Split from HPE made HP leaner
It has been over 15 months since US-based (SPY) HP Inc. (HPQ) and Hewlett-Packard Enterprise (HPE) announced the spin-off between them. The split was initially announced in October 2014 as part of the company’s five-year plan to turn around its businesses, which had been hit by the emergence of cloud technology and continued softness in PC (personal computer) shipments.
Now, HP focuses on PCs and printers, while Hewlett-Packard Enterprise focuses on servers, storage, the cloud, networking, services, and software. Shares of HP have risen 24.8% since November 2015, when HPQ completed its spin-off with HPE.
Core markets in decline
HP’s core businesses include the PC (personal computers) and Printing segments. The PC segment is a mature market with declining sales over the past two years. However, HP believes that it can tap into several “pockets of growth” within these core business segments. The firm understands that it can no longer focus on mature businesses to drive revenue.
HP has identified three subsegments that could drive sales over the next few years. It plans to penetrate the A3 copier space, where it’s currently a small player. HP is also optimistic about its graphics business growth, where it currently leads the market. Its third pillar of growth is the 3D printing space.
In the next part, we’ll take a closer look at HP’s role in the A3 market.