PC, printing and software giant HP is trying to transition itself from a box to a solutions provider at a time when consumers are increasingly abandoning the older devices for newer ones such as smartphones and tablets.
Annual events of multinational technology companies tend to be a reaffirmation to investors, partners and even the press. HP’s annual event, which for the first time, was held in Beijing was along similar lines.
However, Meg Whitman, who took over as CEO in September 2011, made it clear that the company will continue to build the IT infrastructure of the future that would be a combination of hardware, software and services and the company is here to stay.
This statement comes in the backdrop of the technology major, which was founded in a California car garage in 1939, has seen continued stress in all its lines of business, something that rival Dell is grappling with. Revenues from printers and PCs declining quarter after quarter as consumers are starting to move away from PCs and shifting to devices such as tablets, laptops with rotatable screens, smartphones and other devices. This has impacted the company revenues in the last eight quarters.
This is corroborated by research firms. Worldwide PC shipments totalled 79.2 million units in the first quarter of 2013, which has declined 11.2 per cent compared with the first quarter of 2012, according to Gartner. “It was the fourth consecutive quarter that showed a drop in worldwide PC shipments," said Mikako Kitagawa, principal analyst at Gartner.
However, there is another trend emerging. Unlike in the past when the market for PCs was still growing in emerging economies, the trend was broken in the first quarter. Gartner data suggest that Asia Pacific PC shipments totalled 27.6 million units in the first quarter of 2013, a 10.3 per cent decline from the first quarter of 2012.
Seismic shift
Apart from users wanting to shift away from traditional devices, another trend is impacting the gameplan of companies like HP. “The domination of Wintel (refers to Windows software and Intel microprocessor) is coming to an end and it will be technologies like Android and Apple with ARM that will dominate,” said an analyst from a multinational research firm.
According to comScore, iOS has a 37.8 per cent market share and Android a 52.3 per cent in January 2013. “It is no longer about one screen but many screens (smartphones, tablets, laptops) and PC makers have realised that,” said Ajay Kaul, Executive Director, Global Brand Communications and Marketing Analytics at Lenovo.
HP has tried to address this with a spate of launches from 10-inch tablets to 21.5-inch PCs that is marketed as a computer that houses every component except the keyboard and mouse inside the same case as the monitor.
Further, HP has made some business changes earlier this year. The personal computer and printing businesses are under a single executive leadership and it has created a new enterprise group that combines global accounts sales team with enterprise servers, storage, and networking business and technology services business.
Analysts still are not convinced about HP’s strategy. “The company does not have a significant mobile device that can put it back on track,” said an analyst. However, Whitman is convinced that the company has got its mojo back. “We are the only company that has the combination of hardware and software from printers to tablets,” said Robin Seow, V-P, Marketing APAC and Japan for printing and personal systems, HP.