Analyst: Windows 8 may not be enough to save HP

Analyst: Windows 8 may not be enough to save HP

Summary: HP is in trouble, and the company can't rely on Windows 8 -- whether installed on desktop, notebook, tablets, ultrabooks, or convertibles -- to help dig itself out of the deep hole the company is in.


As HP prepares itself for a tough 2013, the company cannot count on Windows 8 to help smooth the way. 

This warning comes from Sterne Agee analyst Shaw Wu, who has downgraded the company from a buy to neutral rating amid fears that the things could be worse for the electronics and services giant.

"After spending more thought post its analyst day where the company surprisingly lowered its FY13 outlook more than expected," writes Wu. "We have lower confidence in its turnaround strategy". He predicts "further downside surprises" to HP's core PCs, printers, services, and enterprise hardware businesses. 

While many PC OEMs are hoping that Windows 8 -- due to hit PCs around the world on October 26 -- will help to boost flagging PC sales, Wu believes that it is far too premature to start celebrating. First, Wu points out that the PC business as a whole is facing encroachment from lower-cost mobile devices such as smartphones and tablets. HP specifically will face stiff competition from the likes of Asus, Acer, and soon-to-be market leader Lenovo.

Another obstacle facing HP specifically -- but also PC OEMs in general -- is confusion over which of the new Windows 8 inspired form factors will sell. The influx of Windows 8-powered tablets, ultrabooks, and convertibles suggest OEMs confidence in the new platform, but these are entirely unproven.

HP has already showcased a number of Windows 8 PCs, including four new 'All-in-One' systems ranging in price from $1,299 for the HP Spectre One, to $499 for the Pavilion 20.

Then there's pressure from Apple's iPad, which has already been out for several years, sold millions of units, and is already widely used in enterprise environments. It is unclear whether Apple's 70 percent dominance of the current tablet market leaves an opening for Windows 8.

Concerns have been raised by Raluca Budiu, a user experience specialist with Nielsen Norman Group, that the new Windows 8 user interface -- previous called Metro but now renamed Modern UI by Microsoft -- is "confusing" and imposes "a cognitive burden" on users. This claim alone should act as a warning to anyone thinking of putting Windows 8 in the hands of thousands of users in an environment where you expect people to get real work done. Training costs could eclipse the costs of deploying Windows 8, and offset any savings that the new operating system might offer.

Image source: HP.

Topics: Hewlett-Packard, Hardware, PCs, Windows

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  • Releasing an iMac isnt going to help either.

    Not sure what's going through their heads with that one.

    Also, the iPad has only been out for three-ish years. Not "several".
    The one and only, Cylon Centurion
  • The screens will determine the winners....

    My prediction: it's the screens that will determine the winners of the Windows 8 competition. And more specifically, not the screen resolution, not the color saturation, not the size, not even the view angle, but something much more mundane: the swing arm.

    From using an ASUS transformer TF300 over the past few months, I'm convinced that users will take to the touchscreen experience, but they will do so only if their LCD monitors are mounted on a swing arm that allows the monitor to be easily pulled toward the user and set at an angle so that the whole thing resembles a big iPad resting on stand. The monitor should just as easily slide back to be positioned like a traditional monitor when keyboard input is more appropriate.

    I can't emphasize how much I prefer scrolling in web pages with my fingers over even a scroll wheel on a mouse, even when my TF300 is docked in the keyboard dock. It helps, of course, that this thing's basically a netbook, and I can rest my elbow on the table while doing it. it would be a far less pleasant experience, no doubt, if I had to keep my arm extended in from of me the whole time.
    • And perhaps therein lies the problem

      Productivity on a large touch screen involves just too much "flailing" of the arms. It will be physically and mentally tiring.

      • Depends...

        Depends what you do. Just try Google maps on a traditional PC vs. a decent Android tablet.

        There are plenty of tasks for which a touchscreen is ideally suited and could make one more productive.
    • I have been thinking about this also

      and I think that my pc desk will need to be lower. But then my legs won't fit. To use a touch screen desktop everything has to change. The ergonomics are different. Keyboard gone, monitor forward with the base right on the desk and sloped back slightly. A place to rest your forearms or elbows.

      Years ago I was at a Lazy-boy store and they had a coffee table with a swing up top that tilted. Flat for food tilted for reading or writing. At the time I thought this would be cool for a pc screen. It would be perfect for a Win8 pc

      To best use a large touch screen it needs to be positioned like it is in your lap and your chair will need arm rests. Small tablets can go in your lap, over 12-13 inches will need support.

      I don't create I just consume and I hate to type so I could do away with the keyboard but for some content creation it would be back to a classic desktop layout.

  • Where are HP's killer designs?

    HP may have never been known for design, but I haven't seen anything from HP that makes me want to go buy a computer from them ... no amazing tablet, no solid notebook that is more so than Lenovo, Dell, etc., nothing other than something that works for those who always buy HP. Maintaining a portion of their current base will not be enough for HP.
  • I see a lawsuit with this one

    This is an iMac that needs to loose weight. I guess you can't hang it on a wall since the PC looks like its in the stand. Wow talk about total blatant copy of a product... Is there only one good design team on the planet and they work for Apple? There has to be more creative ideas out there!! Send me an email HP. I will send you some original designs.
    • I'm surprised people are still talking about Win8

      the conversation has been going on for what feels like ever.

      A PC company with no new ideas, relying on an OS chasing the leader.

      Press releases and red ink. Good work team.
      Richard Flude
  • Has nothing to do with Win8, PCs or desktops

    HP as it exists today will not be around in 2 years, just like IBM the mainframe and PC company isn't around anymore. The only thing that will save HP is that Whitman and the BoD have a picture in their minds of what HP is going to look like, and whether that is the *right* answer.

    If it's not right, then HP will completely disintegrate, and it won't take long to happen.
    terry flores
  • HP cant blame W8 for it's failure. It's been underway for years

    And Meg is not the right one to turn it around despite her unsubtle begging not to be fired for a few years. When HP introduces an enterprise W8 tablet thats so low res it doenst support snap view you have to realize that the brains have left the building. It should just work on selling pieces of itself off to other companies and fade away.
    Johnny Vegas
    • they screwed themselves when

      they bought Palm and decided to leave PC business. On top of it both Hurd and Apotheker (sp?) were not right candidates for the job.
      Ram U
    • screen fail

      And this is exactly the reason MS are making the Surface.

    It will actually place the last nail in their coffin!
    • Doubt it

      OEM will still buy millions of licenses.. even if windows 8 is the next vista (which most people know it will be) the oems will still purchase the licenses in hopes it sells which will feed microsofts payroll..

      But if Office subscriptions don't take off, because they raised the prices on physical media it can hurt there bottom line in that dept..
      Anthony E
  • A "cognitive burden" no less!

    How long did it take all those millions of consumers to learn how to use the iPad / iPhone? How about their Samsung Galaxy S III?

    The Metro interface is no different. Nothing in business happens overnight but Windows 8 will make it into the enterprise. Initially, it will be in the hands of decision-makers, middle-managers, and road-warriors who are tired of trying to get their iPads to peacefully co-exist with their Windows notebooks but, as soon as the IT department realizes that if it runs on Windows 7, it will run on Windows 8, we will see that change.
    M Wagner

    The Sun is rapidly setting on Microsoft, a company that has made crappy software for decades, strategically ruining great companies in the process.

    With Cloud and Mobile computing gaining wide adoption with both consumers and the Enterprise, the need for consumers and businesses to spend billions of dollars each year supporting Microsoft's horrible software are numbered.

    Analysts are already saying that HP stock should really be MINUS 2 bucks. This will eventually be the fate of all M$ partners, until Windows is just a distant and "legacy" relic of our computing past.
    • Many of the so called

      Could options run on.. microsoft software. I am glad to point out that despite all those millions of ipads, Microsoft was able to sell well above 700 million licenses of Windows 7 in less than three years.

      I am pretty certain Microsoft's demise (which has been predicted for over 20 years) won't happen in the next twenty years either.

      The fact if the matter is that despite their "horrible" software, the competition isn't really been considered, it is hillarious to suggest they are being contested by tablets and smartphones, of which the market leader (Android) also brings in quite a bit of revenue for the redmonians, because Google likes to steal stuff and not license the IP.
    • Why don't you go back to troll school, and get a new line of attack,

      since, the same old attacks have never worked and they're always wrong.

      If any of what you and the other trolls were in any way close to the truth, Microsoft must have closed shop some 10 years ago, but, I keep hearing about them, and about how they're constantly coming out with new software and updated software and gaming systems and now, they're even coming out with new tablets of their own. So, I must be imagining things, since, Microsoft has been dead and buried since more than 10 years ago.

      It's very likely that, you'll still be making the same silly and ignorant attacks some 80 years from now, if you're still alive, and Microsoft and most people will have continued ignoring you and your fellow trolls.
      • RE: Why don't you go back to troll school, and get a new line of attack,

        For the love of God, yes . . . . and thank you very much for a good couple of "Bingo!" points.
  • Jettison The PC Business

    Windows is a business of razor-thin and declining margins for everybody apart from Intel and Microsoft. It's time HP realizes that it has to say goodbye to that. The company has remade itself before (starting out as an instrument maker before going into PCs and printers), now it must do it again. The obvious new frontier is mobile devices. It dipped its toe in with WebOS, only to give up very quickly. Time to make a more concerted effort. Perhaps join the Android camp--still plenty of room for innovation there, though it's happening fast and won't wait for the slowcoaches. You've got to get into it now.