10 Things That Are Wrong With HP’s New Strategy
The PC IdeaOne of the most surprising moves from HP was its decision to possibly spin off its PC business, an operation has been the backbone of its operation for years, and a key component in its relationships with enterprise users. By spinning it off now, there’s no telling what the future might look like for the company.
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It’s A Slash-And-Burn PolicyAfter announcing disappointing financial results, HP could have done more than just initiate a slash-and-burn policy across its business. Yes, there is trouble at HP, but why should the company disintegrate so many facets of its operation? More innovation and product-development is needed at HP, not an outright destruction of many core pieces of its business.
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There’s No VisionAll HP is saying right now is that it wants to focus its business around the operations that are most profitable. The company specifically says that software and solutions could be integral to its plans. But is that really all HP has planned? In order for the company to be successful, it needs to have a vision of what the future looks like and what it can do to get there. By eliminating several divisions and only focusing on a handful of others, it doesn’t appear to be doing that.
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Expect More AcquisitionsLet’s face it: HP’s software and solutions operations aren’t exactly the best in the marketplace. There are some gaping holes in its operation that it will need to address. The only problem is, times are tough at HP, which means acquiring other companies seems to be its best bet. Unfortunately, investors who have been selling the company’s stock as of late don’t seem too happy to hear that.
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It’s Giving Up A Key MarketYes, HP might have failed in the mobile market, and yes, its acquisition of Palm might have been a bad idea, but by discontinuing its mobile hardware and all but turning its back on WebOS, the company is giving up a prime market that’s set for growth in the coming years. The mobile space means everything right now. When will HP acknowledge that?
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Tablets Will Be LostAs noted, HP has decided to discontinue its TouchPad. By doing so, the company is leaving the tablet market. That’s a huge mistake. The iPad has been dominating that space for just a couple years. Prior to that, tablet revenue was practically zero. HP had an opportunity to at least play in a fledgling market that, over the long-term, it could succeed in. But it gave that up.
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How Will Consumers Respond?HP might have hurt its reputation with consumers by making its latest move. Let’s face it: when it comes to the TouchPad, only those people that love HP products bought it. The same is true with the Pre and Pixi. By discontinuing the devices so abruptly, and spinning off its PC business, HP has annoyed customers that were trying to be loyal to it. Now, by spinning off its PC business, there’s no telling what the future of that operation will look like. HP might have just lost the consumer market.
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Can Solutions Win the Day?It’s understandable why HP wants to focus its efforts on software solutions. For one, its CEO has focused much of his time and effort in that market. In addition, the company has long been an enterprise provider, which makes its renewed focus there make some sense. But there’s still a big question mark over the possibility of solutions carrying an entire business. The enterprise is littered with the remains of companies that have tried and failed to do just one thing really well. Will HP be another?
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No Future for WebOSHP hasn’t gone so far as to say that WebOS is dead, but let’s face it: the operating system’s days are numbered. Recent reports suggested WebOS could make its way to cars and appliances, but is that something that shareholders are really after? WebOS was supposed to be the operating system to save HP. Now, it’s the operating system that the company has forgotten.
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A Wasted Palm AcquisitionWhen HP acquired Palm last year for $1.2 billion, there were critics, analysts, and shareholders that thought it was a mistake. But all along, HP said it wasn’t. Now that it has destroyed its mobile business, it’s clear that the Palm acquisition was a huge mistake. And all that cash could have been used more effectively elsewhere. Hopefully HP won’t make the same mistakes all over again in the coming months.