Can we sidestep the boardroom drama at Hewlett-Packard (NYSE:HPQ) for a moment to discuss the company itself?
Last month, Seth Jayson took HP to task for overpricing its MediaSmart television, which combines Wi-Fi functionality with a 37-inch LCD screen. At $2,700, it was a thousand bucks more expensive than comparable sets, even if they lack the ability to stream Internet and PC-stored video, music, and snapshots.
Seth wasn't the only one who felt that way. CNET (NASDAQ:CNET) also gave the MediaSmart a favorable review, until it pointed out that it would be cheaper to combine a third-party media network player with a conventional flat-panel system.
Well, Seth and CNET, HP has listened. The revolutionary set has been marked down by $500. The new $2,199 MSRP will hopefully win the MediaSmart system some much-needed holiday shopping action. (Over the weekend, I actually saw it going for even less than that at my local Best Buy.)
The convergence of TV and the Internet is for real. At the rate that the major networks have been busy snapping up online properties, the all-in-one set was bound to happen. It's actually surprising that HP beat rivals Dell (NASDAQ:DELL) and Gateway (NYSE:GTW) to the punch, since they seem to have been pushing their television products longer.
Working against HP is the Apple iTV, which will also allow you to stream downloaded videos and other content from your computer to just about any television set. The iTV won't be out until early next year, so HP's smart to mark down the MediaSmart so aggressively. If Apple has another category-killer on its hands, there may be little need for the MediaSmart come the 2007 holiday season.
The MediaSmart is pretty nifty, boasting built-in functionality with partners like digital photo-sharing site Snapfish and RealNetworks' (NASDAQ:RNWK) Rhapsody service. Subscribers to both services can display photos or play music on their MediaSmart sets.
With LCD and plasma television prices dropping sharply this year, the 2006 holidays are shaping up to be a strong one for the industry. HP hopes that the MediaSmart will find a home in 37-inch stockings this year. To hear Apple tell it, next year's stockings will be much smaller.
Dell and Best Buy have both been recommended to Motley Fool Stock Advisor newsletter subscribers. Dell is also an Inside Value stock pick. CNET is a Rule Breakers selection.
Longtime Fool contributor Rick Munarriz did peck out this story on his HP desktop -- but he's using a Dell monitor. So there. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
