HP Continues to Drive Digital Imaging Mainstream with Market Entry, New Products and Relationships

ORLANDO, Fla.--(BUSINESS WIRE)--Feb. 25, 2002--Photo Marketing Association Tradeshow. Hewlett-Packard Company (NYSE:HWP) today announced its entry into the $14 billion consumer photofinishing market with the intention to be a complete digital imaging solutions provider to both central and on-site retail photo labs.

The move enables HP to harness business opportunities emerging from the fast-growing digital capture market, as well as traditional analog photography, by providing consumers the power to choose how they want to print and share their photos -- whether they capture their images digitally or with film.

HP also has enhanced its consumer digital imaging offering with the introduction of HP Memories Disc Creator software, a product that enables consumers to personalize, enrich and save their digital photos, and with an online print fulfillment relationship with Shutterfly, a leading online photo service.

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

HP is extending its printing systems portfolio beyond inkjet and dry laser technology to include high-speed color printing through its relationship with Indigo N.V. HP and Indigo, a leader in high-performance digital color printing systems, plan to serve the high-capacity needs of central photofinishing labs with advanced, high-speed digital color printing systems that provide an all-digital workflow. All-digital workflow offers compelling business advantages, including the elimination of manually intensive batch-production processes and top line growth from servicing the growing digital capture market.

The in-store retail market is served by the introduction of the Phogenix Imaging DFX digital photofinishing system, which is being unveiled at PMA. This is the first product resulting from a two-year collaboration between HP and Kodak, leveraging HP's inkjet printing technology and imaging expertise. The collaboration is focused on creating an entirely new category of digital photofinishing equipment, offering retailers an easy-to-use, affordable digital system for their customers' digital photofinishing needs.

DFX is a full-featured minilab that uses HP's thermal inkjet technology to produce high-quality, long-lasting photos. In addition to standard 4 x 6-inch prints, DFX efficiently produces mixed and digital orders for one-hour fulfillment of high-value products such as custom print packages, specialty-sized posters of up to 12 x 18-inches, calendars, greeting cards and CD-ROMs. Custom orders are produced efficiently through the use of a unique in-line finishing system that allows multiple formats to be produced from a single roll.

HP Memories Disc Creator Software

Furthering its strategy to push digital imaging mainstream, HP introduces HP Memories Disc Creator digital imaging software. With the software, consumers can create personalized photo slide shows, add music and a title page, and then play the shows on their PC or television via a DVD player. Before HP Memories Disc Creator, integrating all these features was complex and cumbersome.

HP Memories Disc Creator is expected to be available in March at an estimated U.S. street price of $29.95.(1)

Shutterfly Online Photo Services

HP also has established a relationship with Shutterfly, one of America's most popular online photo services, to further enhance the services available to digital imaging consumers. Shutterfly's high-quality, on-line print fulfillment service and proven digital imaging experience complement hpphoto.com, HP's online photo-sharing Web site, by providing photofinishing services.

Shutterfly will support the breakthrough HP Instant Share technology available in its recently announced HP Photosmart 812 digital camera. HP Instant Share allows users to take a picture and immediately decide how to share the image, including via e-mail and with prints -- no other camera on the market offers this feature. Recipients of a photo sent via e-mail through HP Instant Share will now have the option to obtain prints in the mail through Shutterfly's photofinishing services.

"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," said Joshi. "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."

About HP

Hewlett-Packard Company -- a leading global provider of computing and imaging solutions and services -- is focused on making technology and its benefits accessible to all. HP had total revenue of $45.2 billion in its 2001 fiscal year. Information about HP and its products can be found on the World Wide Web at http://www.hp.com.

(1) Actual prices may vary.