Hewlett-Packard Company (NYSE:HPQ): Betting High on Tablet and Phablet Segment

Rising Tablet Market

Boston, MA, 04/07/2014 (usastockreports) – Worldwide traditional PC market which includes notebooks and desk computers is declining. In year 2013 tradition PC shipments saw a decline around 10%. Reports by various research firms like IDC, Gartner Inc (NYSE:IT) suggest that in year 2015 worldwide Tablet shipments will overtake overall traditional PC shipments. Worldwide tablet shipment for year 2014 is expected to increase to 263450 units from 179531 units in year 2013. With a large number of players in the market Apple Inc. (NASDAQ:AAPL) has the largest share in the PC market including Tablets and Phablets, while Lenovo Group Limited (HKG:0992) and Samsung Electronics Co., Ltd. (KRX:005930) have second and third largest market share.

Tablet Business for HP

Investors feel that company can play an important role in global Tablet market, and the segment can bring a much needed revenue boost for the company. Microsoft Corporation (NASDAQ:MSFT) recently announced that Windows will be free for devices with screen sizes of 9 inches or less. The move by Microsoft to make Window free for devices is seen as a strategy to check the dominance of Android operating system in mobile phone and tablet segment. Hewlett-Packard Company (NYSE:HPQ) reported a loss in revenue for year 2013 in all major business segments, company’s revenue for year 2013 decreased by 6.7% to reach $112298 million, while in 2012 company had revenue of $120357 million. Microsoft’s announcement of making Window operating system free will help HP boost its revenue and increase operating margins. However in Q1 2014 result, company has shown some signs of improvement, with 16% increase in net income. This increase was attributed to reduction in costs not increase in revenue as revenue for the company decreased by 1% as compared to Q1 2013.

Conclusion

With Microsoft giving Window free for HP smartphone and tablet devices HP is in better position for turn around. Company is expecting to gain a substantial market share in tablets market with its new range of Windows 8 tablets; HP Slate6 and HP Slate7. Also company has entered into 3D printing market. With all these new business units, Hewlett-Packard Company (NYSE:HPQ) might see a revenue increase in future.

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