Can HP face Palm again?
There’s a new report that Hewlett-Packard might be about to jump into the mobile phone business. Its last such venture – the capture and rapid slaughter of Palm and its webOS in 2010 – is generally regarded as a disaster. But HP has to try again. It has no choice.
Computer sales are slipping, both for HP and the industry in general as tablet sales climb. It does make a Windows tablet, but that pretty much says it all. Hardly anyone is buying them.
The big question for HP is: does it try to swim in the mainstream of the mobile market and embrace the Android operating system, for both phones and tablets, or does it try to differentiate itself with an alternative like Linux or Firefox?
To succeed, HP has to come up with a unique selling proposition. The brand still has some lustre, but as the Palm debacle showed, that’s not enough to sell phones or an independent operating system. Its brand image is strong on technology and embarrassingly weak on design. So its best hope of catching the market’s attention is to come out with a product with new features and better performance.
Blackberry’s imminent demise could provide an opening. The HP brand is much loved by IT managers. By creating a product that meets bring-your-own-device standards and delivers a user experience that appeals to employees, it might fill a niche in the corporate world. Combining a novel operating system HP controls with its historical technological excellence might be enough.
I doubt HP wants to be a niche player, but right now that would be a step up.
First new Chevy of the 80s.
Hewlett Packard is the latest high tech company to distance itself from reported labor practices used by some Chinese contract manufacturers. It’s telling its suppliers to limit the number of student-age workers, the type of work they do and the hours they work.
The email to HP’s suppliers follows similar measures by Apple and Samsung. Two weeks ago, Apple said that a labor contractor used by one of its Chinese suppliers was forging documents in order to hire underage workers.
It’s a common enough problem: shoddy labor practices in a low wage market are exposed, large multinationals that benefit take a hit to brand image and announce measures to ensure it doesn’t happen again.
The new rules won’t disrupt HP’s (or Samsung’s or Apple’s or anyone else’s) supply chain. They’re all more or less adopting common standards. Costs will go up, but the problems with illegal and/or unethical labor practices are a symptom, not a cause of the increase. Wage expectations in China are rising along with living standards. The problems we’re seeing with labor practices are ill considered and, ultimately, futile efforts to fight that trend. The result will be renewed focus on improving productivity, a growing move to even lower wage economies and product price increases.
But HP has even bigger problems. It’s still the world’s biggest personal computer maker, but it’s caught between a market shift towards tablets, smart phones and other trendy devices, and what seems to be an institutional inability to make attractive products.
Like Dell, HP makes bulky commodity computers. Its Chromebook entry has a form factor only an IT manager could love. The comparison that keeps coming to mind is 1980s Chevys versus Japanese imports of the time. Stodgy styling was fine for corporate fleets, but consumers wanted something with more imagination. Unlike General Motors, though, the quality of HP’s products is as good as anyone’s. Which is a good place to start.