An Open Letter to HP: Don't Dump Your PC Business
Last Thursday, HP released a statement that announced it was discontinuing webOS devices, including the TouchPad and webOS phones. In that same document, the brand declared that it's also "exploring strategic alternatives for [the] Personal Systems Group," which many speculate means that the tech giant is considering ditching its PC business all together.
This prompted the dealnews CEO, Daniel de Grandpre, to write an open letter to HP, advising the brand against this potential development:
A Plea for HP
Dear HP: Word on the street is, you're thinking of dumping your PC business.
HP, please read this. Read this now.
Look, you and I have had a long, long relationship. I'm familiar with your victories — I replaced my Macs' LaserWriter with a LaserJet in the '80s. I'm familiar with your failures, especially on M&A — I once had a Compaq desktop, connected to a DEC CRT, syncing my PalmPilot. More recently, of course, I've bought your Pavilion PCs, and I'm on my umpteenth Color LaserJet. You and I have known each other for a long, long time.
You're potentially about to make the biggest mistake in your 72-year-old life. Right now, you're stuck selling PCs — a commodity product — at commodity prices. The way you run your business, your PCs should be traded on an exchange along with pork bellies and concentrated orange juice. No wonder you want to exit the PC business while there's still some runway ahead of you.
But you're missing something big. Like, huge. HP, you've got the world's best tech brand. Yes, your brand is potentially even more valuable than Apple. (Bear with me on this.) And yet you've wasted your brand by playing the PC game the same way that everyone else has: driving prices, and thus profits, into the ground. That's for companies like ASUS. That's not for HP.
People criticize Apple for selling a lifestyle instead of a product, saying that its products are more expensive, and people pay extra because they want to look cool. I say, exactly. Apple stands out in a commodity market. Apple's not-so-secret asset is that it's an aspirational brand. You're cool if you use Apple.
Here's your secret asset: HP is the brand for smart people.
When I think of HP, I think of a bunch of eggheads working in a lab in white coats. A bunch of nerdy guys who have screwdrivers in their pocket protectors, standing next to nerdettes with horn-rimmed glasses and their hair up, all sitting around an oscilloscope and inventing ways to improve the PC. They're smart, dammit. They're fracking brilliant.
Being perceived as smart is way more important than being perceived as cool. Buy Apple, and you're hip. You're a hipster who just got his hipster degree. But you can tell people that when they buy an HP, they're intelligent. You just graduated from MIT with a minor in Harvard. Smart is the real cool.
Work on your marketing. Make ads that tell people that if they buy an HP, they're buying a product that comes from the same people who founded Silicon Valley and invented laser printers, pocket calculators, and WYSIWYG. They're buying the highest quality PC available on the market, a PC filled with hardware and software that makes them smarter, with a design that makes them smarter. You have all the patents, all the dependability, and all the innovators under your employ, and their mission — what keeps them up at night — is to make the consumer smarter when he buys an HP PC. Buy an HP, and you're buying the future.
Go heavy on industrial design; make your PCs look like they can solve global warming. A modern day WOPR. Make your cases transparent. Heck, maybe you should put the circuit boards on the outside. Partner with brands that have nerd cred, like LEGO and LucasArts, and smart luxury brands, like TAG and TUMI. Change your pitch. You are the Mercedes Benz of PCs, and you need to market your legacy and your position as the leader for luxury Windows PCs.
Hey, it's hard to be a leader in a highly competitive market. I know this firsthand. At dealnews, there's a lot of competition from other deal aggregators. We've succeeded by having a service that stands out on one core feature: quality. Our readers choose us because of the quality of the experience — price-checking, reliability, readability, and the ethics and high standards that come from our editorial guarantee. And if our brand can stand out, yours can too. Trust me on this.
It's ridiculous that Apple is the only luxury brand of PCs, but you're letting that happen by first chasing the bottom on PC pricing and then conceding defeat. People want a high-end brand of Windows-based PCs. They want to buy-in to something greater. You can be that brand, and run it with Apple's profit margins. Before you know it, the trolls will be saying how people should buy a competitor's PC because it's just like yours but costs less. Awesome.
Apple positions its brand for the beautiful people. HP should position its PC brand for the brainiacs. Apple is for artists. HP is for people who buy art. You can stake out this position and become one of only two luxury brands in the market, by raising prices, developing savvy marketing, ramping up quality and bundling, and actually innovating instead of chasing the $200 price point. Yes, you'll see sales plummet. But profits will skyrocket. Why own an unprofitable 20% of the market when you can own 20% of the market's profits?
It's up to you. Please think about it before you waste all of your brand's consumer goodwill and become an IBM wannabe that also sells inkjet cartridges.
So, please, HP, don't give up on the PC business.
Top photo credit: Omarukai via Flickr