HP Loses Ground in the Tablet War
Hewlett-Packard announced its earnings for the first quarter of 2011 earlier this week. The net revenue of $32.3 billion was up 4% from the prior-year period both as reported and in constant currency, yet things might need improvement given a 12% fall in sales in consumer PCs. CEO Leo Apotheker indicated that a possible explanation could be the recession and the a ‘continued softness’ in the consumer PC market concurrently.
Given that Apple, under the same conditions, managed to sell over 7 million iPads, the softness argument is not sustainable. Yet, it hints that the answer might lie in the popularity of iPads that overtakes consumer PCs. “HP is pointing to weakness in consumer segment, when the real problem is that its notebooks are being cannibalized* by tablets, where Apple is in a premier position,” Capstone Investments analyst Shebly Seyrafi observed in a note to clients today. “We believe both factors are at play.”
Hewlett-Packard is facing serious competition and must continue what has started last year by acquiring Palm to get through with this year’s launches. Yesterday we mentioned Apple’s upcoming March event, an un-official occasion for the launch of the long-expected iPad 2, exactly one year after the launch of the original iPad.
Today Motorola launched its much acclaimed Xoom tablet, a tough competitor for the iPad due to the new OS (Honeycomb 3.0), powerful processor, front and rear cameras and higher screen resolution. Later this year, Hewlett-Packard will have to take into consideration the launch of the Galaxy Tab 10.1 from Samsung, the Optimus Pad from LG and HTC Flyer’s to name just a few.
At the beginning of this month Hewlett-Packards announed its latest devices, namely Palm Pre 3, Veer and the Touchpad Tablet, but the strategic steps Hewlett-Packards will need to make remain to be seen.
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