HP CEO Enrique Lores has spoken of “realistic optimism” for the channel community as the global device market declines post-pandemic.
Speaking during HP’s Amplify Partner Conference in Chicago, Lores acknowledged the market “correction” that will lead HP to lay off 4000 to 6000 staff by 2025.
However, despite this, Lores said the business was taking a “faster, simpler and more aggressive" approach to its future business.
“We have realistic optimism because we realise it’s a tough environment,” Lores told partners during his keynote. "Many of our key markets are not growing and we don’t expect them to grow in the near future. At the same time, we remain very optimistic about the future of the company.
“[During the pandemic] we faced the strongest demand in many years while at the same time, we faced significant supply chain issues... It’s important not to lose perspective.”
In its fourth quarter 2022 financial results, HP saw personal systems, consumer, and commercial segments fall by 13 per cent, 25 per cent and six per cent respectively. Notebook and desktops units also saw a decline, with units decreasing by 21 per cent overall.
Looking at the market’s softening following the pandemic-driven surge, Lorres said: “[It’s] clearly not a nice picture. But if we expand our perspective and look at where this fits in the trajectory that the company has had over the last few years, 2023 we may not grow. But since 2017, we have shown a clear growth trajectory.”
Although Lores said it was “hard to predict” when a recovery in the PC market would take place, he said it was critical to making sure its subsidiaries and partners “are ready for when the recovery will happen”.
To ensure this, Lores highlighted four key trends that will be key for HP and its partners in the coming months.
Following the momentous arrival of Chat GPT, artificial intelligence (AI) has dominated headlines throughout 2023.
For Lores, AI technology is only going to accelerate and will play a role in how HP and partners can improve productivity by speeding up core processes to make employees “more effective” in day-to-day work.
“AI has created opportunities to create more product categories, and to improve the lives of customers,” he added.
In the wake of HP’s blockbuster acquisition of video conferencing specialist Poly, it comes as no surprise that the word hybrid, as opposed to remote, work has proliferated throughout Amplify Partner Conference.
“Hybrid does not mean working from home,” Lores explained. “We have learnt there are many key categories that cannot be done at home. Learning from each other is a great example. We want our teams to be back in the office to plan, design and build opportunities for the future."
According to Lores, HP estimates that there are 90 million meeting rooms in the world and only 10 per cent of these have video conferencing solutions.
“At US$3000 to US$5000 per system, we are talking about a multi-billion opportunity,” he said.
“There is a lot of opportunity for innovation. We all know how painful it is participating in a meeting when some are in the room, and some are not.”
During the two-day conference, Poly unveiled a series of upgrades made to its video conferencing technology, including AI integrations designed to pick up each individual speaker in a room setting as well as improving the visual and audio experience in glassed rooms.
“We always say when you use Zoom, you are watching a movie,” added Lores. “In person, you are part of a movie. It’s a very different kind of engagement.
The next theme taking precedence was resilience in the wake of HP, and fellow hardware vendors’ supply chain struggles during the COVID-19 pandemic.
According to Lores, HP “clearly learned” it had to build a more resilient supply chain during the pandemic and has made moves to redesign its factories as a result.
However, he added: “It’s not only about re-designing the supply chain though but also about being aware of the multiple changes that continue to happen in the world. There are a lot of changes driven by geopolitics and climate change. We need to make sure our companies can deal with multiple types of crisis.”
The final trend Lores spoke of was the pervading “mistrust” towards governments and public institutions.
According to Lores, this presents an opportunity for HP and its partners to differentiate themselves as trustworthy brands.
“Citizens have built a lot of mistrust for governments,” he said. “In fact, they trust companies more than their own governments. That means that companies which build a reputation for being trustworthy will be the ones winning in the future. This is clearly the case with HP, and we know we can use [trust] to build in the future.”
One area where HP has made significant moves regarding its public reputation is sustainability. Two years ago, the vendor launched the Amplify Impact program, which incentivises partners to boost its sustainability efforts.
“It’s helping us to win business,” Lores said. “Companies want to buy from companies that are helping them meet their sustainability goals.”
Looking ahead, Lores made the message clear that partners were their focus, with new incentives being rolled out as part of the vendor’s Amplify Partner Program upgrade.
“Partners are at the forefront of our sales team,” he added.
“We work for our sales organisations and we work for our partners. We want to make you successful because if you win, we win.”
Eleanor Dickinson travelled as a guest of HP to the Amplify Partner Conference in Chicago.