HP: Abandoning China PC Market? 惠普能否继续在中国PC市场走下去？

By newsdoug on February 15, 2012

HP becoming bit player in China New data is showing that Hewlett-Packard’s (NYSE: HPQ) share of China’s PC market continued to plummet at the end of last year, a worrisome development for a company that is at once the world’s biggest computer brand but also seems unable to decide on its future direction in a PC market that will soon overtake the US to become the world’s largest. According to the latest data from IDC, HP’s share of the China PC market tumbled to 5.3 percent in the fourth quarter of last year, down from 8.5 percent in the second quarter, which was down from double-digits not long before when the company was one of China’s top players. (English article) The steep drop means that HP is just barely a top-5 player in China, with the latest data placing it behind market leader Lenovo (HKEx: 992), followed by Taiwan’s Acer (Taipei: 2353), US rival Dell (NYSE: DELL) and up-and-comer Taiwan’s Asustek (Taipei: 2357). HP’s rapid decline is due in no small part to confusion at the company’s headquarters over its future direction, following the departure of its widely respected CEO Mark Hurd in 2010 amid a scandal involving personal matters. Since then the company has announced plans to sell its core PC business last year, only to change its mind months later and force out the new CEO who made the decision. Such turbulence in the company’s top ranks is clearly not good for its longer term prospects, and its rapid fall in China is clearly an alarming sign as the country, already the world’s second largest PC market, prepares to overtake the US in the next few years to become the world’s biggest. Of course, many will argue that PCs could soon become an obsolete product anyhow, and that it’s more important to focus on next-generation products like smartphones and tablet PCs, which are more mobile and can perform many functions of PCs. But HP looks weak even in these 2 categories, and it’s probably fair to say its limited line of smartphones and tablet PCs are virtually unknowns in China. It’s probably too early to say HP is destined to become a non-player in China, as the company may finally be entering a new period of stability after the turbulence of the last 2 years. But unless it changes its game plan soon, it faces the very real risk of becoming a non-player in China, and ultimately losing its spot as the top global PC brand to the more focused Lenovo.

Bottom line: HP’s rapid fall in the China market reflects a broader turbulence at the company, which could result in its removal from the market if it doesn’t sharpen its focus soon.

Enjoy this blog? Please spread the word :)