HP: Rival Printers Mean No More HPs Through Dell

blamanj writes: "Dell Computer seems to have pissed off HP, with their intent to sell their own printers. HP will apparently stop supplying printers to Dell, even though the new Dell products are not yet shipping."

Comments

Smart Move.

[AtariDatacenter]

You're only giving a long-term leg-up to your competition by allowing them to smoothly and easily transition to their own product line by continuing to sell them yours. You're giving up a short-term gain for a bit of long-term hurt. Exactly what I would have done.

This whole 'coopetition' thing is just like Microsoft tries to get competitors to do. "Let us use your product and embrace it until we're ready to demolish it."

Re:bad decision

[Sc00ter]

Well look at it this way.. HP Printers sell thru dell because they're part of a package deal. To buy just the printer alone from Dell is usually more expensive.

If Dell is selling their own printers, they're going to package their printers with their systems, not HPs. So since Dell selling them standalone isn't really worth it to HP, and they're not going to be part of the package deal, they're probably not going to sell many, if any, thru Dell. So what's the point?

Re:bad decision

[Telecommando]

It's probably not as simple as that. HP probably sells printers to Dell at a discount while selling them at full price elsewhere. Now that Dell is going to compete with them in the printer market, why would HP want to give them that discount only to have Dell undercut them on their own printers in the retail market?

Where it went wrong for HP

[joneshenry]

HP's problems began well before Carly Fiorina. The critical decision was made by 1993 when HP decided that it could not afford to manufacture the next generation of processors, choosing instead to partner with Intel to develop the Itanium processor. What HP refused to admit a decade ago was that in effect it was surrendering the high-end Unix business.

By telling the world that PA-RISC was going to be phased out, HP killed any chance of growth in the high-end business. No customer with any sense would believe that a transition from PA-RISC to Itanium would not be a monumental upheaval. And if a painful transition was a certainty, why not bite the bullet and go with either Sun or IBM? The decision could not have come at a worse time with the last boom for a while in business computing just about to start.

With growth flat in what should have been a boom time, HP desperately entered the lower margin consumer PC business in order to generate more cash flow, any kind of cash flow. Unfortunately HP entered the business just as it was about to crash in turn. What was supposed to at least generate some revenue now has the prospect of unending losses.

Anyone can see that the sensible approach for HP would be to save the last of the company's crown jewels, the printer business, by simply exiting the consumer and small business PC markets, both HP and Compaq brands. This would have eliminated competing head-to-head with Dell and probably avoided provoking Dell into trying to offer Dell's own brand of printers. The only problem would have been figuring out what was left for the company to do in the computing industry. Where can HP generate profit if on the high-end the product line is dependent on the Itanium processor, especially if Intel is now selling to anyone not just the processor but also the guts of entire systems? What exactly does HP own that is unique in the computing industry? Where's the beef?

Perhaps the decline was inevitable once HP ceased to be a company of engineers who got things done. The company had reached the limits of organization. To have preserved the "HP Way" the company by the 1980s would have had to have morphed into a high-tech holding company whose "business" would have been using connections to Stanford and Berkeley to finance upstarts such as Steven Wozniak.