Outsold By Smaller Screens, PC Makers Strive To Reignite Their Popularity

Has there ever been a consumer electronics product whose unlamented demise was repeatedly declared with an installed base of almost 2 billion devices and sales of a quarter billion a year? With apologies to Will Shakespeare, methinks the rest of the industry doth protest too much. JL

Quentin Hardy reports in the New York Times:

Last year, 289 million PCs were sold worldwide, an 8 percent drop from 2014.The falloff is expected to level off this year, with PC sales expected to begin growing slowly in 2017. But that still leaves the question of whether PCs can seem cool again..“I hear ‘post-PC era’ and think it’s rubbish,” said Jeff Clarke, president for client solutions at Dell. “We sell a quarter-billion devices. The installed base is 1.9 billion. "

Dion Weisler, the chief executive of HP Inc., recently held out a bulky laptop that was the pride of 2012. “This is the laptop we had when I came here,” he said.

He opened it to reveal another HP laptop within its hollowed-out insides. Then he opened that machine to produce another smaller and lighter laptop. Like the last in a set of nested Russian dolls, a final and even more slender laptop emerged from inside the third machine.

“Pretty spectacular, right?” said Mr. Weisler, a toothy and optimistic Australian.

It was an impressive visual trick — and one with a point. On Tuesday, Mr. Weisler will publicly introduce a personal computer similar to the slimmest one he brought out of the nested machines, with a 13.3-inch screen but even thinner. At less than 11 millimeters thick (less than half an inch), he said, it beats the best effort by Apple and shows that HP’s PCs are still hip and innovative. In fact, HP has made a small number of the new slim laptops in gold and diamonds, to be sold for $25,000 each for charity, with the unveiling planned for a New York Times Luxury Conference in Paris.

HP’s new laptop, called Spectre, underlines the lengths to which PC makers must now go to attract customer attention. Apart from HP, PC makers like Dell and Lenovo are also pumping money into the design of desktop and laptop computers, coming up with increasingly sleek machines, as well as “two in ones,” whose screens detach to become tablets. There are PCs that fit in a pocket, understand voice and gesture, or sense when they need repairs and call on their own for a remote tuneup.

Yet as people increasingly gravitate to smartphones and tablets for their computing needs, shifting into what has been called the “post-PC era,” the investment into design and new innovations by PC makers may come to naught. Last year, 289 million PCs were sold worldwide, an 8 percent drop from 2014, according to Gartner, a research firm.

The sales decline was just the latest in several years when the PC market faced an onslaught of smartphones and tablets as cooler alternatives. The falloff is expected to level off this year, with PC sales even expected to begin growing slowly in 2017. But that still leaves the question of whether PCs can seem cool again.

Even people who depend on the PC industry now lack passion for these onetime miracle products. “It’s one of many ways onto the Internet now,” Mikako Kitagawa, an analyst at Gartner, said of the PC. “The big companies are pretty much making similar devices.”

That clearly sticks in the PC industry’s collective craw.

“I hear ‘post-PC era’ and think it’s rubbish,” said Jeff Clarke, president for client solutions at Dell. “We sell a quarter-billion devices. The installed base is 1.9 billion devices. Maybe it’s taken for granted, but the innovation is second to none.”

Mr. Weisler, who became chief executive of HP Inc. in November, when the original Hewlett-Packard was split into two entities — one a PC and printing business, the other an enterprise technology company — also says he doesn’t agree that PCs are dull. The products can still be fetish objects, he said.

“In aggregate, devices like PCs, tablets and smartphones are still growing, but they are also shifting,” said Mr. Weisler, 48, who has spent his career in PCs, working at Acer and Lenovo before joining HP. “You can create new categories.”

To do that, Mr. Weisler has modestly increased research and development spending and plans to raise that amount. Under Hewlett-Packard’s previous chief executive, Meg Whitman, printing and PCs “didn’t get investment dollars,” Mr. Weisler said. He also plans to merge HP’s consumer and commercial PC businesses, hoping to bolster the cachet of PCs both at home and at the office.

Obstacles remain in the way of Mr. Weisler’s vision. When Hewlett-Packard was one giant company, it was valued at $60 billion. Now HP Inc. and the separate enterprise company, called Hewlett Packard Enterprise, are worth about $53 billion.

A lot of the woe has been in the PC business. Not only did HP Inc.’s revenue in its fiscal first quarter drop 12 percent from last year, to $12.2 billion, but operating margins fell half a percentage point to 7.6 percent, compared with the national average operating margin of 10.7 percent. In response, Mr. Weisler has accelerated a plan to lay off 3,000 of HP Inc.’s 50,000 employees.

Even so, he insists on a bright future. On a recent day, he showed off the early results of his push at the company’s Silicon Valley headquarters. One device that looked like a small tablet or a large smartphone could, in fact, be either of those — or a PC, or a laptop. It worked on its own, or it could fit into a dock attached to a keyboard and a big screen, functioning like a PC. It could also connect wirelessly with a keyboard and folding screen, making it a laptop.

Another machine in the room was simply a laptop, but the edges hid a series of quality microphones. It had Internet phone controls built in, and it was designed to open up until it was completely flat. That way it could be used for conference calling, catching voices all around the table.

Nearby, HP’s latest printers had lost their moving nozzles in favor of an 8.5-inch bar that spits about a billion dots a second. The company said it could now do laser-quality printing twice as fast and for half the cost, setting it up for the day when 3-D printing becomes commonplace.

Elsewhere in the PC industry, Dell recently released a PC that works with Oculus, the virtual reality goggles from Facebook. Lenovo has been making more kinds of “two in one” computers. Microsoft, which makes the Windows operating system that underlies most PCs, has also gotten into the PC hardware game and recently unveiled its own computers that recognize handwriting and speech.

“We’re bringing an elegance of design,” Mr. Clarke said, adding that Dell planned to increase spending on research and development.

And for all the challenges, Mr. Weisler thinks HP can thrive when PC demand picks up, and it might even get itself some of the shine that surrounds Apple — which has soared in value on the back of the iPhone — after the last diamond-encrusted PC leaves his desk.

“There is value in building things that are close to people and understand things like facial expressions,” he said. “If you focus on building for the high end, your other devices get better, too.”