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HP is exiting the consumer electronics business! What does this mean to you?


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#1 of 61 OFFLINE  

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Posted August 18 2011 - 04:58 PM

AP Press just reported today that HP is exiting the consumer electronics business.  Recently HP started shipping the HP Tablet, which a couple weekends ago was marked down by $100, typically a bad sign.  HP spent $1.8B on Palm two years ago to get webOS, which is the OS used to power the HP smartphones and tablet.  I thought after the Microsoft debacle of shipping the Kin and then canning it weeks after shipping it was a mistake that no other company would follow!

However, for me, the biggest shock is that HP is exiting the personal computer business.  If you can remember back a decade ago, there was a bitter take over battle that cost HP $24 BILLLION to acquire Compaq.  At the time, that made HP the largest PC manufacturer in the world.

Today HP's PC business is the largest revenue generator, but also the least profitable division.


I'm still kind of in shock, being an old PC guy, that this is actually occuring (the exit from the PC business). I'm not entirely surprised that HP is exiting the mobile market, there is just too much competition and they are battling for last place on smartphone with Microsoft's Windows Phone.  While they have the jump on Microsoft for last place for tablet (i.e. Slate 8 hasn't even shipped yet), it is hard to carve out space in the tablet arena with Apple and Google's Android tablet devices.

For me, I guess it is just a reality check of where things are headed.  This year, there should/will be more smartphone's and tablets sold than PC's and notebooks.  That's a pretty big thing!  It definitely is a trend.


Personally, I've had a history with HP.  I've done worth with them at Disney's "Home of the Future" and I personally have the HP Windows Home Server and the HP Touchsmart, which is, IMO, a very innovative product.  I also have a HP mini-tower that is still a screamer and really like their ultra flat wireless keyboard.  (I am typing this post on a HP keyboard!).

So, it is with a saddened heart that I say "farewell" to an industry friend that I have known since my early PC days.  I guess it is an omen of things to come for the PC industry (even with Dell downgrading it's revenue growth moving forward).






#2 of 61 OFFLINE   Adam Gregorich

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Posted August 18 2011 - 05:14 PM

Based on the headline I assumed it was just the TV business (which they had already mostly exited), Ditching PCs (and printers?) is a huge change for them.  WebOs getting kicked to the curb is probably good for Microsoft though assuming they can get Win8 out and into tablets soon.



#3 of 61 OFFLINE   dmiller68

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Posted August 18 2011 - 05:23 PM

WebOS demise was just a mater time. No developer support no product. HP leaving the PC business could be a much bigger thing. If you look at all the problems Acer has had and now HP it is showing the PC business has never been a profitable endeavor. I built and sold PCs back in the 486 days and I never made much. Profits for hardware are just not there.


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#4 of 61 OFFLINE   Carlo Medina

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Posted August 18 2011 - 06:03 PM

I've owned HP in the past and to be honest, maybe a long time ago (think over a decade) they may have made some pretty solid stuff, but everything since then has been pretty mediocre at best. The only HP I own is a printer and to be honest I regret buying it because it just blows through ink and the print quality for photos is clearly lower than my friend's comparably priced Canon printer. If they stop making ink (which I'm not sure if they will or not since it's such a cash cow for them) it will be bittersweet. Bad because I'll soon have a 10lbs paperweight that looks like a printer. But good because then I'll spring for a nice new Canon photo printer. Had a friend who was laid off from HP (her entire division was eliminated) a few years ago and she saw something like this coming down the pike even then. Their consumer electronics business has been hemorrhaging money for some time.

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#5 of 61 OFFLINE   mattCR

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Posted August 19 2011 - 01:02 AM

For those who go back a LONG way this announcement also means something else: Compaq, one of the original clones, will now be completely no more.


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#6 of 61 OFFLINE   Charles Smith

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Posted August 19 2011 - 01:16 AM

Ordinarily I don't follow these things and they rarely faze me anymore, and I know nothing at all of WebOS, Tablets, or any of this other trendy stuff.  What I do know is that I just happen to have had several HP products that were more solid and dependable than many others.  My own first ever PC was an HP 386sx back in 1993 or so, which I believe survived several lives, for me and a couple of people it got passed on to.  My first laptop in 2006 was heavy and built like the proverbial brick shithouse, which was exactly what I wanted -- a solid computer that was "portable" rather than some lightweight thing.  (That's just me, or it was then.)  Its one physical weakness was a screen hinge design that was destined to break, one side at a time.  I'm still delighted with the L7650 all-in-one printer (which is sitting right behind me or I wouldn't have remembered the model number), but I'm still grateful I was able to have my company pay for it instead of opening my own wallet.  I forget what else.  But with their few faults, all of these things served me well.  RIP.



#7 of 61 ONLINE   Matt Hough

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Posted August 19 2011 - 03:29 AM

Argh! Both of my primary computers are HP products (one HP, one Compaq). I, too, use an HP flat wireless keyboard as my primary writing tool. I am completely astonished by this news!



#8 of 61 OFFLINE   Todd Erwin

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Posted August 19 2011 - 03:56 AM

The article I just read from my CompTIA feed indicated that HP is looking to sell or spin-off their PC division, much like IBM did with Lenovo. So, the HP "brand" may live on....



#9 of 61 OFFLINE   Sam Posten

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Posted August 19 2011 - 04:42 AM

Butbutbut who will make low quality shiny computers for soccermoms now? =p Seriously tho, I was shocked to hear about this but I think their reasoning is sound. The difference between them and IBM is that Big Blue didn't make that big a deal about it and slid out and onto different things and HP isn't going to have that luxury. They are doing the right thing now, before it's too late, getting out of the PC bus, but it remains to be seen if they can be relevant with something else.

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#10 of 61 OFFLINE   mattCR

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Posted August 19 2011 - 05:50 AM

God, word is already out that Acer is a suitor for their marketspace.  The problem is, when Acer bought Gateway and eMachine, they bought them whole and marketed under their brand name.   Buying HPs division buys.. what?  Pavilion?


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#11 of 61 OFFLINE   Joseph Bolus

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Posted August 19 2011 - 06:35 AM

Both of my current home computers are HP laptops ... but our family also has *two* iPads (one first-gen and one iPad 2) -- and I have to admit that we rarely turn the laptops on anymore. My daughter seems quite happy pairing a Bluetooth keyboard to her iPad2 and doing all of her homework via iWorks. And she can simultaneously Facebook, Skype, run Pandora, read books, and view TV shows and Movies. She's completely happy with the machine. For my part, about the only time I turn the HP laptop on is when I need to do some video editing work .. and to sync the iPads. Once the iCloud-enabled iOS 5 hits, the latter chore will apparently no longer be required. To tell you the truth, if I could purchase an iPad with a "Thunderport" so I could dock it to a large hard drive and monitor my PC days would be done. So I suppose HP is doing the right thing here. But I *will* miss the "good ole" PC days. My first portable computer was a Compaq -- and now the company that purchased them is getting out of the business. Changing times, indeed!! http://static.hometh...um.com/imgrepo/
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#12 of 61 OFFLINE   Thomas Newton

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Posted August 19 2011 - 11:15 AM

AP Press just reported today that HP is exiting the consumer electronics business

Tablets, yes. PCs, maybe. But I bet they're not looking to get rid of the part of their consumer electronics business that has to do with that high-margin inkjet ink.

#13 of 61 OFFLINE   Carlo Medina

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Posted August 19 2011 - 11:24 AM

Tablets, yes. PCs, maybe. But I bet they're not looking to get rid of the part of their consumer electronics business that has to do with that high-margin inkjet ink.

You mean the one where they fill up the ink tanks only 1/3 or 1/2 way? Yes my friend who used to work at HP admitted that to me.

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#14 of 61 OFFLINE   Todd Erwin

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Posted August 20 2011 - 06:39 AM

An article I read had mentioned Samsung, which has been trying to break into this marketplace for several years, but unsuccessfully.

Originally Posted by mattCR 

God, word is already out that Acer is a suitor for their marketspace.  The problem is, when Acer bought Gateway and eMachine, they bought them whole and marketed under their brand name.   Buying HPs division buys.. what?  Pavilion?







#15 of 61 OFFLINE   Todd Erwin

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Posted August 20 2011 - 06:40 AM

I agree, HP is better known for consumer printers than computers and laptops.

Originally Posted by Thomas Newton 

Quote:
Originally Posted by Kevin Collins 

AP Press just reported today that HP is exiting the consumer electronics business


Tablets, yes. PCs, maybe. But I bet they're not looking to get rid of the part of their consumer electronics business that has to do with that high-margin inkjet ink.






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Posted August 20 2011 - 07:07 AM



Originally Posted by mattCR 

God, word is already out that Acer is a suitor for their marketspace.  The problem is, when Acer bought Gateway and eMachine, they bought them whole and marketed under their brand name.   Buying HPs division buys.. what?  Pavilion?



And Acer is the company that could use the boost the most.  THe are the only one of the top 5 WW vendors that LOST market share in the last year!


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Posted August 20 2011 - 07:16 AM




Originally Posted by Thomas Newton 

Quote:
Originally Posted by Kevin Collins 

AP Press just reported today that HP is exiting the consumer electronics business


Tablets, yes. PCs, maybe. But I bet they're not looking to get rid of the part of their consumer electronics business that has to do with that high-margin inkjet ink.


Yes, you are right.  The are talking about spinning off / selling their PSG (Personal Systems Group).  The printer division is in the Image and Printing Group.


From their last annual report...


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#18 of 61 OFFLINE   Adam Gregorich

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Posted August 20 2011 - 07:16 AM

Hitler learns HP is abandoning WebOS:






#19 of 61 OFFLINE   Patrick_S

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Posted August 20 2011 - 05:01 PM

You mean the one where they fill up the ink tanks only 1/3 or 1/2 way? Yes my friend who used to work at HP admitted that to me.

I used to work for HP's IPG division and this statement is total bullshit. All manufacturing processes are subject to some product not being manufactured to design specs but the idea that HP is deliberately shorting the ink is laughable. Third parties test that cartridges all the time and if it became apparent that HP was consistently overstating the page yields (which would be the result if they were shorting the ink) the class action law suits would be piling up. As for IPG, I would be really surprised if they were to sell that division. It makes a lot of money and they are still the market leader in terms of units placed in the enterprise market.

#20 of 61 OFFLINE   Carlo Medina

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Posted August 20 2011 - 05:34 PM

Sorry I'm going to call you on this one (and on your insulting language). What's more, I have first-hand proof. I bought an HP printer from Best Buy before my friend told me this (I still own it) and despite coming with sealed cartridges, I got *maybe* 20-25 pages worth of color printouts before certain ink colors started to run out. Not full color photo prints either (though I may have printed a couple of 5X7 photos, but mostly normal text with some colored graphics.

I used to work for HP's IPG division and this statement is total bullshit. All manufacturing processes are subject to some product not being manufactured to design specs but the idea that HP is deliberately shorting the ink is laughable. Third parties test that cartridges all the time and if it became apparent that HP was consistently overstating the page yields (which would be the result if they were shorting the ink) the class action law suits would be piling up. As for IPG, I would be really surprised if they were to sell that division. It makes a lot of money and they are still the market leader in terms of units placed in the enterprise market.


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