PC
Round-Up
More
Details On The Hp Merger Of IPs And PCs
In an analyst call on
January 28th, HP’s Imaging and Personal Systems
Group’s Executive Vice President and GM Vyomesh “VJ” Joshi
discussed HP’s reasoning behind the reorganization and how the
new organization might work.
His first order of
business has been to make extensive visits throughout the new
organization, since understanding the entire business and its
value proposition needs to be the basis of the new organization.
I asked him if he would
focus more on the consumer market after the merger and received a
firm no. HP is 70% in
the SMB and Enterprise market with its Imaging and Printing
business (in spite of its high profile in the consumer markets,
especially in photography) and VJ sees a terrific opportunity in
both the SMB and Enterprise spaces in both imaging and personal
systems. For example,
he sees a need for both consumers and SMB customers to be able to
buy bundles that speak to a solution or experience, rather than
pieces of technology.
Consumers want Digital
Photography or Digital Entertainment, they don’t want to buy PCs
and try to understand the technology, they want to buy an
experience and use it quickly and easily.
In the SMB market, a
customer wants to run his business but not to spend time
understanding technology. Customers
don’t have IT departments.
HP needs to focus on providing experiences and solutions
Enterprise customers are
different. Here, HP
will continue to provide its own products (PCs), which IBM will no
longer do now that it’s sold its PC company (see next story).
VJ thinks this will be an advantage.
This new division will be
very large. VJ
expects to manage it by focusing on strategies, growth and
execution, and the unique value proposition they will need to
offer to each customer segment. This will dictate the organizational structure and how
reporting should work. He
– and the industry – recognizes it as a big job.
Execution is going to count.
Is
The IBM Lenovo Deal In Trouble?
The IBM deal to sell its
PC unit to Chinese Manufacturer Lenovo was barely announced before
rumors began to circulate that the federal government might be
unwilling to approve it on the basis of security issues.
It seems that the deal
must gain the approval of the Committee on Foreign Investments in
the United States and some members are concerned that either
United States innovations could pass to Communist China (haven’t
heard that term in a while) or that the Chinese could use their
new site in South Carolina as a base for industrial espionage.
While it is necessary to
take this seriously (because IBM will have to convince the
Committee that there is no cause for concern) one wonders what
they are thinking about. The
PC industry is based almost entirely on commodity technology and
Lenovo is unlikely to know anything as a result of its merger with
the IBM PC company that it could not have purchased in ordinary
global commercial markets. Perhaps
the committee doesn’t understand the difference between what IBM
as a whole company does and the much more limited merger (and
ongoing relationship) that is represented here?
It is true that Lenovo is
mainly owned by a part of the Chinese government (most Chinese
companies are) and the merged company was going to continue to be
partly owned (18.9%) by IBM.
One would hope that an
approval can be negotiated; presumably, changes in the exact terms
of the merger could be considered if necessary, in order to meet
government requirements. It
isn’t clear, however, since no one is actually talking about
whether there’s actually a problem, or whether there’s just a
discussion, whether this is simply a process or a problem.
Apple
Reduce Some MAC Mini Prices
Perhaps mindful that the
very positive reception the Mac Mini received could be diminished
by the relatively high price of the many add-ons that the little
systems requires for reasonable usage, Apple has quickly reduced
the pricing of some of Mac Mini’s build-to-order options.
The big deal was cutting
the price of upgrading memory from 256MB to 1GB of RAM from $470
to $325. Other cost
cuts in wireless connections ($30) were much smaller.
We’re not surprised.
Customers are quick to figure out the full cost of what
they intend to buy – not the price tag for one component – and
act accordingly. We’re
going to reprice and happily reconsider. Probably
going to treat ourselves to a new toy sooner, I’d bet.
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