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July 30, 2005
My Bad (H-P's Too)
Posted by Dana Blankenhorn
Hewlett-Packard is apparently ending its relationship with Apple.
When I last wrote about the company I called this relationship a key to new CEO Mark Hurd's future. Apparently this was just a re-sale agreement, and H-P's channels were pushing out only 5% of the iPods being sold. (My mistake.)
So they're dropping it. And they're blaming Carly Fiorina. (Of course.)
But I believe Apple remains the key to any possible H-P comeback. (Here's why.)
Shaw Wu of American Technology Research approved the deal in AP's story, calling H-P "a technology company and "an innovator."
But in the PC business, which is the heart of the market's volume, what innovation is possible?
Is H-P going to suddenly push Linux desktops? No? Then there are only two kinds of PCs it can make -- Windows PCs and Macintosh PCs.
H-P has been flailing in the Windows market for years now, trailing Dell badly because it can't cut its costs and distribution channels far enough to match Dell's just-in-time manufacturing and pricing.
For Hurd to try to out-Dell Dell would be stupid. I don't care if he's got Michael's old CIO. Copying someone else isn't innovating.
But if he applied his mass production and distribution techniques to something with mass appeal but without mass sales -- say the Intel-based Macintosh due out in 2006 -- he might be able to do some business.
Now, it's possible that Jobs doesn't need this service. Obviously H-P didn't perform in terms of the iPod. A 5% share of iPod sales hardly seems worth the trouble.
But if H-P isn't going to make Macs, how is it going to grow?
Comments (3)
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Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
1. Chris on July 30, 2005 11:53 PM writes...
I agree with your assessment; I'd add that Steve likely doesn't _want_ any HP service, whether or not he needs it.
From HP's perspective, I think this could be a bad bean-counter-mentality mistake. Associating with the iPod was a great "halo" move, even if they lost (a small amount of) money on it. In the absence of stellar ideas from HP engineering, borrowing a halo from another company isn't a bad idea. It was the first --possibly only -- intelligent thing Carly did.
I mean, unless they plan to drop the consumer market, I don't see a better way to distinguish themselves from the other Dell-wannabes than riding the iPod wave. Maybe they really do intend to drop the consumer market.
Permalink to Comment2. C R on July 31, 2005 01:24 AM writes...
HP needs to offer low end Linux machines for consumers.
Everyone knows that,
but HP continues to be
an anti-competitive Microsoft desktop monopoly maintainer.
Permalink to CommentI refuse to to business with HP for that reason.
3. Eitan Caspi on August 2, 2005 03:19 PM writes...
It looks like HP is heading back to its origins. Focusing again.
It made its name for excellent hardware and services for the business sector.
The move Fiorina made, towards the consumers (which the iPod was a part of), was against the company's attitude and abilities.
This was a case of a company throwing its rider of its back. The transplant was rejected.
From my experience, HP has a much better server products than Dell.
Yes, Dell has lower prices, but it is felt when using the products. You get what you pay for.
HP will go bad if it will try to be DELL II.
Yes, it can cut some "fat" and work more efficiently, but we need a company like HP-pre-Fiorina, especially now that IBM sold its PC division, and we can't tell how it will work out.
HP can grow into IBM's market, which is in a shaky state now.
Apple? Let them move smoothly to Intel and lower their noses towards the masses, and only then HP should look into cooperating with it.
Permalink to CommentEitan Caspi
Israel
Blog (Hebrew): http://www.notes.co.il/eitan
Blog (English): http://eitancaspi.blogspot.com
"Technology is like sex. No Hands On - No Fun." (Eitan Caspi)