INDUSTRY ANALYSIS

HP’s Plan To Revolutionize Consumer Electronics

Last week I attended the HP analyst conference and I suddenly realized that the dynamic surrounding the mess we currently have with consumer electronics has changed.

For some time I’ve been concerned that we have been focusing, as an industry, way too much on technologies that engineers care about and not enough on the wants and needs of real people. These real people don’t want to know about the processor or software in a product. They simply want to get things done without having to learn a whole new skill-set.

For decades I’ve watched the flashing “12:00” on VCRs worldwide and used that as an example to vendors in the hope I could get one of them to take the leadership in shifting from a technology focus to a user-benefit focus in both product development and marketing.

In the past, I’ve had the hope that Sony or Apple would step up to this challenge. Both firms seemed to understand the problem but, unfortunately, neither was able to execute effectively. Sony can’t seem to get its own divisions to cooperate to save its life and is so inwardly focused that I often doubt it even really knows it has customers anymore.

Apple’s trials in the 1990s took it out of the broad markets needed to drive its customer-focused vision so it could no longer execute, although I still believe the company understands the consumer better than most others.

HP’s New Vision

If someone had asked me five years ago if I thought HP — which, at the time, was struggling in most of its key markets and offered only calculators to the consumer marketplace — would be a power in this market, I would have been certain of my “no” answer. HP was a printer-workstation-midrange computer company with a strong tools business. It was about as far from a company like Sony as you could get and still stay in the high-tech segment.

Over the past two years, that focus has clearly changed. In looking around at Sony, Thompson Electronics, Matsushita, LG, Samsung, Philips and GE, only Sony talks about the kind of experiences that customers want, and, as I mentioned above, this is more of an exception even for Sony these days. HP, a firm that wasn’t even in this class of company a few years back, is starting to showcase the results of its newfound passion for the folks who actually buy consumer electronics.

Part of what makes HP’s chances of doing this successfully better than Sony’s chances is that HP doesn’t own the content. Much of what works to make Sony products difficult to use is Sony’s desire to protect its digital content, which has, so far, made the user experience less than acceptable and turned many of its media products into nonplayers. Sony also gets too hung up on controlling things that should be standards — and has been late to the scene or unable to capitalize on markets that shifted to technologies like VHS and SD flash memory.

Not Invented Here

HP, on the other hand, works with Microsoft and Linux, Intel and AMD, and Cisco (even though HP has its own networking division) — and HP is the only company to create a meaningful partnership with Apple in over a decade. The company seems willing to go where its customers want. HP has lost the “not invented here” religion held by almost all of the other vendors in the high-technology segment.

This is a significant change. Given how pervasive the “not invented here” disease is, I’m not yet convinced that HP won’t catch it again. But for now, the cure seems to be taking.

If HP is going to lead, then we need to get a sense of where HP’s products are going and what the related solutions will look like. While I saw not only the products and solutions that HP will be bringing out this year, I also had to sign a nondisclosure agreement that prevents me from providing the details of future offerings. I can, however, use those details as a template to discuss what the near-term and long-term future will be in this segment if others follow HP’s lead.

In the near term we will increasingly see products that don’t need PCs to communicate and share information: cameras that associate pictures with e-mail addresses and automatically send pictures, once connected to the network, to locations all over the world; and printers and scanners that can automatically receive and send content to other devices worldwide. The effect of the latter is that the fax machine will become a fully obsolete platform.

In addition, we’ll see cell phones that can show your physical location on a virtual map in addition to showing the location of anyone else you have permission to track. We’ll also see media repositories that collect, in a central location in your home, all of your media from photos to personal videos, from TV programs to music, and help you manage your DVD library.

We’ll also see industrial designs that are sleeker. In particular, there was one product that HP won’t even let me hint at that could revolutionize an entire market segment, much like the iPod did for music. I want one of these devices so badly I can taste it.

Looking Ahead

Have you noticed how companies that build white goods, ceramic products and home decor products build families of products that look like they go together? A refrigerator matches a stove and a dishwasher, a sink matches a toilet and shower, and drapes match sofas and chairs. In effect, you have themes. The manufactures of these products have discovered that home buyers want their products to look like they were designed to go together to create an environment that looks integrated.

Certainly, sound systems have gone down this path in the past. Receivers look like DVD players and CD players from the same family. But scanners, printers, PCs, TVs and other PC-based consumer-electronic products don’t follow this same path. But this will change. Future products will fit into families that expand on the common look-and-feel concepts started with sound and video systems to incorporate computer functionality, displays and networking products.

These products will be smarter. They will show you how to use them more effectively through integrated displays or connections to central components that can display this information. If it weren’t for the need for a power line, most components would only require one HDMI cable rather than the mess of input-output cables currently required.

The company that sells the solution will own your experience for the life of the products, which will connect back to that company for service and support. This last development — probably the most revolutionary — is way too long in coming, but it is incredibly important if many of these products are to be used as designed and not sit in the corner flashing “12:00” for their useful lives.

Now, for these developments, I’m not talking 10 years. I’m talking two to five years. This stuff is coming more quickly than many of us have thought. We are transitioning from a products-based consumer electronics market to a services-solutions market. The end result should be products that are easier to use, customers that are much happier and more loyal to their vendors, and the opportunity for another golden age of technology.

I may have had a bit too much of the HP Kool-Aid at this event, but I have to admit that, this time, it tasted damned good.


Rob Enderle, a TechNewsWorld columnist, is the Principal Analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.


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