HP’s recent announcement that it wants to exit the PC business has generated a lot of flack: The stock took a big dip and customers are publicly backing off from buying more PCs from what is currently the world’s largest manufacturer of said computers.
A few days ago it was reported that HP’s Chief Communications Officer, most likely the person who crafted the messages and managed this announcement, has been put on “special assignment.” At about the same time, a new PR and ad campaign broke repositioning the PC business announcement to try and generate a more positive spin.
Bill Wohl, who worked closely with new CEO Leo Apotheker at SAP, was brought over by Apotheker into the newly created Chief Communications Officer role just a few months ago, so the timing of this new move is a bit curious.
I don’t know Wohl at all and I’m not familiar with his work, but I have a hard time believing that even a Chief Comms Officer who is tightly tied to the CEO can be held solely responsible for this kind of mis-communication.
Whether or not the strategic decision to exit the PC business is a correct one, it had to have been made by a team of senior executives who should have been aware of the impact of this kind of announcement (at least we certainly hope so). A communications officer can craft messaging and try to put out a positive spin, but this is not the kind of announcement that should have been made without serious thought to the consequences, from both a sales as well as an investor viewpoint (at least we hope not!).
Moving communications back under the marketing function may make sense for the organization, but HP’s Marketing organization has gone through significant change over the last several years. It seems like the venerable Silicon Valley bluechip company is faltering in ways that Marketing can’t necessarily coverup. Beating up on marketing and communications is like scolding the deck hands on the Titanic for not arranging the deck chairs more attractively.
On a related point, at the same time it made its PC announcement, HP also said it was cancelling their new tablet line, and announced a bargain basement price to move existing inventory. Given how much time and resource and expectation had been put into this line, this was fairly shocking. Rumor has it there have been major quality problems with HP tablets, resulting in major product returns, but I don’t have direct experience with the product.
At $99, the tablets started flying off the shelves like hotcakes, so much so that HP announced this week that to meet demand they would make another run of the product they just summarily killed. Huh? So is the product line resuscitated, is it the technical equivalent of a zombie, or are we not sure how much capability the “patient” will recover when this is all over.
Here’s the kicker: Estimates are it costs HP over $300 to make each tablet, yet they’re ordering *more* units to be sold at $99 each. That’s a loss of $200+ on each unit, but I guess they’ll make it up on volume?
The best marketing team in the world can’t put a good spin on this kind of confusing strategic move. And here’s the worst part: If you have a habit of shooting the messengers, then it doesn’t take long for people with something important to say to put their heads down and duck for cover.