Hewlett-Packard (NYSE: HPQ) will not bow to Lenovo in the PC market. That's the message from HP CEO Meg Whitman this evening. During an earnings call, Whitman said HP is determined to "defend our Number One position in this business." Whitman didn't mention Lenovo by name, but she conceded HP is "under attack by some very strong competitive pressures, and we're going to respond." Here's how.
First, the facts:
- HP's Personal Systems Group (PSG) revenue fell 10 percent in Q3 2012 vs. Q3 2011.
- HP said business PC sales fell 9 percent; consumer fell 12 percent; desktop units fell 6 percent, notebook units declined 12 percent and total units were down 10 percent.
- Dell yesterday announced similarly weak PC sales.
- Meanwhile, Lenovo revenue announced another record quarter of profits and has nearly leapfrogged HP as the world's top PC supplier.
Speaking about HP's PC business, Whitman said:
"We are focused on profitable growth and continuing to deliver very strong return on invested capital in this business. But we are under attack by very strong competitive pressures, and we're going to respond" in three ways.Those three ways include HP's innovative PC lineup; a growing family of ultrabooks and tablets; and cost benefits of combining PSG (personal systems group and IPG (imaging and print group) together:
"One of the benefits of putting IPG and PSG together is we have a much more seamless go-to-market solution...And we have got to make sure that our cost structure allows us to compete effectively because we're going to defend our Number One position in this business."Memo to Lenovo: The war is on.