Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, June 18, 1993 TAG: 9306180100
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: Associated Press
DATELINE: PALO ALTO, CALIF. LENGTH: Medium
HP became a household name by developing the hand-held calculator that made the slide rule obsolete. In the eyes of many, however, HP stood for "high-priced."
These days, some on Wall Street are applying that nickname to the company's stock.
Jittery investors, thinking HP is due for a drop from its lofty heights of about $85 per share, pushed the price sharply lower Wednesday on news reports of slower order growth in the second half of the year. On Thursday, the company's stock closed at $81 a share, down $2.375 a share from Wednesday's close, with 2,009,200 shares traded on the New York Stock Exchange.
The nation's No. 3 computer maker - arguably its healthiest - has in the past few years quietly transformed itself into a mass-market computer company and a leading maker of printers.
Far from the stodgy old HP of the past, the company has even begun talking and acting like a high-tech company of the 1990s. Today, H-P not only stands for "hot products," but also the company's new and somewhat uncomfortable "high profile."
Hewlett-Packard has cast off a staid marketing stance and "let them come to us" attitude to aggressively market products at competitive prices.
It sells nifty little "palmtop" computers nicknamed "Jaguar," powerful "workstation" computers and supercomputers for business and industry. It makes the hottest inkjet and lowest-cost laser printers on the market. And it's still an instrument maker of renown.
The transformation is so deep that the company last year even began running ads on television.
"HP is not afraid to change its way of doing business and adapt to a new world," Lew Platt, HP's chief executive, said in a recent interview.
More than half a century after former Stanford University students David Packard and William Hewlett joined their visions of science and management and founded Hewlett-Packard Co. in 1939, the company is barely recognizable.
While the nation's top computer company, International Business Machines Corp., and others have suffered losses and layoffs and are struggling to deal with a rapidly changing computer industry, HP seems way ahead of the curve.
It has diversified products, decentralized production and sales forces, planned new products for the future and forged alliances with partners such as Microsoft, Hitachi, Samsung and Lotus Development Corp.
Platt and others credit much of Hewlett-Packard's current success to strategic decisions made by John Young while he was chairman. Young retired last year, and he declined to be interviewed for this story.
Hewlett-Packard has 93,800 employees, 400 sales and support offices or distributorships in 100 countries and ranks No. 38 on the Forbes 500 list of largest U.S. public companies. Last year only 14 percent of its sales came from instrument and testing equipment. Seventy-three percent was in computers.
The emphasis is on quick development and speed to market.
Bob Frankenberg, vice president and general manager of Hewlett-Packard's personal information products group, says it now takes less than six months, compared to 18 months previously, to develop a new product.
The new structure and aggressiveness has paid off.
In May, Hewlett-Packard reported its first $5 billion quarter. Earnings were $347 million, or $1.38 a share, on net revenues of $5.1 billion - a 7.4 percent increase in profits and a 21 percent jump in revenues over the same period a year earlier.
Despite the success of the new business model, chief executive Platt says he fears overconfidence.
"You can think about people who were on top of the world three or four years ago and they're in deep trouble now," he said. "When you get there, everybody starts shooting at you . . . You just don't relax."
by CNB