PC refresh lifting demand ahead of AI computers: HP Inc. CEO – MASHAHER

ISLAM GAMAL29 May 2024Last Update :
PC refresh lifting demand ahead of AI computers: HP Inc. CEO – MASHAHER


HP Inc. (HPQ) managed to best its fiscal second-quarter earnings estimates, posting $12.8 billion in revenue (expected $12.6 billion) and adjusted earnings of $0.82 per share ( expected $0.81 per share), slightly revising its full-year forecast. The computer company also reported a rise in PC sales as demand returns to the industry on anticipated AI innovations.

HP Inc. CEO Enrique Lores sits down with Yahoo Finance Executive Editor Brian Sozzi to talk about the earnings figures, consumers’ needs to “refresh” and upgrade their personal tech, and what HP will be bringing to the table with its AI-powered devices.

“This is the first quarter in eight where our PC business grew and [was] especially driven by the commercial side, both enterprise and SMB [small and medium-sized businesses],” Lores says, later adding: “There is a significant need to refresh now because of how old the install base is, and second, we think that AI is going to be very impactful. But the penetration is going to take some time.”

Envisioning AI PCs to grow from 10% at launch in 2024 to 46% of the market in three years, Lores explains that HP computers will be equipped with two processors to handle the workload: “There has been a lot of work to make sure that not only we cope with the demand of our customers, but we really can excel the expectations that our customers are going to have.”

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Luke Carberry Mogan.

Video Transcript

At HP out with its latest results.

Let’s dive right in here with HP CEO Enrique, Lores Enrique always great to get some time with you.

So my takeaway from this quarter, looking at that results is there was finally some stabilization in the PC market.

Is that a fair assessment compared to three months ago?

I I think it’s a good assessment not only compared to three months ago, but really compared to several quarters.

This is the first quarter in eight where our PC business grew and special driven by the commercial side, both enterprise and SMB.

So we are pleased with the progress that we have seen in P CS and we think that this is going to continue now for the second half of the year.

Yeah, I think the commercial side uh of the business may surprise a few folks on the, on the PC side.

Enrique, what’s driving that is that return to work.

Uh People, more people were turning to the office and realizing their computers are four or five years old and they can’t use these pieces of junk anymore.

We think it’s a combination of multiple factors, one of them as you said is the fact that the install base has aged and now people both small companies and large companies realize that they need to change.

That we also are approaching a big windows, refresh windows, 11 refresh.

Also this is going to have an impact on, on growth and on the the need to accelerate the refresh of P CS.

And also we think it is because of all the innovation we have bringing being into market, whether it is A I integrating the P CS better communication, there has been a lot of innovation that customers are starting to realize can have a very positive impact from a little DVD perspective.

Are you surprised to see uh businesses and, and to a lesser extent, I guess consumers out there refreshing these computers ahead of what looks to be the A I PC era.

Why by now if you can wait a few minutes or, or a few quarters and get something extremely more powerful.

Well, first of all, Luis, there is a significant need to refresh now because of how old the install base is.

And second, we think that A I is going to be very impactful, but the penetration is going to take some time.

Our expectation is that this year, only 10% of A I of P CS will be high on the second half and that it will grow to 46% 3 years after launch.

So it’s not gonna be an immediate change.

It’s gonna take a change that is gonna take some time, the, uh, the outlook you, uh, the, the quarterly outlook that, uh HP provided.

Uh, uh, my surprise may surprise a few folks up to the upside.

How much have you built in, uh, with respect to those early shipments of your what?

Two new A IP CS.

Well, there is some of it integrated but the key drivers really are coming more from the refresh cycle that we were talking before by the shift to Windows 11.

And also in the case of the US by a stronger federal business during the first half of the year because of all the budget limitations, our federal business was impacted and we expect that this business will accelerate.

Now in the second half, sell me on an A I PC enrique.

So there has two big three big things.

One is significant productivity improvement.

Second, you, it will personalize based on how you use it.

And for example, we will optimize uh battery life and third, a much more secure solution than anything you have ever had before.

There’s a lot that is going to be running on these computers, um, with these various A I bots and applications.

How do these computers handle this processing power?

Why won’t some of these computers melt down?

I’m not saying your computers are going to melt, but there’s gonna be so much going on in these computers.

How can they handle all this stuff.

Well, there is a lot of technological innovation in the new products.

And also from a performance perspective, for example, they come with two processors, they will come with a same similar processor than what we have had before.

And then a special TPU or GP U that will handle all the A I work.

So basically you have two processors in your PC, each of them specialized for each type of activity.

Additionally, of course, we had redesigned the full board has faster memory, more memory than anything we have had before.

So there has been a lot of work to make sure that not only we cope with the demand of our customers, but we really can excel the expectations that our customers are going to have.

HP is not the only one looking to build out A IP CS.

Uh Can you get the chips that you need to build these out?

Yeah, we, we don’t see any limitations in terms of availability of nor the P CS we have introduced nor the ones we plan to introduce in the coming months.

On the printer side, you and I have talked about this business.

Um a lot through the years.

Enrique uh this is a challenging quarter for the printer business uh with the top line, not so much margins but on the top line.

Do you see any inflection point in sales for printers over the next 12 months?

Yes, I think that it was a, a difficult quarter, but it performed as we were expecting.

And now we, when we project the business for the second half, we start seeing stabilization and recovery.

So we think that the business is going to start perform better in the second half than what we have seen in the first half or some of the, the the reasons for the top line pressure and printers enrique is that that these Japanese competitors are undercutting us based companies on price.

Well, clearly the G is now very favorable for all Japanese competitors.

And this is why we have been very aggressively reducing our cost so we can be more aggressive in the second half and still meet our goal of driving profitable growth.

We are not interested in selling units with low or negative profit.

We want to sell profitable units and we have been adjusting our cost to be able to compete in this new environment.

I want to mind a deal on a printer enrique.

I’m just saying I want to mind a great deal.

Well, if you got a great deal, you should subscribe to our subscription programs both with instant ink, instant paper.

Now with the all in offering, you can get a full printer for a very, very small amount of money and meet all your needs.

All right.

Well, you saw me on A I PC and A and a good price on a, on a printer.

Enrique.

Lares.

Uh HPC O always good to see you.

I’ll talk to you soon.

Great to see you, Brian.

Thank you.


Source Agencies

Leave a Comment

Your email address will not be published. Required fields are marked *


Comments Rules :

Breaking News