Think of it as Moore's Law in action.
HP (HPQ) is in a commodity product trap from which it can't escape. Talk of it being undervalued is thus premature.
You can see the problem with its new product line.
- Intel-based Ultrabooks (no hard drive) priced starting at $749.
- AMD-based "Sleekbooks" at $150 less than that.
- New styling for the standard Pavilion laptops with prices starting at $549.
- A new printer-scanner, called the PhotoSmart, priced starting at $129.
These are commodity products, with commodity prices. They are not exciting. They are not new or different. They are not an ecosystem, unless you consider ink-and-paper an ecosystem. Basically HP is running in place, waiting for Windows 8 to drop.
But waiting for Windows 8 means remaining a commodity-priced hardware company that lives inside another company's ecosystem, Microsoft's (MSFT). They are an office products company, selling into a replacement market. That means falling prices and tiny margins.
If there is to be a renaissance at HP, it will come from the former EDS unit. It will come from high-value consulting and cloud work, not from computers and printers. Think they can beat IBM (IBM)?
I don't.
