Hewlett-Packard WAS a great company for a long time, with a number of innovations in the calculator, computer, printer, and other categories over the years. As noted by Businessweek (and highlighted by this photo montage): “Stanford University classmates Bill Hewlett and Dave Packard founded Hewlett-Packard in 1939. The company’s first product, built in a Palo Alto (Calif.) garage, was an audio oscillator — an electronic test instrument used by sound engineers. Seventy–four years later, their legacy lives on in microchips, cameras, data centers, and, of course, printers.”
But, recent years have not been as kind for HP; and its future is uncertain. As reported by Ashlee Vance and Aaron Ricadela for Businessweek: “Things are challenging at HP — more, perhaps, than at any time in its history. Customers are buying less of two of HP’s most important products — PCs and printers — while the company has amassed debt and laid out billions on acquisitions that haven’t worked out. Wall Street analysts have kicked off the New Year by saying that CEO Meg Whitman ought to break up the company. Since August 2010, the company has lost 70 percent of its share price and close to $68 billion in value. ‘You just wonder how HP can possibly fall so far so fast,’ says William George, a professor at Harvard Business School and board member of ExxonMobil, Goldman Sachs, and the Mayo Clinic. It’s true that HP has a collection of now commoditized businesses such as PCs, servers, and printers, and that its products look dated in some areas. But many of these businesses remain cash machines, with HP generating more than $12 billion in operating income a year. The disarray at the top of the organization chart, though, has just been too much. ‘This is one of the great corporate destructions of all time,’ says George.’“They will continue drifting and disappointing their shareholders unless they’re ready to make some really hard decisions.’”
And click the image to see a video on the challenges facing HP.
Photograph by Kim White/Bloomberg