HP To Offer A Smartphone?

Category: Technology / May 23, 2013 7:50PM EDT


Hewlett-Packard (HP) recently reported another sharp drop in profits of the second quarter of this year, but still surpassed market expectations due to cost cuts and better-than-expected results in its printing and services businesses.

HP's (NYSE: HPQ) Chief Executive Meg Whitman credited the performance later, adding that the company still needs to be more efficient and perform better in competition against the wider industry.

Global PC shipments plunged 14 percent in the first three months of 2013, according to the newly released figures from the market research firm IDC, with mobile computing devouring most PC profits and HP's, in particular.

HP has struggled to increase the sales of its PCs as customers continue to switch tosmartphones and tablet computers, particularly those produced by Samsung and Apple.

"They don't have any mobile applications right now. They have a tablet that just came out. TheHP slated its price to sell. It's not a spec monster, so it's not gonna appeal to people into specifications, super high definition displays and ultra fast processors. It's only 169 dollars, running on Android, so it's capable," said Maxwell Ramsey, a writer from PhoneArena.com.

Whitman said that ultimately, HP will offer a smartphone, but she later said that such a product would not launch in 2013.

Some analysts point out that HP just doesn't appear to be ready to take on that market even though its other markets are dwindling.

"You aren't selling laptops in the 1,500 dollar or 1,200 range anymore. You are now down in the 500-800 dollar range. So the profit has been kind of been taken out of the PC sector. Same with printers. The hardware at the printer level is almost given away. The big issue has been the ink but one very big thing that change is email. We don't print stuff anymore," said Tim Bajarin, president of a leading market intelligence firm, Creative Strategies.

HP continues to attempt a turnaround as the PC industry faces growing pressure from mobile devices and a weak market for printers and servers and its rival Dell Inc. (DELL) reported last week its fiscal first-quarter earnings dropped 79% amid weaker revenue in its computing segment.

"They and Dell and any of the guys who are traditional hardware guys, they absolutely have to make this complete transition to solutions and services where the money is. The fact is it's where all the money is. The fact is that competition for managing IT and services has basically quadrupled in the last 5 years, and as a result they are not the only player," said Bajarin.


(Video Source: REUTERS)