When a company hosts it annual shareholder meeting, it usually presents one of the few opportunities that investors have to pitch questions directly at management.
Berkshire Hathaway's
Iconic PC maker Hewlett-Packard
Exhibit 1
According to AppleInsider, one investor mentioned that Steve Jobs described Apple's plan to compete with HP as simply having more innovative products and having technology that was "years ahead" of its rivals, particularly on mobile devices. The shareholder asked HP CEO Meg Whitman, "Do you think HP was and is innovative enough?"
Whitman gave Jobs and Apple credit for its success but said that HP is "No. 1 or No. 2 in every business" that it competes in, although that's certainly not true for mobile, since HP is taking a break from mobile after ex-CEO Leo Apotheker's bungling ways. It currently has no smartphones or tablets on the market, although it's gearing up for the open-source release of webOS later this year.
It's debatable whether you could consider mobile a space that HP plays in, but you can sure bet that it wants to. There's a good chance that HP will get back into webOS tablets, but an even better one that it will get in on Microsoft
Whitman then touched on HP's focus on innovation and R&D. HP actually spent a little more on R&D last quarter than Apple did, although it comprises a larger portion of revenue, and HP's broad product line means those dollars are less focused.
|
Company |
R&D (% of Revenue) |
R&D ($) |
|---|---|---|
| Apple | 1.6% | $758 million |
| HP | 2.6% | $786 million |
Source: SEC filings; figures as of most recent quarter.
Looks as if HP should be taking notes from this Apple Lesson of the Day. Then again, maybe it already has.
Exhibit 2
A second investor voiced frustration that HP doesn't have any retail stores with repair service like Apple Stores and their renowned Genius Bars, making him instead wait upwards of three weeks for a printer part to be shipped from one of HP's facilities on the East Coast when his printer broke.
Whitman pointed out that HP actually does have retail stores -- in Latin America. The company's Brazilian arm started opening retail locations in 2008, and HP has subsequently expanded its retail presence into other markets, including South Africa.
Source: HP.com. HP Experience store in Sandton City shopping center, Gauteng, South Africa.
Whitman offered nothing about embarking on retail domestically, saying she was unsure whether the economics would work out in the United States -- although she did say that the company is working on improving its website.
Exhibit 3
Come on down, HP investor No. 3, who similarly chalked up Apple's successes to its ability to innovate better than its rivals. This fellow wanted to know whether there was anything "cooking up in HP's labs" that might reinvigorate HP.
Whitman served up a couple of buzz phrases, saying that HP was built on the "power of innovation" and "disruptive technology," while acknowledging that it's lost sight in recent times as it focused on incremental improvements instead of game-changing breakthroughs.
She said HP needs to "place some bets on disruptive or revolutionary innovation" but also isn't open to making any more large acquisitions. Good thing, since investors weren't too pleased with Apotheker's Autonomy acquisition.
Wait for it ...
It's a tough gig when you've inherited the mess Apotheker left for Whitman to clean up. On top of that, he got a hefty payday of roughly $10 million for his services, destroying $52 billion in shareholder value in almost exactly one year's time, and that's before you include all the shares he's received.
Out with you, Apotheker! Return from whence ye came! Enjoy your executive air travel and paid relocation back to France or Belgium! OK, he probably did enjoy that. But that's it! Good luck enjoying all those millions of ... dollars. All right, he made out like a bandit, and he didn't even break any laws!
HP investors clearly want their company to be more like Apple, and probably not just by copying its industrial designs. Whitman has already said that most of 2012 will be spent mopping up after Apotheker. Maybe 2013 will be better.
There is a much easier solution for HP investors who admire Apple, one that doesn't require losing sleep or traveling to annual meetings to voice discontent. Sell your HP shares and buy Apple shares.
Problem solved.
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