Hewlett-Packard (HP) is making a fresh assault on the Asian market for low-cost business personal computers, targeting the region's vast number of small and medium-size enterprises (SMEs). Armed with a new line of products, HP aims to gain ground in a market segment - desktop PCs priced below US$800 - where Asian PC makers such as Legend Group in China, HCL Infosolutions in India and Samsung Electronics in South Korea have enjoyed brisk demand. Joergen Jakobsen, HP vice-president and general manager for its business PC division in the Asia-Pacific region and Japan, said the company had a 4.9 per cent share in this segment. 'We have been weaker in the low end of the market,' he said, but noted that HP had a healthy 15 per cent share in the market segment for PCs costing US$800 or higher, based on estimates from Gartner. The research firm found desktop computers that cost US$800 or higher made up 58 per cent of the PC market in the Asia-Pacific region and Japan, while machines priced below US$800 composed 42 per cent. Although low-end commercial desktop PCs offer thin profit margins, the high volume of business in this segment makes it increasingly attractive to computer makers. In China alone, about 77 per cent of demand is for PCs that sell for below US$800, according to Gartner. Mr Jakobsen said that, a year after completing its merger with Compaq Computer, HP was better positioned to attack the low-cost business PC segment, seize market share and make a profit from it. 'We have greatly enhanced our operations and cost structure in the region,' he said, emphasising that HP could effectively compete in the low-end PC market against local players and multinational rivals such as Dell Computer. He said more than a dozen manufacturing sites in Asia had been consolidated, with a focus on key markets. HP business PCs are made in six countries: China, Australia, Singapore, India, South Korea and Japan. In addition, HP machines can be bought directly from the company or through a network of channel partners including systems integrators, value-added resellers and other dealers. HP officials last week unveiled across Asia the new HP Compaq d220-series desktops. This product line is at the centre of HP's PC upgrade programme for SMEs, which consists of basic office applications and Internet programs running on simple, low-cost PCs with stable technologies. 'Many companies today are putting themselves at risk by running older, less secure PCs in their IT [information technology] environment,' said Kelvin Kong, product marketing manager at HP Hong Kong's personal systems group. To ensure that this message gets across to its target customers, HP has enlisted the help of its network of more than 45,000 channel partners in the Asia-Pacific, excluding Japan. 'It is hard for companies to assess just how much time, money and productivity is lost while users of vintage PCs sit and watch the hourglass spin. However, up-to-date PCs clearly increase productivity, save on service costs and give an overall better end-user experience,' said Roger Kay, vice-president of client computing at research firm International Data Corp (IDC). 'And there is substantial evidence that the costs of supporting and migration from older, soon-to-be-unsupported environments increase the longer an upgrade is delayed.' SMEs represented about 45 per cent, or US$28.4 billion, of total IT spending in the Asia- Pacific region last year, according to IDC. With the atypical pneumonia crisis seemingly drawing to a close in the region, HP is keen on stimulating demand for its products and services as well as on widening its lead in desktop PC sales, Mr Jakobsen said. Gartner estimates show that HP's first-quarter desktop PC sales this year cornered 11.2 per cent of the the Asia-Pacific market, excluding Japan. Legend, the leader in total-PC sales, and global rival Dell, meanwhile, each had an 8 per cent share in the desktop PC market segment.