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Whitman Embraces China

This article is more than 10 years old.

Public speaking skills honed from her (ultimately unsuccessful) run for governor of California, Whitman used them to make a convincing pitch to the Chinese people in Shanghai, where the company chose to introduce 80 new products May 10th.  The announcements were part of a two-day conference, HP’s Global Influencer Summit 2012, held at the Shanghai Expo Centre .

China has become an ever more important venue for everyone.  In the past, American computer companies made their announcements in New York, San Francisco, or Las Vegas.  Now, U.S. journalists are increasingly learning of odd embargo times that relate to the Chinese — rather than the North American — news cycle.

And that’s how it should be.  China became the number one PC market in 2011, passing the United States, and with growth rates well above more established geographies, the Middle Kingdom is poised to reach twice the size of the U.S. market by 2016, according to Sean Maloney, head of Intel’s China group, who addressed the crowd in Shanghai as a key HP partner.

Of course, PCs are only one measure.  China is busting out in every product category.  In smartphones, for example, China will pass the United States this year, absorbing 137 million units, according to Gartner.

So, China is the place to be, and HP is there.  In spades.

Aside from unleashing a broadside of products in country, the company has made substantial investments there, and Whitman said there will be more.  Speaking clearly and with confidence, Whitman told the audience that HP is “committed to being the best partner to the Chinese government, businesses, and consumers.”

In fact, the world “committed” came up a number of times.  She said HP is “fully committed to the PC and printing businesses,” a reference to her recent decision to retain the PC business (after previous CEO Léo Apotheker announced the intention of spinning it out) and combine it with the printer and ink business.  For those partial to acronym soup, Personal Systems Group (PSG) and Imaging and Printing Group (IPG) were blended into one huge hardware business now named Printers and Personal Systems (PPS).  Together, they account for about half of HP’s revenue.

HP’s commitment to China derives a great deal of substance from the company’s investments there.  Aside from a headquarters and branch of HP Labs in Beijing, the company also has a 215,000 square foot manufacturing facility in Chongqing, eight regional sales offices, the Chinese subsidiary of recent acquisition 3Com, H3C, and many other engagements.  As the largest component acquirer in the world purchasing from the largest component supplier in the world, HP buys billions of dollars of Chinese subsystems every year.  And the company recently opened an R&D center in Shanghai.

And it’s not all promises.  Evidence of the company’s growing strength in China was demonstrated in a recent win against local rival Lenovo at China Post, the national mail service.

Last week’s triumphal display went a long way toward dissipating the clouds that have hung over the company from years of board infighting, CEO turnover, underinvestment, and related erosion of market position.  The barrage of product announcements made it difficult to focus on any one, but highlights included a thin client that uses a single cord for both power and data communications (developed with 3M), a mobile all-in-one printer, and several new Ultrabooks, including the top-of-the-line Spectre XT.

HP has signaled that it will begin to consolidate and solidify its product lines, which will mean fewer models overall and to some extent headcount reduction.  But Whitman assured the room that there would be “no broad-based workforce reductions in China.”  In smaller conference sessions, product leaders indicated that brands also would be simplified.

Coming back at the end of her speech to hammer home the commitment theme, Whitman summarized: “Our commitment to hardware is strong; our commitment to PCs and printers is strong, and our commitment to China is deep and enduring.”

And while HP still has work to do to deliver on all these commitments, the will and the means are there.

Disclosure: Endpoint has a consulting relationship with Hewlett-Packard.

© 2012 Endpoint Technologies Associates, Inc.  All rights reserved.

Twitter: RogerKay