The last Hewlett-Packard Co. (NYSE: HPQ) laptop I bought crashed six months into the warranty period. I sent it to HP, which diagnosed it as a problem with the hard drive and fixed it. Then, it died for good, less than a year later (warranty expired).
Since HP couldn't fix the laptop in less than two weeks and I relied on it for my freelance career, I bought a Gateway Inc. in the interim.
The Gateway still works.
The same thing happened to the HP printer I bought with the aforementioned laptop -- HP blamed Vista for the problem. Although the printer will operate, none of the laptops I now own want anything to do with it (seems to be a software issue). So it sits on my desk as a storage unit for the paper that goes into my other HP printer.
Still, I'm not dancing on HP's grave -- quite the opposite. I think HP's intention to spin off its PC business is the right move -- but not because HP is exiting PCs. I want HP to reboot the PC business so we can stop talking about the "post-PC era" or the "Apple vs. everyone else" world. Is HP right to get out of tablets and smartphones? Oh yes. But there's still opportunity in PCs. Maybe PCs will be relegated to "workstation" status -- PCs do all the heavy lifting, while tablets and smartphones sail around the world. But are PCs ready to be doorstops? Nope.
From the business standpoint, an HP PC spin-off is the right thing. HP is not only still reeling from all of the high-level subterfuge of a few years ago -- it never really did justice to the Compaq acquisition. (Check out some of the jokes circulating about the spin-off -- I'm not sure re-naming the unit Compaq is such a bad idea.) There's still a lot of legacy technology in HP's PC business, which might make for a nice patent "going out of business" sale, or as a foundation to build on.
Unfortunately, indications are that HP is scrapping PCs altogether to focus on enterprise hardware and networking. It's acquiring Autonomy Corp. for $10 billion. In doing so, HP's looking a lot like IBM. And IBM's former PC business is doing pretty well:
Lenovo Group today reported results for its first fiscal quarter ended June 30, 2011, and for the seventh consecutive quarter, Lenovo grew faster than any of the top five PC manufacturers, helping the Company to become the world’s third largest PC vendor in total shipments.
During the first quarter, Lenovo’s worldwide PC shipments grew 23.1 percent year-over-year. Comparatively, industry PC shipments increased just 2.7 percent worldwide for the same period, marking the ninth quarter in a row that Lenovo has grown faster than the industry.
Consolidated sales for the first fiscal quarter increased 15 percent year-over-year to a record of US$5.9 billion. The Company’s gross profit for the quarter increased 41 percent year-over-year, with gross margin at 12.5 percent. Operating profit for the quarter grew 51 percent year-over year to US$123 million. Operating profit margin continued to expand, even after the Company’s reinvestment in branding, R&D, and mobile Internet business to drive future growth.
You could argue the industry doesn't need another Lenovo, or a Dell, or an Acer, or _______ (fill in your preferred PC brand here). HP probably doesn't have the cash to invest in PC R&D. And could anything top the Macbook Air? I don't know. But it seems everyone has already written HP (and the PC) off, and I'm not quite there yet. Anybody else ready to rally behind HP?