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How HP Could Become the Next Apple

How HP Could Become the Next Apple

HP has repeatedly shown glimmers of product development genius over the past couple of decades but then fallen short. Now the time may be ripe for it to make some bold moves. HP has big advantages in several trending product categories -- smartwatches, 3D printing and hosted client computing -- and given proper execution and smart marketing, it could become a market maker on a par with Apple.

By Rob Enderle
05/06/13 5:00 AM PT

I was given a task the other day, and this happens every once in a while, to imagine a sequence of events that would turn HP from an industry problem to an industry leader in Apple's class. Apple went from being in far worse shape than HP's in now to become more valuable at its peak than even oil companies, so this isn't an impossible goal.

I figured I'd lay out a scenario of events that could do for HP what Jobs did for Apple. So what follows is how HP could go from where it is to where it undoubtedly wants to be.

I'll close with my product of the week: easily the best VoIP phone solution for home or small business currently in market.

Marketing Matters

This may seem like a strange place to start. You'd think I'd start with some amazing new product, and I will get there, but often the difference between a product like the iPod and a product like Zune is marketing. Few tech companies do this well, with Apple and Samsung as leading hardware exceptions.

If you specifically look at Zune, two mistakes were made. First, it was undermarketed, so people didn't see it for its advantages -- they saw it for its differences from the iPod. It was far more robust, it could do video long before the iPod could, and it was generally less expensive. For a product that is often bought as a gift, that is a big advantage. If you can't present a compelling new product to a market in a way that drums up some excitement, you'll have a ton of trouble with the product differences.

You see this done well in the effort Samsung is taking against Apple. First, it is focusing on destroying the image of Apple as a standard. Then it is pushing interest toward its unique differences: tap to share and screen size.

Unless you are capable of doing both, you're likely to be compared unfavorably to the market leader, because it sets the standard -- and unless you have a good marketing team, you can't execute a strategy that does both.

Getting Ahead of a Wave

Apple was never successful chasing anyone from behind. It took the MP3 market by first redefining it and then building demand around its redefinition. Until the iPod came to market, MP3 players were defined by hardware and often by DRM limitations (Sony). Apple initially tossed out the DRM and made it easier to rip CDs, then brought out iTunes so it could deliver protected music to its devices.

Don't get me wrong -- it redefined the hardware as well. In a market defined by products that sold for less than US$200, it had a successful product at near $500, largely because it redefined what an MP3 player was and got it to stick.

Apple did the same thing with the iPhone. It focused the smartphone experience on media and entertainment and away from business, doing RIM/BlackBerry a ton of damage. It did it again with the iPad, which was seen as "magical" and vastly different from other tablets, even though it was basically an expensive netbook -- a failed low-cost PC concept -- with a touchscreen instead of a keyboard.

In the case of all three products, there was no significant market position by anyone that had anything similar. Apple first redefined and then executed sharply on the redefined designs and services. It is clear Jobs, who played the critical role, focused the company on building in capabilities that he could weave into compelling stories when he announced the products. This also showcases the need for strong marketing; the marketing team has to have input into decisions to ensure that what is built can easily be explained and marketed.

Innovation Wave Riding

There are three obvious waves that HP could get ahead of: smartwatches -- which, if positioned and configured correctly, could replace smartphones; 3D printers; and hosted client computing. I pick these as opposed to virtual reality, head-mounted displays, and blended entertainment because HP already has advantages in each.

Smartwatches -- which both Apple and Samsung appear to be moving toward -- is an opportunity Carly Fiorina identified nearly a decade ago. In a project for the military, HP actually had the most compelling solution I have seen. This could give HP not only a time-to-market advantage, but also intellectual property that could be defended against similar offerings from Apple and Samsung.

HP even thought through and developed a flexible transflective (outdoor viewable) touchscreen for the device that remains unmatched in the industry today. Granted, HP's last CEO apparently killed this effort, but there is still time to reinstitute it and make it strategic. The resulting product could be HP's iPod; it could form the core of a set of accessories that together could allow it to gain a significant advantage over Apple and Samsung.

3D printers are coming to market at an alarming pace, and we are days away from the first demonstration of a printed gun (with one non-printed part -- the firing pin). While printing on paper is declining, the opportunity for printing objects is in its infancy. HP's massive technical lead in printing should provide it with a huge advantage. If HP could execute sharply and get these printers down in the $500 range, it could turn a division that has been a problem into a massive success.

The existing companies doing 3D printing are mostly small and well below HP's manufacturing and sales distribution capabilities, and I doubt there are many people who wouldn't like the opportunity to just print stuff they wanted rather than having to run to the store to buy it.

Hosted client computing is already moving. Microsoft is making massive efforts with Office 365 and Azure. However, the hardware side still isn't fully cooked and HP's Moonshot and the recent announcement of a unique Converged Systems Group could make it the leading contender to equip companies that want to provide these services.

It is also an experienced hosting company, and if there is any company better suited to providing a subscription desktop productivity or gaming experience at scale, it would be HP, because it understands both the client and the requirements -- networking/server/storage -- of a truly robust Desktop as a Service experience.

It could simply buy OnLive, the first to market with both productivity and high-performance gaming, and then wrap the firm with its unique servers and services to provide a subscription desktop that could redefine the company and industry.

Wrapping Up

HP has been just short of amazing a number of times over the last couple of decades. It had a product like the MacBook Air, called the Sojourn, long before Apple did. It had the only MP3 player that ever scared Steve Jobs (and Steve went to incredible lengths to keep it from market), and it almost had the only tablet that was competitive with the iPad, but someone apparently decided to use it as an opportunity to get its CEO fired instead.

That's a lot of "close but no cigar" activity, and I think -- partly because Apple is clearly forgetting Jobs' formula for success -- it is well past time HP benefited from the technology leadership potential it didn't make use of previously.

The problem is that HP is so complex, and the leadership so focused on putting out fires, that its ability to see -- let alone execute -- these opportunities may be beyond its reach. Then there is the issue of risk; for a lot of executives, not trying is better than taking the risk of failing when everyone is watching.

Product of the Week: Ooma

Product of the Week

Ooma was a product of the week last year because I was considering it for the house I'm still trying to build for retirement in Belize. (I'll provide an update on that when we all agree on the plans.)

Ooma is a plug and play VoIP (Voice over IP) phone solution that doesn't use a PC in order to make a call. What made Ooma different last year was voice quality -- it has what appears to be the best compression/decompression algorithm, and the result generally sounds better than both Skype and a traditional landline.

Ooma

What's different this year: It can support multiple lines on the same device; it has its own wireless handset; it can be installed on a wireless network so you can use it in dorms; it has an Android/iOS app that allows you to use the service with your smartphone to save charges; and it has a Bluetooth adapter that will route your cellphone calls to your regular office or home phone.

I initially thought Ooma would make a great Belize solution (Skype is blocked there) and allow me to take my office line with me when I traveled (just pack the Ooma device). While it would not be a full replacement for all of my landlines, it is pretty impressive.

Ooma could save a ton of money and there really isn't anything I've found it its class, and that's why it is my product of the week. Oh, and given Mother's Day is this coming weekend and surveys say they mostly want a phone call, you could buy this for yourself and call it a Mother's Day present!


Rob Enderle is a TechNewsWorld columnist and the principal analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.


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