Of all the companies I’ve written about over the last 35 years, the one I really respect is Hewlett Packard. Conversely, it--at times-- also the one company that I have the most difficulty reporting on.
Trying to put your hands around HP today is like trying to hug a big squid. For the last 15 years of the 20th Century, HP really didn’t have to pay much attention to marketing any products other than its printers, a task they did very well. In fact, they were so good at this they set the bar for an entire industry segment. My problem was that because printers were destined to quickly fall victim to commodity business modeling the best parts of the HP computing product story was never told. The failure to communicate that message set the stage for a period of lack luster marketing by HP. Fortunately they’ve come roaring back.
In the fabled history of Silicon Valley what’s often overlooked is the tradition of HP as a preeminent leadership academy; for both products and people. What’s also been left out of the history books is HP’s early position in key markets like personal computing (hey, when Mount Saint Helens blew up, guess what company’s personal computers were being used to monitor the eruption? Am I the only person who remembers the HP-85?) And then we come to first implementations of other emerging technologies like touch screens and ultra-compact notebook computers (the HP Omnibook 300-800 are the only machines I really mourn in my long view of this industry). And last, but certainly not least, we come to HP’s bedrock stake in operating system and other software. Few people remember that much of the code for early versions of Windows was written by HP—in support its NewWave environment, dropped by HP when Windows 95 launched.
Look around the Valley and it’s hard not to find a pioneering company or investment banker that’s not been shaped by someone who worked at Hewlett Packard. Software Publishing, Apple Computer, Sun Microsystems, 3COM and Palm Computing as well as Kleiner, Perkins, Caufield and Byers are just a few.
Like a squid, HP has changed its colors slightly recently as it tries to blend in to commodity-like markets. And when it needs to feed, the big squid rises up out of the ocean and continues to clasp market share in its beak, and leaving other companies scuttling in its wake to clean up on bits and pieces.
Look for a minute at HP’s marketing today. It doesn’t matter that it recruited Apple executives to fill the job. All that counts is that it’s jetted far ahead of other competitors who are struggling to find their place in a void where the best they can do is to say “me too!” to Hewlett Packard’s marketing programs.
Straight up, HP’s “The Computer is Personal Again” is masterful marketing. It was so good, that during the holiday buying season just concluded Dell had to spend like a drunken sailor on a Hong Kong liberty to keep up and try to get consumers to believe that Dell computers would be built to their unique requirements.
But HP isn’t just executing good marketing for new products. It’s also rewarding customers for their loyalty – a concept that gets overlooked in today’s business environment. Buy a Pavilion notebook and get a big discount on a backpack or an all-in-one printer. The only thing different I would recommend is offering a combo memory upgrade and a steeply discounted version of Vista to its loyalty reward programs menu (which I suspect Microsoft would be happy to help underwrite).
But for all the kudos HP deserves for its marketing, there is something it’s not doing very well, which is communicating a message about its history of solid product and technology development, something its notebook market competitor, Lenovo, does exceptionally well.
And if I wanted to pick one contemporary HP product that could be used to communicate an effective marketing message it’s the HP Pavilion tx1000 Entertainment Notebook PC, a convertible tablet PC which costs $1,299, was introduced in January and is just becoming available. HP’s newest addition to its line of convertible notebooks is aimed at a market segment that’s seeing rapid growth—university and other students.
Unlike most other tablet PC’s, which are based on business subcompact notebook hulls equipped with digitizer screens, HP added a new screen to a notebook commonly sold to and used by students. It’s a simple, but effective approach to getting a product on the market at an appropriate price point for a specific segment.
Looking out over the notebook market there are several other companies that could take the same approach. Lenovo with its N200 line and Toshiba with the retail Satellite line, are just two examples.
As the father of a college student, there’s little doubt in my mind why she would want the HP Pavilion 2000 convertible notebook. It has the battery life she needs for class, and the audio and video components she wants for her music. It’s also a brand she and I are comfortable with, and is a form factor that fits well with her lifestyle.
But so far, HP has been remarkably quiet when it comes to communicating marketing messages that highlight its position in markets such as educational computing-- although HP is the only company with a dedicated academic evangelist, Jim Vanides.
I’m waiting for other notebook makers to realize that the biggest potential buyers for their convertible computers are students and that students really want computers that can be used for academic and entertainment purposes. When that happens, watch out, because this category is going to really take off.
--Jim Forbes 02/20/2007
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