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HP Rethinking Wisdom of Spinning Off PC Division
bdking writes "After signing off on former CEO Leo Apotheker's proposal to spin off or sell HP's personal computer unit, the company's braintrust is reassessing the wisdom of dumping a division that contributes nearly 30% of revenue and holds together a valuable supply chain."
HP appears concerned not so much for the revenue generated by PC hardware, but instead by access to various distribution and supply channels. It seems that just announcing a spin-off has affected their access to retail distributors.
I won't purchase an HP device (didn't before, either) and don't recommend them to friends and family (didn't then, either). This is just reinforcement of my beliefs. Who wants to own a device, that the manufacturer doesn't want themselves?
Time to reboot and upgrade the kernel or something.
Did I miss something? Is HP begin run by Reed Hastings now?
-dZ.
Carol vs. Ghost
Fire the board, they showed their stripes years ago with Carly, and again with other bungled decisions. They have got to be the most incompetent board for any company of their size in the world. The board lost the HP way long ago, and it hasn't changed that much since then.
The whole rotting thing has got to go and the culture has to restored from the top. Nothing less will do.
Thats what happens when mbas take over running of corporations. Everything is geared towards teaching of maximizing profit minimizing costs in those programs in ultimate end, and even if some programs incorporate engineering concepts like systems management and so on, the mba types eventually lack on strategic planning and vision.
flop. thats what you get if you hire too much suits or put them in charge.
Read radical news here
When HP absorbed EDS they thought they'd finally be able to compete in the lucrative snake oil business of large scale "consulting" (a la IBM), but after a massive reorg and an almost precision extraction of any talent prevalent in the EDS husk they're left with nothing but the most clueless of drabs.
To watch them flail around and try to bail out of this self-inflicted situation by dumping their hardware division has been entertaining.
When it comes to HP, they're already in such bad shape that a loss in revenue might actually save the company.
Back when the PC business was mostly Compaq, they made systems that needed all manner of proprietary components. If they have other products which rely on that supply chain they're so deep in the doo-doo that they won't climb out. But the CEO shouldn't worry because even getting fired from that job is more lucrative than many others are.
These CEOs are obviously worth hundreds of times what a "normal" employee makes. We should pay them more for their outstanding decision making skills. Also looking at you, Reed Hastings.
giggity
HP made their own version of a "I'm a Mac" ad, but you can only find it on the kind of sites that show videos of shit like a guy cutting off his own penis.
I'm sure everyone has their opinion, but after throwing away a bunch of $2000 HP printers in the last year, we've had enough.
I started buying Xerox and Oki printers and so far, they have been fantastic. The Okis in particular seem to be built well enough to take a bullet, and the toner cartridges are huge compared to an equivalent HP printer, yet they are priced about the same.
I think we are done with HP forever at this point.
That `thinking' has application to the industrial base of the entire US. Any given tire shop owner could have explained it to them, but hey, better late than never.
How much of that revenue comes from the huge bundle of pre-installed of demos?
However, their PC tower at a big box store was competitive priced compared with a generic import computer store.
Generally I don't support HP, tho I was very impressed with the Green packaging a friends new printer came with.. no plastic wrappers, instead it all was packaged in a re-usable shopping totebag and accessory pouch.
shut it down and give the money back to the shareholders.
"In America, first you get the sugar, then you get the power, then you get the women..." -H. Simpson
Dumbass MBAs all over again.
No effing clue about the industry they are in.
Brain trust? If I was making decisions like this for a company, I would *THINK* about the effects of the change and how that affects other parts of the company. I would do this *in advance*. Its a little like playing chess, where a player is at least one move ahead of his opponent, and if that player wanted to really be part of a 'brain trust' it would be playing 3-4 moves ahead of his competitor. Tinkering and poking means people have no clue as to how to determine outcomes, nor do they have any abilities to run non-destructive scenarios to determine the outcomes if there are too many variables to keep track in their heads. Instead they poke with live data (the company) and that means they are losing jobs and burning money.
The power of HP is the distribution channel! To have a strong channel, it needs to be moving volume. How did they get to be the leaders in laser printers? It wasn't technology. They've been essentially outsourcing Canon laser printers for over 25 years. Seriously. Look at a LaserJet I or II. The housings aren't even different from other companies also outsourcing from Canon at that time. Yet, they owned the segment from the beginning. Why? The distribution channel. Plain and simple.
I just got an email from HP about this. HP's Personal Systems Group is the #1 PC maker on the planet, and that won't change. I can assure you our future is brighter than ever. Spirit of a Startup Our preferred course to harness our vision of the future is to build a separate, more agile company. It's time to think like a startup again. It's time to be nimble and revolutionary. It's time again for world-changing innovation. And so, it's time we realized we're at a crossroads in an evolving HP. But don't misunderstand: We-the same great folks who make HP PCs today-will make them tomorrow. We will continue to build on our legacy creating reliable, stylish, and high-performance PCs to improve your personal and professional life.
Well, somebody has to use the Quikster name, might as well be them.
I'm sure everyone has their opinion, but after throwing away a bunch of $2000 HP printers in the last year, we've had enough.
I started buying Xerox and Oki printers and so far, they have been fantastic.
Your timing is prescient - all of our HP printers were recently replaced by Xerox machines at my workplace. They do put out some nice prints, although I wouldn't say they are better than the HP ones. I'm fairly insensitive to print-quality -- however, yesterday at a meeting with some clients that rarely see print-outs from my office, someone asked if we had just gotten new printers.
Anyway -- I have noticed that what I would call our Xerox "workgroup-class" printers are really loud. The analogy "It sounds like it's barfing a sheet of paper at a time" was used by two different people on two different occasions.
Especially Best Buy which is, I'm sure, a not insignificant partner. After the complete abortion that was Touchpad, retail stores are going to be hesitant about stocking up on product. HP shipped units to them, then almost immediately tanked the price and ran.
--- Do you believe in the day?
the company's braintrust is reassessing the wisdom of dumping a division that contributes nearly 30% of revenue and holds together a valuable supply chain.
Not to mention a significant chunk of jobs. We have enough unemployed (read: competition to get a job) as it is, thanks.
What do I know, I'm just an idiot, right?
Comment removed based on user account deletion
I'm not going to belabor the point that the spin off wasn't a good idea. The problem now is that they're coming off as indecisive, unsure, rudderless, out of control, pick your metaphor.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
Lastly, Win 8 finally appears to be an upgrade that may finally pry people off Win XP and truly offer integration across smartphone, tablet, laptop, desktop and gaming (xbox).
Uh, what?
XP laptop and desktop users are waiting out Windows 7 so they can 'upgrade' to a crappy tablet interface?
That's some good stuff you're smoking.
I see a lot of really strange business trends going on. It seems so many companies are announcing terribly thought out decisions, and then reversing their opinion, and an entirely different set are content to do nothing but play a game with patents, where nobody builds or designs anything anymore, they just collect up the patents and sue people who actually are building and designing things. Why does this feel like some really weird corporate-hijinks fiction novel we're living in?
Another satisfied Brother user. The designed-to-be-refilled toner cartridges are great.
As for linux drivers, I find that's always the tip of the iceberg. Lack of linux drivers is an excellent indicator that windows versions get drop FAST, and crappy drivers in general. Canon, I'm looking at you.
HP has always had extremely poor support at the consumer level, IMO. I remember about 10 years ago I wanted to buy a replacement Li-Ion battery for the OEM NiMH that came with my HP. With credit card and HP part number and SKU in hand, I called the HP store. I was transferred to literally 5 different people before I just gave up. I never did get a new battery, living with the ~40 minute degraded life of the NiMH for the next couple months.
I've had great success with their printers, though. I still think at the mid-to-high business end, they're very solid machines. I recently worked at an office that used Ricoh's, and never again with I touch Ricoh printers. They can't even get simply LDAP right...
HP's best products are its laser printers. Its most profitable products are probably its inkjet cartridges. If HP spins off its PC business it's going to have a harder time selling its laser printers and inkjet cartridge cartridges (aka printers).
Brain trust? If I was making decisions like this for a company, I would *THINK* about the effects of the change and how that affects other parts of the company. I would do this *in advance*.
This is why you're not a billionaire hedge-fund manager.
Thats what happens when engineers take over running of corporation. Everything is geared towards teaching of maximizing profit minimizing costs in those programs in ultimate end, and even if some programs incorporate business concepts like systems management and so on, the engineers types eventually lack on strategic planning and vision.
The PC business is a tough business to be in. You have a lot of competition. Dell, Lenovo, Apple. The home consumer market is more willing to hold on to their PC for 2 more years and get themselves an iPad or a smart phone. So what is this strategic plan of keeping desktops to the future? There isn't really much. You might as drop it to a smaller firm who will nurture it more, and try to really fit in the niche market segment.
As I am using a Lenovo Think Pad right now, I have to say IBM is happy, Lenovo is happy, and the people who made the transitions from IBM to Lenovo are happy. The problem is sometimes companies get too diverse, and need to sell off units that they are distracting from their core business or perhaps may be hindering it mind share.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Someone else has always made the printers from the beginning. Typically Canon. The LaserJet I and II even had the same housings as competitors, because they were all using the stock Canon housings.
LaserJet I: http://www.printerworks.com/Catalogs/SX-Catalog/SX-Images/HP_LaserJet-II.jpg
QMS SmartWriter: http://www.printerworks.com/Catalogs/CX-Catalog/CX-Images/QMS_SmartWriter.gif
LaserJet II: http://www.printerworks.com/Catalogs/SX-Catalog/SX-Images/HP_LaserJet-II.jpg ...and the Canon version: http://www.printerworks.com/Catalogs/SX-Catalog/SX-LBP_8II-8IIT-8IIR.html
Here's a list of first generation Canon products. Lots of small players:
http://www.fixyourownprinter.com/reference/pcr/engine/1311
HP's power is the channel. To my knowledge, HP has never manufactured, nor designed, the engine of a single LaserJet ever. That's almost always Canon, and has been since the beginning.
...with fire. And put through a wood chipper. Makes using networked HP printers, which we've used for decades, pure hell.
Never let a lack of data get in the way of a good rant.
After getting tired of screwing around building PCs from parts I decided to get one of the hp ready to ship models. I'm quite satisfied. It was easy to set up, runs every game I want to play and is stable. I also had one of their TouchSmart all-in-one models (where the computer is built into a touch screen). It was quite nice but someone stole it. The point is, hp does have some good products coming out of the PC division. It would be stupid to let it go just because margins are small.
We buy oodles of them. A shipment of ten every week or so. We clone them and crank them and prep them and deploy them in a neverending cycle to keep our clients (many of whom are also growing) up to date with decent machines. Their business class desktops are reliable little workhorses, and my office was nervously considering the prospects of what we would have to do if the supply of HP boxes disappeared. I volunteered to hand build machines from kits, but I don't think my boss took me seriously.
Occasionally living proof of the Ballmer peak.
Don't even joke about that!!
Never let a lack of data get in the way of a good rant.
When I heard they were "considering" spinning off their PC division my first thought was...Guess who's sales of PC electronics just took a nose dive? Sure their margins are razor thin but they had sales. Who wants to buy a product that may not be supported in 6 mo. because the company that made it no longer supports it. Granted hp does that now but the consumer has the illusion of a supporting company. I've watched hp squander opportunity after opportunity. Perhaps it's the Digital Equipment Corporation curse. DEC floundered and it's carcass was purchased by Compaq in 1998. It gave Compaq indigestion and they were swallowed by hp in 2002. Now hp is circling the drain.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
They started as a gadget company - lab devices. They got into printers. then computers. Then software services after buying DEC and EDS. I presume they were emulating IBM which moved mostly our of hardware into integrated services.
I refuse to buy a printer that doesn't support postscript. Who needs vendor-specific drivers when there have been standardized page-layout languages for decades?
I do not fail; I succeed at finding out what does not work.
Yep. As far as I'm concerned the best part of HP was spun off long ago.
WTF? Seriously? Is there some kind of legitimate fear that stores that can't sell HPs crappy PC's will stop selling their crappy printers? The other major printer companies don't sell PC's, and they seem to be doing just fine.
Yes, because HP has shown themselves to be masters of the art of running a business....
I thought we were discussing buying a HP computer not HP stock? If they build a decent PC its an option, who cares about the boardroom/c-suite antics. Many computers are purchased from local white box PC clone shops. How likely are they to be around next year, yet they seem to remain an option.
That said, it is terribly sad to be thinking of HP in this way.
Haha.
I am really amazed how management do not look for direct and indirect synergies between products and products.
- Apple has mastered this.
- HP is obviously oblivious to this.
- Google understands this but thinks their simple google search page must be a consistent theme across their entire landscape.
- Microsoft is trying to find what sticks and is very quick to kill its products. (To Zune or not to Zune, etc).
We live in an age where one manufacturer can now dominate the entire global market. When you realise this, you understand why Apple and Samsung are now at each others throats locked in an eternal live/or/die grip. I believe the religious Google v.s. Microsoft war will die down a little as Apple has taken centre stage.
So... My point. This was an arbitrary move by HP especially since they are the only large player who is in a position to find synergy between their desktop and enterprise environments to find an advantage over its competitors in the enterprise space (IBM, etc). Google will do this with its Chromebook.
I had the HP6L and that thing was a workhorse for almost 10 years. My newer HP laser printers are very solid but some don't have Mac drivers.
HP laptops on the other hand only last a little bit longer than the warranty period. They tend to overheat and fail almost as much as Acers from my experience.
HP EliteBook 8740w is still my favoured desktop replacement PC, at least since Sony discontinued their AR and AW ranges. Are there any other non-widescreen portable workstations out there? And is EliteBook as good as it looks?
What else can be said. Walk away from a division that provides 30% of your income and which brings the higher end business to your door? Greedy losers must expect 100% profit margins.
Yeah, yeah, yeah 30% revenue, supply chain and channels of communication... Well it is not a serious problem. Easily solved by firing the CEO, pay for his/her golden parachute and then hiring another hot-shot CEO with a bigger parachute.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Seriously, HP would be better off bringing back manufacturing to the states and getting control of their pipelines. By doing what IBM, and Dell did, they will see that they lose the ability to compete with Chinese companies that simply steal the tech and idea. However, if HP brings it back, they gain control. To br
I prefer the "u" in honour as it seems to be missing these days.
Uh, what?
XP laptop and desktop users are waiting out Windows 7 so they can 'upgrade' to a crappy tablet interface?
That's some good stuff you're smoking.
Exactly. If people didn't move to Win 7, they're not moving. The only thing that will get people off Win XP is driver support.
Advice: on VPS providers
Odd, I find that using the single Universal print driver simplifies the use of hundreds of printers on thousands of desktops.
driver support.
Read: Forced upgrades due to lack of driver support.
All the world's a CPU, and all the men and women merely AI agents
not only will they make it through, they'll be less top-heavy and more bouyant in the end.
i mean, why should they rethink it? they're going to revolutionize computing in two years. shouldn't the focus be on getting existing warehouse and/or factory space down to bare minimal and ready to process memristor based components? they can get ahead of the game by cleaning out and retooling right now.
i wish i had the money to invest. surely remarks such as they're making will drive down the value of their stock, and they'll have another opportunity to only have shareholders on who are genuinely interested in the product and who know what they're got their hands on. this will make them smarter long-term investors who are more likely to hold onto their stock during mild troubles.
it's a great strategy, if that's what they're doing. it should be a model for the future: being honestly concerned about one's own business decisions, in front of everyone. the whole "don't lose your cool" presence has........ strained...... things.
"Stratigraphically the origin of agriculture and thermonuclear destruction will appear essentially simultaneous" -- Lee
If it does not support the PostScript Universal Printer Driver, they cut corners on the printer and you are gonna get bit.
There is no right to feel safe thru security vaudeville at the expense of everyone's freedom, privacy and tax money.
These guys are making decisions that seem ridiculous on their face, and flip flop them weeks later.
Is this a consequence of the decline of American education finally reaching the CEO-aged generation? Or are these people just idiots that will believe anything Excel or PowerPoint tells them?
but systems management is an engineering discipline and field. please dont try to bullshit your way with stuff you dont know. it was only in mid 90s that the mba programs started to include systems management.
Read radical news here
In the previous HP article
Is it just me or does HP look like a fish laying on the dirt, flailing around gulping for non-existant water?
HP must be confusing the meaning of the word "wisdom"
A few months ago, Harvey Norman (a large Australian Retail Chain - think Best Buy down under) had an exclusive on the HP TouchPads.
They were going for a big Push on the weekend, with discounts of over $100 off List price. They had billboards at Bus Stops and had reserved prime advertising space in the big Daily Newspapers for Friday, Saturday and Sunday.
On the Thursday before, Leo killed the Touchpad.
The Harvey Norman group decided to retaliate by selling their entire stock of HP Products at Cost. They replaced their Newspaper Ads with iPad Ads including the slogan "The only Tablet you would want to buy". They also surplussed other electronic goods at or below cost price. (I picked up a Sony Blu-Ray player for less that AU$100.00).
Innovation extends beyond slapping different plastic on the same old products. At least they are honest enough to admit they are not capable of actual innovation.
People who pay the extra money for a name brand PC with warranty and support wish for the company to be around, and to be able to provide future product care. If HP's executives no longer know how to run a business, that raises serious concerns for PC buyers (and enterprise ones too)
There are toner page counters in the high-end stuff. It's how the consumables monitoring/reporting works, and that's good to have. It's just the printer firmware doesn't refuse to work once the page count exceeds the rated life.
dragonhawk@iname.microsoft.com
I do not like Microsoft. Remove them from my email address.
Somewhere in China there's a factory that makes the internals for ALL cheap printers and depending on incoming orders puts them in a slightly different case and slaps a different sticker on the box.
While there are some shared laser print engines, I've also seen quite a bit of differentiation.
For example, Espon's inkjets don't appear to share much of anything with HP. The carriage is a very different design, the paper feed mechanism is a different layout, the control software has nothing in common, and the drivers are night-and-day different. HP's drivers are hundreds of megabytes and buggier than Maine in June; Epson's are 3-5 MB and are well-behaved.
Or compare HP's laser printers with Lexmark. Lexmark uses a two-piece design for consumables (separate toner and photodrum), while HP uses a single cartridge for both. Again, HP's driver is bloated and unstable; Lexmark's is compact and unobtrusive.
Now, they might well all be assembled in the same factory in Malaysia, but if so, it's out of different parts.
dragonhawk@iname.microsoft.com
I do not like Microsoft. Remove them from my email address.
Strikes me as simple as that.
AT&T is running continuous ads on local radio supporting its merger with T-Mobile. They say that 96K jobs will be created. I don't buy the number, but it leaves out how many jobs will be lost by the merger.
Ask who is enriched by the merger. Who is enriched by the lost jobs and reduced competition.
The real problem here isn't HP's rudderless vision, or the mediocrity that has set in, or any other factor other than...
The Board of Directors.
Fire the fuckers. Seriously. A fish stinks from the head, and the Board is about as close as you're gonna get to Carp-head. They're the ones that have authorized every bone-headed maneuver in this little trail of broken tears. First iCarly, then Mr. "I Fuck Secretaries", and finally the Tuetonic Uber-munchkin from Hell(tm). Are you kidding me? What the fuck are you guys smoking on the weekends? And you do know that it's laced with rat poison, right?
You really want to turn HP around? After getting rid of the board, appoint an intern board. Then sell a 30% stake of the company to the employees. Why? Because suddenly their ass is on the line. You want to keep that bland, faceless, cushy job? Better get cracking and make it profitable, because if you can't get a profit, then hey, that's YOUR FUCKING MONEY YOU JUST BLEW YOU DIPSHIT. With regard to their PC division, the real problem here is that there are about umpteen-zillion different fucking models of the same box. Narrow it down a bit - by a bit, I mean, less than 10 models for business, and less than 10 models for consumer use. Not having to stockpile a shitload of plastic injection molds will go a LONG ways towards doing what really needs to be done, and that's standardizing on set parts. A limited part list means you can negotiate more in bulk, drive costs down further, and have repair/spare parts from the same stockpile. Get the laptop designers to follow suit - why the fuck do we need 20+ different flavors of laptop? 5 consumer and 5 business models would be MORE than enough. Get rid of the General Motors "we make a zillion models out of the same pieces of shit" mentality and you suddenly have room to start looking at what you're doing, which means each model is carefully designed because you can suddenly throw more resources into that process. While we are at it, get those industrial designers to work. Stop throwing unneeded shit into the products because some focus group says they might use it 3% of the time. Focus on quality, aesthetics, durability, oh hell yeah I said durability, because the defect rate for computers at the retail level is insanely high compared to any other kind of manufacturing, and each return is a miniature version of "you suck turds at building things, and this is proof of that failure". Tell the bean-counters that they still have the power to determine divisional budgets...but then tell them they don't have the power to decide how it will be designed, engineered, or built, because they clearly don't know how to do any of those. Let your designers, engineers, and manufacturing people do what they know best. Stop making accountants into what they are not. Get on the horn and tell the WebOS people they need to produce a device that is FCC-ready in 5 months, or kiss it goodbye. Tell the newly-aquired software division that they work for us, not the other way around, so better get puckered up for ass-kissing pronto.
Better yet, just hire me. For fuck's sake, I could whip the fuckers into line in 90 days. Don't believe me? Just give me those 90 and I'll turn HP into the 800lb gorilla it was meant to be, instead of some skinny Bonobo fucker flinging monkey crap. Hell, pay me just $1 a year, and I only get $100,000 in stock options every quarter (but only if the quarter was profitable), but do pay my living expenses. No, by living expenses I don't mean I am arriving to work in a fucked up expensive sports car. Yes, I will drive the same used 8-year-old-car every day. I will need food and a place to live, utilities, and unfortunately an internet connection of some kind because I'm gonna be working my ass off from home and work both. So that's what, about $80,000/year for everything (including standard health benefits, etc.)? Big savings over the multi-million dollar idiots that keep getting hired. That, and when I meet other executives, I can
Since HP OEMs its PCs, what difference does it make?
we finally got rid of them when Oracle sh|tcanned them after the Sun purchase. It's bad enough that we have to deal with them as customers!
I just want to see a new phone coming to HP period. Here is my wish list to Meg Whitman:
http://www.palmunlocker.com/blogs/news/4137212-webos-4-0-will-new-hp-ceo-whitman-reinvent-webos