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HP Did Better Than The Market on PC Sales, But Mum About Mobile

Hewlett Packard meg Whitman computer mobile strategy

Meg Whitman, the CEO of Hewlett-Packard, said in the latest quarterly earnings conference call that the market for personal computers is “in a slow decline.”   Yet, she said, HP “outperformed the market pretty dramatically this quarter.”

In other words, even though the market for personal computers is declining, HP did not decline like the market.  HP’s sales were essentially flat or up a bit from a year ago.

Profits were up a bit at $1.3 billion compared with $1.1 billion this time last year.

Like other computer manufacturers, HP is grappling with a world gone mobile.

HP’s tablet offerings are limited.  True, over the past few years, HP has introduced a number of personal desktop, notebook and tablet hybrid devices aimed at business users including small businesses. Devices have included the EliteBook 850 Laptop [1], the SlateBook x2 [2], the Split x2 [3], the Slate 7 Plus [4].  Just recently HP introduced a low-end $99 Android tablet [5]. None of these, however, have become household names.

It’s not surprising that one commentator said about HP that “they’re not playing the mobility game.”   Fred Lane, the vice chairman of Raymond James, said [6] in an appearance on CNBC that  HP has “a longer term strategic challenge to deal with” and “still reinventing themselves.”

Sales of printers were also down slightly, but also “outperformed the market” according to Whitman.

Almost no mention was made of small businesses in the HP earnings conference call.  In such a large company, the small-business segment gets tucked under either the commercial or the consumer side for financials, depending on the product.

Whitman said the numbers posted are part of HP’s multi-year turnaround, and the turnaround is “on track”, explaining:

“With each passing quarter, HP is improving its systems, structures and core go-to-market capabilities. We’re gradually shaping HP into a more nimble, lower-cost, more customer- and partner-centric company that can successfully compete across a rapidly changing IT landscape.”

But the shift has not been without costs. HP announced it would be eliminating another 11,000 to 16,000 jobs. That would bring the total number of eliminated positions to upwards of 50,000 people.  The staff reductions, Whiteman said, are to make up for numerous acquisitions that were never properly integrated for efficiencies.

HP plans to get into 3D printing sometime in 2014. Whitman said in an interview with Jim Cramer on CNBC that HP is focused on business 3D printing, not the consumer side.  “We think there’s a real opportunity here,”   Whitman said, but added that it’s an acorn being planted that will eventually grow into an oak tree, cautioning investors to have patience.  Earlier this year HP announced it would be investing $1 billion in cloud computing services [7].

And as far as plans for mobile? Very little was discussed in the earnings call, so it’s still not clear what HP’s mobile strategy is.

Image of Meg Whitman: Hewlett Packard