Posted on 11/23/2009 5:30:03 PM PST by RightOnTheLeftCoast
HP's 3rd quarter results hurt by budget PCs
updated 05:30 pm EST, Mon November 23, 2009
HP Q3 2009 shipments up, revenue down
HP this afternoon revealed mixed results for its quarter ended in October. The company's net earnings climbed 14 percent year-over-year to $2.4 billion, but its revenue dropped by 8 percent to $30.8 billion in the same time frame. It credits the profit boost to cost-cutting measures but saw its revenue drop across the board in every category, including the Personal Systems Group that handles its common PC business.
The division shipped 8 percent more PCs than a year earlier, enough to keep its lead in market share, but suffered directly from a heavy dependence on budget PCs such as netbooks. Its revenue dropped 12 percent from year-to-year to $9.9 billion, and its profit dropped a sharp 25 percent to $460 million. Desktops took the deepest hit as revenue for the category fell 16 percent where the notebook category, which includes netbooks, dropped a softer 8 percent.
The Palo Alto-based firm also warned of further declines in the fall. Although higher than analyst predictions, it expects its revenue to decline again to between $29.6 billion and $29.9 billion and its relative profit per share to drop as well.
HP's success in market share is widely attributed to its strong presence at retail with economy notebooks and desktops but has also increasingly counted on its Mini netbook range. This includes carrier deals such as with AT&T and Verizon that subsidizes the portables to an even lower price, albeit at the networks' expense.
Contrasting against the results is Apple, which posted sharp increases in both areas based both on the rise of its iPhone business as well as its emphasis on lower-volume but more profitable Mac sales. It forecasts both an increase in revenue and a disproportionately larger profit.
Even given that their prices are partially subsidized by crapware placement revenue, it's a free-for-all commodity market. Hard to differentiate yourself in a market like that.
A company can "cut costs" (that is, lay off) over and over again, firing the legions of good people who once set HP and the nearly-forgotten Compaq apart, and ultimately it ends up with no company left, just a me-too marketing and support arm for Chinese manufacturing. And good luck providing decent support for a $300 Windows PC. 40 minute 800-number waits to talk to a script-reading troll in Bangalore, yup that's the ticket to excellence.
Sad to watch.
Ping, and bring all your friends.
I dread having to open up HP and (worse) Compaq units. HP lasers are OK.
yup.....
build you own.
You either compete in netbooks or watch Acer and Asus grab market share from you and eventually eat your lunch, just like it happened tp IBM when Compaq and Dell took IBM on.
Prices have always fallen in the PC business since the start of time. I remember back when the average IBM PC was selling for a massive $5000 each.
Nobody is demanding that they bring back average PC’s for $5000 right now.
“Hard to differentiate yourself in a market like that. “
There are very few PC companies who's products are in the shope right now; HP, Acer, Toshiba, Asus, MSI and that's about it. Dell has started some retail presence again but they are not everywhere, and Apple sells too few computers worldwide because of their high prices.
I was in the shops over the weekend, and people are buying these budget priced laptops like crazy.
Good news is, much bigger unit sales in places like India and China, with huge populations who don't even own a PC at all, will eventually drive PC company dollar sales revenues up from sheer volume alone. China will soon be selling more PC's units per year than the US, and not too long after that, may start selling as many as twice as many units avery year as the US, from their 1.3 billion population.
Don’t forget, Compaq got rid of many of the Digital employees (me being one) before getting chewed up by HP.
Raises a different question to me. Revenues are down but earnings are up. Why hire? These are the numbers(among others) that will keep unemployment stubbornly high.
I am looking really hard at an Acer to replace my old but trusty Averatec. This first business trip in ages really showed how old it was. It has never given a bit of hardware trouble. It will become a glorified file uploader as long as it will load up.
They might be OK, but some of the cheaper ones may ship with introductory toner cartridges. That means they only come with half the toner.
The DEC Alpha patented technology was cross-licensed to Intel in 1998 after DEC settled a lawsuit that charged Intel with infringement. Intel then incorporated the Alpha technology in the development of the Intel/HP 64-bit processors and all future Intel 64-bit processors, from what I understand. The FTC ordered DEC to share the technology with AMD to maintain AMD competitiveness with Intel.
See:
The DEC Alpha patented technology was cross-licensed to Intel in 1998 after DEC settled a lawsuit that charged Intel with infringement. Intel then incorporated the Alpha technology in the development of the Intel/HP 64-bit processors and all future Intel 64-bit processors, from what I understand. The FTC ordered DEC to share the technology with AMD to maintain AMD competitiveness with Intel.
See:
I hired on with DEC in 1977, been through Compaq and now HP. I’ve been supporting VMS on Vaxes, Alphas and now IA64 systems. Our systems are in the heart of the DOD, national research labs, and the financial systems world wide. Our VMS engineers in the US for the most part have been replaced by engineers in India. The VMS support team I joined in 1990 had 72 network specialist in it. Now that is down to 6. Guess I should consider myself lucky, but it’s been a lot of work on my own personal time to stay current and even expand into areas of VMS including programming, internals and performance to keep my job. We have about 24 total VMS second level support engineers left in the US. The rest are all being off shored to India and Costa Rica. Our L3 engineering is almost all in India now. Quality is definitely going down hill.
What I can not figure out is how the DOD, national labs and a lot of the Military depend on our systems and the engineering is being done in India. Who knows what phone home code is being incorporated into the code to send sensitive or secret information else where. When I was in a secure environment for 7 years 25 years ago, there were no outside connections to the outside world outside of the secure network you were on. Security was taken seriously and it was secure. Then came the days of Clinokio and his secretary of Energy Witch Hazel O’Leary, who totally relaxed security at the national labs.
I really have to wonder about our top Executives of HP and for that matter the DOD and DOE on letting this engineering go offshore. Even in Los Alamos the security is suspect.
A couple of things:
Oracle bought RDB and got great cluster technology to build
their Oracle-RAC product-
I still have customers using Alpha servers and VMS- most
TRU64 unix customers have disapeared-they will migrate to Itanium
have only seen a couple of PDP11- runing RSX11m or RT11 for shop control machines-
I still have some customers running Vaxes-purchased about
1988 !! they think it is funny that the app will never be upgraded or replaced.-
I just recieved an order for a used VMS Alphaserver to replaced an older server from 1996! ( they were nervous about getting spare parts)
DOW rolled out a whole bunch of Vaxen and are upgrading to the IA64 platforms for their production systems after they did a 5 year study on the cost of ownership, after they had all moved over to MS systems. The cost of ownership on VMS was 40-60 less for them on VMS. I make an extra effort to support those folks.
40-60% less on VMS, sorry
Remember me?
I remember you!
I was there when you first posted when you signed up on 9 Oct 2007. You were promoting a website.
That one was removed by the moderator. Do you remember that? I certainly do.
You were quiet for a long time. Eventually you posted again on 18 Nov 08.
That's almost a year after your first pimping post was smacked down.
What's the deal?
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