With HP out of the PC business, which vendor becomes Microsoft's new champion?

With HP out of the PC business, which vendor becomes Microsoft's new champion?

Summary: The biggest PC vendor, HP, is getting out of the PC business. What's this mean, if anything, about the future of Windows?

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HP is -- and now, was -- the No. 1 Windows PC vendor. On August 18, HP announced it is selling off its PC business, dropping webOS and discontinuing the TouchPad so as to focus on enterprise software and cloud services.

What's this mean for Windows and Microsoft?

Opinions are all over the map. Intensifying the matter is the fact that Microsoft is a year or less away from rolling out Windows 8. Traditionally, HP has been a tight partner for the Redmondians, especially given HP's decision to hang tough with Windows-based touch PCs and tablets.

Dell, Lenovo, Acer, Asus and Toshiba are still selling PCs. (A lot of them, according to Gartner's Q2 worlwide shipment data.) Any of these companies could and most likely will take up the Windows touch-PC and touch-tablet mantle, as could recently rumored buyer Samsung--  or which ever vendor ends up buying HP's PC business.

I don't see this HP's sell-off as the PC death-knell or even an acknowledgement that 30 years after the PC's birth, we're now officially in the post-PC era. Instead, I'm hoping it will be an opportunity for a new, more risk-taking and innovative PC maker to swoop in as the new PC champion. I have to say I've never been overly enamored of HP PCs. They always seemed to be lacking a feature I wanted (or having another I didn't). The more interesting new Windows form factors, especially in the thin-and-light category, haven't come from HP in the past year or two.

But if and when another vendor buys HP's PC business, they're going to be facing the same challenging consumer PC and tablet environment that HP has endured. My ZDNet colleage Larry Dignan quoted HP CEO Leo Apotheker's remarks on the no-win situation HP found itself facing:

"Consumers are changing the use of their PC. The tablet effect is real and sales of the TouchPad are not meeting our expectations…The velocity of change in the personal device marketplace continues to increase as the competitive landscape is growing increasingly more complex especially around the personal computing arena. There’s a clear secular movement in the consumer PC space. The impact of the economy has impacted consumer sales and the tablet effect is real and our TouchPads has not been gaining enough traction in the marketplace. For our PC business to remain the world’s largest personal computing business it needs the flexibility and agility to make decisions best for its user direction."

Meanwhile, note to Microsoft: If you need some give-away tablets to put a first Windows 8 test build on for attendees of your Build conference -- maybe you could help HP and Best Buy unload some of those TouchPads (retrofitted to run Windows 8) ...

What's your take on HP's exit from the PC business? What's it mean for other PC makers -- and Microsoft -- in your view?  And who do you think will become the new reigning Windows PC king?

Topics: Microsoft, Hardware, Hewlett-Packard, Operating Systems, Software, Windows

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

    It'll probably be Acer, otherwise known as: The Brand To Avoid If You Want Your PC To Last More Than Two Years.<br><br>Also, there's no question that the PC business, particularly the consumer PC business, is not only ailing, but in serious decline.<br><br>Dell also confirmed this yesterday.<br><br>PCs aren't going away, but they'll be fully shifted over to Asian companies that can operate and thrive on razor thin margins, in a no-growth commodity business.

    I wouldn't be surprised if Dell likewise eventually exits the consumer PC business.
    Theseus
    • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

      @Theseus

      hmm, so growth = decline in your world...
      evilcart
    • Not in serious decline, instead

      @Theseus

      not large enough to support so many vendors.

      Apple is doing quite well being the only company that can sell Mac (OS X) branded hardware.

      The market had a shakeout years ago, where brands like Tandy, Pacakard Bell, ect closed shop.

      The remaining companies are far too large and many to support the market as it is today.

      if HP/Compaq closes shop, those customers will go to Dell, Acere, Lenovo, making them healthier.
      William Farrell
      • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

        Exacly... isn'it simple :)
        EricDeBerg
      • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

        @William Farrell You do realize that Packard Bell is available to the friendly people in Europe, right? However, it's nothing more than an Acer brand, just like Gateway and EMachines.
        Champ_Kind
    • It'll be HP... just you'll not notice it...

      @Theseus : Apotheker can sell HP PC unit, with no impact at all, 'cause <i>ironically</i> it no longer exists.

      What's left it's just a bunch of "rubber stamp" engineers in Palo Alto who earn $250K by "vetting" designs from the ODMs and Intel. Another group, the ID side, just figures a way to apply fancy thermoplastics on top of the original components, created on Foxconn, Jabil or somewhere else.

      With that said, he'll just layoff those crew, license the HP brand to some Asian manufacturer: Asus, Acer, Samsung, etc. and concentrate on Services like EDS and now Authonomy...
      cosuna
      • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

        @cosuna

        This. HP has not been a PC company in any real sense of the word for years.
        SlithyTove
      • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

        @cosuna If it were only true ...

        The reality is that HP still has a LOT of people working on PC stuff, they just don't contribute much to innovation, productivity, or the bottom line. Even after all the layoffs, they are still there, playing mindless corporate games and sucking what little profit there is from the business. Selling it off is bit like burning the house to get rid of the roaches, but it seems that is all Apotheker can figure out how to do.
        terry flores
    • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

      @Theseus
      There is a point there. Consumers are increasingly passing on Windows machines. They are either just getting an iPad or buying a Mac (Apple's sales are up year over year a significant amount).

      I can see why. I picked up a cheap netbook (Aspire 1 722) to replace my Cr-48. The hardware is decent. Speedy AMD CPU, 2GB, 250GB, high rez screen. Trackpad sucks and it has a cramped keyboard.

      Window 7s is the issue. I went to setup e-mail. Whoops, nothing there. The Office 2010 Starter only has ad supported versions of Word and Excel. Off to download Thunderbird. Got it setup and want my calendar. Off to find a plugin for it and got it setup.

      Wanted to get a photo app. Off to download Picasa.

      Spent about 2 hours downloading updates, uninstalling crapware and getting things set up.

      Contrast that to my Macbook:
      Mail for mail
      iCal for iCal
      iPhoto for photos

      It all works out of the box.

      Still not sure if I'm keeping this Acer though - the keyboard and trackpads are killing me.
      itguy10
      • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

        @itguy10

        And if Microsoft were to add a mail client, photo app or anything else as the default choice in the OS you'd probably be one of the first people to cry to the antitrust police!

        Loser...
        omdguy
      • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

        @itguy10 <br>Remind me again what share of the pc market Apple has?. Passing over windows machines my a$$.<br>Have you not heard of Windows Live. You can find all you need there my friend.<br>It's cheap netbook, what are you expecting it to be a MacBook?<br>Your nothing<br> but a troll, and by the way this is being typed
        out on my iPad which I've had for over a year. I still think
        of this as a <br>toy and not much more. I cannot wait to
        get my hands on a windows 8 tablet and do some proper
        work.
        P.S. Please excuse any errors. It's my IPad's keyboard.
        Blogsworth
      • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

        @itguy10

        You can't be serious dude. Just really really dumb.
        JimmyFal
      • Mr. itguy, can you do nothing but write such obviously

        @itguy10
        false statements?
        [i]Consumers are increasingly passing on Windows machines[/i]

        You have said that line before, and eveytime it has proven to be false, yet you ignore the facts and continue to post it like it was true.

        If people are "increasingly passing on Windows machines" then what are slaes of PC's still outpacing Mac sales by such large numbers?

        How is it more Windows 7 licenses have been sold then all of Apple's OS's combined?

        I must commend you on your control of your emotions: most humans would be too embarrassed to continue writing after being proven wrong as often as you have bben.

        :|
        Tim Cook
      • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

        @itguy10 - a significant increase to a (relatively) small number is still a small number.

        What's interesting is that the number of Macs Apple sold in Q2 2011 was the first significant drop-off in sales since the economy fell off a cliff. In Q2 2011, Apple sold approx 3.6M Mac machines. By comparison, in the same quarter, HP alone sold 14.9M PC machines and there were 85.2M PC devices sold across all vendors.

        By that reckoning, Apple accounted for 4.2% of combined PC and Mac machines.

        While Apple is doing much better than before, they're primarily doing well in phone and tablet sales. Their desktop/laptop sales are pretty small by comparison to the PC industry.

        The fact is that tablet sales are eating into traditional laptop desktop and laptop sales (inc. Mac machines), filling a void where people simply want a companion device to provide them a portable primarily consumption-oriented internet/entertainment device.

        Once that void starts to fill, tablet sales will flatten off and peoples' now older, power-hungry, unreliable machines will need replacing. Because that fact is that tablets are NOT laptop/desktop replacements - they're companion devices.
        bitcrazed
      • Really?

        @itguy10 I guess your comment finally proves that picking up the shopping carts at Best Buy doesn't make you an ITGuy.
        Stark_Industries
    • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

      @Theseus
      This article refers to a massive decline in PC sales in western Europe:
      http://mac.blorge.com/2011/08/17/as-windows-withers-mac-soldiers-on/
      Only Apple had an increase, and that was marginal.

      The reductions in PC sales are quite staggering:
      HP 6.1%
      Dell 12.7%
      ASUS 22.9%
      Acer 44.6%
      Wakemewhentrollsgone
    • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

      @Theseus
      The Handsets (stupid Phones) are killing the market and unfortunately with all the stupid youth texting while driving are killing innocents as well.
      partman1969@...
    • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

      @Theseus
      Acer makes great PC. My last laptop was an Acer and it lasted about four years until I wanted a Windows 7 laptop with up to 8GB RAM and Intel i7 CPU and up to 3.20Ghz overclocked. If you know how to use a PC, regardless the brand, it will last you much more than a couple of years. I am an IT personnel, by the way.
      techiegz@...
  • Whoever buys them.

    it's not like whoever buys the PC division will sell something else instead of Windws.
    William Farrell
    • RE: With HP out of the PC business, which vendor becomes Microsoft's new champion?

      @William Farrell You never know - could be webOS or Linux :)
      Imrhien