Articles for HP

HP Worst Hit As PC Market Stumbles in the Fourth Quarter

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Friday, January 13th, 2012 by Trefis Team

Worldwide PC shipments totaled 92.7 million in the fourth quarter of 2011 (4Q11), down 0.2% compared to the same quarter in 2010, according to research firm IDC. In terms of vendor market share, HP (NYSE:HPQ) continued its lead in 4Q11 accounting for 16.3% of the worldwide PC shipments, followed by Lenovo, Dell (NASDAQ:DELL), Acer Group and Asus in that order. HP market share however took a major hit during the quarter.

We estimate the PCs (Notebooks and Desktops combined) make up nearly 13% of our $42 Trefis price estimate for HP.

Europe Will Drag on IT Spending in 2012

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Monday, January 9th, 2012 by Trefis Team

Worldwide IT spending is forecast to total $3.8 trillion in 2012, a 3.7 percent increase from 2011 according to the latest outlook report released by research firm Gartner. While not much of a surprise, the growth estimate for 2012 is much lower than the 6.9 percent experienced by the industry in 2011 primarily due to the impact of Eurozone crisis and hard-disk drive shortage resulting from the flooding in Thailand. Lower IT spending could impact players like Accenture (NYSE:ACN), IBM (NYSE:IBM), Microsoft (NASDAQ:MSFT), Oracle (NASDAQ:ORCL) and SAP (NYSE:SAP) while a hard drive shortage will weigh on HP (NYSE:HPQ) and Dell (NASDAQ:DELL) as well as enterprise storage vendors like EMC (NYSE:EMC), NetApp (NASDAQ:NTAP) and IBM.

The reduced spending is expected to impact all the four major technology sectors, including computing hardware, enterprise software, IT services and telecommunications equipment and services, which will witness low to mid single digit growth in the year.

Cloud Computing and Mobility to Drive HP’s Networking Business in 2012

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Thursday, January 5th, 2012 by Trefis Team

The increasing adoption of cloud computing and penetration of mobile devices are the two biggest trends shaping the IT industry today. While a lot is said about the rapid pace at which these technologies are being embraced by consumers and enterprises alike, networking is another industry that is growing as much as, if not more, as a result of the growth in mobile and cloud. Networking benefits from increased demand for bandwidth capacity and wireless network architecture that cloud computing and mobile devices are generating. As a major player in the networking business, Hewlett-Packard (NYSE:HPQ) stands to gain significantly from these developments in 2012 together with other networking majors like Cisco (NASDAQ:CSCO), Juniper Networks (NYSE:JNPR) and Alcatel-Lucent (NYSE:ALU).

We currently have a $42 Trefis price estimate for HP which is significantly above the market price.

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Downside to HP and Dell as PC Shipments Drop

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Thursday, December 22nd, 2011 by Trefis Team

Intel (NASDAQ:INTC), the world’s largest chip company, recently reduced its fourth quarter revenue estimates by 6.8% citing that the continued hard disk drive supply shortage due to flooding in Thailand is holding up computer manufacturers. This is leading to lost sales for microprocessors and memory chips. With PC manufacturing taking a near term hit, we see some possible downside for leading PC makers like HP (NYSE:HPQ) and Dell (NASDAQ:DELL) using some back of the envelope estimates given our market share and pricing assumptions for these companies.

We estimate PCs make up nearly 13% of our $42 Trefis price estimate for HP.

HP Acquires Hiflex Software As Printer Market Returns To Growth

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Friday, December 16th, 2011 by Trefis Team

HP (NYSE:HPQ) recently announced the acquisition of Hiflex Software GmbH, a privately held global software solutions provider specializing in web-to-print and management information systems solutions for printing services. The acquisition coincides with the worldwide hardcopy peripherals market returning to year-over-year growth in third quarter of 2011. HP continues to be the leader in the market with a dominating share of 42.9% followed by Canon (NYSE:CAJ), Epson and Samsung.

We estimate that imaging and printing offerings (printers & ink cartridges) make up nearly 23% of our $42 Trefis price estimate for HP.

HP Makes Its Move: Adds Box’s Cloud Collaboration to PCs

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Tuesday, December 6th, 2011 by Trefis Team

On Monday, HP (NYSE:HPQ) announced it will be offering the Box cloud content-management and collaboration platform on select small and midsize business and enterprise devices. The move, surprisingly, comes in tandem with a survey from PCWorld on ‘Desktop PC Reliability and Satisfaction’, in which HP’s business and home PCs performed poorly on parameters like durability and product support compared to most of their competitors including Apple (NASDAQ:AAPL), Asus and Acer. Dell (NASDAQ:DELL) also performed poorly – especially in the home segment.

HP earlier confirmed that it will not be spinning off its PC division as ex-CEO Leo Apotheker has suggested. We currently estimate that PCs (including desktops and notebooks & netbooks) make up nearly 13% of our $42 Trefis price estimate for HP.

HP Updates: Whitman Doesn’t Have a Clue About webOS, and Surprisingly PC

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Wednesday, November 16th, 2011 by Trefis Team

Last week on Tuesday HP (NYSE:HPQ) announced that it still was not sure what to do with WebOS, the mobile operating system it gained in its acquisition of Palm in 2009 for a staggering $1.3 billion. According to The Verge, which first reported about the meeting, CEO Meg Whitman told the room that a decision is coming in the next three or four weeks, not today. While a number of firms like Oracle (NASDAQ:ORCL), Amazon (NASDAQ:AMZN), IBM (NYSE:IBM), Intel (NASDAQ:INTC), and RIM (NASDAQ:RIMM) were touted as potential buyers, apparently none made an acceptable offer.

What was more surprising is that Ms. Whitman also said that she needed to figure out what to do with HP’s huge PC business, which she earlier announced HP will keep to assure the investors, and how to deal with the integration of Autonomy, which HP bought for more than $10 billion.

We currently have a $42 Trefis price estimate for HP, which is significantly above the market estimates.

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Big Data is for Real: EMC Sees a $70 Billion Industry Growing at Double Digits

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Wednesday, November 9th, 2011 by Trefis Team

According to EMC (NYSE:EMC) President Pat Gelsinger, Big Data is a $70 billion industry and growing at a rapid rate of 15% to 20% a year. In our view, this helps put to rest the notion that ‘Big Data’ is just a fanciful marketing term. As IDC puts it, “Big Data developments will be perhaps the most critical new marketplace for storage solutions providers in the coming decade. Providing a strong portfolio of complete Big Data solutions – hardware, software, and implementation services – will be a high priority to succeed.”

These are indeed exciting times for storage players like EMC, NetApp (NASDAQ:NTAP), HP (NYSE:HPQ), IBM (NYSE:IBM), and Dell (NASDAQ:DELL) among others that now face the challenge of securing their position in an industry undergoing rapid changes. We see outsized returns for the companies well positioned for this trend like EMC.

HP’s Stock Catches Tailwind After Whitman Cancels PC Spin Off

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Friday, October 28th, 2011 by Trefis Team

Barely a month after being named CEO, Meg Whitman Thursday announced that Hewlett-Packard (NYSE:HPQ) would keep its PC division rather than selling it off, reversing a plan proposed by former Chief Executive Leo Apotheker who was fired in September after a boardroom row over his plans for the business. When Meg Whitman announced she needed to do some “number crunching” to determine if HP should spin off its PC business, we had a strong suspicion that she would reverse this decision. So while not a total surprise, it does carry large implications for shareholders as well as competitors such as Dell (NASDAQ:DELL) and IBM (NYSE:IBM).

The press release mentioned that HP has completed its evaluation of strategic alternatives for its Personal Systems Group (PSG) and has decided the unit will remain part of the company. While the decision itself is not a big surprise as earlier reports indicated the costs to spin out the business would outweigh its benefits, such as its component-buying advantages, among other reasons. This also brings into question whether or not other decisions would be reversed such as HP’s tablet PCs and WebOS.

We currently have a $42 Trefis price estimate for HP which is significantly above the market price.

See our full analysis of HP.

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Backed by HP, SAP Jumps on the Cloud Bandwagon

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Monday, October 10th, 2011 by Trefis Team

SAP (NYSE:SAP) is one of the largest enterprise software players, but it has been present largely in the traditional on-premise software market. It competes with heavyweights like Oracle (NASDAQ:ORCL), Microsoft (NASDAQ:MSFT) and IBM (NYSE:IBM) as well as Salesforce.com (NASDAQ:CRM), the new leader in cloud based software. SAP announced a partnership with HP (NYSE:HPQ), to provide cloud based delivery of SAP applications via HP’s enterprise cloud platform.

We currently have a $62 Trefis price estimate for SAP, almost all of which is driven by its CRM, ERP and other enterprise software. Our price estimate stands nearly 20% above its current market price.

Check out our complete analysis for SAP