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HP Leaps Into Photofinishing Market

Hewlett-Packard Co. Monday unveiled an aggressive strategy to elbow its way into the photofinishing market at the Photo Marketing Association (PMA) Tradeshow.

The company has partnered with high-performance color printing systems provider Indigo N.V., Eastman Kodak Co., and online photo services provider Shutterfly, as part of an effort to become a complete digital imaging solutions provider to both central and on-site retail photo labs.

"It is clear that digital imaging and printing are undergoing major transformation, and HP is a key driving force behind this," said Vyomesh Joshi, president of HP Imaging and Printing Systems. "In fact, it is expected that in the next couple of years some 111 billion digital images will be printed annually. With our entry into photofinishing, we are extending our competitive leadership across the digital imaging and printing markets."

The company is pursuing the strategy with a multi-pronged approach. First, with help from Indigo, HP plans to extend its printing systems portfolio beyond inkjet and dry laser technology to include high-speed color printing. This would allow it to serve the high-capacity needs of central photofinishing labs with advanced, high-speed digital color printing systems that provide an all-digital workflow.

HP expects central photofinishing labs will find such a solution compelling, because all-digital workflow would eliminate manually intensive batch-production processes and top line growth from servicing the digital capture market.

On the in-store retail front, the company introduced the Phogenix Imaging DFX, the result of a two-year collaboration with Kodak focused on creating a new category of digital photofinishing equipment that offers retailers an easy-to-use, affordable digital system for customers' digital photofinishing needs.

HP said DFX is a full-featured minilab that utilizes HP's thermal inkjet technology. It produces standard 4 x 6-inch prints, but also offers the ability to produce mixed and digital orders for one-hour fulfillment, high-value products like custom print packages, specialty-sized posters of up to 12 x 18-inches, calendars, greeting cards and CD-ROMs. DFX uses an in-line finishing system that allows multiple formats to be produced from a single roll.

For consumers, the company unveiled HP Memories Disc Creator digital imaging software, which allows consumers to create personalized photo slide shows, add music and a title page, and then play the shows on their PCs or television via a DVD player. HP said it expects the software to be available in March at an estimated street price of $29.95.

Finally, HP's strategy wouldn't be complete without a Web component. The company already has an online photo-sharing site, hpphoto.com. To round out that offering, the company partnered with Shutterfly to provide online print fulfillment.

The partnership also makes Shutterfly part of HP's strategic consumer initiative, by supporting HP's new HP Instant Share technology -- part of the new HP Photosmart 812 digital camera -- which allows users to take a picture with the camera and immediately decide how to share the image, including through e-mail or with prints.

"Companies that are capable of looking into the future to anticipate the digital imaging needs of consumers will be the ones that best capitalize on the available business opportunity," Joshi said. "Today, HP has done this with a one-two punch -- on the retail side, with our entry into photofinishing, and on the consumer side, with the extension of our digital imaging offering."