HP IS talking with China's three mobile carriers...

Hewlett-Packard Co., the world's largest personal-computer maker by sales, said it is talking with China's three mobile carriers about offering small, portable computers along with their services.

Demand in China, the world's second-largest PC market by shipments, appears to be coming back. Shoppers bought HP laptops at a Beijing mall in January.

The possible collaborations with China Mobile Ltd., China Unicom (Hong Kong) Ltd., and China Telecom Corp. to offer mobile broadband-enabled mini-notebooks, called netbooks, would help expand HP's sales channels in China, said an HP spokeswoman.

HP, Dell Inc. and other PC makers have similar arrangements with wireless carriers in Europe and other regions.










An HP Mini 110 computer. HP executives introduced several new products in Beijing on Wednesday, including a notebook computer, the HP Mini 110 series, which weighs 2.5 pounds and will cost $299.

"We are living in a challenging economic time," said See Chin Teik, senior vice president of the personal systems group of HP's Asia-Pacific operations.

In China, the world's second-largest PC market by shipments, demand appears to be coming back, with HP notebooks enjoying the highest growth category of its China PC sales, but HP executives remained cautious on their outlook.

Mr. See said HP's sales grew faster in China in its second fiscal quarter ended April 30, than the local PC market as a whole. HP's gains in China translated to an increase in market share to 13.7% in the first calendar quarter from 10.9% in the previous quarter, according to market researcher IDC.

HP has made significant progress over the past two years, surpassing Chinese PC makers like Founder Electronics Co. to become the second-largest vendor in the country after Lenovo Group Ltd.

Isaiah Cheung, vice president of the personal-systems group for the company's China and Hong Kong operations, said sales growth in China will shift toward lower-tier cities, and sales in rural China will grow over the next three years

HP currently has service centers in 425 Chinese cities, up from 325 at the end of last year, he said.

The company highlighted four new products on Wednesday. In addition to the HP Mini 110, HP launched an all-in-one desktop computer, the HP Pavilion MS200, which will start at $599.

The lineup further emphasizes low prices as commercial and consumer PC demand has slowed world-wide because of the weakened economy.

The company posted a 17% drop in profit in its second quarter on revenue of $27.4 billion and saw a 19% drop in revenue from its PC division.

Chief Executive Mark Hurd said earlier this month that he isn't seeing any improvement in the current quarter, and the company expects revenue to decline 4% to 5% for the fiscal year.