HP’s New 32 GB TouchPad for $149: Will Downfall Result In Sale Out Of PC Unit ?

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Today, HP has released a Notice that company’s supply of touchpad has been spent, and there will no further shipment from HP online store. However, some retailers shall have some stock available but company’s online inventory is depleted. HP has announced that it has succeeded to liquidate its inventory of 16 GB WebOS-based touchpad by dropping its price tag from $500 to $99. Today, Best Buy announced that the new HP touchpad – 32 GB – will be available for online and store sale at $149, beginning from Nov 1 and Nov 4 respectively.

On 27 October, HP announced that, despite considerations to the contrary, the company keeps its PC manufacturing business under the HP umbrella, and will continue to produce PCs. The CEO of the company- Meg Whiteman –said, “It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees. One of my observations is that HP tries to do a lot of things and I am big believer in doing a small number of things really, really well — set them up, knock them down, set them up, knock them down”.

The board of directors is confident that PSG can drive profitable growth for the company and accelerate solutions for other parts of HP’s business. Presently, PSG is a key component of HP’s strategy to maintain everlasting relationship with consumers and enterprise.

Thursday, HP announced, they will released at least one window 8-based tablets in the next year. But the future of its mobile operating system (WebOS) remains uncertain.

HP needs to be in tablet business and certainly the company is going to be there with Window 8. Therefore it is going to make a decision about the long-term future of WebOS within HP over next couple of months.

So what made HP to pass such extensive explanation on above issues? The announcement, came on August 18, stumbled the world that Hewlett-Packard would be discontinuing development on its webOS platform. Shockingly, the world’s number one PC maker was acting to shut its door, and, probably, was looking for someone to buy its personal systems group (PSG) – responsible for all consumers PCs, business PCs, handheld products like pocket PC, and TV-related devices like MediaSmart TVs and DVR products.

The impact of such report was very extensive and made Apple the number one PC manufacturer with its line-up of Mac computers and massive success of iPad.  Apple secured  21.1 percent share of the global PC market in Q2 2011, while HP slipped to the number two spot, moved down to 9.7 million PCs in the second quarter.

That’s when HP planned to relieve its PC division because they understood; it won’t be benefitted in future. Apparently, HP initiated to interbreed with the PC space and Smartphone space, and its traditional PC sales was stagnated (down 2 percent in Q2 2011). Although, it’s printing, enterprise, software, and services businesses created higher profit potential than PCs and tablets.

Two year ago, HP paid $1.2 billion to purchase Palm for WebOS because it saw great future in WebOS , but failed to modulate on the platform. In February 2011, HP announced three new WebOS devices- HP Veer, HP Touchpad, and Palm Pre 3. Unfortunately, company has dissolved its plan todays due to failure of HP Veer and HP touchpad.

However, it’s not the first time in the history of any device manufacturing company. In 2005, IBM made the decision to sell off its PC business to a Chinese company called Lenovo for $1.75 billion – at the time when IBM was at number three consumer PC manufacturer in the US. IBM saw a brighter and more profitable future in the world of enterprise, computing architecture, and a number of other business and government related projects. Currently, Lenovo is the number five PC maker with 7.5 percent of the market share, $4.8 million in Q2 2011 sales and 9.7 percent of total market share in 2010; compare to IBM’s 5.5 percent market share back in 2004.

So who will be possible best suit buyer for HP’s computer hardware business ? Who will step up and buy the said unit of PC giant? Definitely, the presumption would be one of HP’s competitors, like Dell, Acer, Lenovo, and Toshiba who could be interested in acquiring HP’s major arm. After all, in 2002, HP proved himself as world number one PC maker with its purchase of Compaq computers. Compaq remained number one manufacturer from 1996 to 2000. By 2006, HP had taken back the top spot from Dell.

The supposition about the decline of PC market is counterfeit, it’s not dying, it’s just evolving. Tablet computers are becoming important sector and slowly merging to the traditional computers. Overall, global sale of PCs has been appreciated from 305.9 million units in 2009 to 346 to 350 million in 2010. 2011 sales will likely grow still, propelled by the growing tablet market. In 2005, 218.5 million units were sold across the world, only 134.7 million were sold in 2000, and in 1996, only 70.9 million computers were sold. The demand of PC’s has grown from 71 million to 350 million in last 15 years. For those with an open mind, the PC industry is a great place to compete in business.

So, with lots of leaps and bounces with their decision, HP still seems to be pretty confuse which will surely result in their future strategy, so in their sales figures. And, undoubtedly, this is a dangerous sign for any business to run with positive feel. What do you think friends? Is HP on right track with its roller coaster decisions?



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