HP fights to survive decline of the printer market

When the old tech giant Hewlett-Packard officially split last October, it was clear which of the two new companies was likely to have the tougher road.

Hewlett Packard Enterprise got the slightly more desirable parts of the business: Servers, software, storage, networking and services. Of course, these businesses are not exactly on fire, with HPE posting a slight revenue dip during the first six months of this fiscal year.

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Still, its sibling, HP, got saddled with printers and personal computers, which are two business in terminal decline. HP reported its latest earnings yesterday with revenues down 3.8 percent to $11.89 billion for the quarter.

There was some good news from the PC division, part of the Personal Systems group. Revenue for Personal Systems was flat, which qualifies as a win for anything HP-related. Within that, sales of consumer PCs rose 8 percent, and notebooks gained 12 percent in sales.

But Printing fell 14 percent year-over-year. And the company says that decline will continue for the short-term.

Now, part of this is being driven by a change in the company’s supply sale model. And the good news (such as it is) is that sales of printing hardware are falling less fast compared to the two previous quarters. Printing unit sales fell “only” 10 percent from the previous year. In the last two quarters, it was 20 percent and 16 percent.

In part, these numbers are driven by the trend that we’ve expected for almost two decades: People are printing less and therefore buying fewer printers and supplies.

However, it would be a mistake to think that HP is throwing in the towel.

On the earnings call yesterday, the company said it increased research spending for printing. It was doing so to support a number of new initiatives it has launched this year.

These include what may or may not be the “world’s smallest all-in-one inkjet printer” and the launch in May of HP’s 3D printing system.

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The question now is whether these new products can accelerate enough to reverse the printing declines. As challenges go, it’s not impossible. But it seems like there will still be a lot of pain in the coming months as HP tries to weather that transition.

Whether HP can grow, and remain an independent entity, may hinge on whether it can reinvent its printing business fast enough. Otherwise, it’s going to become a very enticing target for anyone hoping to consolidate the PC market.