Can HP catch Apple?

Few global technology companies have had as rocky a ride as HP over the past few years. With fingers in so many pies – desktop PCs and laptops, smartphones and tablets, printers, monitors, accessories, enterprise and software – such a huge company was always at risk of moving too slowly for the changing times.

HP bought struggling Palm back in 2010, making a dramatic entry into the rapidly growing mobile market, but webOS handset launches were few and far between. Then in July 2011, the TouchPad tablet arrived, and reviews widely praised the OS. It suffered poor sales, though, and was effectively ditched soon after in a hysteria-whipping fire sale.

Such a huge company was always at risk of moving too slowly for the changing times

The software lives on as Open webOS, but its future is uncertain and many big names have exited the App Catalog. CEO Meg Whitman has talked in the past of a TouchPad 2, but it won’t arrive before 2013 – if at all – leaving Windows 8 as HP’s main tablet platform.

After confusion over the future of HP’s PC division – former CEO Léo Apotheker had considered selling it before he was replaced by Whitman in September 2011 – it was eventually merged with the printing division in an attempt to spur combined sales of hardware to customers.

Sliding sales figures show little sign of a significant uplift there. Even sales of enterprise servers, storage and networking equipment, usually a stable source of income, have fallen recently.

A decision to invest in software included the £7.1 billion purchase of Autonomy, but when a massive 27,000 planned redundancies were announced in May – around 8% of HP’s workforce – that number included the head of Autonomy, Mike Lynch. Whitman admitted HP was struggling to integrate Autonomy into the wider business.

All of which makes worrying reading. HP’s share price is close to its all-time low, and with Whitman focused on restructuring and cutting costs, the real work of rebuilding will be slow and painful.

Verdict: SELL


Head back to the main feature page for more on whether other tech firms can ever catch Apple

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