CONSUMER ELECTRONICS Dell and HP consider digital TV business

Dell and HP are poised to join Gateway in selling electronic gear.
DOW JONES NEWSWIRES
NEW YORK -- Gateway chief executive Ted Waitt thought he was getting a step ahead of rivals when he added plasma televisions to Gateway's lineup of personal computers and laptops.
But now he may be stepped on, as Dell Inc. and Hewlett-Packard Co. eye the market that Waitt thought he had to himself.
In recent weeks, Dell has expressed interest in selling branded digital televisions and other consumer electronics gear. Speculation has abounded that HP will also get into the game.
Their moves come at a time when computer sales have slowed from their heady days of the '90s and the market is becoming increasingly saturated.
Filling a gap
"There have been a lot of innovations in the PC market, but they haven't changed the lives of consumers," said Preyas Desai, an associate professor of business administration at Duke University's Fuqua School of Business. "Consumers are not replacing their PCs as much as they did in the '90s. They [computer makers] need new markets to grow."
Little has been disclosed by either Dell or HP about their plans in the consumer electronics market. But it's not surprising they would target that market given its relative health during the economic downturn.
According to the Consumer Electronics Association, sales of liquid crystal display TV are expected to grow 72 percent to $431 million this year, while plasma TVs sales are expected to increase 76 percent to $908 million.
Dell was to hold a conference call to discuss its consumer strategy. McCarthy said the company will likely unveil a hard-drive based MP3 player and talk about its television initiative.
A spokesman at Dell declined to comment, but did note that executives have long said they would look at a variety of markets. Two areas that have been highlighted are flat-panel TVs and digital music.
Marketing effort
HP recently unveiled a slew of digital and imaging products for consumers and is launching a roughly $300 million marketing effort targeted toward the consumer. The company is launching a consumer advertising campaign this fall.
Despite the lack of information from the companies, at least when it comes to TVs, industry watchers said they expect both HP and Dell to be successful.
Gateway spokesman Bob Sherbin wouldn't comment on increased competition, but noted that the company's market share in plasma TVs is bigger than Sony's and Panasonic's combined.