HP has always been one of my favourite computers brands so I was somewhat surprised by their recent announcement to spin off their PC and tablet divisions. I didn’t see this coming although maybe I should have.
HP has always had a good track record with hardware. In fact, I would always recommend HP PCs over many of the over brands due to their quality and reliability. However, as stated in their announcement, PCs are low margin devices. With the onslaught of smart devices, PCs sales will decline over the next few years as users switch over. Also, HP doesn’t have the wow factor like Apple, so they cannot charge premium prices for their hardware in the consumer market.
HP recently purchased palm so the demise of Palm’s WebOS is tragic. I am a fan of WebOS tablets as they have some nice features. Unfortunately, WebOS has issues with the speed of the devices and they are a late entrance to the tablets market. A market that is dominated by iPads and Android tablets. While HP says WebOS will live on, I think they will have a difficult task licensing it to other companies.
What we’re seeing is the beginning of a changing market and HP are just repositioning themselves with this brave step. This is a totally necessary step that other companies will have to consider for themselves. There is RIM (Blackberry) who will have to consider the PlayBook tablet if it doesn’t gain sufficient market share. There is also Dell who will also need to evaluate their PCs market as they face the same low margins as HP. There will also be others.
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