HP, Compaq CEOs see revenue boost in wireless

Wireless integration projects and PC innovations will be big revenue drivers for the proposed merged entity of Hewlett-Packard Co. and Compaq Computer Corp., the CEOs of both companies said yesterday.

"Wireless will be huge," said Michael Capellas, Compaq chairman and CEO, in an interview with several trade newspaper editors during the Gartner Inc. Symposium ITxpo 2001.

"Wireless drives infrastructure in a way that provides market growth for sure,'' added Carly Fiorina, chairwoman and CEO of HP.

Both companies announced intentions to merge last month, a deal roundly criticized by analysts and users. Part of the criticism stems from what is perceived to be the new company's inability to expand spending on IT, especially during a bad economy. "They can't increase the top line revenues in the near term," said Jim Cassell, an analyst at Stamford, Conn.-based Gartner Inc.

But Fiorina and Capellas both said wireless implementations will expand the software and hardware markets by driving the need to connect devices over reliable networks, requiring companies to seek out the proposed HP/Compaq company for integration help, as well as for servers and other infrastructure, to make it happen. The profit margins on actual wireless devices might be small, but it will be the connections behind them that are large, they said.

"What wireless does is change traffic patterns that people have to deal with," Fiorina said. That will require "lots of servers and storage and software, for sure.'' The executives also gave a glimpse of innovations coming for desktop computers that will keep the proposed company in a leadership spot. Installed in future desktops will be smart cards that help IT shops track the assets and information about the machines, making it easier to update software and do other chores and to keep total costs down, they said.

"Fascinating things will happen'' with PCs, Capellas said. They will be "simpler and easier to manage." PCs will be a part of an integrated access architecture, helping to coordinate the use of handheld and wireless devices connected to them, as well as many other devices, such as cars, he added.

Fiorina said such PC innovations will help the new company win market share from Dell Computer Corp., led by CEO Michael Dell, who she said is "not an innovator, period," a comment she made earlier in the day in a keynote speech at the Gartner conference.

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