Hewlett-Packard Aims To Become Pc Leader Third-Largest Pc Manufacturer Hopes To Overtake Compaq, Ibm

Hewlett-Packard Co. intends to be the world’s top personal computer maker by 2000, passing current leaders Compaq Computer Corp. and International Business Machines Corp., said Jacques Clay, vice president and general manager of its Extended Desktop Business unit.

H-P, which also makes large computers as well as laser printers, is betting that it can win the PC wars with strategies that differ from the direct-to-consumer method used by Dell Computer Corp. and Gateway 2000 Inc., Clay said.

At the same time, H-P wants to differentiate its selling methods from industry leader Compaq, which sells its PCs mainly through electronics stores and resellers.

Hewlett-Packard uses what it calls an “indirect channel,” allowing vendors such as Inacom Corp. and Vanstar Corp. to handle the sales of PCs into corporate markets.

While the company will continue to design and develop its Vectra PCs for business, some of its resellers will have more latitude in deciding how to configure the computers for business.

Last week, the H-P division, based in Santa Clara, Calif., introduced its Kayak workstation to rival new advanced PC-workstations that rivals Compaq and Dell previously introduced. It also announced a series of other plans to boost sales and profits.

“Our goal is to be one of the most competitive suppliers,” Clay told the Bloomberg Forum by satellite from New York’s Equitable Center, where he had presided over the product introduction.

Two weeks ago, Gateway 2000 Chairman Ted Waitt told the Bloomberg Forum that his company hadn’t been able to penetrate the corporate market as planned. As a result, his company, which sells its entire line directly to customers, said third-quarter profit wouldn’t match analyst’s estimates.

That gives H-P, the No. 2 U.S. computer maker and third-largest PC maker in the world according to International Data Corp., an opening to sell to corporations its way, Clay said.

Business customers need hand-holding before they place an order, said Clay, an engineer who joined H-P in France in 1973 and who shepherded its highly successful OmniBook portable PC unit until getting his current job.

Attention to customer service, even after the sale is made, can lead to other business such as help-desk service, software upgrades and training, he said.

The company also said it will extend its HP TopTools software to manage an entire PC network, rather than just individual PCs. In addition, TopTools will be extended to work on PCs with software from Computer Associates International Inc. and International Business Machines Corp. Tivoli division.

Hewlett-Packard’s sales of computer products - including all its computers and printers - rose 11 percent to $25.8 billion for the nine months ended July 31, representing 83 percent of revenue for the Palo Alto, Calif.-based company.

Clay declined to break out how much of that was PCs and low-end workstations sold by the extended desktop business division or how profitable the unit is. Analysts said the company sold about $6 billion of PCs last year.

“We are doing extremely well according to H-P standards,” the executive said. “H-P is not a company known for letting profit go.”

H-P’s nine-month net income rose 19 percent to $2.3 billion, or $2.20 a share. Revenue rose 10 percent to $31.1 billion.