Under the heading of This Might Not Help, the HP TouchPad tablet has a take-them-back return order from retailer Best Buy. According to a story at businessinsider.com, 200,000 units of the newest HP computer are sitting on Best Buy shelves. The head of HP's PC business Todd Bradley is in flight to Best Buy HQ to talk the retailer off the ledge. HP's stock has dropped 5 percent today, perhaps in reaction to the news. The vendor has said that it will make the TouchPad's WebOS a serious part of its enterprise strategy over the next year-plus.
Hewlett-Packard at least needs to hope that's the reason for today's stock decline. Tomorrow the vendor will release and discuss its quarterly numbers at 5 PM EDT. A drop in a company's stock usually happens after negative financial news -- although there's no telling for sure if the Thursday afternoon news will be good or bad.
The vast majority of HP stock is traded by institutions, but these companies have a vote with dollars about what Hewlett-Packard does in the future. The HP 3000 never generated this kind of dip, or bounce, because that HP of the '70s and beyond didn't know how to draw widespread attention to that enterprise server.
Although HP has no link to the TouchPad on its main products page, a lot of shareholders will be paying attention tomorrow to see if the new CEO -- and his affection for software -- has the magic touch. HP needs it to lift its stock beyond $31 a share, while its enterprise rival IBM trades at $170 without a tablet.
Some might say that comparing computer rollouts 39 years apart is a fool's errand. And while some things haven't changed -- software never goes away, while hardware gets discounted ($399 and falling for the TouchPad) -- other things are different, like the market's attention span.
What makes the shareholders hold their breath this August, one year after Mark Hurd was given the boot during the last Q3 results season? PC performance in a declining laptop-desktop market. During the era of the Hurd HP board, Hewlett-Packard wrapped its revenue growth around PC sales, squashing Dell like a bug. In 2011 an IT vendor needs a strong mobile offering to be taken seriously elsewhere in the enterprise. A colleague at a mobile security vendor says the customers look at OS infrastructure when choosing smartphones and tablets. HP would love to sell more of its infrastructure, from CloudSystems to more business for a Services group whose growth has stalled this year.
Tablets and smartphones and wireless printers -- these are the kinds of things that get a vendor noticed and brought into an environment. The HP LaserJet lifted Hewlett-Packard into more businesses than any HP 3000 did in the middle 1980s. The last PC pratfall of this caliber could be traced to the HP Touchscreen PC -- a bit or irony, considering that product featured a touch interface, in a crude introduction of the TouchPad's novelty.