One thing about the technology landscape should be obvious. It’s constantly changing. Remember when the dominant smartphone makers were Nokia, Motorola, HTC, BlackBerry, and Samsung. Only Samsung remains profitable, but less viable than just a few years ago.
If you’ve been following technology trends recently you know that HP– Hewlett Packard— has undergone some drastic changes to keep up with the changes in the technology landscape. HP makes a little of everything except profits. PCs, printers, network gear and instruments, and a wife variety of enterprise products and services. It’s safe to say HP is a shadow of its former self. Literally.
HP, HPE, And Profits
How is industry giant HP a shadow of its former self? Well, the company just split up and became HP, Inc. and HPE, Hewlett Packard Enterprise. One is a shadow of the other (don’t ask which one). It’s sort of like what happened when IBM sold it’s PC business to Lenovo. Even in technology focus is important.
HP is the world’s third largest PC and tablet maker. That’s because it gives away a huge number of PCs and hybrid PCs, and tablets. When I say ‘give away’ that means there isn’t much profit coming back from the sales of what amount to commodity items. Only Lenovo and Apple sell more computers than HP but it’s Apple which holds most of the industry’s profits, and it doesn’t matter which hardware we’re talking about; PCs, tablets, hybrids, smartphones, smartwatches, whatever.
Apple does well what HP has been unable to do for a few decades. Make insane amounts of profits.
Maybe that’s about to change. If Apple’s past misfortunes and co-founder Steve Jobs’ decade or so of playing Moses in the wilderness taught him anything, it’s that discipline and focus and profits are important to a company’s well being, and that’s important to customers.
HP, Inc, the part of HP that sells PCs, hybrids, tablets, and whatever else that uses electricity and still hold an HP logo has decided to exit the cheap Android tablet business. Why? There’s no money there. HP cannot differentiate its product from competitors. And, well, again, there’s no money there.
If you want a very inexpensive Android-based tablet that bristles with hardware features that don’t mean anything, and that’s saddled with an antique operating system (Android, I’m looking at your) that can’t be upgraded, then check HP’s website for liquidation bargains.
The differences between HP tablets and Apple’s iPad are numerous. iPad runs more tablet applications but HP’s tablets are cheap. True, there won’t be any more Android tablets, because, you know, losses, but many HP tablets sport nearly full versions of Windows; some Windows 8.1, newer ones Windows 10. If they have Windows 8.1 running on them, then the warehouses are stocked full of technology that isn’t selling very well, and there are reasons why.
Product differentiation is a key component of successful marketing. That’s why Apple can get by selling antique iPad mini 2s for a few hundred dollars against better hardware specifications in Windows tablets. One Windows tablet runs pretty much like every Windows tablet so there’s little incentive to spend as much money as an Apple customer will spend on an iPad.
By getting out of the Android-based tablet business HP is showing some discipline. Cheap sells, but not enough to make any money and if you’re not making any money, then why bother?
Remember Apple’s highly acclaimed Xserve, those screaming fast OS X servers that users loved but Apple killed? Steve Jobs explained the reason why. “Hardly anyone was buying them.” That statement, and Apple’s action backing it up, is brutal but a necessary component of a successful business. Apple was not afraid to pull the plug on a product that wasn’t working, and ‘wasn’t working‘ was defined as not selling enough to make any money.
That’s a tough lesson for many technology companies to learn, a concept that’s difficult to digest for proud and overpaid executives who are more fearful of losing out in a market segment than they are confident that they can build a product that customers actually want to use. HP just exited an unprofitable product segment because the math did not add up to success and it became increasingly difficult to believe the Excel spreadsheets and PowerPoints from various HP product managers that it would get better. Apple has done the same thing. In the second Jobs era, Mac Cube, MobileMe, Xserve, but few others. Prior to the second Jobs era Apple had plenty of failures including Apple III, Lisa, Mac TV, Mac Portable (luggable), eMate, Bandai Pippin, Newton, and a few others.
A product that fails (profits, market share or whatever metric is imposed or desired) is not the issue. The issue is knowing when to pull the plug on a product that has failed, and which direction to go next. Apple designs, builds, and sells far fewer products than competitors, indicative of the confidence executives have in the company’s ability to integrate new products into the ecosystem which acts as a buffer against failure. Of course, it doesn’t hurt to have a few hundred million card-carrying, highly satisfied customers, and along with discipline, focus, and vision, that’s something HP could use.
