1) It is way undervalued. It is currently trading at a much lower multiple than its peer. It's current trailing P/E is in the 11's while Dell's and IBM's are in the 13's. HPQ's outlook for this year is in "the range of $4.42 to $4.52" (GAAP). This means that its forward P/E is ridiculously under 8!
2) They now have a focused mobile strategy. Currently they have a hot product in the Slate 500 for the enterprise market. And they will be coming up with a tablet (PalmPad) for the consumer market. The PalmPad will be based on the WebOS platform that they got from their acquisition of Palm. They will also be coming out with a 5-inch touch-screen only phone as well as a suite of other WebOS mobile devices. There is rumors that HP will launch a new phone every 2 months in 2011. "Rubinstein predicted HP will be among the top three to five players in the smartphone market". The PalmPad and the 5-inch touch-screen only phone is expected to be unveiled at CES in January.
Jon Rubinstein recent installment onto Amazon's BOD will mean synergy between HP and one of the biggest content providers for ebooks, mp3 music, and movie streaming. I think the next Kindle will be a color version (to compete with the Nook Color) and it will run WebOS. Also, HP's upcoming WebOS tablet and smartphones should include access to Amazon's contents.