Hewlett Packard to Expand Razor Product Line

Whoops, I meant their printer product line.  This expansion could  generate a fair amount of ink cartridge revenue for Hewlett Packard, as well.  "We haven't had a new product lineup in seven years," said HP CEO Meg Whitman in talking about Hewlett Packard’s plan to announce a new line of printers.  "It was very obvious that we had a product gap here."

Hewlett Packard will be introducing multi-function machines that combine printers with scanners and software to manage electronic documents.  The software will come from their Autonomy group.  The rumored price point, around $2500 to $3000, and targeted at small businesses and groups within larger companies.

In IDC's  “MarketScape: U.S. Shared, Networked Multifunction Peripherals for the Distributed Office 2012 Vendor Analysis” (Doc # 235820).  Companies in the Leaders quadrant include Xerox, Rico, HP, and Canon.  Konica/Minolta are close behind as Major Players.  IDC’s quadrant displays a company’s market share graphed against Capabilities and Strategies.  The Capabilities score measures vendor product, go-to-market and business execution in the short-term.  The Strategy score measures alignment of vendor strategies with customer requirements in a three to five year timeframe. Whitman's announcement will help keep HP in this section of the quadrant.

This announcement may portend good things for Todd Bradley,  head of HP’s printer and personal-computer businesses.  The printing unit has brought in over $25 billion in revenues to HP. Under the Hurd regime, R&D  suffered, dropping from  $3.7 billion to $3 billion between 2003 and 2010.  More will be spent under the Whitman regime.

Whitman also telegraphed some of her other strategies for the next couple of years  while speaking at the Gartner US Symposium/Txpo, held in Orlando.  She stated that HP would probably not release a smartphone until 2014.  She also expects HP to be a major contender in the tablet and mobile PC markets.

“There will be ups and downs in this business," Whitman said.  "PCs may be declining.  Tablets may be growing.  The business definition here is 'personal systems.’  It's not PCs.  It's personal systems.  And we think we can win.”  Whitman didn’t comment on which OS the smartphones will use.

Hewlett Packard’s stock decline has been steeper than the double diamond ski  runs at Squaw Valley in Lake Tahoe, California.  On October 26, the stock hit another 52-week low of $13.94.  This represents a 52-week decline of around 50%.  Competitor Dell has had a slide of almost 45% over the same period and also had another 52-week low of $9.19.

Whitman and Hewlett Packard need to make some bold moves.  She  said when she became CEO   that turning Hewlett Packard around would be a multi-year effort.  She’s now just into her second year at the helm.  There may not be a third if things don’t start improving.

“Hewlett Packard and Meg Whitman – The First Year. Turbulence and Turmoil in the Valley” at

http://kensek.blogspot.com/2012/09/hewlett-packard-and-meg-whitman-first.html

UK Intelligence and European Commission Look at Huawei More Closely - IBM as a Partner

British Telcom (BT) has been declining to comment on whether it had received any requests from US officials to stop doing business with Huawei.

Nonetheless, on Friday, a United Kingdom Parliament committee said that it is performing an investigation about  Huawei's business in the UK after governments from Australia and Canada expressed concerns.

The UK Parliament's intelligence and security committee is examining the relationship between Huawei and the UK firm BT.  They are  "reviewing the whole presence of Huawei in regard to our critical national infrastructure and whether that should give rise for concern" according to an article in the Guardian.  Recently, Huawei had announced their intentions of spending almost $2 billion in the UK, including moving into a new 140k square foot building in Reading and plans to increase employment from around eight hundred to about fifteen hundred.  Victor Zhang, chief executive of Huawei Technologies UK, has stated “This move marks the beginning of an exciting new period of development for Huawei in the UK.”  However, this was before the investigation announcement from the intelligence and security committee. 

In March, The Australian Financial Review wrote that Huawei had been banned as a supplier for the $37.4 billion Australia Broadband Network after concerns were raised about the potential security implications.  Huawei, as one would suspect, has been calling this political. 

On the European front, European Trade Commissioner Karel De Gucht has been collecting evidence for a potential anti-dumping or anti-subsidy case against both Huawei and ZTE over subsidies.  The European Commission has suspicions that these two companies have been receiving   receive illegal state subsidies to undercut rivals in Europe. 

Huawei and ZTE are the world’s second and fifth largest manufacturers of wireless telecommunications gear.  Huawei has    many of the biggest telecommunications companies in Europe as it customers.  They include BT and Vodafone in the UK,   Telefónica of Spain, and Everything Everywhere, a partnership between France Télécom and Deutsche Telekom in Britain.  Huawei had European sales of over $3.7 billion last year. They employ about seven thousand people in Europe. 

Huawei spokesperson Roland Sladek   has started, “Europe is almost like a second home market for us.”  Their reception in this is becoming a little chillier.

ZTE is another story.  Cisco terminated a technology relationship with ZTE  in July.  They also  terminated their sales partnership with ZTE  in early October   after an investigation showed  that ZTE had sold Cisco branded networking gear  to Iran.  Iran is under ban from the US government  from  receiving this and other  technologies  from US firms.

IBM as a Key Huawei Partner

An  October 10 Wall Street Journal article,  "Huawei's Ally, IBM", discusses   how IBM has been working closely with Huawei since 1997.  This has included teaching management techniques (R&D, supply chain and financial management),  packaging its technology into Huawei products, a 2000 initiative to jointly develop networking gear, and most recently, advising Huawei on its expansion into selling smartphones and tablets.  Consumer products such as smartphones contributed 21% of Huawei's $32.4 billion in revenues last year. Huawei  announced a strategic partnership with IBM Global Business Services in February. Without IBM, "We could not have had the Huawei of today" stated Charles Ding, Huawei senior vice president for the US. Other companies Huawei has hired as consultants include Accenture, Boston Consulting Group, PrecewaterhouseCoopers, Mercer, and Hay Group.

To read more about Huawei -
 http://kensek.blogspot.com/2012/10/us-intelligence-report-dont-trust-huawei.html