Summary
Hewlett-Packard has a solid strategy to take advantage of the expected up-swing in the China economy. Led by a tiering strategy, HP will focus on the cities where it can have the biggest impact. Their primary competitor, Lenovo, has had a strong-hold on this market for some time, but you might see that change in the coming quarters.
Analysis
Hewlett-Packard has long coveted the potential of the China marketplace. They were keen on making significant investments into China, but backed down (to some extent) during the global recession. Now that things are turning around, many are betting on China to lead the world out of this funk. HP is betting big that China will, in fact, be the springboard for the world economy and for their growth in APAC.
Hewlett-Packard has performed quite well from a marketshare perspective in the Tier 1 cities of China. Its biggest competitor is Lenovo and in many cases, it is a two-horse race. HP believes it can become the leading share provider in China and has a strategy to do so. Led by a strong product lineup, HP is poised for growth in this country. HP will focus on key segments such as the ultra-thin notebooks to propel its growth in China and throughout APAC.
It's good to hear that the #1 PC supplier in the world is betting big on the China Economy (followed closely by India) as many of the US Economists point to China as the "rabbit" to lead us out of this rut. Remember, where the China market goes, the rest of APAC typically follows.
HP has become known for its ability to execute. I believe their strategy in APAC is sound and that they will be able to make significant waves in this market in the coming quarters.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
