Will HP Rise From Ashes?

By David Muthukaden - September 12, 2012 | Tickers: AAPL, HPQ, MSFT | 0 Comments

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Hewlett Packard (NYSE: HPQ), the world’s largest PC manufacturer, after being injured and bruised by its competitors is making another attempt to get back on its feet. HP committed many mistakes in the past which includes hasty acquisition decisions, frequently changing its top management, making public announcements to spin off its PC business, and not giving enough time to capture the tablet market. But then HP wants to correct those mistakes.

Innovation and Change are the two weapons that can help HP from sinking. After Apple (NASDAQ: AAPL), launched the iPhone and iPad, the personal computing experience had changed completely. Apple’s iDevices were revolutionary products and were changing the way people viewed personal computers. HP should have realized that any delay in capturing the tablet and phone market would affect their business adversely. However it was slow to react to this change. And when it did finally react it came out with products that lacked innovation. Also it withdrew from the tablet market as soon as it saw a low sales figure.

But now HP’s top management is making some decisions in the right direction. HP introduced three devices at the IFA show which would run on Microsoft (NASDAQ: MSFT) Windows 8 Operating system. The HP Envy x2, a hybrid PC with a  11.6-inch display; the TouchSmart Ultrabook 4, which features a 24-inch multi-touch high-definition display; and the Spectre XT TouchSmart Ultrabook, a higher-end model with a 15.6-inch display.

ENVY x2, is designing at its best. It’s an ultra thin laptop-cum-tablet device. The highlight of this product is its detachable screen that docks with the keyboard through a magnetic latch, thus allowing you to easily convert between the two form factors, somewhat similar to Apple's Smart Cover. While details are scarce, here are the confirmed specifications:

• 11.6" touch display with 1366x768 pixels (135 ppi), IPS panel.
• Screen brightness of 400 candelas per square meter.
• 8 mp rear camera, HD (720p) front camera.
• Beats Audio integration.
• NFC, optional stylus.
• SSD storage.
• 1.4 kg total weight, 700 gm in tablet mode (without keyboard dock).
• Intel X86 processor (no word yet on which one exactly)
• Runs the full version of Windows 8 (Just like any other laptop)

Spectre XT TouchSmart Ultrabook is a new entrant in the Spectre series. Its known specifications are as follows:

• 15.6" multi-touch Full HD (1080p) IPS panel display
• Only 0.7" (18 mm) thick and weighing 2.2 kg.
• Intel Core CPU (exact model unknown)
• mSATA solid-state drive supports Intel Thunderbolt technology for faster data exchange with external devices.
• Glass touchpad, Beats Audio with quad speakers.
• Gigabit Ethernet, USB 3.0, HDMI-Out, and other standard ports.
• HP CoolSense technology
• HP TrueVision HD Webcam
• Battery life: up to eight hours
• Includes full versions of Adobe Photoshop Elements 10, Premiere Elements 10, and a two-year subscription to Norton Internet Security
• Concierge phone line dedicated exclusively to HP ENVY Spectre owners

The HP Spectre XT TouchSmart Ultrabook is expected to be available in the US in early December, with a starting price of $1,400

ENVY TouchSmart Ultrabook 4 is an updated offering in the ENVY series of laptops. This one has the following confirmed specs, which isn't saying much:

• CPU: available with second- or third-generation Intel Core processors
• 14" multi-touch HD (720p) display
• 0.9" (23 mm) thin, 2.2 kg
• Backlit keyboard
• Ports include: Gigabit Ethernet, USB 3.0 (2), USB 2.0 (1), HDMI, SD reader
• 8 hours of claimed battery backup
• Beats Audio.
• Optional AMD graphics card with 2 GB of RAM.
• Optional SSD, Thunderbolt supported
• HP CoolSense technology
• HP TrueVision HD Webcam
• HP Protect Smart
• Intel Technologies: Rapid Start, Identity Protection Technology, Smart Response and Smart Connect Technologies

 It is scheduled to be available in America by mid-December, while the price is currently unknown.

Sources say that Apple will soon be coming out with its miniature version on iPad. Though primarily this version of iPad will compete with Amazon’s Kindle and Google’s Nexus but it will also be a challenge to HP’s envy x2 cost wise.  Also the new iPad (3rd version) already has a huge fan following. Can HP be able to lure customers to buy its tablet?  HP’s envy x2 has been categorized as a hybrid product and its price is expected to be around $1000. The question here is whether customers would be willing to pay so much for a tablet. With iPad 3, iPad mini, Galaxy tabs, Kindle and Nexus available in the market what would be the chances for survival of HP’s new products? Also there are other manufacturers like Lenovo, Dell, Sony and Acer who are also introducing tablets with Microsoft Windows 8 Operating System.

Microsoft has recently announced that it is coming up with its own series of tablets ‘Surface’ and ‘Surface Pro’ which will run on Windows RT.  This could be a concern for other OEMs who were left sidelined by the perception that Microsoft's new tablet will replace their products. If Microsoft decides to customize its Operating system with better features and better performance for ‘Surface’ then this could hurt the sales of products like HP’s Envy x2.

HP’s Envy x2 is different from the existing tablets in the market. It is sleek and beautiful but at the same time it is much more powerful. It can do everything that a laptop can do. It is a low power high performance device which can be a threat to other products. Also its ultra thin series of laptop looks elegant and the same time is very powerful.

Competition is part and parcel of the game. HP’s decision to venture into the tablet market once again is good news for its shareholders. 

**Graph source: http://www.nasdaq.com/symbol/hpq/interactive-chart?timeframe=5d&charttype=line

Though not much, we can see a slight improvement in the share price of HP after the launch of the three new products. In the short run the share prices may not reflect a drastic change since HP has already been through a lot of ups and downs. But this surely is a good start. HP returning back in the tablet business along with some ultra thin laptops reflects the company’s potential to come up with innovative products. HP has been in this business for a very long time and its customers have a lot of expectations from the company. This expectation is what drives HP’s share price. With every new product launch, HP strengthens its bond with the customers which in turn boost investor’s confidence. If HP continues to frequently come up with good products, if it is able to establish itself in the tablet business and if its Open WebOS becomes a hit then HP can restore its lost glory. These new products were launched at the right time and were absolutely necessary to save the sinking ship. If everything goes well then HP should be able to capture a good share of the tablet market. Also Open WebOS can pose a serious threat to Google’s Android in the near future.

Let’s wait and watch if HP can regain its lost glory and rise back from the ashes.

Please leave your views and opinions in the comments section below.

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