Days after the late Steve Jobs retired as the chief executive of Apple in 2011, a surprising headline soon hit the web: "New Apple CEO Tim Cook: 'I'm Thinking Printers.'" The article, of course, was a joke, a brilliantly funny piece from the satirical newspaper The Onion. After all, a company as innovative and sexy as Apple would never return to selling such antiquated products as laser printers and ink cartridges.
The same satirical headline could be written for HP--minus the satire. Since joining the company in late 2011, CEO Meg Whitman has sought to reinvigorate HP, which has seen its reputation as an innovator tarnished in recent years, especially following its disastrous attempt to enter the mobile market. Much of its business still depends on its print unit, however, one of the few bright spots in HP's financials. Last quarter, for example, earnings from printing operations were up 25% year-over-year, whereas earnings from its consumer-facing personal systems group were down 51.4%. Considering the latter department is responsible for producing HP's sexiest products--from tablets to hybrid PCs--its downswing speaks to a larger issue around the HP narrative. Public perception is incredibly important to shareholders and consumers, but it's almost impossible to revive when one of the company's strongest revenue-generating divisions is in direct competition with Dunder Mifflin. As John Hinshaw, EVP of global tech and operations at HP, told me recently when asked whether HP could ever be seen as a sexy company again like Apple, "Well, I'll tell you, if you saw some of our newer printers, they border on sexy."
The unfortunate fact is, for HP, there is sexy, and then there are printers. There is Tesla, and then there is toner. Sexy companies--Apple, Google, Nest, and Nike--create sexy products. Printing is certainly still a huge business for HP--but like many of the other promising areas for HP, which, according to Hinshaw, include cloud computing, security management, and data analytics, printing is essentially a solution for the enterprise, which is synonymous with unsexy. This wouldn't be an issue if HP's reputation weren't so poor and in such need of a fresh makeover. "There's a halo effect of being seen as an innovative company," Forrester Research analyst Sarah Rotman Epps told me recently. "It's not lost on industry watchers and the press. There's this narrative that emerges around your company that becomes very hard to change. You can be caught in that in a negative way, like Microsoft or Nokia or HP or RIM, or you can create this halo of innovation around your brand," like Apple or Jawbone.
We've seen what combative reception companies get in this disadvantaged position, as the media piles on Microsoft and Nokia for subpar sales and products. Only last week, BlackBerry CEO Thorsten Heins said he sees no future in tablets--a provocatively absentminded statement that fits in perfectly with the company's negative image.
For HP to pull off a perception turnaround, it needs a game-changing product--and not simply a marketing campaign featuring Dr. Dre. "The key is rolling out the leapfrog products," Hinshaw says. "Not just, 'Hey, here's another tablet, and here's another smartphone,' but something that makes people say, 'Wow, nobody has that!'" The problem is, certainly, that HP doesn't either. Its interesting Moonshot system, a server that requires significantly less energy and space at a lower cost, is an enterprise product--not exactly the next iPad, at least in the eyes of consumers. The company can argue all it wants with Lenovo over which is the No. 1 PC maker, but PC sales are sharply declining. Whitman herself has acknowledged resources are shifting away from PCs and toward tablets and smartphones, and after HP's failed attempt to enter these markets with Palm, it's understandable why many would be skeptical about whether the company could be successful this time around. It has yet to introduce a compelling mobile product into the market--let alone a smartphone. Even Hinshaw admits to me that the company missed the mobile window. "We are behind in the consumer space," he says. "There is innovation [at HP], there is some sexiness, and there is more to come, but we are behind."
Meanwhile, without ever making one hint at what's coming, the public already expects the next product revolution to come out of Apple. After the iPod, iPhone, and iPad, we assume Apple's innovations are forever on the horizon--it's in the company's DNA. (It was once in the DNA of HP, too, a company that inspired Steve Jobs and once employed Apple cofounder Steve Wozniak.) And if an iWatch or an iTV isn't next, then perhaps the next paradigm shift will come out of Google, where Glass and driverless cars and space elevators are supposedly fast becoming a realistic future.
But nobody expects that next revolution to come out of HP anymore--and it doesn't even need to be a wearable computer. Perhaps its printing unit could pick up the slack. As Bloomberg Businessweek wrote earlier this year, "Nothing would repair HP’s reputation as an innovator so much as a super-easy-to-use, cool-looking home 3D printer."
But outside Moonshot, there isn't really a moonshot taking place at HP, it seems. "What our leapfrog [product] will be, you'll have to wait and see," Hinshaw says.
For how long? In an interview last week, Andreessen Horowitz cofounder and HP board member Marc Andreessen said of HP, "This is the company that built Silicon Valley and [it] deserves to be a glorious success story."
The too-often-ignored issue for HP is that it can only be a success story if it has a story to tell. And right now, it simply does not have a compelling narrative.
When I point out to Hinshaw that printers and enterprise solutions are unsexy (you can't put a server on the cover of a magazine, in other words), he demurs.
"Most magazines, you're right [you can't put a server on the front cover]--there are a handful of them, but not many," Hinshaw says. "There is probably a printer magazine out there."
And nobody reads it.
[Burnt Paper Image: Nito via Shutterstock]