HP Inc. (NYSE:HPQ) generates its revenues from the sales of desktops, notebooks, workstations, print supplies, consumer hardware, and commercial hardware products, clubbed under two segments ~ Personal Systems, and Printing. In this note we discuss the company’s segments, their performance in recent years, and expected trajectory in the coming years. You can look at our interactive dashboard analysis ~ HPQ Revenues: How Does HP Inc. Make Money? ~ for more details. In addition, look at more Trefis technology companies data here.
Hp Inc. Generates Its Revenue From Sales of Personal Systems, Which Includes Notebooks, Desktops And Workstations, And Printing, Which Includes Supplies, Commercial Hardware, And Consumer Hardware.
Revenue Contribution As of Fiscal 2018:
- Personal Systems: 64%
- Printing: 36%
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HP Inc Business Model
- What Need Does It Serve:
- HP Inc. sells personal computing devices, printing products, and related technology solutions. Its revenues can be divided into two segments: 1. Personal Systems, and 2. Printing.
- Who Pays To HP Inc.?
- Consumers and the business segment across industry verticals buy from HP Inc.
- What Do Buyers Care About?
- Buyers of HP Inc. products primarily care about price, latest technical know-how in terms of processor speeds, hard disk space and other features, easy after sales support, weight in terms of portability, speed, and life of device.
- Who Are The Competitors To HP Inc.?
- Competitors in the printing space are Canon, Xerox, Epson, and Lexmark, among others.
- Competitors in desktops and notebooks are Dell, Apple, Asus, and Acer, among others.
- HP Inc.’s total revenues grew from $48.2 billion in fiscal 2016 to $58.5 billion in fiscal 2018.
- This represents an average annual growth rate of 10.1%.
- We forecast the revenues to be around $60.3 billion by fiscal 2020, reflecting an average annual growth rate of 1.6%.
- Notebooks revenue has grown from $17.0 billion in fiscal 2016 to $22.5 billion in fiscal 2018, and we forecast the revenues to be $23.7 billion in fiscal 2020.
- Desktops revenue grew from $10.0 billion in fiscal 2016 to $11.6 billion in fiscal 2018, and they could grow to $12.3 billion in fiscal 2020.
- Workstation revenues grew from $1.9 billion in fiscal 2016 to $2.2 billion in fiscal 2018, and it will likely grow to $2.5 billion in fiscal 2020.
- Expected slower growth in the near term can be attributed to the launch of newer generations chips from Intel and AMD, resulting in delay in purchase or replacement of notebooks. Also, the overall chips shortage from Intel for desktops and notebooks will likely weigh on fiscal 2019 performance.
- Trade tensions between the U.S. and China, and a slowdown in Chinese economy could also impact the near term sales growth.
Printing Revenue Could Decline In Low Single-Digits Over The Next 2 Years
- Printing supplies revenue grew from $12.0 billion in fiscal 2016 to $13.6 billion in fiscal 2018. We forecast the sales to decline to $13.2 billion by fiscal 2020.
- Commercial hardware sales grew from $3.8 billion in fiscal 2016 to $4.7 billion in fiscal 2018, and it could grow to $5.0 billion by fiscal 2020.
- Consumer hardware revenue grew from $2.4 billion in fiscal 2016 to $2.6 billion in fiscal 2018. We forecast the sales to decline to $2.4 billion by fiscal 2020.
- HP has been focusing on contractual solutions, Graphics and 3D printing to aid the segment growth.
- In the near term, a slowdown in the Chinese economy, and trade tensions between the U.S. and China could impact the segment sales.
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