HP senior exec: Laptops still alive

Martin Fink
Martin Fink

HP EVP & CTO Martin Fink tells "Globes" about competition with Microsoft and the wearable computer revolution.

Hewlett Packard (HP) has been dealing in recent years with a series of technological revolutions spearheaded by other manufacturers in the market. HP has yet to develop a successful smartphone and is suffering the effects of the global slide in laptop sales, while no significant change in its inkjet printer, one of its main products, capable of motivating customers to upgrade their home printer has been made in recent years.

IDC Israel's data confirms these trends. HP was the number two computer manufacturer in Israel in 2013, with a 20.9% market share, compared with 15.5% in 2012. This figure appears encouraging, but keep in mind that the entire market has shrunk: 377,000 laptops were sold in 2013, compared with 421,000 in 2012.

"I don't think the laptop category is dead," says HP EVP and CTO Martin Fink in an exclusive "Globes" interview. "There are people who are converting their tablet to a laptop by adding a keyboard to it. The question is how much the customer wants to start with a tablet and later add laptop capabilities to it. The user can also buy a laptop and convert it into a tablet. We're doing it with hybrid laptops that make it possible to disconnect the screen from the keyboard, or models in which the screen turns 180 degrees with respect to the keyboard, thereby making a tablet. We also have stylus pen solutions for laptops that are better than Apple's (offered by various manufacturers, T.H.)."

Fink says that the entire laptop market is influenced by tablets. "Even Apple is feeling the pressure from tablets based on Android, Google's operating system, which is selling for $99, as we have presented not long ago (the 7 plus model). These products are enough for the average customer who wants to check his e-mail, surf the Internet, and update his Facebook and Twitter pages."

Software giant Microsoft, a business partner of HP, recently launched Surface Pro 3, its third generation tablet, and became a partner of a company that in effect competes with HP.

"Globes": What do you think about Surface? Has Microsoft become a competitor of yours?

Fink: "I think we have to wait and see whether there is a market for tablets with a 12-inch screen, and whether people in general want such a large screen, which gives more of a laptop experience than a tablet experience. Miocrosoft is our competitor in the tablets category. There are companies that are our partners that have become competitors in certain categories. There's no doubt that Surface is a product that competes with us."

In mid-May, Microsoft announced Surface 3 at a press conference in which Microsoft CEO Satya Nadella said with reference to competition with his partners, "We are not building hardware for hardware's sake. We want to build experiences that bring together all the capabilities of our company from our cloud infrastructure to our application services to our hardware capabilities to build these mobile-first productivity experiences… And the Nokia close really gives us that extra strength to be able to do that. We're not interested in competing with our OEMs when it comes to hardware." What do you think about that?

"If Satya says he isn't competing with us, he has to get out of the Surface business. He can't say one thing and do something else. If you put a tablet on the market, a product that belongs to our core business, you're competing with us."

"Computers with Windows 7"

What do you think about Windows 8?

"With Microsoft's latest upgrade of Windows 8.1, Version 1, I think Microsoft has made an improvement. The change between Windows 7 and Windows 8 was very significant, and a lot of people had trouble getting used to it. The improvements in the latest revision adapted the product more to users working with a keyboard and mouse, not a contact screen. We're still selling computers with Windows 7, mostly to the business market."

HP's shed its exclusive loyalty to Microsoft a long time ago. It sells both Android-based tablets and Chromebook laptops based on Google's operating system. The Chromebook category is aimed at a category in which Microsoft is dominant, and as of now, it appears that the Chromebook is gathering steam. "Chromebook is very successful for us," Fink says.

"Chromebook is a suitable product for people who adopt Google's ecosystem, such as the company's storage services and word processor. I think that it's a good product for this community. The challenge with products in this category comes when the user wants to leave Google's ecosystem for other things, and he can't operate other Microsoft features. I don't think Microsoft needs to be afraid of Chromebooks, but it certainly needs to be aware of them. For example, the Office 365 service (Word, Excel, and Power Point for which the user pays annual subscription fees, T. Hoffman) is a solution."

Smartphones in India

One category in which HP has had difficulty for years in establishing a presence is smartphones. At present, you're almost totally inactive in this area? Do you have any news?

"Recently, we've been operating mainly in India in Pablets (a cross between a smart phone and a tablet). In order to operate in the smart phone category in the US, you have to work together with the cellular companies. In India, on the other hand, there is more separation between the cellular company and the device sold on the market. Furthermore, most people in places like India have only one device, a smartphone, and don't also have a tablet, so the Pablet is the solution. We look at India as a market in which we are now testing our product, and we have done this there, because our brand name has a strong presence there. We're not planning to take our Pablets to the general world market right now."

"We have plans"

The wearable computer field is considered one of the hottest in the industry. Only a week ago, Google unveiled additional details of its platform in this category- a Wear Android, while manufacturers such as Samsung and LG have already launched their watches. Fink is still unwilling to disclose HP's plans. "We have plans in this area, but we're planning to unveil them only in a few more months," he says.

Fink is considered the number two man in HP, after CEO Meg Whitman. He visited Israel last month for the 20th anniversary celebrations of the company's innovative laboratories in Haifa and Yehud, which are developing new generation memory components. "It turns out that the storage and calculation memory in products such as tablets will reach its maximum capacity in 2018. We're working on a different technology called resistive memory, which will make it possible to store information on our mobile devices," Fink says.

"Private 3D printers? Not in the next decade"

Three-dimensional printers are stirring up the world of technology. These products facilitate home printing of self-designed objects (usually made out of plastic). While the 3D printers market is aimed primarily at businesses, some manufacturers are also appealing to the private consumer. A year ago, the Bug chain offered the 3D Cube of 3D Systems for sale at NIS 7,000. The market itself is waiting for the major printer manufacturers to enter the 3D sector, which will lead to a significant decline in the price.

"We're not planning to issue a 3D printer for private consumers right now," Fink says. "The global 3D printers market for private consumers is small, amounting to about $30 million. I think that the market for consumers is more for people who like the sector, but there is no general market. I don't think most people are aware of how long it takes to print a product with a 3D printer- it takes many hours for a few parts. Furthermore, the quality of what is printed is low. If 3D printers catch on among the consumers, it will take a really long time. I don't think it will happen in the next ten years. What is true is that people will use stores offering 3D printing services. We'll aim our products at this market."

Published by Globes [online], Israel business news - www.globes-online.com - on July 1, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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