Hewlett-Packard is shifting its strategy in the world of computing. Without a position in mobile smartphones, HP needs to strengthen its core business in personal computers to remain a key player. The world of personal computers is declining, but this does not mean HP needs to be a weaker player in this space. Consumers and business alike will always need a computing device with a keyboard and mouse to do productive things.
One of the most significant shifts for HP is developing computers running Google’s Chrome OS. This will alienate Microsoft, but it does give consumers more choice. With Microsoft revising its Windows 8 to gain appeal to its core users, HP is no longer tied to Windows’ issues for growth. HP developing Chrome OS and Windows-based solutions is worth looking at further.
PC shipments fall
PC shipments fell again by 8.6 per cent. The phenomenon of back to school sales supporting PC sales is no longer true. This is due to rising sales of tablets and smartphones growing, which is hurting PC demand:
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 3Q13 (Units)
| Company |
3Q13 Shipments |
3Q13 Market Share (%) |
3Q12 Shipments |
3Q12 Market Share (%) |
3Q12-3Q13 Growth (%) |
| Lenovo |
14,154,355 |
17.6 |
13,774,828 |
15.7 |
2.8 |
| HP |
13,732,398 |
17.1 |
13,532,449 |
15.4 |
1.5 |
| Dell |
9,306,202 |
11.6 |
9,218,063 |
10.5 |
1.0 |
| Acer Group |
6,666,789 |
8.3 |
8,615,940 |
9.8 |
-22.6 |
| Asus |
4,923,397 |
6.1 |
6,354,096 |
7.2 |
-22.5 |
| Others |
31,496,126 |
39.2 |
36,314,030 |
41.4 |
-13.3 |
| Total |
80,279,267 |
100.0 |
87,809,406 |
100.0 |
-8.6
|
Source: Gartner
Chromebook 11 for $279
To compete with inexpensive tablets, HP is selling an 11-inch laptop for a mere $279. The device has:
- 16GB solid state disk
- 2GB RAM
- Dual-band 802.11 a/b/g/n and Bluetooth 4.0
- 2 x USB 2.0 ports
- IPS panel with 1366 x 768 resolution
- VGA webcam
- 100GB Google Drive storage (2 years)
The laptop will weigh just 2.3 lb and have a battery life of up to 6 hours.
Chromebook 11 challenges
HP is on the right track with offering an inexpensive laptop, but there are two main problems. First, the Chrome OS is still a web browser. This means that consumers will need to create and use a Google account to benefit from the cloud storage (100GB). Users will also be tied to using only chrome-based solutions. The second issue is that installed programs cannot be run locally. Windows RT actually stands out as a viable alternative, though weak sales for RT would suggest otherwise.
Chromebook strengths
The Chrome OS could reach mass appeal, thanks to its low pricing. Enterprise customers do not need to pay for costly support contracts, and any hardware issue could be solved simply with an inexpensive replacement.
Chrome OS is a very simplified system with the browser the core gateway for accessing information and using apps. This could prove a benefit: most users only use the Internet the majority of the time. Productivity applications (Microsoft Word/Excel) are available for free via Google Docs. Users could be happy using Google’s Picasa program instead of buying expensive photo processing applications like Adobe Photoshop.
Google integrated Picasa with Google+, which added “social” elements including photo sharing. More importantly, many innovative features were added. This includes auto-awesome, which fixes contrast, colouring, sharpness, and many other things to help make photos “pop.” Photos taken using burst mode could be merged as an animated GIF, transforming photos into a video-like format.
Consumers benefit
The ChromeBook will ultimately revive HP, and help the hardware giant gain PC market share from Lenovo. Providing more choices for consumers, innovating on design, and being more competitive will help HP. HP will also benefit partnering with Google. Since Facebook remains the top social network destination, higher Chromebook sales will benefit Google. Google wants to remain relevant in search engines, and is doing so by promoting the social (Google+) and offering cloud storage.