing projections, as consumers held back on holiday purchases and chose iPads over desktops and notebooks, market researcher IDC said last month.

HP retained the industry’s top spot, even as its market share dropped 0.7 percentage point to 19.5 percent from a year earlier. Dell Inc. was second with 12.1 percent, followed by Acer Inc. with 10.6 percent.

HP’s new product will let businesses customize its options and provide greater security, the company said. Customers can opt to automatically encrypt its hard drive, or disable USB ports and Webcams.

Tablets Surpass PCs

With combined smartphone and tablet sales expected to surpass a Deloitte forecast of 400 million personal computers sold this year, HP is trying to make it easier for its computers to share movies, music and other content across networks. The company adapted virtual private network technology used in its business workstation products to move such content from netbooks and laptops to new consumer models of the TouchSmart.

HP engineers are working on extending the service to smartphones, tablets and other products based on the WebOS operating system it acquired from Palm Inc. last year, said HP experience software development manager Paul Rygaard.

The company scheduled a Feb. 9 event to unveil new WebOS tablets and smartphones.

The product introductions come as HP, Dell, and other computer makers are making provisions to deal with a flaw in Intel Corp. chips that was revealed on Jan. 31.

Malfunctioning Chips

HP said it stopped making PCs with the malfunctioning chips and put a hold on shipping affected inventory. It also canceled a presentation to journalists on new business notebook computers that was scheduled for Feb. 10. The flaw doesn’t affect the TouchSmart desktops and notebooks announced this week, the company said.

Dell said the Intel flaw affects four products sold under its XPS, Vostro and Alienware brands, and that it’s working directly with customers who’ve bought affected machines. The fault is in a support chip, or chipset, for Intel’s latest processor model called Sandy Bridge, unveiled last month.

HP rose 71 cents to $48.14 on the New York Stock Exchange today. The shares fell 18 percent last year.

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net; Clifford Edwards in San Francisco at cedwards28@bloomberg.net

To contact the editor responsible for this story: Thomas Giles at tgiles5@bloomberg.net

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