Hewlett-Packard Takes Swipe at Apple

Hewlett-Packard ( HPQ) fired a shot across the bow of rival Apple ( AAPL) Wednesday with the launch of its first touch-screen notebook, claiming to offer consumers a completely new way to access their data.

H-P's TouchSmart tx2 uses fingertip-controlled touch-screen technology more typically associated with Apple's iPhone. In a clear attempt to tap into the youth market, H-P is claiming that fingertip screen controls offer users an easier way to interact with their PCs.

"Breezing through Web sites and enjoying photos or video at the tap, whisk, or flick of a finger is an entirely new way to enjoy digital content on a notebook PC," said Ted Clark, senior vice president of H-P's personal systems group, in a statement.

H-P has also developed a "convertible" display for the tx2, which lets users rotate its screen and use the notebook like a tablet PC. For less adventurous users, the tx2 also offers a traditional keyboard and mouse.

Rival Dell ( DELL) already offers touch-screen technology on its Latitude XT tablet PC, although H-P is touting the tx2 as the first product of its type aimed specifically at consumers.

For months, the media has also been buzzing with rumors that Apple was planning a touch-screen version of its own notebook products. Apple already offers a small fingertip-controlled trackpad on some of its MacBooks, but does not yet offer a touch-screen display similar to the tx2.

At least one analyst feels that H-P is attempting to gain first-mover advantage with the launch of the tx2.

"But the real battle will be what features H-P adds to this," said Richard Shim, an analyst at technology research firm IDC. "At the moment, it's still quite gimmicky."

H-P, for example, could attempt to shrink the size of its notebooks by offering an onscreen keyboard, according to Shim, who pointed to a similar feature on Research in Motion's ( RIMM ) Blackberry Storm.

Still, a big question mark surrounds whether touch screens are a viable alternative to traditional keyboards. For instance, at least some users might not be comfortable holding their arms out in front of them to touch a screen over long periods of time. Then there is also the issue of leaving grimy smudges and fingerprints all over a laptop screen.

Perhaps for these reasons, Apple Chief Executive Steve Jobs appeared to pour water on the rumors of a touch-screen MacBook recently. The CEO reportedly said that Apple had looked at the technology, but decided that it didn't "make a lot of sense."

Apple did not respond to a follow-up enquiry from TheStreet.com about its notebook strategy Wednesday, although Jobs has been known to change his mind about key technologies. In 2003, for example, the CEO was quoted as saying he had no interest in an Apple-branded cell-phone, only to launch the iPhone last year.

H-P clearly thinks that touch screens are worth investigating, and it already uses the technology on its TouchSmart PCs. Even if touch-screen notebooks fail to take off, the company has signaled its intention to play Apple at its own game.

Despite recent speculation that Apple was planning to significantly lower the price of its notebooks, the company ultimately announced modest price cuts, with Jobs reiterating Apple's focus on cutting-edge features. Priced at just under $1,150, H-P's feature-rich tx2 is in the same price bracket as Apple's low-end MacBooks.

Shares of H-P, which recently announced that its fourth-quarter earnings and revenue would top analysts' estimates, were down 56 cents, or 1.7%, to $33.03 at the market close. Apple's stock fell 4% to $86.29.

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