Further to our earlier analysis of HP’s proposed spin-off of its PC and printer businesses into HP Inc., I thought you’d be interested in the regional perspective.
We looked at the $365B spent on the relevant hardware products from all vendors in the year to June and split them by region (see Figure). While at a worldwide level PC/Printer spending represents 59% of the total, this increases to 60% in EMEA and 67% in Asia/Pacific; it was just 51% in the Americas. Enterprise (server, storage, network) spending was 33% of the total worldwide, but was only 33% in Asia/Pacific – it rose to 40% in EMEA and a massive 49% in the Americas.
Of the major IT vendors HP, Microsoft and Dell are the weakest in terms of doing business in Asia/Pacific (see our Figure which compares the revenues of the top 6 by region).
By splitting the company HP Inc. will have an opportunity to improve the overall balance by building better business in Asia/Pacific and it should consider moving its headquarters there. In China especially it will need more than printers and PCs however for success.
While the American market will be more important to HP Enterprise, it will still need to keep a clear focus on China as its indigenous suppliers Huawei, Lenovo, ZTE, Inspur and Sugon expand their business in the West.
Big is no longer beautiful for HP in organisation terms, but it needs to think about regions and products as it reorganises.
Further research:
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