With no stake in the post-PC world, HP resorts to massive cuts

HP's absence in tablet/smartphone markets bleeds over into computer sales, as the numbers sink lower

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As you might recall, HP touted WebOS as the future of its entire computing lineup, shipped the mediocre TouchPad tablet six months later, and killed the WebOS project six weeks after that. Starting in mid-2010, Dell shipped several woefully bad Android-based Streak mini-tablets, becoming the poster child of an old-guard company that doesn't get it.

Neither HP nor Dell shows an indication of engaging in the smartphone market, ceding that market and brand awareness to the Apple, Samsung, and the other mobile leaders. As for tablets, they're banking on the forthcoming Windows 8 -- like everyone else in the PC market.

That would be water under the bridge, I guess, but during the fairly lengthy earnings call, there wasn't one mention by Whitman or her lieutenants about a mobile strategy other than the me-too Windows 8 strategy -- not a good sign.

Software a bright spot for HP
HP's Imaging and Printing Group, which is merging with PSG, performed very poorly. Revenue declined 10 percent year over year with a 13.2 percent operating margin. Commercial hardware revenue was down 4 percent year over year, with commercial printer units down 7 percent. Consumer hardware revenue was down 15 percent year over year, with a 13 percent decline in printer units. One reason for the poor consumer sales, Whitman said, was a decline in the printing of photos at home by consumers, who are probably making more use of online photo-sharing sites.

Sales of servers, storages, and networking gear were off by 6 percent, and service revenue was off 1 percent.

By contrast, software revenue was up 22 percent, and revenue from financial services was up 9 percent. Interestingly, software was the one area that Apotheker wanted to focus on; he even publicly mused about selling off the company's PC business. But Autonomy, his controversial $10.3 billion acquisition, did not perform well, and Mike Lynch, Autonomy's founder and executive vice president for information management, will take the hit: He's leaving and will be replaced by Bill Vehhte.

I have to say, Whitman sounded reasonably upbeat and on top of the situation, and the news that a majority of the money saved by the bloodletting will go to R&D and other internal investments is welcome. But without a mobile strategy, how will the company repair the terrible damage done to its sales and market position by the clueless Apotheker?

This story, "With no stake in the post-PC world, HP resorts to massive cuts," was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog. For the latest developments in business technology news, follow InfoWorld.com on Twitter.

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