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HP ‘Back’ in PCs: Now Invent the Ultrabook

Let's hope the PC drama at {complink 2376|Hewlett-Packard Co.} 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 {complink 38|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.”

30 comments on “HP ‘Back’ in PCs: Now Invent the Ultrabook

  1. AnalyzeThis
    October 28, 2011

    First of all, what's with all the flip-flop corporate decision making lately? First Netflix, now this??

    And IT guys love PCs more than just because they can control the content. In fact, that's not even probably in the top five reasons they are preferred: they're durable, last a ton of years, are rarely stolen/broken/lost (since they aren't mobile), versatile, easy to re-purpose, simple to repair, easily shareable amongst multiple people… the list goes on and on.

    The average office worker is not going to be issued a tablet instead of a PC anytime soon. It makes no sense. Less security, less productivity, higher cost… there really are very few reasons for your traditional enterprise to ditch PCs.

    And yes, I realize there are certain jobs in which tablets are useful (ones that place a high importance on mobility). But those positions are the exception rather than the rule in the majority of large companies outside of the service/transportation industries.

    The PC is going to be fine. HP needs to get their act together and decide what they're doing quick, though.

  2. Clairvoyant
    October 28, 2011

    I think it is a good idea that HP are keeping themselves in the PC business. However, it is concerning that they are changing their minds about this. How can consumers and stockholders have confidence in HP if they change are changing their minds? Hopefully they won't try to change their mind on their tablet decision and try to get back in the tablet market after selling all of them off at rock bottom prices.

  3. t.alex
    October 28, 2011

    Now they jump into ultrabooks. That will not make any big difference from other competitors still.

  4. Parser
    October 29, 2011

    I think that HP could team up with Amazon to make an Ultrabook by HP and have content provided by Amazon.  If these were merged with full compatibility it would make the difference to the consumers.  

  5. Taimoor Zubar
    October 29, 2011

    It's not surprising to see HP coming back into PC business. Already HP received a lot of criticism when it announced the decision to shut off its PC division. I won't be surprised if they announce to produce a new version of Touch Pad. Tablets is one other area they cannot afford to withdraw from.

  6. Anna Young
    October 29, 2011

    @Taimooz, I agree it was a wrong move on HP's management part  to have decided to ditch its PC business in the first place. This is a revenue generating business for the company. Even IHS iSuppli reported (as quoted in Barbara's post)  that in September HP sold more computers in the second quarter without even trying. well, good on HP for the U-turn.  I look forward to see Its version of the Ultrabook though.

  7. Eldredge
    October 29, 2011

    I'm glad to hear that HP is not exiting the PC business after all. It seemed like a strange decision when it was announced. Seems like they need to research their decisions a bit more before they go public.

  8. Himanshugupta
    October 29, 2011

    “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.”

    This is forward thinking while keeping the feet on the ground. I completely agree that PC business is in its downturn but new innovation in PC will help reshaping this market. The concept of ultrebook is very novel. This will help increase the battery life and shed some more weight from PCs while keeping the same functionality. 

  9. Backorder
    October 29, 2011

    This U turn is gradually appearing as a major faux pas. It seems HP made the decision in a hurry and hurried up some more to let it out in the public. I have a feeling they will be turning about on the Touchpad rollback as well.

     

  10. itguyphil
    October 29, 2011

    Great, another device to have to carry & manage. Someone will get rich inventing a carrying case that can hold a laptop, tablet, smartphone, & space for lunch.

  11. Tim Votapka
    October 29, 2011

    Nothing wrong with adapting, but flip-flopping comes with a great price. For one thing your customer base(s) begin to lose their grip on what you represent, what you stand for and what your overall position is.

  12. JADEN
    October 29, 2011

    It is good seeing HP reversed the decision to spin-off their PC division.  This has been their core business line and the most profitable to the company, PCs industry has to continue to be part of their future.

  13. Anne
    October 29, 2011

    Good news! I think this is the right decision for HP.  The former CEO really messed up with his strategy and vision.  The company lack backbone to push through in the tablet market, andhe you think the right decision was to drop the profitable PC market, that was a mess. 

  14. Taimoor Zubar
    October 30, 2011

    Flip-flopping definitely comes with a price where your stakeholders (particularly the investors) begin to lose confidence in the company's strategic plans and long-term growth. I don't think any reputable company can afford to make such haywire decisions in the long run.

  15. Susan Fourtané
    October 30, 2011

    “Someone will get rich inventing a carrying case that can hold a laptop, tablet, smartphone, & space for lunch.”

    Hi, pocharle

    You made me laugh with that. 🙂 I'm glad someone else thinks of space for lunch when thinking of a carrying case, too. What I haven't found yet is a laptop case with a specially designed space for lunch. 

    -Susan 

  16. _hm
    October 30, 2011

    It is very good news. HP has capability and there is lots of space for innovative ultrabook with low low power and many more innovative features. We wish to see some good products from HPin coming months.

     

  17. saranyatil
    October 30, 2011

    Pocharle,

    This idea is really cool and i think u need to patent this idea before some one steals just kidding. definitely with more and more gadgets coming up we need to find a solution to carry them with less effort. I would prefer something light wait.

    It would really help me because i carry 2 bags hope i can fit my lunch into the same bag .

  18. Backorder
    October 30, 2011

    Interesting thread. I doubt if I have ever seen any such bag with a specific pocket for lunch. Maybe, more than the space, we need to reduce the weight of what we carry in our bags- laptops, chargers, batteries et al. 

  19. Tim Votapka
    October 30, 2011

    If you really want to impress me, let's see an Ipod/Smartphone/Blackberry, etc. that drew power from light. Now that would be an innovation worth gold, or lithium, eh?

  20. Daniel
    October 30, 2011

    It’s a drama and game play between the top officials. I don’t think they can spin off the PC business that much easily because that’s their core business area. More over they cannot play well in software business because still they have products and suits only from earnest while Mercury. They had spend a quite some time for tablet R&D and its webOS.

  21. Himanshugupta
    October 31, 2011

    @Tvotapka, if one can develop such a technology then one will solve all the problems related to the power shortage. 

  22. prabhakar_deosthali
    October 31, 2011

    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.

  23. bolaji ojo
    October 31, 2011

    @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.

  24. Barbara Jorgensen
    October 31, 2011

    @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.

  25. Ms. Daisy
    October 31, 2011

    Barbara:

    Do we need the the ultrabook, or something totally new from HP?

  26. Backorder
    October 31, 2011

    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.

     

  27. _hm
    October 31, 2011

    May be in two to three years time, vibration and solar will charge and power mobile devices. It is not very far. Does Apple has few patents for this?

     

  28. Tim Votapka
    October 31, 2011

    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.

  29. electronics862
    October 31, 2011

    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. 

  30. SemiMike
    November 1, 2011

    http://news.cnet.com/8301-10805_3-20128013-75/the-inside-story-of-how-microsoft-killed-its-courier-tablet/?tag=TOCcarouselMain.0

    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.

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