After claiming Apple is poised for doom for so long, it’s going to be real hard for some members of the media and financial community to admit there are better suited candidates to include in the list of troubled companies. It’s not that news of those companies is being hidden, but they won’t give it much play unless it’s all somehow linked to Apple.
So you have a story in the Wall Street Journal about Samsung’s ongoing problems competing in the mobile handset space against not just Apple, but against such companies as Xiaomi Tech at the low end. So Samsung is being encroached on both ends of the market, and that is considered one of the key reasons why the company is reportedly going to report a drop of 62% in operating profits for the latest quarter. That makes four bad quarters in a row, which is not such a good thing for a company that was once considered to be unstoppable.
To make matters worse for Samsung, Apple has taken away the biggest argument to get a Samsung smartphone, and that’s display size. With the 4.7-inch iPhone 6, and the 5.5-inch iPhone 6 Plus, which is expected to garner a hefty portion of the market in Asia once supplies improve, demand is said to be off the charts.
Of course, we will know more once Apple’s quarterly financials are disclosed on October 20. But it would be surprising if there wasn’t a pretty large boost in iPhone sales compared to last year, what with 10 million units sold as of the first weekend.
How Samsung will cope with this turn of affairs is ripe for speculation. It doesn’t seem as if there is much new, other than to take existing products and do modest refreshes. The Galaxy S5, with a barely usable fingerprint sensor, failed to catch fire. There are hopes for the Galaxy Note 4 phablet, but there are also published reports that graphics performance is nothing to write home about.
One thing Samsung might do, of course, is to settle the patent disputes with Apple. That might encourage Apple to do more business with them, which would surely help compensate for the lost sales in Samsung’s mobile handset business.
That takes us to another tech powerhouse, one that highly influenced Apple over the years, and that’s HP. It’s fitting that Apple’s new spaceship campus in Cupertino, CA is being built on land formerly occupied by HP.
So we have the announcement this week that HP is splitting itself into two. One division will handle the traditional PC and printer business, while the other will cater to the enterprise with servers, software and services.
Certainly Wall Street has reacted positively to this musical chairs scheme, which will culminate next year. But I fail to see how reorganizing corporate umbrellas will somehow boost revenue and profits. Perhaps it will give HP room to sell off the HP Inc. division, the one that will sell PCs and printers, to a company that might fare better in the marketplace. I’m reminded of IBM’s decision in 2004 to sell off the PC division to Lenovo of China.
It’s fitting to note that Lenovo has actually been quite successful and, along with Apple, has been one of the few PC makers to actually gain market share. Indeed, in the recent quarter, Lenovo reportedly outsold HP, which causes one to wonder just what HP is doing wrong and how the latest desperate maneuver will change things.
What is clear, though, is that CEO Meg Whitman has yet to express a genuine vision for the future of HP that will somehow deliver improved financials. Why would an HP customer care which division sells what? If the prices are the same, the products are the same, and the quality of support is the same, what difference does a change in corporate structure do?
What might happen, I suppose, is that it would give investors more options, and they can decide which division to back and which division to ignore.
The issue with HP may also be that, typical of many companies, it’s just trying to do too many things, which makes it more difficult to be a lean and mean competitive machine. So being split in two parts may give the two companies more incentive to boost revenue. After periods of layoffs, it may also create the need for more employees, since certain tasks may not be divided among different divisions.
Still, I cannot see why anyone would be more tempted to buy an HP PC or printer, although both are well designed and reliable. Would being part of a separate company somehow inspire a new wave of innovation? I also fail to see how more HP servers will be sold to the enterprise, or how any of the services and software products that are being offered will suddenly become more attractive to customers.
I also wonder if an HP enterprise salesperson, freed of dependence on the company’s own PC and printer divisions, would be free to begin to recommend someone else’s products instead. Imagine an HP rep selling Lenovo PCs.
| Print This Article