HP, the Great PC Whale Beached Itself
TweetFollow Us on Twitter

HP, the Great PC Whale Beached Itself

By Greg Mills

As news of the cancelation of the HP TouchPad and Web OS smartphones hit the street, speculation abounds as the future for both HP as a company and its established business units. Almost as an afterthought the news came out that HP was also throwing in the towel on its PC manufacturing business.

What makes the abrupt changes at HP significant is that HP was the largest PC manufacturer in the world. Normally, economy of scale rules mean that HP should have demanded and gotten the best prices on parts and assembly. That should have reaped the largest margins in the industry.

Unlike the Apple computer manufacturing business, the PC manufacturing industry has seen so much competition and so little innovation that PC is just a PC, only a commodity that is defined by the sum of its parts. The PC manufacturers, Intel and Microsoft, the three legged stool is teetering right now. For the first time ever, a combination of a poor economic outlook and strong innovation at Apple have caused a global decline in PC sales.

While Apple has a gross profit margin of 30% to 40%, HP was working with a 7% margin on its PCs. This is partly due to the Apple premium. Everyone knows quality costs a bit more than junk and Apple has reduced its prices enough to be competitive in recent years.

When you are working on a razor thin margin in a cut throat business like manufacturing PCs, even a minor change in the market can be disastrous very quickly. While some think HP panicked way too soon, time may prove their decision to get out while the getting is good to have been brilliant.

I am still unclear on what the new business HP intends to get into will amount to. Something about cloud software? Don't tell them Apple is also getting into that, as they have had enough bad news at HP for a while.

Now that HP has beached itself, competitors are lining up to pick the bones and hope to own some of the PC market HP has surrendered. The HP PC manufacturing business may be too large for any one competitor to purchase intact, but HP might rearrange the division for better liquidation.

The failure of the HP TouchPad, Palm Pre and the Web OS platform has resulted in HP planning for a US$100,000,000 charge off to pay for a mountain of unsold TouchPad tablets. The problem is, that once a platform is publicly abandoned, no one in their right mind would touch an orphaned device. Want to buy a Kin phone for cheap? Actually, TouchPads that have been sold are likely to be returned in a mass panic that will make the day after Christmas returns seem tame.

The market shunned the HP TouchPad to the extent it has to be sold at less than the cost of manufacturing it. There is no way out of that sort of mess. Actually, the HP TouchPad lasted about 6 weeks, Microsoft killed the Kin phone after just three weeks. HP's TouchPad lasted twice as long as Microsoft's Kin Phone before being scrapped.

While discussing epic electronic disasters, RIM is working on streaming Music on its poorly received PlayBook. When you think of RIM, you think business. RIM has a problem of not being able to focus on its strengths as it becomes distracted by the success of others who's focus is more general. There is a market for a really good tablet computer for business. While iPad is certainly making progress in that market, RIM is so unfocused they have even dropped the ball in their strong suit.

Launching PlayBook without an email client, requiring a BlackBerry to hook up to cellular Internet and an almost empty app store doomed the well built PlayBook from the start. For my money, I predict the PlayBook won't last much longer. RIM has launched a number of new smartphone just recently to a collective yawn from tech reviewers. RIM may go on the block as soon as its patents are worth more than the market cap of the company.

That's Greg's Bite.

 
AAPL
$97.67
Apple Inc.
+0.64
MSFT
$44.50
Microsoft Corpora
+0.10
GOOG
$589.02
Google Inc.
-4.33

MacTech Search:
Community Search:

Software Updates via MacUpdate

TotalFinder 1.6.2 - Adds tabs, hotkeys,...
TotalFinder is a universally acclaimed navigational companion for your Mac. Enhance your Mac's Finder with features so smart and convenient, you won't believe you ever lived without them. Tab-based... Read more
Vienna 3.0.0 RC 2 :be5265e: - RSS and At...
Vienna is a freeware and Open-Source RSS/Atom newsreader with article storage and management via a SQLite database, written in Objective-C and Cocoa, for the OS X operating system. It provides... Read more
VLC Media Player 2.1.5 - Popular multime...
VLC Media Player is a highly portable multimedia player for various audio and video formats (MPEG-1, MPEG-2, MPEG-4, DivX, MP3, OGG, ...) as well as DVDs, VCDs, and various streaming protocols. It... Read more
Default Folder X 4.6.7 - Enhances Open a...
Default Folder X attaches a toolbar to the right side of the Open and Save dialogs in any OS X-native application. The toolbar gives you fast access to various folders and commands. You just click... Read more
TinkerTool 5.3 - Expanded preference set...
TinkerTool is an application that gives you access to additional preference settings Apple has built into Mac OS X. This allows to activate hidden features in the operating system and in some of the... Read more
Audio Hijack Pro 2.11.0 - Record and enh...
Audio Hijack Pro drastically changes the way you use audio on your computer, giving you the freedom to listen to audio when you want and how you want. Record and enhance any audio with Audio Hijack... Read more
Intermission 1.1.1 - Pause and rewind li...
Intermission allows you to pause and rewind live audio from any application on your Mac. Intermission will buffer up to 3 hours of audio, allowing users to skip through any assortment of audio... Read more
Autopano Giga 3.6 - Stitch multiple imag...
Autopano Giga allows you to stitch 2, 20, or 2,000 images. Version 3.0 integrates impressive new features that will definitely make you adopt Autopano Pro or Autopano Giga: Choose between 9... Read more
Airfoil 4.8.7 - Send audio from any app...
Airfoil allows you to send any audio to AirPort Express units, Apple TVs, and even other Macs and PCs, all in sync! It's your audio - everywhere. With Airfoil you can take audio from any... Read more
Microsoft Remote Desktop 8.0.8 - Connect...
With Microsoft Remote Desktop, you can connect to a remote PC and your work resources from almost anywhere. Experience the power of Windows with RemoteFX in a Remote Desktop client designed to help... Read more

Latest Forum Discussions

See All

This Week at 148Apps: July 21-25, 2014
Another Week of Expert App Reviews   At 148Apps, we help you sort through the great ocean of apps to find the ones we think you’ll like and the ones you’ll need. Our top picks become Editor’s Choice, our stamp of approval for apps with that little... | Read more »
Reddme for iPhone - The Reddit Client (...
Reddme for iPhone - The Reddit Client 1.0 Device: iOS iPhone Category: News Price: $.99, Version: 1.0 (iTunes) Description: Reddme for iPhone is an iOS 7-optimized Reddit client that offers a refreshing new way to experience Reddit... | Read more »
Jacob Jones and the Bigfoot Mystery : Ep...
Jacob Jones and the Bigfoot Mystery : Episode 2 1.0 Device: iOS Universal Category: Games Price: $1.99, Version: 1.0 (iTunes) Description: Jacob Jones is back in Episode 2 of one of Apples 'Best of 2013' games and an App Store... | Read more »
New Trailer For Outcast Odyssey, A New K...
New Trailer For Outcast Odyssey, A New Kind of Card Battler Posted by Jennifer Allen on July 25th, 2014 [ permalink ] Out this Fall is a new kind of card battle game: Outcast Odyssey. | Read more »
Hay Day – Tip, Tricks, Strategies, and C...
Recently got into Supercell’s other huge hit, Hay Day and could do with some advice on what to do? We’ve got you covered with some helpful trips and tricks to bear in mind! Ticking Along One of the key things to keep in mind while building up that... | Read more »
Monster Head Review
Monster Head Review By Nadia Oxford on July 25th, 2014 Our Rating: :: FEEDING TIMEUniversal App - Designed for iPhone and iPad Racking up a high score with Monster Head is trickier than it first appears. The appeal wears out fairly... | Read more »
Garfield: Survival of the Fattest Coming...
Garfield: Survival of the Fattest Coming to iOS this Fall Posted by Jennifer Allen on July 25th, 2014 [ permalink ] Who loves lasagna? Me. Also everyone’s favorite grumpy fat cat, Garfield. | Read more »
Happy Flock Review
Happy Flock Review By Andrew Fisher on July 25th, 2014 Our Rating: :: HERD IT ALL BEFOREUniversal App - Designed for iPhone and iPad Underneath the gloss of Happy Flock’s visuals is a game of very little substance. It’s cute, but... | Read more »
Square Register Updates Adds Offline Pay...
Square Register Updates Adds Offline Payments Posted by Ellis Spice on July 25th, 2014 [ permalink ] Universal App - Designed for iPhone and iPad | Read more »
Looking For Group – Hearthstone’s Curse...
For the first time since its release (which has thankfully been a much shorter window for iPad players than their PC counterparts), Blizzard’s wildly successful Hearthstone: Heroes of Warcraft CCG is sporting some brand new content: the single... | Read more »

Price Scanner via MacPrices.net

13-inch 2.5GHz MacBook Pro on sale for $1099,...
Best Buy has the 13″ 2.5GHz MacBook Pro available for $1099.99 on their online store. Choose free shipping or free instant local store pickup (if available). Their price is $100 off MSRP. Price is... Read more
Roundup of Apple refurbished MacBook Pros, th...
The Apple Store has Apple Certified Refurbished 13″ and 15″ MacBook Pros available for up to $400 off the cost of new models. Apple’s one-year warranty is standard, and shipping is free. Their prices... Read more
Record Mac Shipments In Q2/14 Confound Analys...
A Seeking Alpha Trefis commentary notes that Apple’s fiscal Q3 2014 results released July 22, beat market predictions on earnings, although revenues were slightly lower than anticipated. Apple’s Mac’... Read more
Intel To Launch Core M Silicon For Use In Not...
Digitimes’ Monica Chen and Joseph Tsai, report that Intel will launch 14nm-based Core M series processors specifically for use in fanless notebook/tablet 2-in-1 models in Q4 2014, with many models to... Read more
Apple’s 2014 Back to School promotion: $100 g...
 Apple’s 2014 Back to School promotion includes a free $100 App Store Gift Card with the purchase of any new Mac (Mac mini excluded), or a $50 Gift Card with the purchase of an iPad or iPhone,... Read more
iMacs on sale for $150 off MSRP, $250 off for...
Best Buy has iMacs on sale for up to $160 off MSRP for a limited time. Choose free home shipping or free instant local store pickup (if available). Prices are valid for online orders only, in-store... Read more
Mac minis on sale for $100 off MSRP, starting...
Best Buy has Mac minis on sale for $100 off MSRP. Choose free shipping or free instant local store pickup. Prices are for online orders only, in-store prices may vary: 2.5GHz Mac mini: $499.99 2.3GHz... Read more
Global Tablet Market Grows 11% in Q2/14 Notwi...
Worldwide tablet sales grew 11.0 percent year over year in the second quarter of 2014, with shipments reaching 49.3 million units according to preliminary data from the International Data Corporation... Read more
New iPhone 6 Models to Have Staggered Release...
Digitimes’ Cage Chao and Steve Shen report that according to unnamed sources in Apple’s upstream iPhone supply chain, the new 5.5-inch iPhone will be released several months later than the new 4.7-... Read more
New iOS App Helps People Feel Good About thei...
Mobile shoppers looking for big savings at their favorite stores can turn to the Goodshop app, a new iOS app with the latest coupons and deals at more than 5,000 online stores. In addition to being a... Read more

Jobs Board

*Apple* Solutions Consultant (ASC) - Apple (...
**Job Summary** The ASC is an Apple employee who serves as an Apple brand ambassador and influencer in a Reseller's store. The ASC's role is to grow Apple Read more
WW Sales Program Manager, *Apple* Online St...
**Job Summary** Imagine what you could do here. At Apple , great ideas have a way of becoming great products, services, and customer experiences very quickly. Bring Read more
Lead Software Engineer, *Apple* Online Stor...
**Job Summary** Imagine what you could do here. At Apple , great ideas have a way of becoming great products, services, and customer experiences very quickly. Bring Read more
Manager, *Apple* Fullfillment Operation (AF...
…cross-functional teams to drive the highest level of program management quality for Apple . You will help plan launch strategy and demand generation programs with Read more
Project Manager / Business Analyst, WW *Appl...
…a senior project manager / business analyst to work within our Worldwide Apple Fulfillment Operations and the Business Process Re-engineering team. This role will work Read more
All contents are Copyright 1984-2011 by Xplain Corporation. All rights reserved. Theme designed by Icreon.