Hewlett-Packard Is Sick of Wintel

For decades, PC makers had little choice but to succumb to the Microsoft (NASDAQ: MSFT  ) and Intel (NASDAQ: INTC  ) hegemony known as Wintel. The software giant and chip maker both rose to ubiquity together, enjoying the most valuable roles in the segmented PC value chain. The vast majority of computers ran Windows and were powered by Intel processors during the rise of the PC.

However, one PC maker has had enough: Hewlett-Packard (NYSE: HPQ  ) .

HP has been in turmoil for years. Mark Hurd's controversial ouster in 2011 also came at a time when the broader computing industry was at an inflection point. Apple had launched the iPad just a year prior, jump-starting the tablet renaissance. Leo Apotheker's reign didn't last long, and current CEO Meg Whitman's turnaround is starting to take shape.

That turnaround is very much hinged on a broader approach than HP has historically implemented, one that acknowledges the shift away from Microsoft and Intel in favor of iOS, Google (NASDAQ: GOOGL  ) Android, and ARM-based chips. On the last earnings conference call, Whitman made it clear that HP is intent on "using multiple operating systems, multiple architectures, and multiple form factors" going forward.

Whereas once HP's PC portfolio were all Windows PCs with Intel inside, HP has now broadened its horizons and is embracing Google's vision of the future. HP released its first Chromebook earlier this year, followed almost immediately by a Slate 7 Android tablet reminiscent of Google's Nexus 7. The Android-powered SlateBook x2 convertible was just announced, which sports an NVIDIA Tegra 4 processor. Google is uprooting many of Microsoft's core businesses, and HP wants in.

HP SlateBook x2. Source: HP.

On the server side, HP's power-efficient Moonshot system that boasts 89% energy savings use ARM-based chips instead of Intel silicon. The company makes it clear that this isn't just an "evolutionary" improvement -- this could be revolutionary.

HP is now taking something of a "shotgun" approach, trying everything to see what sticks. That broad strategy is similar to what Samsung has done in mobile, testing every imaginable form factor and price point. If Microsoft and Intel fail to gain traction in the mobile future, HP wants to hedge its bets.

The massive wave of mobile computing has done much to unseat the major players in the PC market, including venerable technology names like Hewlett-Packard. However, HP's rapidly shifting its strategy under the new leadership of CEO Meg Whitman. But does this make HP one of the least-appreciated turnaround stories on the market, or is this a minor blip on its road to irrelevance? The Motley Fool's technology analyst details exactly what investors need to know about HP in our new premium research report. Just click here now to get your copy today.


Read/Post Comments (3) | Recommend This Article (3)

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  • Report this Comment On June 10, 2013, at 12:23 AM, stretcho44 wrote:

    Quite a revisionist view of history.

    You are talking about the PC15% of HPQ revenues and even less profits.

    HP has always made systems with AMD CPU. That sort makes your Wintel argument a pile of bologna without going further.

    Leo Apotheker's contribution to HP was to dump HP tablet inventory below cost and tell the world that he was going to dump the PC division. A brilliant move by Leo. Leo destroyed HP in one form and then overpaid for the parts to make HP into another IBM.

    I guess you cannot think past the boundary of "the PC". HP also makes other stuff TOO Evan.

    40% of the company is services ... you know the stuff that Leo overpaid for.

    20% printers and cartridges.

    15% servers. Can you say Itanium and HPUX/Linux? Your microservers are a small fraction of this 15%.

    13.2% PC stuff you are talking about up above.

  • Report this Comment On June 10, 2013, at 10:32 AM, 6M wrote:

    "HP's power-efficient Moonshot system that boasts 89% energy savings use ARM-based chips instead of Intel silicon."

    Do some research. HP's first two generations of Moonshot will use Intel processors, first an Atom S1200 (available now) and then Avoton (2H13).

    http://newsroom.intel.com/community/intel_newsroom/blog/2013...

  • Report this Comment On June 10, 2013, at 11:07 AM, jpanspac wrote:

    Very poorly-researched article. As 6M notes, HP's first Moonshot systems use Intel, not ARM.

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