HP surrenders as post-PC era beckons

The stunning announcement by Hewlett-Packard, the world's top personal computer maker, that it is taking steps to exit the business is the surest sign yet the post-PC era is here.

"We tend to throw the 'post-PC era' term around a lot, but it's clear that, in the wake of HP's announcement, were closer than ever to that reality," said independent technology analyst Carmi Levy.

"When a stalwart of hardware's golden age essentially walks away from the business on which it was built," Levy told AFP, "it's easy to conclude that the point of no return has been officially passed."

HP said its board has authorized the evaluation of "strategic alternatives" for its unit that could sell or spin off its PC business into a separate company.

The Windows-powered PC has been at the center of the lives of consumers for years but the arrival of powerful smartphones - essentially pocket computers - and touchscreen tablets like Apple's iPad has lessened its importance.

Consumers no longer need a desktop or a laptop to be connected and with the steady erosion of profit margins on PCs, HP failed to position itself with the products of the future, Forrester Research analyst Sarah Rotman Epps said.

"What (the post-PC era) really means is not that PCs go away but that there's a shift away from computers to computing," Rotman Epps told AFP.

"Computing happens now on many different devices and it's a much diverse landscape than one type of computer," she said. "And HP really didn't have an answer for what was next beyond the PC.

"Where there are higher margin computing products being made HP hasn't been able to succeed," the Forrester analyst said, pointing to Apple as a technology company that has been able to do so.

"Apple has been able to innovate, to sell the iPad, an all-new form factor, because of its non-hardware ecosystem," Rotman Epps said. "It has the channel in the Apple store, it has the service, and it has the software - iTunes, the App store, the whole developer platform."

"HP took a baby step towards getting there when they acquired the Palm webOS but they weren't willing to really go full throttle and invest the capital that would have been needed to make that a successful business," she said.

California-based HP also said it was stopping production of its iPad rival, the TouchPad, and phones based on the webOS mobile operating system acquired from Palm last year for $1.2 billion.

Explaining the moves, HP chief executive Leo Apotheker said the weak economy was having an impact on PC sales but there is also a "clear secular movement in the consumer PC space."

"The velocity of change in the personal device marketplace continues to increase and the competitive landscape is growing increasingly more complex, especially around the personal computing arena," Apotheker said.

"The tablet effect is real and sales of the TouchPad are not meeting our expectations," he said.

Gartner analyst Mark Margevicius said HP's decision to sell or spin off its PC division was more about the shrinking profit margins in the PC industry than anything else.

"The PC market has transformed into a tactical, commoditized business," Margevicius said. "We're not in an era when the PC is dead. The PC market is flat but it's still a huge business.

"If the PC business was a business that generated 20 percent margins HP's not dumping their PC business," Margevicius said.

In jettisoning its PC unit, HP is taking a page from the playbook of IBM, which sold its PC business to China's Lenovo in 2004 to concentrate on servers, software and services for the enterprise market.

"In a way, these two transactions bookend the transition from hardware to a software- and services-based post-PC focus where the device that runs a service is less important - and profitable - than the service itself," Levy said.

"The trend has been building for years, as margins on hardware have become consistently tighter," the Ontario-based analyst said.

"While it is still possible to build a profitable business based on selling hardware, the returns - coupled with limited future growth potential - are often insufficient for edgy investors," he said.

"HP's move confirms, as if we weren't already convinced, that the box itself no longer matters," Levy said. "It's the value of the software that runs that box, and the services delivered via that software, that are most notable - and profitable - now."

Sport
Luis Suarez and Lionel Messi during Barcelona training in August
footballPete Jenson co-ghost wrote Suarez’s autobiography and reveals how desperate he's been to return
News
newsMcKamey Manor says 'there is no escape until the tour is completed'
Voices
Hunted: A stag lies dead on Jura, where David Cameron holidays and has himself stalked deer
voicesThe Scotland I know is becoming a playground for the rich
News
people
PROMOTED VIDEO
Life and Style
ebooksA superb mix of recipes serving up the freshest of local produce in a delicious range of styles
Life and Style
ebooksFrom the lifespan of a slug to the distance to the Sun: answers to 500 questions from readers
Arts and Entertainment
Architect Frank Gehry is regarded by many as the most important architect of the modern era
arts + entsGehry has declared that 98 per cent of modern architecture is "s**t"
Money
Welcome to tinsel town: retailers such as Selfridges will be Santa's little helpers this Christmas, working hard to persuade shoppers to stock up on gifts
news
Arts and Entertainment
Soul singer Sam Smith cleared up at the Mobo awards this week
newsSam Smith’s Mobo triumph is just the latest example of a trend
News
Laurence Easeman and Russell Brand
people
Sport
Fans of Dulwich Hamlet FC at their ground Champion Hill
footballFans are rejecting the £2,000 season tickets, officious stewarding, and airline-stadium sponsorship
News
Shami Chakrabarti
people
Arts and Entertainment
Benedict Cumberbatch has refused to deny his involvement in the upcoming new Star Wars film
filmBenedict Cumberbatch reignites Star Wars 7 rumours
Sport
football
News
news
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Business Analyst - Surrey - Permanent - Up to £50k DOE

    £40000 - £50000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

    ***ASP.NET Developer - Cheshire - £35k - Permanent***

    £30000 - £35000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

    ***Solutions Architect*** - Brighton - £40k - Permanent

    £35000 - £40000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

    Senior Software Engineer - C#, VB.Net, ASP.Net - Kingston, Sur

    £50000 - £60000 per annum: Ashdown Group: Senior Software Engineer - C#, VB.N...

    Day In a Page

    Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

    Wilko Johnson, now the bad news

    Former Dr Feelgood splits with manager after police investigate assault claims
    Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

    Mark Udall: The Democrat Senator with a fight on his hands

    The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
    New discoveries show more contact between far-flung prehistoric humans than had been thought

    New discoveries show more contact between far-flung prehistoric humans than had been thought

    Evidence found of contact between Easter Islanders and South America
    Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

    Cerys Matthews on Dylan Thomas

    The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
    DIY is not fun and we've finally realised this as a nation

    Homebase closures: 'DIY is not fun'

    Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
    The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

    Air New Zealand's wizard in-flight video

    The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
    Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

    Pumpkin spice is the flavour of the month

    The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
    11 best sonic skincare brushes

    11 best sonic skincare brushes

    Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
    Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

    Paul Scholes column

    I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
    Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

    Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

    While other sports are stalked by corruption, we are an easy target for the critics
    Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

    Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

    Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
    How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

    A crime that reveals London's dark heart

    How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
    Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

    Lost in translation: Western monikers

    Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
    Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

    Handy hacks that make life easier

    New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
    KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

    KidZania: It's a small world

    The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker