IS THE SPYING DEBACLE GOOD FOR HP ?

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IS THE SPYING DEBACLE GOOD FOR HP ?

 user 2006-10-16 at 10:56:00 am Views: 71
  • #16619

    Is the spying debacle actually good for HP?
    All
    of the intrigue surrounding Hewlett-Packard is titillating stuff, sure,
    but investors mostly worry about three things: the effect on HP’s
    focus, sales and stock price.It’s a particularly important question now
    that it’s October, the official start to the big fourth-quarter
    consumer buying season, with HP placing bets on a new line of laptops
    and desktops with built-in next-generation HD-DVD technology.We might
    not know the spying scandal’s impact on HP’s focus for several more
    quarters; it often takes that long to see whether executives took their
    eyes off the ball at a crucial moment, allowing a competitor to gain
    tactical advantage. But we do know that focus is an often
    underestimated asset; it’s what allowed Apple Computer to innovate
    through the tech downturn and emerge triumphant with the iPod, and what
    allowed HP itself to invent and survive a diet and exercise regimen
    that has given it a new air of vitality.But what we will see a lot
    sooner – indeed, we’ll pick up hints of it when retail sales reports
    start trickling in next month – is any impact on sales. If the scandal
    has sullied HP’s reputation with consumers, that could hurt badly; the
    company still pulls in a huge proportion of its profits from sales of
    printer ink, for example, and the holiday season is prime time for that
    and every other consumer category.

    But what if the scandal doesn’t hurt HP at all? What if it actually helps?
    I
    know, it’s crazy talk. But unlike the hot-battery fiascos that Dell and
    Apple recently weathered, this HP business might not give consumers
    that not-so-safe feeling. Consumers might actually hesitate to buy a
    laptop from Dell or Apple, remembering the battery recalls of a few
    months ago. But will they hesitate to buy HP gear because the company
    snooped on board members, employees and journalists (and their
    families) in the process of hunting a leaker? Heck, I’m gonna say
    probably not.Those of us who are semi-geeky followers of tech news
    might be taken aback by the notion, but really, the American public
    lately has shown an amazing willingness to give investigating powers
    the benefit of the doubt. It’s unclear whether the public will extend
    HP the same goodwill it gives the Bush administration. But I wouldn’t
    be surprised.Mark hurd How could the scandal help HP? It’s possible
    that the public will see the company as an aggressive and innovative
    company that has secrets others want to view. They might view the
    company as one that got just a little too carried away with its efforts
    to keep a lid on things. And folks might view the steady statesman Mark
    Hurd, who’s able to pacify irate lawmakers, as just the guy they’d
    trust to treat them right.Who hasn’t had a tech problem and had to call
    a company to make things right? The image of HP CEO Hurd showing up on
    Capitol Hill to personally take responsibility and set things in order
    might be just the reassurance that holiday shoppers are looking for.
    And if that happens, that could even mean good things for HP
    stock.That’s not a prediction, by any means. But it’s a possibility
    worth considering.