US PC and printer manufacturer HP, is moving to a subscription model according to the Companies CEO, a move that put a dent in retail sales of their products via CE retailers and the specialist B2b PC channel.

CEO Enrique Lores recently mapped out the future for the big PC maker and that includes selling a subscription to HP hardware and services.

In an interview with the Wall Street Journal, he claims the future for the business is “Being a digital Company” over one that sells their product via retail stores.

When asked products will be available on a subscription basis he said “As of today, we have ink, toner and paper. Very soon you will be able to buy your printer as part of the subscription. Soon after that, you will be able to buy your PC. And over time, our goal is to offer the full portfolio”.

HP CEO Enrique Lores

“I think it’s the desire to be more relevant to our customers. We can offer a much stronger value proposition to customers with, rather than a product, a full service. It’s all about engaging with customers in a more permanent way”.

Recently the business in Australia hired Rob Wilkinson as their new head of consumer. A former Toshiba executive Wilkinson was heading Toshiba’s PC business when despite being a popular PC brand, they exited the market in Australia.

Shortly after becoming HP’s chief executive in 2019, the three-decade veteran of the company found himself fending off a takeover attempt by Xerox Holdings.

Currently HP is discounting out stock in an effort to offload a surplus of stock as consumers stop buying PC’s.

Shortly after he took on the top job, he had to manage an overnight surge in purchases for personal computers as schools and employers started operating remotely due to COVID.

The run on its products continued through the depths of the pandemic—until it didn’t, when the pulled-forward demand dried up and consumers suddenly stopped spending due to inflation fears and rising costs.

HP initially expected demand to eventually bounce back but at this stage they are still handling stock and supply issues.

Enrique admits that he is charting a future for HP that goes beyond its bread-and-butter products.

He sees significant cost savings in moving to a subscription model for paper, ink, printers, and computers.

Right, he claims that the biggest issue is “The speed of change. Whether it’s in the technology space, geopolitical space or the economic space, changes are much faster than what we saw 10 years ago or 20 or 30 years ago. We need to continue to build a company that can respond to these changes fast” he said.

He claims that AI will change the way personal computers are designed.

Another big change is related to all these geopolitical changes we are seeing. I think we are entering a different phase of globalization. Until now, globalization in our industry was defined as we design products in a similar way for everywhere in the world. We’re going to go to a model that is going to be much more regional where there will be regional hubs both for manufacturing and, to some extent, design.

He said” I really think this is a super exciting opportunity that is going to really help us and the industry to redesign what a PC is and what people are going to be able to do with a PC. In the next 12 to 24 months, there is going to be a new generation of PCs that will have the capability to run locally AI applications that are really going to transform how many people work”.

He concluded claiming “To be a successful company 20 years from now, we need to be digital—and being digital means, we need to change how we connect with our customers. We need to change how we run the company internally and really do it like if we had been born five years ago”.