NEW YORK (CNNMoney.com) - Hewlett-Packard has announced it is launching self-service photo printing kiosks in retail locations in a bid to reach consumers where they shop, giving the company a physical presence in the retail photo market for the first time.

HP (up $0.43 to $32.94, Research) plans to launch its self-service Photosmart Express kiosks in retail outlets that do not traditionally offer their own photo printing operations, such as discount and grocery chains. The company will debut these kiosks in the Albertson's and Bashas grocery chains. The Photosmart Express kiosks allow users to print photos instantly from their digital cameras.

HP will debut its Photosmart Studio kiosk in retailers with existing on-site photo labs, including a deal with Longs Drugs. Photosmart Studio kiosks let users create customized calendars, posters, greeting cards and other items with their own photos and pick them up in an hour.

In entering the kiosk market, HP will face entrenched competitors like Kodak (up $1.40 to $27.40, Research), Fuji (down $0.16 to $31.83, Research) and Sony (up $1.07 to $46.85, Research), which have photo kiosks in outlets ranging from Walgreens to Kinko's.

HP has been making big moves to reach out to the consumer in the retail photo printing industry, launching stand-alone photo printers that allow users to print photos at home straight from their digital cameras and acquiring photo storage Web site Snapfish as well as Picaxo, a similar site in Europe. HP already has a deal with Walgreens to let users print photos stored on Snapfish at Walgreens stores and pick them up an hour later.

Those moves are part of a larger plan to find new growth opportunities in HP's imaging and printing group, a roughly $25 billion business and HP's largest division.

HP's Rich Duncombe, vice president of retail photo solutions in HP's imaging and printing division, said the company is announcing its retail initiative as a third way to reach consumers, who are in the midst of a mass migration to digital pictures, he said.

"The market transformation is bringing digital photography directly into our area of strength," he said. "We view the consumer experience to be the central part of this play for us."

Duncombe declined to give revenue projections for the new venture, but he did note that HP thinks the number of photos consumers print themselves will climb from 33 billion in 2005 to 67 billion in 2008.

In December, HP outlined its ambitions for the company's printing division, which include a bid to win more corporate in-house document production contracts and moves to capitalize on the growth of digital photos.

Vyomesh Joshi, executive vice president of the printing division, said the company will focus on "printing, not printers," a mantra HP has repeated as it focuses on increasing the number of pages that businesses and consumers print – while making sure those pages are printed using HP products.

HP's printing division generated sales of $6.5 billion last quarter -- an 8 percent sales increase from the year-ago quarter.

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