Showing posts with label HP. Show all posts
Showing posts with label HP. Show all posts

Monday, April 08, 2013

Inbox : This Fortnight

INTERNATIONAL
BUSINESS, ECONOMY & FINANCE
Meg in, leo out!

When Leo Apotheker was named CEO of HP in October last year, there were doubts about whether a the former CEO of a software company (SAP) would ever be able to handle a mix of hardware and software at the world’s largest IT company (in terms of topline) as the CEO. After analysing the situation and his competencies, B&E did a story titled, “Wrong person. Wrong place” (issue dated November 11, 2010), in which we concluded that “The new CEO is a software guy and has prior experience only in enterprise sales – A clear mismatch with the current philosophy of HP – the largest IT company in the world”. When he announced his decision to sell off HP’s hardware division and buy out Autonomy for $11.69 billion in the last week of August 2011, we ran a follow-up story titled, “Is Apotheker destroying HP?” (issue dated September 15, 2011). This was our claim: “Apotheker, had little clue about what could potentially be done with a PC-plus-services portfolio. Post sell-off of the PSG unit, the company stands to lose $400.74 billion in expected revenue earnings over the next 20 years (arrived at using a binomial regression forecast model; R2=0.99; Eqn: y = -37.75x2 - 1395x + 42154).” The expected followed. Apotheker was booted out of the company. HP’s Board confirmed this publicly on September 22, 2011.

First question: Did he really deserve the bullet so soon? Actually, Apotheker has done enough in 9 months than what humans are usually capable of. Under him, HP’s m-cap shrunk to $47.52 billion – a fall of 51.52% since he took over!

Interestingly, the very moment the Board announced Apotheker’s exit, they pulled out another “typically-HP Board” trick. Former CEO of eBay Meg Whitman, with no prior experience in the field of hardware, was handed over the crown.

This brings us to the second question: Is a lady, who in the past four years was known only for two less-than-glorious acts – she resigned as eBay’s CEO in 2007 and then unsuccessfully ran for the office of the Governor of California (after spending $322.5 million in election campaigns) – fit to become the CEO of the world’s largest IT firm? Apparently, she is a fast learner. And what HP needs right now is someone with a vision. Remember, it was her vision that made eBay buy Skype for an inflated $4.1 billion in cash in 2005 (and which was later sold at $2.75 billion in 2009). But at least a move like this will keep HP’s hardware and software units going for some years! Apotheker destroyed more than 51% of HP’s m-cap in less than a year. How long will Whitman take to wipe out the rest? Difficult to say. But, if she manages to convince the HP Board to eat its own words and retain the hardware and mobility units (with webOS), she would have scored a one on ten to begin with in our books.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles

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Tuesday, March 26, 2013

Will they be Good at Crossing ‘Tablets’?

A number of low cost Giants are Preparing to launch tablets in India, Motivated by the way The Mobile Phone landscape changed in The Country. Is an Encore as Certain as expected

First there were desktops. Then there were laptops. Then there came mobiles. Indeed these devices made life simpler. But then, as smart phones, netbooks, media PCs, smartbooks, mobile internet devices and now tablets have come into the picture, life is not necessarily easier, neither for companies nor customers. For innovator companies like Apple, which rejuvenated the tablet segment in the first place, the challenge is to be able to milk innovation fast enough before competitors bring in substitutes and disrupt their pricing structure. Within a short span of launch of the iPad, competitors like HP, Blackberry, Dell, Samsung, HTC and Asus came into the fray.

Simultaneously, there are a host of Asian players who are looking to grab the opportunities in this new gold mine, and India will be very firm on their radar. After all, a precedent was set for them when Nokia suffered deep cuts in its market share from 60% in 2008 to around 31.5% by the quarter ending September 2010, thanks to players like Micromax, Lava & G’Five, who enhanced the value proposition by many times.

Now these players are set to enter the emerging tablet PC market in India with a price tag less than Rs.15,000. Delhi-based Lava Mobiles is on the verge of introducing its affordable tablet PC by September this year, which will be priced between Rs.15,000 and Rs.20,000. Micromax has plans to launch a tablet somewhere in July. Though initially these tablets might sound a bit expensive, prices will most likely fall. According to report released by the Boston Consulting Group titled ‘Swimming against the tide’, competition will drive down prices of affordable tablet PCs to Rs.9,000 by 2013. This is reaffirmed by S. N. Rai, Director and Co-founder, Lava Mobiles, as he exclaims, “Once our range of Tablet PCs is launched, we will keep working on the innovation side and therefore expect that the price will come down further to sub Rs.10,000 levels.” Zen, Olive, G’Five, Acer and Fly are expected to make their launches soon. But will customers, who pay for sub-Rs.5000 mobiles, show the same response to sub-Rs.15,000 tablets from these companies? According to Arshit Pathak, MD, G’Five, “Tablets from Apple and BlackBerry will be an add on for people who already own a laptop and/or a smartphone, but our product will be an independent device and will target people who don’t have any computing system.” They will look at students, SMEs & young professionals who wish to remain connected, have a better multimedia experience and don’t wish to spend on a notebook or a smart phone.

When the phenomenon called the Apple iPad took over the computing world last year in March, the immediate result was a fall in netbook shipments. In the nine months ending December 31, 2010, Apple sold 15 million iPads globally. Gartner estimates worldwide media tablet sales to touch 54.8 million units in 2011, up 181% from 2010, and surpass 208 million units in 2014. In fact, a recent study conducted by Accenture titled ‘Finding growth: Emergence of a new Consumer Technology Paradigm’ states that “while the growth rate of computers is expected to decline, the growth rate of tablet PCs is expected to be up by 160% in 2011”.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

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