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December 1, 1993

HEWLETT-PACKARD CHIEFS PREVIEW PLANS TO DO EVEN BETTER

By CBR Staff Writer

An ebullient Hewlett-Packard Co staged a meeting for securities analysts in Palo Alto this week and discussed decidedly rosy prospects for what is now America’s second largest computer company. Our order and revenue growth in fiscal 1993 – both at 24% – would seem to indicate that we’ve swum upstream, said chairman, president and chief executive Lewis Platt, citing strong competitive and economic currents. Capital spending in 1993 was about $1,400m, a 36% increase over the prior year, and the company plans to spend $1,570m this year. Wim Roelandts, senior vice-president and general manager of the Computer Systems Organisation, told analysts that his fiefdom’s profitability increased last year, the result of strong revenue growth and tight cost controls that will continue throughout the new year. The multiuser Unix server business continued to grow by more than 30%, or twice what the market reported as a whole in the US and in the world. New workstations introduced early in the year rounded out the product family to include all key price-performance points, and high-end workstations continue to be especially popular. Robert Frankenberg is the vice-president and general manager in charge of the Personal Information Products Group, and he reported a tremendous year in the personal computer business in revenue, orders and improved profitability. Over the last two years, Hewlett-Packard doubled its worldwide market share and expects to join the top 10 manufacturers in the world by the end of the calendar year. This was not achieved without cost – the company has eliminated seven out of 10 manufacturing sites. Personal computer networking products grew 75% in the year and profits high. Emerging opportunities for the personal computer business are seen as interactive television set-top hardware that will support cable and radio-frequency channels and serve a wide range of content and service providers. The company is enthusiastic about the convergence of entertainment, publishing, communications and computing in an emerging all-digital world, reckons people want information anywhere, anytime and in any form – and aims to make it happen.

Inkjet engines for Japanese facsimile machines

The star performer these days is the printer division, now called the Hardcopy Group: in fiscal 1993, HP LaserJet and HP DeskJet printers logged their strongest growth rates in orders for four years. The company is also growing OEM business and says that inside Matsushita Electronic Industrial Co and Sharp Corp facsimile machines are Hewlett inkjet engines – a neat reversal given that the company built its laser printer empire on Japanese Canon Inc engines. The company is now developing printers that can capture images from video sources such as televisions and home video cameras and making printers that enable people to create and customise greeting cards and signs. The printer products also have a net profit margin that still exceeds the corporate average. Less excitingly, the Test and Measurement Organisation saw a 3% growth in orders, an improvement over previous years. Analytical Products Group orders improved in the US and Asia-Pacific, but slowed in Europe. The strongest growth was in productivity tools such as sample-preparation robots and instrument-computer systems, which grew more than 20%. Components orders were mixed – strong in optocouplers, communications components and light-emitting diodes and weak in government-related business. The Components Group has stopped seeking cost-based military contracts and has focused on the commercial side of the business. Communications is now its number one target – Hewlett has been growing this segment faster than the industry, a natural fit with its other businesses of measurement and computation, it says. Medical Products Group orders were up 19%, and productivity tools and systems that combine measurement with computation and communication, such as patient-monitoring systems, experienced high demand. Joel Birnbaum, senior vice-president and head of Hewlett-Packard Laboratories said the

labs were prototyping many of the technologies the company thinks could lead to billion-dollar business opportunities combining measurement, computation and communication. This is the most exciting time in the history of technology, and our problem will not be to find the opportunities, but rather to choose among them, he said. One recently completed telemedicine experiment enabled Stanford University neurophysiologists to monitor and assist surgeons in Pittsburgh who were conducting brain surgery, and improve patient care. The labs are also working on the next generation of computer architecture, and Birnbaum said that it will rival the performance advantage RISC achieved over complex-instruction-set computing.

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