COMMENT: Hewlett Packard is a dysfunctional company that is struggling for direction. Now they are taking on Intel with the launch of a Sleekbook which is HP’s cheap offering to an Intel Ultrabook.What’s a Sleekbook? According to HP, it’s an Ultrabook that doesn’t have Intel inside.
The new HP Envy range will include both Ultrabooks and Sleekbooks, and that’s going to be confusing for consumers.
HP’s new flagship Ultrabook is the Envy Spectre XT which looks very much like a ripoff of an Apple design.
Instead of running the Intel range of processors that have been specifically designed for a new generation of lightweight notebooks, HP has chosen AMD processors, from a Company who is losing money and struggling to compete with Intel.
While Intel has spent hundreds of millions marketing the Ultrabook brand to the benefit of all PC Companies, AMD and HP have spent very little marketing their product offering.
What both HP and AMD are trying to do is get a free marketing lift from Intel’s marketing for Ultrabooks in the hope that, when consumers walk into a store they will buy a low cost AMD Sleekbook, which is a bit like comparing a BMW with a Toyota Camry.
For decades HP has been a Company that has failed to impress; 12 months ago things were so bad that the Company decided to explore the notion of getting out of the PC business altogether.
A Company that lacks original marketing ideas, they have often been described as more public service than entrepreneurial. Prior to Apple revitalising the PC market with great design, HP sold boxes labelled as PCs with components inside. Very little was invested in smart design which is why Apple has been able to walk over them in the smartphone and tablet market.
Their first all in one PC was cumbersome, slow and more traditional PC monitor than sleek all in one PC. Their latest offering is a lot better, but a long way away from what Apple and Samsung are offering.
People aspire to own an Apple product but they don’t aspire to own a HP product for the simple reason that HP see notebooks as a commodity, as opposed to Apple who love to design technology in packaging that people want to own.
You only have to take a look at the HP web site to see the differences between their thinking: HP’s is clinical and dysfunctional while the Apple web site is inviting, well designed and informative.
HP is more software engineers and managers than creative designers.
When Meg Whitman took over the CEO role at HP recently, she called a staff meeting according to the Wall Street Journal. The engineers and managers who make up the bulk of the Company were not impressed with what their new boss had to say.
Their heads were down, and they were tapping furiously on handheld devices as they leaked her comments to the outside world.
Whitman who has been bought in to change the culture at the Company where even in Australia things have become “dire” following a humiliating series of epic stumbles last year hit out at the employees for their attitude.
Current employees – including those in Australia – have become institutionalised around the bad habits of the past.
These are same employees who failed to develop a successful tablet strategy. HP’s TouchPad was dumped after only a few weeks by stores like Harvey Norman and Best Buy, reduced to $99 in an effort to shift a backlog of stock that consumers did not want.
HP’s tablet was an unmitigated disaster. It went on sale only to be panned as ungainly, slow, and burdened with a subpar battery.
The tablet debacle came after HP management screwed up the Palm Computing acquisition as well as the expansion of the Compaq iPaq. Back in 2002 the Compaq iPaq and the Palm Pre were both acquired by HP were selling extremely well as organisers. Some of the Palm devices already had a phone built in and were the forerunners to today’s smartphones.
But as HP floundered and their engineers were unable to develop the Pre and the iPaq into the smartphone brands of today, brands like HTC, Apple and Samsung came in and stole HP’s marketshare for organisers.
The Wall Street Journal said recently that for a decade now HP has seemed more like a tawdry reality show than one of the world’s great enterprises.
The public dysfunction started with the vicious infighting over HP’s merger with Compaq in 2002, which reached its nadir when the company’s high-profile CEO, Carly Fiorina, pilloried Walter Hewlett, a board member and son of a company founder, for daring to voice his opposition to board decisions.
Out of control directors were leaking secrets to the press while the chairman of the board was hiring private investigators to obtain their phone records.
The next CEO of the Company, CEO Mark Hurd, was sacked after claims of a sexual relationship with a marketing consultant who had been an actress in porn movies.
Both parties denied there was any sex between the two.
The WSJ said that simply put, Hewlett-Packard has lost its way. The company is now in the midst of an existential crisis. It remains a behemoth, No. 10 on the Fortune 500, with $127 billion in sales last year and $7 billion in earnings.
But the trajectory is ominous. Those profits, for example, were 19% lower in 2011 than in the previous year. HP’s business is under siege on almost every front, losing market share and facing declining margins.
HP is not innovating it is copying, they don’t have the capacity to develop any bright marketing campaigns because the internal staff don’t have the skill set to recognise a great campaign even when an outside agency develops one.
Take a look at HP advertising, that is if you can find any, it is dowdy boring and more an engineering description than a benefits brand driven sell.
At HP things are going from bad to worse. Their recent WoW, the media event in China, did not impress a lot of journalists who spent time questioning the Company’s direction.
Observers claim that HP is traumatised, its employees disengaged. Internal “voice of the company” surveys revealed that morale had cratered.
HP is today a lot like Sony in that they are barely innovating. The company didn’t boast a single hit consumer product during the past decade despite 67% of its revenue coming from hardware.
Apple on the other hand has shown HP how it had should be done resulting in HP engineers trying to emulate Apple designs.
There are no iPhones or iPads in HP’s bland array of products for the simple reason that their management weren’t smart enough to recognise what consumers wanted moving into this decade.
Faced with pressures on every side, HP is now seeing their numbers slide.
At one stage things got so desperate inside HP as the Company tried to cut costs that it bordered on ridiculous employees claim.
Not long ago the headquarters of HP did not have Wi-Fi. At one US office in Colorado the lights shut off automatically at 6 p.m. every day, effectively forcing workers to go home. An intrepid few brought their own lamps to the office, only to be scolded by facilities managers, who told them to remove the lights.
Spiders fell from cracked ceilings. As the company cut back on trash pickups, detritus piled up, and in one location workers took garbage home in their cars.
Last year HP announced that they were looking to get out of the OC market.
The announcement on Aug. 18, 2011, rocked the tech world. It contained two big pieces of news, the possible PC spinoff, and word that HP was officially ending its multibillion-dollar tablet initiative.
Customers, investors, employees, and the financial press were all aghast. HP, it seemed, had gone mad. Shares plunged 20% the following day.
Now HP is having another crack at improving their market share in the PC market. Globally the Company is struggling. HP’s first-quarter results were even worse than expected, sending shares skidding.
In a call to discuss those earnings, CEO Whitman’s confirmed that HP is keeping its PC group.
She said couldn’t be spun out, without inflicting significant damage on HP’s other businesses.
What happens from here is anyone’s guess, but one thing you can bank on and is that HP is not going to deliver a breakthrough product that brands like Samsung and Apple take notice of.
