Oct.4, 2012
Reuters reports that Meg Whitman has a laundry list of things to do at HP: Arrest a rapid decline in its personal computer unit, compete better on enterprise services, and figure out a strategy as mobile devices eat into personal computer sales.
That leaves one still-bright spot in Hewlett-Packard's beaten-up portfolio - printing.
Revenue from all of HP's main business units fell in the July quarter. Analysts says that HP should focus their next step on 3D printing. They argue that printers always performed strongly. Printing is "not as much a problem as some of the other businesses," said Shaw Wu, analyst with Sterne Agee. "It's still a cash-cow business. The profits have declined but they are still very strong."
Printing revenue declined 2.7 percent last quarter, but operating profit increased by 8 percent. The printing group accounted for $949 million of HP's $3.1 billion in operating income that quarter.
(Credit: HP)
3D Printing Opportunity
The market for 3D printing is estimated to reach $2.1 billion this year and grow three-fold to $6.5 billion by 2019, according Wohlers Associates.
"Companies like HP have to look at where the next big opportunity is," said Terry Wohlers, president of research firm Wohlers Associates Inc. "3D printing is a good fit."
"With their strong marketing and distribution muscle, HP is in a very good position to dominate the market, and they could buy up most of the companies in this business if they wanted to because it's a relatively small but fast-growing and vibrant area," Wohlers said.
HP's thinking on this point is unclear.
Since January 2010, 3D printer manufacturer Stratasys has been developing and manufacturing HP's exclusive line of FDM 3D printers. In later 2010 HP began a phased rollout of the 3D printers in the mechanical design (MCAD) market in select European countries.
But in August 2012, Stratasys and HP announced that they will discontinue their manufacturing and distribution agreement for 3D printers, effective at the end of 2012.
The company is laying off 29,000 employees over the next two years. HP is trying to keep its core personal computing business profitable as competition from mobile devices erodes sales. HP is trying to transform itself into a major enterprise computing provider, while slashing expenses to boost the bottom line.
Whitman is expected to provide HP's outlook for the next fiscal year and an update on the company's restructuring plans.
Wall Street analysts on average expect HP's revenue to decline to $120.08 billion in fiscal 2013 from an estimated $121.14 billion this year, according to ThomsonReuters I/B/E/S.
Posted in 3D Printer Companies
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