"We will adopt an aggressive strategy rather than a defensive one this year and expand our market share," said Zheng-Yaw Sun, president of HP China.

HP China has just passed an inspection of its US headquarters following the merger last May but determining whether the merger is a total success will take at least three years.

The next step of HP China will be to integrate fully the strengths of the former HP and Compaq brands and enhance its market share in China, he said.

Sun said the focus of HP's investment in China will be to improve services to Chinese customers by building a complete chain of industry from manufacturing and marketing to research and development.

Although the company is the biggest notebook computer maker in the world and the Asia-Pacific market in the first quarter, it was only among the top five in China.

High-quality service has become an important way to guarantee its development in the world's most populous market.

Isaiah Cheung, vice-president of the mobile information product business with HP China, said the firm would aim to meet demand for high mobility from business users and the replacement of desktop equipment from individual users.

"We have already leapt to be among the top five players in the market after ranking just seventh half a year ago. With this good start, we will maintain growth and become one of the top three this year," said Cheung.

He said HP will open 200 outlets nationwide this year and recruit 200 HP sales agents in 23 cities this quarter.

Reduced costs following the merger of HP and Compaq will enable the new HP to extend to all segments of the market rather than remain a high-end product maker.

According to Sun, HP has reduced its worldwide structural costs by US$3.5 billion in the past year following the emergence of the new HP on May 8 last year.

The company -- the largest personal computer maker in the world -- believed the reduction would further enhance its competitiveness by expanding into the low-end market and fighting those rivals with a low price strategy such as Dell.

HP China has released six computers models targeting the consumer market and the cheapest product is sold at 4,999 yuan (US$604). The aim is to develop the summer vocation market led by purchases by school students.

Raymond Yau, vice-president of imaging and printing group of HP China, said China's home computer market has huge potential and his company aims to be leading it within three years by selling products with the best performance-to-price ratio.

(China Daily June 12, 2003)