Windows 10

HP Partially Blames Free Windows 10 for PC Shortfall

HP Partially Blames Free Windows 10 for PC Shortfall

HP Inc.—the part of the newly split firm that sells PCs, printers and other hardware devices—reported financial results for its first quarter. And while the company met expectations, its PC business delivered 13 percent fewer units than the year before, well below the industry average.

Worse, perhaps, HP doesn’t see much improvement over the next few quarters.

“We have a clear strategy that leverages our strengths, and we are focused on execution, taking cost out of the business and delivering innovations that will amaze our customers and partners,” HP President and CEO Dion Weisler said in a prepared statement. “Although we have some tough quarters ahead, I am confident in the future.”

Sponsored Content

What is “Inside Microsoft Teams”?

“Inside Microsoft Teams” is a webcast series, now in Season 4 for IT pros hosted by Microsoft Product Manager, Stephen Rose. Stephen & his guests comprised of customers, partners, and real-world experts share best practices of planning, deploying, adopting, managing, and securing Teams. You can watch any episode at your convenience, find resources, blogs, reviews of accessories certified for Teams, bonus clips, and information regarding upcoming live broadcasts. Our next episode, “Polaris Inc., and Microsoft Teams- Reinventing how we work and play” will be airing on Oct. 28th from 10-11am PST.

Unit sales in HP’s Personal Systems—e.g. the PC business—fell 13 percent year over year, with notebooks down 8 percent and desktops down 13 percent. Revenues were likewise down 13 percent year over year.

The problem for HP isn’t its hardware lineup. If anything, the company is firing on all cylinders, having now delivered on two full years of generally stunning hardware across all of its target markets. No, the problem, HP says, is … Windows 10.

we have not seen the anticipated Windows 10 stimulation of demand that we had hoped for, and we’re carefully monitoring any sort of price development that could further weaken demand.”

That is an interesting comment because it suggests that HP is wary of any sign that Microsoft may continue its free Windows 10 upgrade promotion beyond the July 2016 scheduled end date. As I’ve written the past, Microsoft has benefited consumers—and itself—by offering Windows 10 upgrades for free for one year. But this practice harms PC makers because it lowers the need for customers to upgrade to new PCs. For the first time since Windows 95, a huge percentage of new OS installs are coming on existing PCs—via upgrades—and not via new PC purchase.

Of course, Mr. Weisler could simply be referring to component pricing and competitive concerns as well: The PC business remains a low-margin enterprise, and HP, like any other PC maker, finds itself in an awkward place trying to manage both user expectations, around crapware bundling in particular, and profits.

“Remember that we operate in mature markets,” Weisler said. “This is an environment where we know how to win, gain share, and out-execute our competitors.”

As interesting, perhaps, HP Inc. describes itself not as a PC maker, but rather as the owner of a “portfolio of printers, PCs, mobile devices, solutions, and services.” And that first business, printers, is also experiencing a downturn, with revenues down 17 percent year over year and total units down 20 percent. To make up for this, HP intends to focus on high-margin products like 3D printers while cutting costs across the board.

Regardless, HP sees things slowly recovering throughout 2016.

“In the back half of this year, revenue will begin to improve as our technology improves and channel inventory works its way out of the system,” Weisler said. “Our PC lines are being redrawn at the moment, and the goal has been to gain profitable [market] share … We will continue to take costs out of the system, and drive innovation into the system.”

 

Related Topics:

BECOME A PETRI MEMBER:

Don't have a login but want to join the conversation? Sign up for a Petri Account

Register
Comments (0)

Leave a Reply

Paul Thurrott is an award-winning technology journalist and blogger with over 20 years of industry experience and the author of over 25 books. He is the News Director for the Petri IT Knowledgebase, the major domo at Thurrott.com, and the co-host of three tech podcasts: Windows Weekly with Leo Laporte and Mary Jo Foley, What the Tech with Andrew Zarian, and First Ring Daily with Brad Sams. He was formerly the senior technology analyst at Windows IT Pro and the creator of the SuperSite for Windows.
External Sharing and Guest User Access in Microsoft 365 and Teams

This eBook will dive into policy considerations you need to make when creating and managing guest user access to your Teams network, as well as the different layers of guest access and the common challenges that accompany a more complicated Microsoft 365 infrastructure.

You will learn:

  • Who should be allowed to be invited as a guest?
  • What type of guests should be able to access files in SharePoint and OneDrive?
  • How should guests be offboarded?
  • How should you determine who has access to sensitive information in your environment?

Sponsored by: