HP Introduces New Products, but Will They Matter?
In the midst of all the turmoil, and there's no shortage of it, Hewlett-Packard (NYS: HPQ) has announced several new products intended to make a dent in the exploding mobile computing market. Though not a participant at the ongoing Consumer Electronics Show in Las Vegas, HP chose the eve of the CES festivities to unveil examples of its new product offerings.
HP isn't alone in skipping the CES in Las Vegas. Industry heavyweights Microsoft (NAS: MSFT) and Google (NAS: GOOG) are attending, but their participation is limited to a booth. Mobile computing champion Apple (NAS: AAPL) avoided the international CES tech conference altogether, not the norm for the largest annual tech show in the U.S. But the smartphone and tablet leaders introduced their respective new products late in 2012, so they figured "What's the point?"
HP's new lineup
Continual declines in the worldwide PC market are no secret, and the need for HP to grow other revenue lines is a necessity. That's been the case for some time. With nearly $30 billion in quarterly revenue, obviously HP can't simply exit its bread-and-butter market; the same applies for longtime PC competitor Dell (NAS: DELL) . But that doesn't mean HP and Dell shouldn't explore growth opportunities; in fact, they must to remain relevant in today's mobile computing world.
For Dell, the process of reinvention is already under way, and should serve as a model for HP. Continued expansion in its cloud and mobile computing solutions, along with recent acquisitions to open doors in the software-as-a-service and enterprise markets , have positioned Dell as a legitimate mid-term growth opportunity -- irrespective of the PC market.
HP's recent product introductions are steps in a Dell-like direction, a positive among HP's recent spate of negative news. Its new goodies include an affordable touch notebook called Sleekbook, a pocket-sized wireless streaming device, and a Beats (a Dr. Dre collaboration) Envy monitor with, according to HP, studio quality sound.
The tablet market, as you know, is exploding. An estimated 120 million tablets were sold in 2012, led by Apple's iPads and followed by Google's Nexus and Samsung's Galaxy. The new Microsoft surface alternative, along with the announcement that Nokia will also toss another Windows 8 tablet offering into the mix in 2013, will make an already-crowded field even more so.
So, where does HP's Sleekbook fit in the scheme of things? As big as the tablet market is now, it's expected to triple in size in three short years, to 340 million units. That kind of explosive growth leaves room for a lot of players, but differentiation is still critical, especially for latecomer HP.
The Sleekbook, slated for release Jan. 13, and its upscale cohort TouchSmart Sleekbook, which should hit the shelves Feb. 3, are priced at $480 and $680, respectively. The price points planned for HP's tablet solutions are in range of others with similar features and memory -- a 15.6-inch HD screen, up to a terabyte of storage, high-resolution cameras, video, and all the usual goodies users have come to expect. In other words, the Sleekbook falls right in the midst of an Apple-dominated world, and sits side by side with behemoths including Google and Microsoft -- not an easy launching point.
New computer monitors targeting both home and business, along with the portable media device it calls HP Pocket Playlist, round out today's product introductions. The 27 inch Envy monitor with Beats audio will cost $499, with additional displays ranging from $199 to $340, depending on features. The iPod shuffle-like Playlist is expected in mid-Feb., and will retail for $129.
Okay, but so what?
The laundry list of problems at HP are well-documented, so no need to revisit them in detail here. Autonomy, mass layoffs, declining printer sales, and the aforementioned PC market are just a few of the concerns causing headaches for HP CEO Meg Whitman of late.
When Whitman expressed her willingness to explore the sale of entire business units in the recently filed 10-K, investors reacted by bumping up HP's share price 10%. Shareholders are clearly bracing themselves for dramatic, and much-needed, changes at HP in 2013.
The new mobile computing and entertainment products are great, and indicative of HP's recognition that it's time to move into the 21st century. The question is: Will tablets, high-tech monitors, and mobile entertainment devices, despite how cutting edge they are, matter to HP investors? Eventually, it's possible HP will carve out a niche in the crowded world of mobile computing, and that'd be great for long-suffering shareholders.
But in the near term, HP's new products -- no matter how good they turn out to be compared to those of Apple, Google, or Microsoft -- shouldn't matter for investors. Hewlett-Packard simply has way too many other, more pressing considerations to address first.
The article HP Introduces New Products, but Will They Matter? originally appeared on Fool.com.Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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