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Why HP Inc's New Product Lineup Is Spot-On

By Tim Brugger - Jan 12, 2017 at 5:24PM

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Like other tech giants, the PC leader unveiled a host of new products at CES 2017, with one, underlying theme.

HP ( HPQ 3.35% ) enjoyed nearly unanimous positive industry reviews surrounding its slew of new or upgraded devices released at the recent Consumer Electronics Show (CES). While the multiple devices wowed at CES, it could be argued that HP's approach to product sales, as much as the products themselves, is what's driving its success in the PC market. Taking that a step further, the same tack HP so clearly exhibited at CES should turn its printing fortunes around as well.

Image source: HP.

Introductions are in order

HP unveiled five upgraded products recently, beginning with its EliteBook 360x unit. Billed as "the world's thinnest convertible," the EliteBook 360x is designed for mobile business users, with a battery life of over 16 hours and a focus on facilitating online conferencing. Next up is the improved HP Spectre x360. One theme throughout CES was that HP doesn't just invite customer feedback, it implements it, as it did with Spectre x360.

Nearly two-thirds of laptop customers said they preferred 15-inch displays and 93% wanted ultra-high definition, so HP's Spectre x360 now delivers both. Its screen size is 15.6 inches, up from 13.6, and features longtime partner NVIDIA's (NASDAQ: NVDA) highly touted new GeForce graphics chip.

And there's more

The enhanced HP ENVY offers immersive media fans an even wider, curved screen: now boasting a 34-inch display and an "integrated four-speaker sound bar." Sure, the ENVY is a PC, but it's a device with the world's video streamers, YouTube fanatics, and digital photographers in mind. Along with enough power and goodies to satisfy those in need of a PC.

HP likely hit a home run with its first OMEN -- which also comes with NVIDIA's high-end GeForce graphic capabilities -- in the fast-growing virtual reality (VR) market, particularly among gamers. And the fact it now comes with a whopping 35-inch curved screen should have the gaming crowd applauding.

Finally, there's the improved Sprout Pro G2 that was initially designed for consumers. However, Sprout's combination of PC, scanning, 3D, and overhead projector features has proved to be a hit in the classroom and its full redesign is aimed at schools and businesses. The revamped Sprout Pro G2 is smaller to fit on a teacher's desktop, and has better resolution for its projector, along with other, industry-specific improvements.

The common theme

The underlying theme among HP's upgraded product lineup is that each targets a specific market, either by industry or usage requirements. That said, there is surely overlap into other opportunities. HP's VR-ready OMEN is an example. As VR expands beyond gaming into social media, it's easy to imagine social fans, designers, and engineers considering OMEN as an alternative.

The targeting of specific markets via its devices and features isn't new, though it is becoming more refined, and the results are there to see. The global PC sales race has narrowed to two: current leader Lenovo ( LNVGY 1.31% ) and HP. A year ago, Lenovo owned 20.2% of the global PC market, a full 1.4 percentage points higher than HP.

As of 2016's third quarter, Lenovo's margin over HP had shrunk to just half a percentage point -- 20.9% for Lenovo and 20.4% for HP -- thanks to its target marketing and development strategy. As HP demonstrated at CE, it's not just sticking to the plan, it's enhancing it, which is why HP will likely soon be the top PC seller in the world. And with its 3.6% dividend yield, HP stock warrants a good, hard look from growth and income investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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