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HP Sales Fail To Sprout, PC Desktop Sales Down 10% Rampant OZ Discounting

HP Sales Fail To Sprout, PC Desktop Sales Down 10% Rampant OZ Discounting

Desperate to hold onto marketshare in the Australian PC market, HP, who is still paying the price of misleading consumers over their warranty rights, which saw HP Australia fined $3M by the Australian Competition and Consumer Commission, moved to discounting out their consumer PC range prior to Xmas, in an effort to stymie Lenovo’s roll out of their PC offering at JB HI Fi and Harvey Norman.

The strategy did not work with both retailers reporting “excellent” sales of the Lenovo PC range in particular their Yoga tablet and PC models. 

Sales in HP’s desktop PC business, which accounts for about 30% total revenue, declined 10% after showing some improvement in 2014.

Globally the Company is struggling with their first-quarter revenue falling 4.7% because of declines in PC sales. 

Shares of HP, which plans to split into two companies later this year, took a beating in after-hours trading in the US overnight.

HP’s first-quarter revenue of $26.8 billion was down from the $28.2 billion the company posted during the same period last year. The tech giant’s sales came up short of the $27.4 billion that analysts had expected, according to Thomson Reuters. HP’s profits fell nearly 4% to $1.4 billion, or 75 cents per share.

HP’s shares HPQ -9.92% fell nearly 7% in after-hours trading following the disappointing earnings report. 

Sales for HP’s business services unit fell 11% in the fourth quarter, to $4.9 billion, which contributed to the company’s disappointing performance overall. Meanwhile, sales were flat for both the PC business and its Enterprise Group, which includes cloud computing.

Overall, the PC and printing businesses saw sales decline 1.8%, to $14.1 billion. HP said in September the PC and printing businesses would split off into one company while its corporate hardware and services businesses would go into another.

 CEO Meg Whitman said in a statement that her ongoing turnaround plan for HP, which she has said will be completed by 2016, “remains on track” analysts are not convinced.

Just before Xmas Hewlett-Packard launched their latest computer, the Sprout, which they said was built for people who like to make things with their hands, in the real world.
It’s a PC, and it runs Windows, but it has two displays-one of which is a touch mat that lays flat on your desk, about where you’d place a keyboard. 
The Sprout also has a depth sensor, high-resolution camera and projector for 3-D scanning and imaging.
HP says that this unprecedented (and, yes, unusual) combo will let users to “take items from the physical world and seamlessly merge them into the digital workspace.”