19 Jan HP charges toward the living room
Hewlett-Packard’s decision last week to merge its Imaging and Printing Group and its Personal Systems Group into one Imaging and Personal Systems Group (IPSG) is a major milestone in HP’s journey to become the consumer technology brand. By combining these two units, HP has a unified and convincing product message for every room in the digital home. That may be the key that turns HP’s consumer message into overdrive.
The consumer technology market is anyone’s game to win. While there are similarities between consumer electronics (CE) and the PC business, there are many differences, too. As a rule, CE companies carry brand recognition across the divide to computer technology. For their part, technology companies are too segmented to offer a cohesive brand that carries from product to product in the consumer market.
Look at the long history of HP’s attempt to win the consumer PC customer. Nearly a decade ago, HP launched the Pavilion line to counter repeated beatings by the likes of Gateway, Packard Bell (remember them?) and Compaq. The Pavilion was among the first PCs to pay very close attention to the details of the consumer market. Back then, most home PCs were dumbed-down boxes in slightly stylish cases, with little to distinguish them from an office PC except for an underpowered processor and a rock-bottom price. HP played that game, too, and played it well. When you opened the box on an HP Pavilion, for example, the first thing you came upon was a poster that showed you how to connect the color-coded cables. Most people could go from box to something approaching productivity within 30 minutes.
HP realized that the “out of box experience” wasn’t enough to build a persistent brand experience, so they offered what was probably the first integrated digital photo PC package, including a midrange PC, a low-quality digital camera and an overpriced photo printer. Rather than sell on price, HP sold the package on productivity.
It was a great idea and almost a decade too soon. But more than over-anticipating the market, HP was hampered, I believe, by the fact that the components of the photo system came from different business units. They didn’t feel like a whole piece, and it wasn’t supported well as a unit.
This has continued to be a problem for HP. Each division of HP holds its own customers. At HP, you are a customer of the Imaging and Printing Group or the Personal Systems Group, regardless of whether you believe you are an HP customer that doesn’t need to memorize an organization chart to get top quality service.
With the integration of its two most consumer-facing business units, HP finally seems to understand the issue. By bringing these groups together, HP will be able to cross-sell and support its customers. More important, they will be able to more easily develop products that cross from one room to another. We have seen this already, as the former Imaging group contributed technology to the Personal Systems organization. And technology from both groups sits at the center of HP’s consumer digital media offerings.
After spending a morning with HP’s consumer group recently, I came away believing that HP has what it takes to give Sony a run for its money in the living room. With this organizational move, HP may well be the brand to beat.
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