HP without power… PCㆍprinterㆍserver business all in trouble

[ Kang He Ryung strong@ ] | 2018-05-16 11:06:20
HP is in trouble. PCs are gradually being pushed to China, meanwhile printers are getting more competitive as their sales volume is falling. The server is also struggling with EMC. All major businesses are in crisis. We are not able to create a new `cash cow`. Besides, future R & D investment to find new business is only 2% of sales, which is much lower than other IT companies.

According to the industry on May 15, the performance of HP was skyrocketing due to the increase of IT demand in the early 2000s. It exceeded USD 100 billion in sales and reached USD 127.24 billion in 2011 (about KRW 136.57 trillion). However, since then, it has been walking downhill all the time.

HP and Hewlett-Packard (HPE) in 2015, which are mainly engaged in PC and printer business, and servers and solutions businesses, have been recruited and employing 30,000 people, or 10 percent of the world`s employees. The company will also make additional cuts of around 4,000 people by next year.

Combined HP and HPE sales last year was USD 80.927 billion (KRW 86.86 billion). Compared with 2011, sales dropped by 36.4%. The operating margin is also steadily declining. The operating margin, which was 8.36% in 2007 and 9.1% in 2010, was only 4.77% due to poor performance of HPE last year.

HP business is not getting better despite it has been restructured. Although PC and printer businesses still dominate the world`s market share, HP`s earnings are unlikely to improve due to overall demand decline and counterparties` counterattack. In the case of the PC business, Lenovo is chasing after HP, threatening the top spot in the global market. According to market researcher IDC, the world PC market share in early 2010 was overwhelmingly overwhelming, with HP (18.5%) delighting Dell (12.5%) by 6 percentage points. However, from 2013 to 2016, China Lenovo outperformed HP and ranked first in shipments, earning its pride. In the printer market, HP shipped more than 50 million units in 2008, but shipped only 39 million units shrunk by 30 percent last year.

Meanwhile, the server market also gave Dell the top spot in product shipments and sales in the fourth quarter of last year. When Dell bought storage company EMC in 2016, Mc Whitman, CEO of HP, said, "Dell is confused and HP will have a chance," but the market is going against it.

HP is looking for new businesses such as 3D printers and virtual reality (VR) PCs. However, this new business seems difficult to become a next food business. HP is motivated by `keep reinventing`, but the company is neglecting R & D investment, as this motto is colorless. HP invested nearly 6% of R & D in sales in the early 2000s, but now stands at only 2%. Dell, which is a similar IT company, is lower than those of 5.8%, Microsoft 14.57% and Apple 5.7%.

By Kang He Ryung strong@


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