HP To Focus On Partner For Its Camera Biz

HP has taken a big picture look at its digital camera efforts and decided to retrench. The computer giant plans to continue selling HP-branded cameras through this holiday season, but expects to have a partnership agreement in place by the first half of 2008.

The partner will be licensed to design, source and distribute digital cameras under the HP brand. As a result of its new camera business strategy, HP said it will take a pre-tax charge of approximately $30 million in the fourth fiscal quarter ending Oct. 31, 2007.

“We’re not backing away from the camera business, but looking for an OEM   partner for distribution,” Alyson Griffin, told InternetNews.com.

Once that partner is found, she said HP plans to invest the funds it no longer has to spend on manufacturing into its “Print 2.0” campaign. Print 2.0 essentially covers three areas: a next-generation digital printing platform for increased print speeds and lower printing costs for high-volume commercial markets; services and tools that make it easier to print from the Web; and extending HP’s digital content creation and publishing platforms across all customer segments.

The news wasn’t a surprise to analyst Tim Bajarin. “HP got into cameras as an important way to extend and support its printing business,” Bajarin, president of Creative Strategies, told InternetNews.com. “Now you look at all the new cameras coming out and the aggressive pricing, I think it’s too difficult for HP to continue on its own in something that’s not core to its business. I understand their reasoning. A camera maker without a lot of name recognition or access to the channel, would stand to have a lot of success working with HP.”

HP has made other moves to gets its camera technology more broadly distributed. Last year the company announced it was licensing its latest PhotoSmart digital image technology, first introduced in 1995, to Flextronics, a major supplier of camera modules to phone manufacturers.

At the announcement, HP and Flextronics said they expected the first camera phones to incorporate PhotoSmart would be available for sale by the second half of 2007. While camera phone pictures aren’t commonly printed, HP officials said PhotoSmart will help change that because it enables higher quality images consumers will be more inclined to want to print to keep or share with others.

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