Live in the old HP

The HP that gave birth to the legend of Silicon Valley is struggling to kill in the Red Sea.

At present, HP is struggling to survive in multiple competitions in the Red Sea. Even HP’s glory bottom line, the leading position of the PC industry has once again been taken away by Lenovo, unable to preserve.

Go down the altar again
The continued shrinkage of the PC market is a common dilemma faced by many PC manufacturers, including HP.

In 2001, HP acquired its competitor Compaq Computer. The PC business has become the future of HP. This move is considered by many to be the watershed of HP’s prosperity and decline.

Since then, HP has spent five years completing the Dell PC business and becoming the world’s largest PC vendor. By 2008, HP’s annual turnover was as high as $118.4 billion, and HP, the world’s largest PC maker, was seated in 2012.

In 2012, sales of smartphone products increased by 42.7% year-on-year. Nokia, once the mobile phone overlord, completely stopped the Symbian system. Google’s Android system completely dominated the smartphone market, and the generation of giants fell. At the same time, Qualcomm’s stock price rose 7.1%. To $62.24, the market value of about $106 billion went well over $105 billion in Intel. The global PC market and the smart mobile terminal market are changing dramatically.

In the downsizing of mobile phones and Lenovo’s increasingly fierce competition in the industry, HP’s advantages are lost. Since then, HP’s revenue has begun to endlessly “falling down.”

According to data released by market research firm Gartner, global PC shipments fell 4.3% in the fourth quarter of last year to 68.6 million units, and shipments fell 1.3% year-on-year to 259.4 million units.

Among them, the first and second disputes are particularly fierce. Data show that Lenovo’s PC shipments in the fourth quarter increased by 5.9% to 16.6 million units, and the market share increased to 24.2%; in 2018, the market share increased from 20.8% to 22.5%. In the fourth quarter and the full year, the market share surpassed HP, ranking first in the world.

According to HP’s second-quarter earnings report for fiscal year 2019, HP’s second-quarter net revenue was $14 billion, up 0.2% year-on-year, and net profit was $800 million, down 26.1% year-on-year.

Merger and acquisition
Lenovo continued to expand its footprint with a successful acquisition, and eventually achieved a turnaround for HP PC business.

However, on the road to acquisition, HP is not smart.

When the mobile Internet is in the ascendant, HP is also seeking a layout in this area. In 2010, Hewlett-Packard spent $1.2 billion to acquire Palm. However, Palm, which was in the same period as Nokia, did not have the mobile Internet technology. Under the cloud of Google and Apple, Palm never reversed the success of a hardware manufacturer. . Only a year later, the Palm project was discontinued by HP.

In the same year, HP spent $11.1 billion to acquire the British software company Autonomy. Unexpectedly, Autonomy provided a wrong financial report for Hewlett-Packard before the acquisition. The acquisition directly brought a loss of $8.8 billion to Hewlett-Packard.

At the time of HP’s crisis awareness, capital operation did not bring any impetus to the evolution of the industry, but it financially dragged the group behind. Since then, various attempts by HP in capital operations have been accompanied by too much negative news.

According to statistics, in 2006-2016, HP completed a total of $19 billion in acquisitions, but these acquisitions contributed only 7% to overall profits.

In 2015, the Silicon Valley-created HP completed the spin-off under the leadership of CEO Meg Whitman. After the spin-off, one of the companies will be called HP Enterprise, which is dedicated to providing software, services and hardware to enterprise users. This company will be personally led by Whitman himself. Another company, HP Inc., will sell hardware products such as PCs and printers to business users and consumers, and the division will be led by Dion Weisler.

The spin-off was not successful in the eyes of many HP people.

“In the past, in addition to personal business in China, HP’s core business is cloud computing, services, software and infrastructure. But since the company split, the only business that belongs to HP is HPI.” After the plates were split, quality assets became the cake of others.

This move also led to a large loss of HP’s talents, the status of rivers and lakes plummeted, and the top 50 became the top 500. Today, HPI has inherited the name of HP, and HPE has been renamed Huihe.

Successive losses and data show that in the HP business landscape, in addition to the PC business, the printer business plays a very important role. The acquisition around the printer business has never stopped.

At the end of 2017, HP announced the completion of the acquisition of Samsung’s electronic printer business, with a total value of US$1.05 billion, or approximately RMB6.95 billion. After acquiring the Samsung electronic printer business, HP’s global share of printers and printing supplies is estimated to be as high as 55%-60%, and the global leading position is quite obvious.

HP’s wishful thinking is certainly not limited to Samsung’s market share. After the acquisition, HP will receive more than 6,500 patents from Samsung printers and a top team of nearly 1,300 R&D staff and engineers from the fields of laser printing, electronic imaging and consumables and accessories.

According to the latest data, HP Printing Group’s second-quarter revenue was 5.116 billion US dollars, down 2% compared with 5.241 billion US dollars in the same period last year. The impact of exchange rate fluctuations was 2% lower than the same period of last year; operating profit margin was 16.4%. . Among them, commercial hardware shipments decreased by 3% year-on-year, personal hardware revenue decreased by 4%, and total hardware shipments decreased by 4%. The revenue of the HP printing business continued its downward trend in the first quarter.

History is always strikingly similar, and the acquisition of Samsung’s printing business seems to be reminiscent of HP’s acquisition of Compaq’s planer. The same for the first throne, the same big bet is completely competitive in the market.

The HP that gave birth to the legend of Silicon Valley is struggling to kill in the Red Sea. The stories that belong to it seem to only live in the “old days.”