HP eyes low-cost PCs to help gain China market share

HP eyes low-cost PCs to help gain China market share
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First Published: Wed, May 27 2009. 01 33 PM IST
Updated: Wed, May 27 2009. 01 33 PM IST
Beijing: Hewlett-Packard Co on Wednesday said it was focusing on increasing market share in China as the world’s largest PC maker rolled out a new line of low-cost computers, including the global launch of a netbook.
HP is a latecomer to netbooks — stripped down notebooks optimised for the Internet — which it began to sell only last year after the global netbook market began to soar, even as the overall PC market remained flat or shrank.
But the low prices have also contributed to declining profit margins for the PC makers that are leading the charge into netbooks, such as Taiwan’s Acer Inc.
“We want to focus on our strategy to get more (market) share,” See Chin Teik, a senior vice-president for HP Asia Pacific & Japan, said at the new product launch.
HP noted that it would not chase market share at any cost and was mindful of the risk in the low-cost strategy.
“We are worried the end user will buy the product for the wrong reason,” said See, referring to the replacement effect.
HP hopes its new mini notebook computers — which carry recommended retail prices as low as $299 — will expand the overall computer market to include people who are not in the market for a full-priced laptop.
“We see it as a secondary device, not a replacement device,” said See.
Global PC makers are all struggling as households and businesses cut back on computer purchases to save cash, leading them to explore new revenue sources such as netbooks and smartphones.
“It is always a worry to make money in the PC market,” he said.
Earlier this month, HP gave a disappointing outlook for its full-year revenue and said it would lay off another 6,400 workers as consumers and businesses cut spending on computers, printers and services.
The new round of layoffs are on top of previously announced cuts from integrating the operations of IT services company EDS, which HP acquired last year.
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First Published: Wed, May 27 2009. 01 33 PM IST
More Topics: Hewlett-Packard Co | HP | China | PC makers | Notebooks |