Let's hope the PC drama at Hewlett-Packard Co. (NYSE: HPQ) has played itself out for now.
Yesterday, HP made a 180-degree turn on its PC business, announcing it would not spin the $40 billion unit off after all. New CEO Meg Whitman doesn't deserve all the credit -- she had endorsed the spinoff plan earlier in her five-week-long career with HP. (See: HP Needs a Higher Bar for Whitman.)
HP's off-again, on-again relationship with its PC business has not impacted the supply chain so far. In fact, the decision to use up inventory on a last run of its TouchPad no doubt eased the oversupply situation the supply chain finds itself in as it enters the fourth quarter. (See: HP Chooses the Lesser of Two Evils.)
The real question facing HP -- as well as all other PC makers -- is the fate of the overall PC market. Supply chain executives got some guidance this week at the Electronic Components Industry Association executive conference. Len Jelinek, director and principal analyst for semiconductor manufacturing at IHS iSuppli, said the tablet fan base is still missing one significant group: IT managers. Until tablets make the transition from entertainment device to workhorse, they won't get a share of the all-important IT business budget.
"PC is still the dominant system," Jelinek told the conference. "It is still at the point where it is a computer. It sits on the desk. It computes. It needs another innovation. The desktop computer is still loved by the IT guys because they can still control the content."
HP and Acer Inc. have done well in the PC market, he said. The netbook, an attempt to change that market, started out well because of its price point. However, there were too many other choices in the market, and demand dropped off.
The ultrabook -- the super-thin notebook computer on which many component makers are pinning their hopes -- may be the form factor that lifts the PC out of the doldrums. It still faces power consumption issues, and it will have to integrate a touch screen. The ultrabook needs to be a flat tablet with all the operating power of a PC. "That could be the killer app," Jelinek says.
Will HP turn its eye toward the ultrabook? If so, it probably has a lot of catching up to do. The company is throwing all its marketing muscle behind its new suite of security services, measuring itself against IBM (which exited the PC market more than a decade ago). Still, as IHS iSuppli pointed out in September, HP sold more computers in the second quarter than any other vendor without even trying. (See: The 'Whoops' Business Strategy in the Supply Chain.)
If it applies itself fully to the next-generation PC, I wouldn't bet against HP. Its corporate mantra (I think) still is "Invent."
This sad story of a great idea rejected by Gates and Ballmer might be idea for HP, a folding two-panel book that features content creation not just content consumption. I love the idea of a thin folded two screen book with touch and pen methods, like the rejected Courier Tab from the makers of X-box.
Thanks for the post Barbara. If hey HP is decided to come up with a innovative PC product they will be in a good position in the market. If we look at the HP in PC era they had a good remark of making quality PCs.
Indeed. Credibility on a corporate level takes a long time to earn, and a great deal of effort to maintain. However, if HP stays true to its own corporate theme "invent,' we can expect to see some interesting developments in the months and years ahead.
In addition how about leveraging other non conventional energy sources- vibrational energy for instance. But I feel it all boils down to the energy storage tchnology which hasn't really come as long a way as the electronics has, still appears archaic and leads to bigger form factors and weight.
@Bolaji--agreed. Our readers make a good point about the flip-flopping coming at a price. Similar to NetFlix, HP has made a number of announcements only to backslide on them. And true, HP is right back where it began. But if it can resist the impulse to release another "me-too" product, it might have a chance down the line. It may be too little too late.
@Barbara, You are too much of an optimist. First, HP first must reinvent itself and then it can go ahead and save its varied market segments. Announcing a strategy to stay in the PC business does not represent a sea change for HP -- it was and still is in the PC business, remember. The "review"exercise of the last few months has been a waste of time and resources. The company returned to the starting point and now must confront the problems it was dodging under Apotheker. Begin again.
By its flip-flops in the business strategy , HP has lost its credibility as a blue chip company such as IBM or Apple , the companies which has always shown prudence in and longsightedness in their business strategies. IBM recognised the power of software much earlier than HP did , and hived off its PC and Laptop business. It is now the topmost leader in Software , worldwide.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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