Hewlett-Packard (NYSE:HPQ) has decided to concentrate on developing and marketing tablets running Intels x86 processor powered by Windows 8 Pro and is steering clear of the ARM processor based Windows 8 RT tablets. The key difference between the two versions of the tablet is that the Intel x86 based tablet is more powerful and is backward compatible to a host of Windows applications, including MS Office and is likely to be used as a productivity tool, replacing laptops while the ARM models are mostly used for media consumption and casual usage.
HP is the world’s largest PC manufacturer with a huge institutional client base and is backing the format that can leverage this network. The ARM tablet space is dominated by Apple with the iPad and HP is sticking to its strength by making productivity focused tablets. 
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Leveraging The Institutional Client Base
The HP TouchPad based on the WebOS was HPs first attempt at gaining market share in the tablet market and was suspended last year due to poor performance. The ARM based tablet space is crowded and is dominated by Apple’s iPad and is consumer oriented, a market the HP failed to penetrate with the TouchPad. The biggest advantage of the ARM architecture based tablets running Windows RT is the battery life, but these tablets will run only apps developed for Windows 8. The Windows 8 Pro based tablets will run most legacy applications and is backward compatible, which is the biggest advantage it has to tap into the institutional client base, making it easy to integrate into a clients IT systems. Currently HP has negligible revenues from tablets and is a potential growth market for the PC manufacturer.
We currently have a $31.60 Trefis price estimate for HP, which is much higher than the current market price.Notes:
- Hewlett-Packard To Shun ARM At Debut Of Microsoft Windows 8, www.bloomberg.com, June 30, 2012 [↩]