HP still seeks competitive edge
Published: 09 Dec 2003 15:10 GMT
Bumps in the road
But not everyone is convinced that the company's fortunes have significantly improved. Outside of its printing business, HP tends to be more follower than leader, Neff said.
"It entered the workstation market because Sun was in workstations," he said. "It entered the PC business because IBM was in PCs. It started to go direct because it wanted to be like Dell. It bought Compaq because it wanted to be like IBM."
Neff said HP's recent hints that it plans to enter into consumer electronics areas, such as the digital music player market, again shows the company following rivals such as Dell, Gateway and Apple. "However, when companies want to be like other companies, they often underperform, since the other companies typically determine the rules of the game," Neff said.
Cross said that HP has not clearly shown how its disparate business units have really begun to work together. "I'm still not really sure how their divisions are truly working together and how much they have that's integrated at this point in time."
Another topic likely to come up at the event is a recent management exodus, with executives leaving to take other jobs, to retire, or in the case of former Compaq chief financial officer Jeff Clarke, for less-than-clear reasons.
Beyond the personnel issues, analysts raise other issues about the company's execution, including a desire to better understand why last quarter's better-than-expected sales did not give more of a boost to the bottom line.
In his note last week, Neff also questioned the impact Dell could have on long-term profit margins in the printer market. He also pointed out the challenges of making significant profits from the PC business.
HP has already committed to more sustained profitability from its computing units. Chief financial officer Bob Wayman said last month that the company's plans call for both the PC unit and high-end computer business to be profitable each quarter in the current fiscal year. He also said he was comfortable with analysts' outlook for 2004, which pegged company earnings at around $1.42 (£0.82) per share.
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