HP is alive and well. At least, that's what the latest notebook numbers suggest. After a year spent hashing out its merger with Compaq, the company has emerged as the worldwide leader in this hot segment--albeit by an ultraportable-thin margin--especially over the last six months.

In the first quarter of this year, HP sold 1.37 million notebooks, edging out cutthroat rivals Dell and Toshiba by about 150,000 apiece, the IDC reported this week. For most of last year, the three top sellers had been running neck and neck. HP still lags behind Dell overall and in desktops, but since notebooks are both a faster-growing segment and more lucrative, HP's recent success bestows bragging rights.

The price is right
How has HP done it? For one thing, HP makes some good notebooks--several models are fixtures on CNET's top products lists. But the real reason behind this recent success, according to several people at HP, is that the company is getting serious about matching Dell's prices dollar for dollar. Indeed, that seems to be the case.

HP is getting serious about matching Dell's prices dollar for dollar.

For example, I found the HP Pavilion ze4315, a solid mainstream notebook for home users and students, for $899 after rebates at Best Buy (Athlon XP 1800+, 256MB of memory, a 30GB hard drive, a 15-inch display, a combo CD-RW/DVD drive, Windows XP Home and Corel WordPerfect office suite, and a one-year warranty). A comparable Dell Inspiron 1100 with a 2GHz Celeron and otherwise identical specs costs $987 after rebates. Both include free shipping.

The same seems to be true of higher-end thin-and-lights. A nicely configured Compaq Evo N620c (1.6GHz Pentium M, 256MB, a 30GB hard drive, a 14.1-inch display, a DVD drive, Windows XP Professional, and a three-year warranty) is available direct from HP for $1,725. A virtually identical Dell Latitude D600 currently comes in at $1,767.

When you combine these competitive prices with the fact that HP's low-priced notebooks are somewhat more visible than Dell's (thanks to a retail presence, where the numerous brands and models litter shelves), HP gets the edge--at least for now. Of course, HP is hoping to capitalize on that momentum.

More than low prices
At the CeBit America trade show in New York later this month, I expect to see some of the first demonstrations of how exactly HP plans to add "special sauce" to its desktops, notebooks, digital cameras, and printers that will somehow make them work "better together" and spur customers to buy all HP, all the time. In the office, HP is banking on its blades--lower-cost, quasi thin-clients that run Windows XP and standard productivity applications--to entice large companies and help it catch up to Dell.

	HP has significantly lowered prices on mainstream models, such as the recent HP Pavilion ze5000 series. (Click to enlarge.)

Though HP's sales numbers look good for now, it will be tough for the company to stick by its overall strategy of delivering innovative technology (read: IBM, Sony, and so on), at a low cost (read: Dell) over the long term. And even with some recent streamlining, I still think HP's brands and models are mystifying.

Home systems still have two separate brands (HP Pavilion and Compaq Presario), but business desktops and notebooks now sport a main brand (HP) and a "sub-brand" (Compaq). But not in all cases. For instance, this week, CNET reviewed the just-launched HP d325 business desktop with an AMD chip. If we had looked at the same system with an Intel chip, however, it would've been the HP Compaq d300 business desktop. The Compaq name is used with Intel processors but not AMD ones. To further complicate matters, the same does not hold true for new business notebooks, which go by the combined HP-Compaq moniker regardless of the chip. Still with me?

If you can get past the name game, however, HP is delivering solid laptops at highly competitive prices. If you're looking to buy a notebook now, give these a serious look.