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HP is Tech's New Top Dog?

Posted by ryuzaki0 on from the top-of-the-heap dept.

bart_scriv writes "BusinessWeek argues that HP is the new Big Blue: 'Now, tech is about to get a new biggest behemoth. It's HP. The Palo Alto, Calif., PC and printer giant had higher sales than IBM last quarter, and analysts project it will finish 2006 with greater annual sales than Big Blue for the first time ever: $91 billion for HP vs. $90.5 billion for IBM. The reason HP pulled ahead is simple: IBM last year sold off its $11 billion PC business to Lenovo Group Ltd. But, because the companies have chosen fundamentally different paths, with HP aggressively going after consumers while IBM focuses on corporations, HP is expected to grow faster than IBM in coming years. Since both use blue in their logos, you might say there's a new Big Blue in the house.'"

10 of 192 comments (clear)

  1. Carly, carly, carly... by penguinstorm · · Score: 5, Insightful

    If this is true, you think Carly Fiorina will feel vindicated?

    She was certainly vilified when they ran her out of the corner office. If it turns out that her years were the ones that built the foundation on which a renewed greatness was built, will anybody remember?

    --
    Skot Nelson music is my saviour / i was maimed by rock and roll
    1. Re:Carly, carly, carly... by Retric · · Score: 5, Insightful

      I don't think HP is doing better than IBM. IBM is doing a lot of high margin sales where HP is doing slightly higher volume low profit sales.

      Which would you like to have a 40% profit on 1 billion or a 1.4% profit on 10 billion in sales?

    2. Re:Carly, carly, carly... by demachina · · Score: 4, Insightful

      No :)

      Carly had reached the point that she was a perpetual distraction, everyone was talking about her more than HP, so I would be inclined to say HP is doing better because she is gone. She was a one women wrecking crew for morale at HP, and her blatant elitism is offensive to most. In particular employees hated her when she was laying them off but buying Gulfstreams, having HP pay to move her yacht from East to West coast, and on perpetual company funded jet setting trips with celebrities mostly to build her political career. She acted more like a Duchess than a business person.

      Her most famous quote "There is no job that is America's God-given right anymore. We all have to compete for jobs.", while probably true is a purely stupid thing for a CEO of an American company, with American workers, dependent on sales to a lot of American geeks to say out loud.

      --
      @de_machina
    3. Re:Carly, carly, carly... by kfg · · Score: 3, Insightful

      Yeah, yeah, they're losing money on each sale, but they're gonna make it up on volume.

      I don't know where people get the idea that sales matter much. Profit is the point of business. Go talk to Amazon about it. $9 billion in sales last year, but they would have been better off stuffing their money into Certificates of Deposit. I know people with salaries higher than Amazon's earnings and they're only considered upper middle class these days.

      I'd invest in the local video outlet with sales of only $9 million before I'd dump money into Amazon, because they're more profitable.

      KFG

  2. So let me get this straight... by PCM2 · · Score: 4, Insightful
    From my read of TFA:
    1. IBM is an enterprise IT company, HP is going after consumers.
    2. Margins on consumer technology are razor thin.
    3. Fortunately, HP has created a printer business with huge margins on ink jet cartridges etc.
    4. ???
    5. HP Profits, IBM quakes in its boots.

    I don't see a lot of "new era for HP" in this story, nor do I see a lot of strategy for success. What I do see is that HP, which was once one of the leaders in technology R&D, has settled into a role where it's fundamentally a printer company.

    Am I missing something?

    --
    Breakfast served all day!
  3. Only one Big Blue by DrWho520 · · Score: 3, Insightful

    There will only ever be one Big Blue. If IBM wants to solve a problem, IBM finds a way to solve the problem. When HP builds a computer can beat a Grand Master at chess, then they can be the Big P.

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    The cancel button is your friend. Do not hesitate to use it.
  4. If your were going to a technology based war.... by Crizzam · · Score: 3, Insightful
    who would you want on your side?

    HP or IBM?

    Personally, IBM research and development puts me in a constant state of awe. I believe they have some of the most brilliant minds in the world pushing the boundries of science. Maybe thier end products don't always reflect the level of R&D invested, but don't kid yourself... the last thing HP wants is IBM's full, undivided attention at it's market share.

    IBM's strength is in it's diversity. Just because they cut PC's to Lenovo doesn't mean anything about the future of the companies presence in the future technology market.

    Remember this little gem?..... http://www.research.ibm.com/quantuminfo/teleportat ion/index.html

  5. Re:B.I.G. by GogglesPisano · · Score: 3, Insightful

    Not sure what to make of the rather incomprehensible parent comment, but I do have a hard time waxing poetic on Carly Fiorina.

    "There is no job that is America's God-given right anymore." - Carly Fiorina

    While working in Manhattan I saw two entire floors' worth of HP staff become unemployed with a stroke of Carly's pen. At the same time she was eliminating and/or offshoring thousands of US tech jobs, Carly Fiorina and her ilk were cruising around in Jetstreams and luxury yachts, hobnobbing with celebrities and politicians. She epitomizes the grasping callousness, hypocrisy and greed that permeates the top levels of corporate America.

  6. Re:Danger for HP by sasami · · Score: 3, Insightful

    30 MB? try 300 MB for newer ones.

    It actually is 30MB... of RAM!

    Our HP Color Laserjet 2550L has, as many devices do, a web-based interface. Except this printer has no network support. How, then, does it have a web interface?

    Because the driver installs a web server on your machine!

    And guess what? The web server is written in Java! So the driver installs Java on your machine!

    Of course, they both autostart as services. That's well over thirty megabytes of RAM, consumed constantly, to support what looks like a 45k HTML web app with a trivial USB backend to talk to the printer.

    Utterly, utterly despicable.

    --
    Dum de dum.

    --
    Freedom is not the license to do what we like, it is the power to do what we ought.
  7. Cute article but HP still looses by uarch · · Score: 3, Insightful

    1) That article is based on estimates. We'll see what happens at the end of the year.

    2) If I sold a $100 lead weight to everyone on the planet would it make me a technology leader? Sales is an arbitrary statistic and probably one of the worst. Why not use profit margin or return on investment?
    IBM
    Profitability
    Profit Margin (ttm): 9.27%
    Operating Margin (ttm): 13.72%
    Management Effectiveness
    Return on Assets (ttm): 7.35%
    Return on Equity (ttm): 26.48%

    HP
    Profitability
    Profit Margin (ttm): 4.07%
    Operating Margin (ttm): 6.56%
    Management Effectiveness
    Return on Assets (ttm): 4.96%
    Return on Equity (ttm): 9.61%

    3) How about patents?
    According to the US Patent and Trademark Office (USPTO), IBM earned 2,941 patents last year (2005), more than any other company. This is 13th consecutive year IBM has led the nation's patent production.

    4) How about leading-edge custom processor design. IBM owns this generation of game consoles (Wii, ps3, xbox360 processors are all being designed at IBM). Why? IBM has an entire service organization that will build you your very own custom processor and will let you be as hands-on or as hands-off as you want. And they win awards for doing it!
    • IEEE ACE - Design Team of the Year: IBM & Microsoft - Xbox 360
    • IEEE Spectrum - Emerging Technology: IBM/Sony/Toshiba - Cell