Fiorina warns tech gloom is spreading

21 Mar 2001 16:39

Slowdown disease is contagious and there is no way Europe will be able to avoid catching it, warns HP chief

Hewlett-Packard chief executive Carly Fiorina opened the CeBIT trade show on a sour note Wednesday, predicting that the technology spending slowdown that has afflicted the United States is migrating to Europe. "This slowdown is now clearly spreading to other parts of the world," Fiorina said, speaking at a news conference a day before the official start of the vast European computer trade show. "Candidly, I am not optimistic about Europe's ability to withstand a slowdown."

The words are significant in light of remarks earlier by HP and competitors such as Sun Microsystems, which had previously pointed to strong European sales as a bright spot that contrasted with the North American slump.

And the near future, though difficult to predict, is looking worse. "I'm not optimistic about recovery in the second half of this year," she said. "It is a little bit like navigating through the fog."

HP's revenue growth, which averaged about 15 percent through 2000, will drop to 2 percent for the first quarter of 2001, Fiorina said. "At this point we are not assuming any improvements throughout the remainder of our fiscal year," which ends in October, she said.

Fiorina also unveiled a new partnership that will help advance its vision of spreading computing services across all sorts of devices. HP's Jornada handheld computers will be mounted on the dashboards of cars built by Gedas, a subsidiary of Volkswagen. The computers will help drivers diagnose mechanical problems with the car and, with the help of an Internet site hosted by HP, find traffic problems, maps and weather reports.

At the CeBIT show, HP also unveiled a number of new gadgets, most notably a lower-priced Jornada handheld computer and a new combination handheld/mobile phone.

The new Jornada 540 uses Microsoft's PocketPC software, far less popular than the Palm OS that powers handhelds from Palm, Sony and Handspring, but gaining some ground in Europe. Palm earlier this week unveiled new models with expansion slots, while Handspring filled out the top end of its product line.

HP didn't announce the price for the new 16MB, color-screen model, but as HP's new entry-level product, it will likely cost less than the $499 model that previously was the least expensive. Palm and Handspring models, though they come with less memory, are available for well under $200.

Bernard Meric, general manager of HP's consumer business in Europe, also showed a combination handheld computer/mobile phone. He declined to discuss specifics about the gadget, which still is under development.

HP also announced a digital camera that plugs into a Jornada's CompactFlash slot, equipment from other companies that allow a Jornada to communicate with the Bluetooth wireless standard, and Bluetooth-enabled inkjet printers.

Sharp Electronics is making moves of its own in the handheld market.

At its own CeBIT news conference, the Japanese electronics giant showed off a handheld computer called the MultiMedia Tool, based on the Linux operating system, that can play MPEG4 videos and MP3 music.

Sharp's handheld comes with a pullout keyboard, a 320-by-240-pixel full-colour screen and 32MB of memory, and it can connect with Universal Serial Bus (USB) and infrared connections. It is equipped with a Secure Digital slot, the same expansion port technology used by Palm. Its software enables it to surf the Web, check email, organize appointments and synchronise data with a PC.

Sharp currently sells handhelds using its own, proprietary operating system under the Zaurus label.

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