HP CEO says company is ready for PC price war By Deborah Gage, Sm@rt Reseller March 11, 1998 12:49 PM PST
Hewlett-Packard Co. chief executive Lewis Platt said today that HP will respond to price cuts promised by Compaq Computer Corp. to remain competitive.
Platt said that although HP did not have excess PC inventory in its channel, as do Compaq and IBM, according to Platt, he expects Compaq's "mistake" to disrupt the market for several months. Platt was referring to Compaq's latest report of dismal earnings and the company's commitment to reduce inventories and prices to compensate.
Unfortunately, Platt said, the worst disruption is likely to occur at the middle and high ends of the market, where hardware companies make their highest margins."This is a case where a mistake by a competitor can cost you. If a price war erupts, there is no way we can avoid that," Platt said. "We will adjust prices to maintain competitive ... and I expect it [price cuts] will have a modest impact on PC margins."
Platt would not give a timetable for the cuts and said he expected several rounds of rebates to occur first.
In a keynote at Internet World in Los Angeles, Platt also reinforced HP's ongoing E-World campaign--which encompasses E-Business, E-Commerce and E-Consumer--although he offered no specifics on how it will impact HP's products and programs. "We've tried to pull together all our offerings under this umbrella because we've been accused of being confusing. I would argue there's lots of new stuff we're going to announce. Probably the most important impact is within HP itself. We have a huge emphasis around internal communication around this message." Via E-World, HP will focus on imaging, banking, IT infrastructure and services, network management, security and electronic commerce. HP has not provided many specifics on when or how it plans to implement these initiatives.