More about PC Sales

Just following on from my last entry.

According to this piece in The Register:

Apple was the only major computer maker to increase its shipments into the UK PC market during the final three months of 2011.
The article was quoting figures from Gartner that excluded iPad sales, despite that Apple showed a growth in shipments of 17.2% when comparing Q4 2010 to Q4 2011.

Comparatively HP dropped 27%, Dell dropped 32.2%, Acer lost 62.4% and Toshiba lost 5.4%.

The big question is if this is being driven by:

1. Everyone wants a Mac because Windows is so yesterday.
2. Everyone is waiting for Ultrabooks running Windows.
3. Everyone has decided to skip Windows 7 and wait for Windows 8.

I do know that many training providers for the corporate markets are now offering Mac training on a regular basis so maybe there is a change happening in the market.

Larry Ellison tells HP Shareholders how smart their board is

On CNN Money there was a piece the other day Oracle kicks HP while it’s down. But why?

Unkind people would say because its hard not to. In reality its because HP is rapidly going from Silicon Valley icon to the punch line of a joke.

Between new CEO, Meg Whitman, claiming she’s ideally suited to running HP because “I bought a lot of software. I was one of the largest enterprise customers in Silicon Valley”, and paying out Leo for 11 months of spectacular decline.

Leo got $11 million. $7.2 million just to go away and $2.4 million for ‘results based bonus’. Results Based Bonus?!

Lets see, shut down the whole Palm thing, a share valuation that jumped off a cliff and putting it out there that HP will get out of the server/PC business and he gets a performance based bonus? I suppose if the bonus is based on decimating the company, then I guess its justified.

The best bit is they’re paying him to go back to France or Belgium and if he loses money on selling his house in California HP will kick in up to $300,000 to help poor Leo.

The reason Larry wants to kick HP while they’re down is because they deserve it!

Hell! I want to kick HP. This just makes me angry. Its stupidity of such a colossal scope. A Board that obviously did nothing to keep the CEO under control and now wants to keep its job by hiring Goldman Sachs to deal with ‘activist’ shareholders.

The best thing that could happen to HP right now would be for Oracle to buy them out and let Larry treat the HP Board to a bit of Ellison love.

How Confident are HP's Board of their Decisions?

I guess they’re not.

It seems that they’ve hired Goldman Sachs to help defend against ‘activist’ shareholders.

Activist shareholders!?

You mean the guys that actually own the company and hire the Board to run the company in an intelligent and farsighted manner? You mean the guys that own the shares that want to see the board increase the shareholder value?

Oh. Okay.

Just so we’re clear because it sounds a lot like protecting your ass because that loud noise the board is hearing is the sound of pissed off investors who don’t necessarily see the genius in your strategy and would like to fire your collective asses.

The HP Soap Opera Continues

I saw a couple of comments from Meg Whitman on the weekend.

Oh…are HP shareholders so screwed. They are going to elevate ankle grabbing to an art form.

She was quoted as saying

“I have run a large company -- not obviously as large as HP, but I have run a very large company,” she said. “While I don’t have years of experience in an enterprise business, I bought a lot of software. I was one of the largest enterprise customers in Silicon Valley.”

One genius at Deutsche Bank responded with “That’s like saying, I’ve bought an iPhone so I can run Apple”.

I can’t say I disagree with him and I’m sure a whole lot of HP stock holders aren’t too far behind given quotes like the one above.

I hope the board of HP has started the hunt for their next temporary appointment to the role of HP CEO.

Googorola like Godzilla just keeps coming back!

Hot on the heels of the analysis by Bloomberg on the Googorola patent mutant monster Eric Schmidt has said that the acquisition was about more than just patents.

Wow. Amazing.

Schmidt and was quoted as saying “We did it for more that just patents. We actually believe that the Motorola team has some amazing products coming.”

Back in 2002 Carly Fiorina said:

With Compaq, we become No. 1 in Windows, No. 1 in Linux and No. 1 in UNIX. This new strength and our market presence make us a much more attractive partner. And with our combined market position in servers, we will be able to engage the software community in building the applications that will drive demand for Itanium systems
Compaq is the leading provider of storage systems in the world on a revenue basis. With Compaq, we become the No. 1 player in storage, and the leader in the fastest growing segment of the storage market - storage area networks.
With Compaq, we double our service and support capacity in the area of mission-critical infrastructure design, outsourcing and support. And while support is frequently considered the boring part of the services business, it produces mid-teens operating margins quarter after quarter. It's like the supplies business - more is better.
More verbose that Schmidt but basically the same sentiment its not just about the PC business.

Mark Hurd, said about the Palm acquisition “We didn’t buy Palm to be in the smartphone business. And I tell people that, but it doesn’t seem to resonate well. We bought it for the IP. The WebOS is one of the two ground-up pieces of software that is built as a Web operating environment…We have tens of millions of HP small form factor Web-connected devices…Now imagine that being a Web-connected environment where now you can get a common look and feel and a common set of services laid against that environment.”

According to Hurd it wasn’t about Palm’s gizmo business.

So all three of these acquisitions aren’t about the most obvious. Sure HP bought Palm for their patents on an OS that no one uses rather than as a quick way to get into a hot and expanding market segment that they totally missed while they bathed in the glow of becoming the No.1 PC maker.

Schmidt went on to say “We’re excited to have the product line, to use the Motorola brand, the product architecture, the engineers. These guys invented the RAZR. We know them well because they’re Google Apps users.”

So let me get this straight. It’s not about the patents really its about the production facilities, the engineering brilliance and the name Motorola?

While the RAZR was a very lust worthy piece of equipment all Motorola did with it was churn out variant after variant of the same handset. After a few years Motorola was yawn worthy, greeted with a resounding “What? Another razory thing? Where’s the Nokia?”

So either Motorola was acquired for their patents which is starting to look more and more like not such a great idea. Or. They bought Motorola to get into the handset business and compete against their customers. Also not a great idea.

This is looking more and more like another glorious corporate exercise in hubris and overreaching that’s going to come home to roost some time in the future.

Random Thoughts II

The PC is Dead! IBM says so.

I’ve been wondering, now that the tablet has become a mainstay in computing what’s the future for the PC as we know it?

IBM’s CTO says the PC has seen it day.

I wonder of this is really the case though? Will people really want to walk away from the box on the desk?

I’m not so sure this will come to pass as easily as some people might think.


Will Samsung buy webOS from HP.

This is an interesting rumour. Samsung are obviously not happy about the creation of Googorola. Add the lawsuits that are coming at them from Apple that have effectively halted sales of the Galaxy S II and the Galaxy Tab in different parts of the world - this may not be so far fetched.

Samsung said to be considering webOS acquisition from HP

Its not out of the realms of possibility.


A Torch, a torch, my kingdom for a torch!

Lately I’ve noticed a bit of a furore (tizz in a teacup really) about the fact that the latest version of the WinMoPho operating system, Mango, doesn’t have a native API to turn on the LED to use as a torch.

No real LED torch apps for Windows Phone 7 Mango

I dunno, it strikes me as a bit absurd that with everything else out there that may be interesting to talk about, the lack of an ability to turn your phone into a torch rates, nay demands, column inches.

White Light: Brings a LED Flashlight to non-HTC users running Mango

I never thought not being able to turn a complex piece of communications technology into an axe simple tool would cause such consternation.


Nokia makes Minority Report a sort of Reality

NFC technology scares me. Its not the tech so much, rather its the lack of consideration of the practical implications.

In the rush to be the first to bring NFC to market to grab “mindshare” security invariably gets overlooked.

Nokia: "From now on, all our products will have an NFC chip inside"

There’s lots of evidence that RFID chips can be skimmed from a distance. NFC chips are really just low power RFID chips that Nokia are so considerately putting into all of their doodads.

Makes feel feel all nice and safe knowing that Nokia, the company that so spectacularly gave away the mobile phone market due to blind arrogance has decided that they’re on top of all of this NFC/RFID security stuff.

Its Finally Finished…almost

I stumbled across an article on the Time online website recently entitled It Just Doesn’t Work: Why New Tech Products Are Increasingly Unsatisfying. It struck a chord with me because I’ve seen so much of technology delivered to market that was so obviously ‘half-baked’.

In the drive to get ‘mindshare’ products are being released to market in ever more rapid cycles. The tech just doesn’t have enough time to get fully baked.

The thing is the tech companies know that most ‘early adopters’ (read: unknowing beta testers) will find ways to justify the quirky behaviour of their shiny new toy even though most people would call it a piece of shit and return the unfinished mess to the manufacturer vowing never to buy another one of their products. Ever.

Its been an axiom of the tech industry that you never buy a product from Microsoft until it gets to Version 3 because the earlier ones just suck.

The article quotes a leaked email from HP’s Jon Rubenstein talking about the, now freshly buried, TouchPad. The part that interested me was:

Today we bring the HP TouchPad and webOS 3.0 to the world.  The HP team has achieved something extraordinary – especially when you consider that it’s been just one year since our work on the TouchPad began in earnest.  Today also marks the start of a new era for HP as our vision for connected mobility begins to take form - an ecosystem of services, applications and devices connected seamlessly by webOS.
 If you’ve seen the recent TouchPad reviews you know that the industry understands HP’s vision and sees the same potential in webOS as we do.  David Pogue from the New York Times says “there are signs of greatness here.” (I’ve included links to David’s review and others below.) You’ve also seen that reviewers rightly note things we need to improve about the webOS experience. The good news is that most of the issues they cite are already known to us and will be addressed in short order by over-the-air software and app catalog updates.  We still have work to do to make webOS the platform we know it can be, but remember…..it’s a marathon, not a sprint.

People don’t want to wait for ‘the next update’ they want it to work out of the box to the level of their expectations.

The TouchPad didn’t, neither did RIM’s Playbook or Vista or so many other technological balls ups.

Rubenstein also quotes some of the first reviews for Mac OS X in his e-mail:

"...overall the software is sluggish" 
"...there are no quality apps to use, so it won’t last" 
"...it's just not making sense...."
 It’s hard to believe these statements described MacOS X - a platform that would go on to change the landscape of Silicon Valley in ways that no one could have imagined.
Great pick up Jon!

That was 10 years ago.

Ten years ago people would accept stuff that won’t get out of the starting gate today.

You bet the farm on the expectation that people would patiently wait until you got it right while providing HP with another revenue stream. You lost.

The reports of my death are greatly exaggerated…kinda

One of the corporate butt coverers at HP, Jon Zilber, posted on the HP Palm blog that the planet was wrong.

WebOS isn’t dead. Its very much alive and kicking, just in some strange undead form and no one has been smart enough to see it.

He says “Far from burying webOS, our goal is to ensure the platform's evolution as a robust operating system for an increasingly mobile and connected world.“

I’m kind of curious to see exactly how this is going to happen.

Let’s try to imagine the conversation.

HP: WebOS has a huge future. We’ll cut you an amazing licensing deal on it. You can develop phones and tablets using it and compete against Android and iOS.

Prospective Licensee: Didn’t you guys try that?

HP: Yes.

Prospective Licensee: And how did that work out for you?

HP: It was a great experience. That’s why we’re here talking to you. We want to share the opportunities with you specifically and the rest of the industry for anyone with the vision to see the possibilities.

Prospective Licensee: So if it was such a great experience why did you stop making phones and tablets? I mean with a sell-through rate of around 10% on the tablet I’m not seeing an advantage here.

HP: It’s based on strategic initiatives.

Prospective Licensee (very confused): Huh?

HP: Leo has seen the future and its software.

Prospective Licensee (even more confused): Okay? But didn’t he say not that long ago that hardware was important?

HP (ignoring comment): So for us to leverage his strategic decision to strategically reposition HP as a software vendor by making this key acquisition for $10 billion of a cloud offering vendor that has astounding upside potential we need to exit future non-core businesses now before they become a drag on future potential earnings.

Prospective Licensee: What?

HP: Look. Everyone knows software is going to drive the industry so we’ve gotten out of the business of building tablets and phones.

Prospective Licensee: And you want me to develop software for what, exactly using WebOS?

HP: Phones and Tablets.

Prospective Licensee: I don’t understand.

HP: That’s part of our strategy. If people can’t understand exactly what we’re doing with WebOS you’ll be able to deliver a market shattering product.

Prospective Licensee: But I want to know what I’m getting into before I sign on the bottom line.

HP: Why? We didn’t when we bought Palm, we were just reacting to Apple and Google. Look everyone wants smartphones. Just sign here and you’ll make a fortune.

Prospective Licensee: I don’t think so.

HP: Trust us. We’ve got your back.

So WebOS is left to forever wander the Earth until someone finally decides that a wooden stake needs to be driven into its undead heart. I just don’t think anyone involved with HP’s Palm division will do it because it’ll be too detrimental to their career.

Better to spin a colossal screw up into a positive while polishing your CV while HP shareholders grab their ankles again.

Now that we ditched WebOS we can spend like there's no tomorrow

On the back of HP saying that they’re shutting down their WebOS business, Leo Apotheker decides that he’s going to go back to what he knows…monolithic, galactically expensive, software.

Yep there’s great fit for HP.

They’re in the hole for $1.2 billion over the Palm aquisition and now they want to shell out $10.24 billion to buy Autonomy. A 64% premium.

What is it with these guys? This is supposed to be a cash deal, no stock. Hmmm…they saw young Leo coming.

They get to cash up, big time, and Leo gets to add big software to the HP portfolio. Yet another acquisition to add business to the HP group, we can see how successful thats been in the past.

Looking forward to see how that one is going to turn out for the HP shareholders.

But you can bet that Leo will have cashed out by then and enjoying his life on some sandy beach leaving the HP shareholders to hold the bag.

I like the take that this article has on HP’s PC business. Tells me a lot about how Leo thinks.

He’s a software guy and he’s reverting to type. hardware just isn’t his thing.

I wonder if he would have made this deal if a large part of his bonuses was based on long term performance of the company after this latest cash splurge.

I really think that this isn’t going to end up being the greatest moment in HP’s history.

Alas poor WebOS we knew thee not at all.

So HP has pulled up stumps, plans to sell off its bat and ball and go back to Palo Alto.

Leo Apotheker has decided that playing in this space is something that HP just can’t do. HP is also going to look at, maybe, getting rid of their PC business.

So lets get this straight, in 2001 HP bought Compaq, who were having indigestion from their acquisition of Digital. A lot of HP shareholders, including Walter Hewlett objected to the purchase and the deal just squeaked through (and there were noises about a bunch of back room deals being done to get it over the line).

Now, ten years later it looks like leaving Compaq alone would have been the smart thing to do.

HP announced that they would be looking at considering “a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction”.

Good move Leo, looks like PSG was your best performing division and sold more units than your nearest competitor, Dell. Lets chalk another one up for management genius in this decision.

Rewind to 2010. HP buys Palm for $1.2 Billion. Why? Because we’ve got to get into the phone, handheld doohickey marketspace.

Today HP announces that “it will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. HP will continue to explore options to optimize the value of webOS software going forward.”

That sound you hear is a billion dollars being flushed down the toilet.

The fact is that margins are being squeezed in the PC business and HP doesn’t want to compete against guys like Dell, Lenovo, Acer, ASUS and Toshiba. In the tablet/phone business they just couldn’t make it work, but at least were smart enough to figure they should get out sooner rather than later.

This is telling us that when it comes to Mergers and Acquisitions that are made to gain market share or shut down competitors, it rarely ever works so what does this tell us to expect from the Googorola mutant as time goes by?

Have a look at this piece from The Register - HP chief bows to Jobsian cult.

The interesting part of the discussion is at the end of the article where it quotes Leo saying

"Due to market dynamics, significant competition, and a rapidly changing environment – and this week’s news only reiterates the speed and nature of this change – continuing to execute our current device approach in this marketplace is no longer in the best interest of HP and HP shareholders.

It's not. All those shareholders are wishing they'd bought Apple. The tablet effect is quite real, and it's affecting desktops and notebook sales at Apple too. It's driving them up.”