Is This Beleaguered Tech Giant Turning to Google for Help?
Investors haven’t hesitated to let Hewlett-Packard (NYSE:HPQ) know that they think the company is in trouble. Shares have tumbled 41.5 percent year over year as HP, by and large, has failed to keep up with the changing technological landscape. The company is best known as a PC maker, and where once this put it at the top of the industry, now it’s struggling for relevancy.
Now, H-P only leads the PC market if tablet sales are factored out of the equation. Including tablets as personal computers, Apple (NASDAQ:AAPL) claims the top spot in the PC market in the fourth quarter of 2012, backed by 75 percent growth in its iPad segment that brought total shipments to 27 million units. That represented a market share of over 20 percent, which compares to HP’s 15 million shipments and 11 percent share for the same quarter. The beleaguered American company just barely managed to edge out Lenovo by 200,000 shipments for the period, a pretty narrow margin.
Interviewed on stage at the Gartner Symposium IT Expo, CEO Meg Whitman faced tough questions about H-P’s status and direction as it faces what many see as a do-or-die scenario…
The 10-second takeaway from her session at the Gartner Symposium, covered by Forbes, is that all the action will come in 2014. According to Whitman, 2012 was a year of diagnosis, as the company took time to evaluate its situation and determine the direction it should head. Indicating cloud, enterprise, networking, and mobile as vectors for growth, the company will spend 2013 laying pipeline, and begin showing returns in 2014. And yes, that means no HP smartphone until 2014.
That’s a long time to wait for a company that has already been accused of missing key inflection points, but Whitman argues that HP is not as far behind the curve as some think. The company already has 2,000 beta customers for its beta cloud products, and 200 managed cloud services customers. Every major tech company, not just HP, is still refining their cloud strategy and building out their portfolio of products and services. Whitman would argue that the perception that HP missed the inflection point is false.
As if trying to prove that point, the company has indicated that it will be forming a partnership with Google (NASDAQ:GOOG) to run its Android OS on an upcoming high-end tablet…
HP will reportedly announce a new tablet powered by the Android operating system pretty soon, and speculation is rampant about what this could mean for both companies. While HP has its problems, it is still a leading tech manufacturer and Google could always use another ally in the fight for market dominance against Apple.
But the implications for smartphone or tablet market share are old-hat and boring. The juicy speculation is whether or not the partnership could one day lead to an HP manufactured, Android-powered desktop. Such a development would take some of the tension out of the tight relationship between traditional PCs and Microsoft (NASDAQ:MSFT).
As Creative Strategies principal analyst Ben Bajarin noted, “HP supporting Android at this point in time is deeply strategic. As any vendor who has history in the PC industry knows, it can be rough when you are completely dependent on only one OS platform provider.” Android has become the go-to platform for any vendor that isn’t Apple, and HP seems like it would be doing itself a favor by teaming up with the little green robot.