HP Expands Digital Photography Business in Europe; Announces New Customer Wins and Offerings Globally

COLOGNE, Germany, Sept. 26, 2006 - HP today made a series of announcements marking the international expansion of its digital photography business and its efforts to further accelerate the photo industry’s transformation from analog to digital technologies.

The news, announced at the Photokina tradeshow, includes the expansion of HP’s online and retail photo businesses in Europe; an addition to its retail photo printing portfolio; new professional photo-printing systems with industry-leading color output and management capabilities; and additional tools for HP Indigo digital presses that enhance photo-specialty printing.

Collectively, these products, services and partners’ efforts enable new experiences for all of HP’s photography customers – from consumers, hobbyists and professionals to retailers and print service providers.

“Today’s announcements move HP significantly closer to realizing the next phase of our vision for creating an all-digital photography marketplace,” said Vyomesh Joshi, executive vice president, Imaging and Printing Group, HP. “HP is the only company with the depth and breadth of offerings to aggressively transform the photography industry in order to enable more compelling, personal and memorable experiences in markets around the world.”

Growing retail and online photo businesses internationally

Linking consumers’ home and online photography experiences to retail, HP has signed two deals with Jessops, the United Kingdom’s No. 1 photography retailer and now one of the first to install the HP Photosmart Studio on a trial basis outside of North America. The HP Photosmart Studio is the only in-store offering where consumers can design creative products in about five minutes – without having to crop or place photos into individual templates – and then pick them up in one hour or less. With HP’s entry into the retail photo-printing market in Europe, the company is now competing in the $35 billion-plus photo industry on an international scale.

Additionally, Snapfish by HP will host Jessops’ new online photo site – Picture House – enabling customers to take advantage of Snapfish’s industry-leading online photo service to print, share and store their photos. Jessops customers now have the ability to upload photos to the online photo site and pick up prints at the Jessops store of their choice.

Snapfish also has extended the “Snapfish by HP” brand to 13 of its online photo sites in Europe, which previously operated under the Pixaco brand. This move makes Snapfish the No. 1 online photo service brand worldwide. Additionally, Snapfish has begun rolling out its award-winning online photo capabilities in 14 countries across Europe. Beginning today in Austria, France and Germany, Snapfish has extended capabilities such as free online photo sharing and storage – services that are not currently offered by most European online photo sites.

New in-store photo-printing solutions for retailers

HP has added the HP Photosmart pm1000 Microlab to the company’s retail photo-printing portfolio. Based on HP’s scalable print technology, which is designed to deliver high-performance printing for high-volume users, the HP Photosmart pm1000 Microlab creates lab-quality, 4 x 6-inch prints quickly – up to 700 prints per hour. Available in North America and Europe this fall, the offering uses specially designed inks and papers to create smudge-, water- and fade-resistant (more than 50 years(1)) prints.

Retailers can easily add the compact, simple-to-operate Microlab to existing photo centers both as a back-counter application and as an instant, front-counter print solution. The system requires minimal maintenance from retailers, resulting in lower operating costs and higher revenue. Additionally, since the system uses a dry process, retailers do not have to deal with hazardous waste as they do with analog printing systems.

Transforming the color experience for photography and graphics professionals

HP is changing the way professional photographers, digital fine artists, graphic designers and prepress professionals create large-format images with the unveiling of the HP Designjet Z2100 and Z3100 Photo Printer series.

The eight-ink HP Designjet Z2100 and 12-ink Z3100 both provide an automated color management experience that enables professional photographers to consistently print museum-quality color and black and white photos up to 44 inches wide. The HP Designjet Z3100 uses a 12-ink HP Vivera pigment system, including the HP 70 Gloss Enhancer and HP Quad-Black inks to create rich black and white prints and achieve truly neutral grays under different lighting conditions. Both printers also deliver unprecedented photo permanence – up to 200 years – on a wide variety of media.(2)

Graphic professionals can now create color profiles in minutes instead of hours and receive exact color matches throughout the printing process. Traditionally complex color management has been streamlined with the first embedded spectrophotometer on a large format printer, based on X-Rite Eye-One color technology and integrated with an HP Color Center interface.

The HP Designjet Z2100 and Z3100 Photo Printer series are also the first large-format printers to leverage HP’s scalable printing technology to achieve the optimal balance between speed and image quality.

HP is expanding its media portfolio with 11 new offerings for a total of 30 options, ranging from photo and digital fine art papers, to backlit, indoor banner and Tyvek.

In addition to its large-format printer line, HP expanded its B-size photo printer portfolio with the introduction of the HP Photosmart Pro B8350 Photo Printer. Priced at $349,(3) this versatile photo printer is ideal for the photo hobbyist who wants to produce 3.5 x 5-inch up to 13 x 19-inch professional lab-quality prints at an affordable price.

Joining the B8350 in the lineup is the HP Photosmart Pro B9180 Photo Printer, which began shipping this month. Also based on HP’s scalable printing technology, the B9180 delivers exceptional image quality at increased speeds and provides the industry’s best photo permanence on a wide variety of HP media with eight-ink color photos that resist fading for more than 200 years.(4)

New solutions for HP Indigo presses enhance workflows for photo-specialty printing

A number of new tools for HP Indigo digital presses enhance the production of high-value photo-specialty applications requiring photo-lab quality.

Taking advantage of the HP Indigo press’s exclusive seven-color printing capability, HP Indigo Light Cyan and Light Magenta inks deliver significantly enhanced photo quality with smoother tone and image transition. Expected to be available in the second half of 2007, the inks give photo finishers and print service providers a competitive edge in the professional album and photo specialty markets.

To improve the efficiency of high-volume, image-rich production, HP has introduced the HP Scalable RIP Solution (SRS). This completely automated workflow solution enables users to centrally process and feed jobs in parallel to multiple HP Indigo presses at maximum press speeds, reporting production status in real time. HP SRS leverages HP’s extensive IT capabilities, employing the HP BladeSystem to deliver full efficiency and reliability in the most demanding production environments.

U.K.-based photo retailer Bowie Castlebank is taking advantage of the growth in photo specialty products including photobooks by integrating an HP Indigo press 5000 into its retail store and kiosk operations. Connected through a broadband network across the U.K., the recently installed digital press will serve Bowie Castlebank’s Klick Photopoint, Max Spielmann and Supasnaps stores.

More information regarding HP’s announcements at Photokina is available in an online press kit at www.hp.com/go/photokinaevent2006.

About HP

HP is a technology solutions provider to consumers, businesses and institutions globally. The company’s offerings span IT infrastructure, global services, business and home computing, and imaging and printing. For the four fiscal quarters ended July 31, 2006, HP revenue totaled $90.0 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at http://www.hp.com.

(1) See www.Wilhelm-Research.com for Display Permanence Rating method details

(2) Display permanence rating by Wilhelm Imaging Research, Inc. on a range of HP creative and specialty media. For details, visit www.hp.com/go/supplies/printpermanence.

(3) Estimated U.S. street price. Actual price may vary.

(4) Display permanence rating by Wilhelm Imaging Research, Inc. or HP Image Permanence Lab using HP Advanced Photo Paper, HP Matte Photo Paper, HP Hahnemühle Smooth Fine Art Paper and HP Hahnemühle Watercolor Paper, HP Aquarella Art Paper and HP Artist Matt Canvas. For details visit www.hp.com/go/printpermanence.

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of HP and its consolidated subsidiaries could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to statements of the plans, strategies and objectives of management for future operations; any statements concerning expected development, performance or market share relating to products and services; anticipated operational and financial results; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the achievement of expected results and other risks that are described from time to time in HP’s Securities and Exchange Commission reports, including but not limited to the risks described in HP’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2006, and other reports filed after HP’s Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2005. HP assumes no obligation and does not intend to update these forward-looking statements.

© 2006 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.

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