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From "Shrek" and "Shark Tales" to co-branded iPods, media PCs, home movie systems and MTV promotions, Hewlett-Packard Co. came up with innovative products and marketing in 2004 to push its case as the ultimate lifestyle technology company.

CEO Carly Fiorina, along with top marketing executive Allison Johnson, is driving the once-gearhead engineering-run company into a marketing-driven empire with a pop culture brand. And it seems to be working. Industry analysts agree that HP is effectively delivering a "cool" lifestyle message, even as the company pushes forward on its traditional businesses, including enterprise, small business and value-added services.

Ms. Fiorina beat skeptics of the 2001 Compaq acquisition she lobbied for by delivering on cost savings of $3.5 billion a year ahead of schedule this fall. Overall, HP boosted fourth-quarter earnings by 32%, with total fourth-quarter revenue of $21.4 billion.

Still, a little humility is serving HP well. Instead of coming up with its own digital music player like competitors Dell or Gateway, HP brokered a deal with the runaway leader, Apple. Not only is the Apple iPod From HP selling well, but so are HP's customizable "tattoo" skins that cover the player.

HP earned critical praise by putting the iTunes software on its PC desktops. HP also expanded its consumer electronics portfolio with the debut of its first flat panel TVs and digital video recorder products this fall.

HP's advertising took edgier turns this year with ad campaigns from Omnicom Group's Goodby, Silverstein & Partners in the U.S. and from Publicis Groupe's Publicis Worldwide, London, garnering kudos from critics including two Cannes Gold Lions for the Publicis work. Goodby's visually arresting "Next Shift" work pushes the boundaries of cool in both TV and print.

U.S. ad budget $220.6 million

Jan.-Aug. 2004

down 23.3%

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