It’s a leading global manufacturer of personal computers (PCs). However, given falling PC sales, Hewlett-Packard (HP), which gets over $3 billion in sales from its India subsidiary, plans to sharpen focus on making mobiles, and not PCs, the centre of computing.
“A PC will no longer be the main device to access information. I firmly believe that information will be accessed primarily through mobile devices. Hence, while our focus is not to make a mobile device, we are working on how to make mobiles the centre of computing,” said Neelam Dhawan, managing director of Hewlett-Packard India. This June, Dhawan will complete a year with HP, which she joined from Microsoft.
HP India, says Dhawan, will ensure that mobile payments are secure. “All services, like mobile payments and SMS for reality shows, have a back-end comprising storage and servers. That’s where HP comes in. Our servers ensure that SMSes reach the right audience. They also ensure that mobile payments are secure.”
HP India’s advantage is use of modular blade servers (self-contained, all-inclusive computer servers, with designs that use little physical space) in which it has 60 per cent market share. IBM, however, leads the overall server market, according to IDC, with 38.1 per cent share. “Blade servers help us reduce costs for organisations, while ensuring efficiency,” said Dhawan, adding that the infrastructure, comprising storage and servers, of 130 value-added services players, is from HP India.
While the global demand for PCs dropped 7.1 per cent in the first three months of 2009, according to IDC, netbook sales remain on track to double this year. HP India, however, has not been strong in this area. “We were a bit late in entering this segment,” admits Dhawan, adding, “However, we launched netbooks this February and so far, the data reveal that the going is good.”
HP launched a range of consumer and commercial netbooks in many colours for the Indian market. It also used the services of designer, Vivian Tan. The netbooks also have a slot for 3G SIM cards. HP India plans to sell these netbooks through its 1,200 retail outlets and around 3,500 resellers.
Nevertheless, HP India’s sales have taken a hit. HP does not officially give India figures separately. However, as on March 31, 2008, Dataquest pegged the revenue at Rs 15,454 crore. Going ahead, Dhawan said, “I will be very delighted if we even have flat sales this year.”
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The reason is not hard to fathom. PC sales have been dipping and it’s unclear if the global PC market has hit the bottom, according to Gartner. Besides, the volatility in the India rupee’s value against the US dollar has been playing havoc with PC manufacturers in India, as nearly 90 per cent of all parts are imported.
“We see sales growth dipping by anywhere between 18-20 per cent this financial year. This is primarily due to the approximately 25 per cent depreciation of the rupee against the US dollar. The economy has not been good to us so far. However, we hope that the pent-up demand will be there after the elections are over,” said Dhawan.
HP India, with over 30,000 employees, has a strong presence in the BFSI, FMCG, telecom and manufacturing verticals. The company now plans to leverage EDS’ strength (which it acquired globally) in government, airline and healthcare segments. In the banking space, it has clients like Bank of India and Bank of Baroda. In the FMCG space, one of the most significant recent wins for HP include a 10-year strategic IT transformation services contract with Godrej.