Sunday, July 21, 2013

Why HP Has An Edge on Microsoft in Consumer Markets

HP is a hardware company trying to reinvent itself into a software and cloud computing company, which will include some high end servers/storage appliances.  Microsoft has a business with high end servers and business software, but with a consumer business which is stumbling out of the gate.

Is there a difference between the two?  HP's long experience with home and small business printers is a differentiator.  HP translated a dominating market share in high volume, business laser printers into a cash cow franchise, based on supplies, for the consumer market.  It learned about models for different retail channels and constantly tinkered with the printer itself to make it lighter, cheaper and almost disposable.

On the laptop side, it translated a leading position with the business enterprise into a leading position with the home user, despite the presence of Dell.

HP has also entered the tablet market alongside Dell and other Android OS manufacturers.  It hasn't had a real winner yet, but its Slate has earned some passable reviews compared to the Nexus 7, and it has responded to the market by cutting prices to clear inventories, hopefully in preparation for a new model. Like many of its laptops, their tablet is private-labeled by Asus.

Since HP uses Android for the OS, it isn't saddled with Microsoft's problem of loading Windows 8 onto the Surface, which is where Microsoft shot itself in the foot.  Knowing that developing a separate OS for tablets was out of the question, they opted instead to handicap their tablet and confuse customers with Windows 8 and Windows 8 RT.  The Windows cash cow became an albatross in the tablet market.

What Microsoft does next after the Surface write-down, with the new Hardware organization in place, will be telling.  As the Stones put it musically, I've got "No Expectations."

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