HP split will force PC group to learn discipline or face irrelevance

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If you want to know how HP’s split into two companies will affect the PC and consumer business, don’t ask HP.

The company has offered only vague statements, promising more “focus, financial resources and flexibility” for each entity, and “a strong roadmap into the most exciting new technologies like 3D printing and new computing experiences.”

So for now, here’s a proposal: Let’s see HP walk the talk with fewer dead-end experiments, and more products that actually matter.

In the last five years, the boldest thing HP did was acquire Palm and its WebOS operating system. The attempt to entwine hardware and software better was a good idea in theory, but the plan failed miserably as HP struggled with identity crises and management foibles. When current CEO Meg Whitman took over, she turned WebOS into an open-source project and eventually sold it to LG.

Since then, HP’s personal computing division has been floating with the breeze. In addition to pumping out the usual laptops and desktops, the company—like most other hardware makers—has dabbled in 2-in-1 Windows PCs, Chromebooks, Android tablets, and Android laptops, and is now part of the first wave of dirt-cheap Windows PCs.

But none of those efforts have produced anything that HP’s PC-making rivals have been eager to follow. HP has simply ridden the wave of the broader PC market, which declined in recent years but is now starting to stabilize.

Making waves versus riding the wave

Maybe HP should look to rival Lenovo—now the world’s largest PC maker—as an example of how to stay relevant. The company’s PC sales have grown consistently even as the rest of the market faltered. Its popular Yoga convertible PC has been imitated by other PC makers (including HP). At the same time, Lenovo has made big gains in smartphone sales overseas, and a purchase of Motorola, whose latest Android phones have received critical acclaim, gives it entree into the U.S. market. HP has avoided the smartphone market entirely.

Stephen Baker, an analyst for The NPD Group, doesn’t expect major changes from a split HP. “I think the future of the market is lots and lots of different form factors and this doesn’t really impact that,” he said.

HP's record with diversifying its product line, however, is full of one-off experiments that were abandoned when they didn’t immediately click with customers. For instance, instead of iterating on ideas like the Slatebook X2—an Android hybrid that was promising despite problems—HP simply walked away from the concept. We’ll never know whether HP really believed in the idea or was just throwing spaghetti at the wall.

The new HP Inc. needs to tell customers what it believes in and how it can make a difference. The passing mention of 3D printing isn't much to go on—and NPD's Baker is skeptical, saying that “you’re going to need a microscope to find sales of 3D printers” in a company of HP’s size.

Perhaps HP has a grand plan that it has yet to reveal. But if all the talk of focus and flexibility translates to more unambitious floating with the current, it’ll be a disappointment.

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