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HP forecasts shaky outlook based on weak home PC demand

updated 06:10 pm EST, Tue February 22, 2011

HP home PCs decline in Q1, get shaky outlook

HP signaled potential problems with its home business both in its past quarter and in the near future. The Personal Systems Group, which covers its PCs and mobile devices, saw its winter revenue dip one percent year over year in a market where others were growing. It specifically singled out the home as sales of regular PCs, like the Pavilion line, plunged 12 percent.

"We assumed that we would deliver growth in consumer [computers]," CEO Leo Apotheker said. "Unfortunately, this did not play out in Q1 due to softness in the older consumer PC market."

The company also didn't expect this performance to turn around for the ongoing quarter, which started in February and ends in April. It didn't see earnings going about $1.21 per share, and revenue of up to $31.6 billion, where the analyst consensus had expected $1.25 per share and $32.6 billion in revenue. HP again blamed expected weaknesses, both in the home PC business but also in services.

While the company as a whole saw its net earnings jump a healthy 17 percent year over year, the results suggested HP was likely to lose market share to faster-moving rivals that were growing. NPD data published today had Apple's Mac sales up 20 percent year over year in January. The growth could see Apple close the gap in the US at the expense of HP, although whether it gains in standing will also depend on how usual rivals Acer, Dell and Toshiba compete.

HP didn't narrow down causes for the drop but has been a minor victim of the iPad and other tablets by leaning so heavily on its Mini netbooks and low-end Pavilion notebooks. It did expect an improvement later this year once webOS devices like the TouchPad and Pre3 are in the market. Apotheker stressed that the upcoming March 14 event would have a special role to play.

By Electronista Staff
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  1. macnnoel

    Fresh-Faced Recruit

    Joined: Feb 2005


    PC formula for success:

    - cram as much technology, features and more features
    - gigahertz
    - more gigahertz
    - load crapware from third party to recoup some revenue from thin margin and pretend it's the value-added product differentiator, what the consumer wants
    - bill as "the next [insert Apple product here] killer
    - load winlose 7

    - no one buys
    - wonder why market share dips again.
    - make some scathing remarks about Apple products
    - fire CEO, hire another lemming
    - rinse, wash, repeat

  1. DeezNutts

    Fresh-Faced Recruit

    Joined: Apr 2008


    Not surprising

    The market is pretty saturated, and seriously... the stuff works well enough. There are no new killer products on the horizon (PC Software wise).

    Add to the fact that Windows 7 does not require massive hardware investments like vista did and its no wonder.

    I'm running Win7 on a machine built in 2007 and it screams.

    I have no reason to buy new hardware as the equipment I have does everything I need and there just isn't anything that interesting out there right now that I see a need to spend money in the PC realm.

    Now if you are talking about buying something new and cool, like I don't know, an iPad or something... yeah that interests me.

  1. danangdoc

    Junior Member

    Joined: Jan 2007


    What Macnnoel said...

    If HP thinks it's market share dropped, wait until the new MacBooks are released (shortly), and then again for the March (2nd?) release of the iPad2 ( I'm getting mine! ) to really dull the sales figures out at HP.
    What HP needs to do:
    Add speed
    Add memory
    Add SSHD
    Better camera
    USB2 and USB3
    Light Peak
    Better screen.
    Add some real value-added software, like Apple does with OS-X
    Don't increase the price.

  1. Bobfozz

    Fresh-Faced Recruit

    Joined: Jul 2008


    HP hardware is c***

    And they have so many different printers. I spent $800 some years back on a scanner and they wouldn't update the drivers. Now it isn't much more than a paperweight. Only works on OS 9 yet for a change did a great job of scanning at any dpi.

    HP is not focused.

    Their stuff is also cheap and plastic breakable parts.

  1. climacs

    Mac Enthusiast

    Joined: Sep 2001


    c.rap indeed

    my mom has a Pavilion, what a hunk of junk. The wireless card has been virtually useless for the past year despite all my efforts to revive it. If you think about it, a laptop with a dead wireless card is kind of useless for most people. Why would a wireless card go dead for any reason other than physical shock or someone getting inside and messing with the internal components? It just sits there.

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