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."

Life and Style
ebookNow available in paperback
ebooks
ebookA delicious collection of 50 meaty main courses
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    SThree: Trainee Recruitment Consultant

    £18000 - £23000 per annum + Uncapped OTE: SThree: Trainee Recruitment Consulta...

    SThree: Trainee Recruitment Consultant

    £18000 - £23000 per annum + Uncapped OTE: SThree: Trainee Recruitment Consulta...

    Recruitment Genius: Network Support Engineer

    £25000 - £30000 per annum: Recruitment Genius: A Network Support Engineer is r...

    Recruitment Genius: Account Director - Tech Startup - Direct Your Own Career Path

    £25000 - £40000 per annum: Recruitment Genius: This is an exciting opportunity...

    Day In a Page

    Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

    Cameron lowered the flag for the dead king of Saudi Arabia...

    But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Humanity must be at the heart of politics, says Jeremy Corbyn
    Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

    Joe Biden's 'tease tour'

    Could the US Vice-President be testing the water for a presidential run?
    Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

    Britain's 24-hour culture

    With the 'leisured society' a distant dream we're working longer and less regular hours than ever
    Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

    The addictive nature of Diplomacy

    Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
    Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

    Fashion: Ooh, Lady Chatterley!

    Take inspiration from DH Lawrence's racy tome with equally racy underwear
    8 best children's clocks

    Tick-tock: 8 best children's clocks

    Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
    Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

    Charlie Austin: ‘If the move is not right, I’m not going’

    After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
    Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

    How Isis profits from destruction of antiquities

    Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
    Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

    'If we lose touch we’ll end up with two decades of the Tories'

    In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
    Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

    The Arab Spring reversed

    Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
    King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

    Academic claims King Arthur was real - and reveals where he lived

    Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
    Who is Oliver Bonas and how has he captured middle-class hearts?

    Who is Oliver Bonas?

    It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
    Earth has 'lost more than half its trees' since humans first started cutting them down

    Axe-wielding Man fells half the world’s trees – leaving us just 422 each

    However, the number of trees may be eight times higher than previously thought
    60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

    60 years of Scalextric

    Model cars are now stuffed with as much tech as real ones