How HP is finding its stride

Since splitting into two, HP is finding a new stride. The company is building great hardware and enterprise software sales are still a source of growth. But it doesn’t hurt to grow sales in laptops, LCD and peripherals.

The PC market may face major headwinds as demand continues to fall. HP’s survival in this space will depend on the company spending time innovating and making better products.

HP is taking steps in the right direction. In June, the company raised its earnings forecast for the current quarter and the full year. Last month’s recall for 41,000 notebook batteries may set HP back, but the R&D work is outpacing the negatives.

HP’s Spectre ultrabook is an example of the company making productive, usable hardware. The x360 notebook comes in several variants. There is a two-in-one version that will compete with Microsoft surface tablet and Apple or Android tablet devices. The Spectre x2 is a more direct competitor for the surface tablet.

None of these models from Hewlett-Packard are cheap. That means HP will aim to sell great quality products at a profit.

On the peripherals side of things, HP sells portable LCDs that accompany laptops. High-end desktop monitors, including 4K models, curved screen, or IPS, target a wide range of customers. Power users may opt for 34-inch displays. Gamers will like the 4K resolution and business users or graphic designers may choose an IPS monitor from HP.

The company has no shortage of options when it comes to hardware display.

Printers do not need much innovation. In the last decade, prices for inkjet and laser printers dropped sharply. HP and manufacturers make their money selling ink. The trouble with printing is that demand for printing is falling off a cliff. When nearly all the data is stored online, consumers and businesses are aware of the convenience in storing on the cloud. Records managements and retention both involve digital storage. Because of this, the need to print will keep falling.

HP’s strategy will rely on having 3-D printing solution. The consumer market for 3-D printing is already saturated. HP will need to develop commercial 3-D printing. Chances are good that the company will leverage decades of experience in the printing market. In a few short years, HP could be a leader in commercial 3-D printing.

Hewlett-Packard Enterprise, the unit focused on software in the business, just received a windfall. It won a suit against Oracle. HPE lost billions after Oracle ended support for HP Itanium servers. The $3 billion in damages awarded will go a long way. HPE now has plenty of cash to spend on R&D. A more likely scenario will be that HPE will make an acquisition that will bolster its data analytics offering.

HPE does not have a good track record when it comes to acquisition. HPE just needs to avoid overpaying for a start-up or mature tech firm.

If it buys technology that complements its existing business solution offerings, there is exciting growth ahead for the company.

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Jim Love, Chief Content Officer, IT World Canada
Chris Lau
Chris Lau
In search for alpha. Telecom, media, technology. Social media. Financial Markets. Real-Estate Agent. Seeking Alpha Contributor. Toronto, Ontario ·

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