6 ms·

Where did HP step out of the path that changed their reputation? Was there a crucial decision where they made the "wrong choice"?

by mongol 6y ago

Gibbon1 6y ago
Hired Carly Fiorina as CEO
linguae 6y ago
The changes started in the late 1990s. Some blame this exclusively on Carly Fiorina, but I want to hear from more people knowledgeable about the situation at HP during this time, since I heard from somewhere that the board was interested in moving away from the HP Way, and they hired Fiorina precisely to change HP. From the 1970s until the late 1990s, HP's calculators were renowned for their build quality, similar to how IBM ThinkPads were renowned for their quality. However, in the late 1990s and early 2000s, some high-quality calculators such as the HP-32SII and HP-48GX were replaced by calculators like the HP-33S and HP-49G, respectively, that did not have the same build quality. This led to HP's older calculators being sold on eBay and other secondhand markets at high prices. (Thankfully HP's calculator quality would improve in the late 2000s with the HP-35S and HP-50g.) I've heard similar things about HP's printers and personal computers; there is a discernible difference in quality between those built before the late 1990s and those built afterwards.
- lotsofpulp 6y ago
  Seems like the typical strategy of arbitraging a brand’s reputation by cutting quality and therefore costs, but still charging the same price. Until information about the brand’s changes in quality pervade the market, the sellers can pocket the extra profit from lowered costs.
  - iguy 6y ago
    I mostly agree. I guess the counter-argument is to claim that the market for the original quality was going away. This does happen, too: the first-mover can essentially spend monopoly profits on making something which makes engineers happy, if they choose to. But as competitors catch up, customers start to vote with their wallets for the minimum usable quality. The early leader may choose to sell the same low-quality items and charge 20% extra for their name, but they can't choose to sell the high-quality items at 3x the price, if there are no buyers.
  - goatinaboat 6y ago
    Seems like the typical strategy of arbitraging a brand’s reputation by cutting quality and therefore costs, but still charging the same price. Again this is the MBA mindset, a company’s assets, of which the goodwill of its customers is one, are to be stripmined for personal gain, then they move onto the next company like locusts.
- DaiPlusPlus 6y ago
  Not to give my age away, but I grew-up with a Ti-83, and I prefer it to any HP calculator I’ve tried. It’s possible that HP saw that entire cohorts of kids were growing up exposed only to Ti and Casio calculators with their own proprietary ways-of-doing-things - and commoditisation in general - and HP didn’t have a way to lock-in consumers the way that Apple did with ITMS when MP3 player competition peaked.
  - linguae 6y ago
    I also grew up with a TI-83, though in college I learned about HP calculators and RPN and ended up buying a HP-48S on eBay; those were the cheapest non-financial HP calculators I could find on eBay at the time. I love RPN, but I liked my TI-83's ease of use. Another factor that could have led to the demise of HP calculators was Texas Instruments' partnerships with textbook companies. When I was in high school, many textbooks had TI-83 examples and exercises. My impression is that HP's calculators were marketed to college students and engineers, while TI marketed its calculators to the much more lucrative middle and high school market. Thus turned out to be a winning strategy for Texas Instruments. As a computer scientist/software engineer, I seldom use handheld calculators anymore. I use the Unix dc command whenever I need to make quick calculations, and I have LibreOffice Calc, GNU Octane, and REPLs available (such as Python and Common Lisp) whenever I need to perform more complex calculations. If I must calculate something away from my computer, I can use my iPhone's calculator app. I would imagine that this killed the traditional market for HP calculators; why spend the money on a bespoke handheld calculator when most engineers have access to computers and smartphones? However, in a classroom setting I wouldn't be allowed to use my iPhone. Texas Instruments did a good job courting the classroom and standardized test markets. HP might have figured that it didn't want to compete against TI in this market. With that being said, I wish I didn't miss out on the HP-15c special edition that was on sale briefly in 2011; I didn't hear any announcements until it was already sold out.
    - jeffbee 6y ago
      I agree that it's hard to see how anyone gets $500 worth out of the HP-50G. I use i48, the HP-48 simulator for iOS. The only thing it lacks is that keyboard feel. When I was in high school virtually everyone had a TI calculator but I couldn't afford one. At college we were required to own an HP-48. I don't recall paying $500 for it, but maybe I did and I just forgot. It doesn't seem like the kind of money I would have had at that time. I still have it and it still works perfectly, which puts it in league with my Tektronix analog oscilloscopes in terms of legendary durability.
- agumonkey 6y ago
  I think it's mostly change in markets. HP reputation (as IBM Thinkpad) came from serious devices for serious tasks. When you sell to the average consumer, a race to the bottom occurs. Lower prices -> larger potential base -> no reason to make it fancy -> no research -> relying on brand name only .. and then large scale economics make you spend more time and resources on the more milkable segment of your sales so the core company suffers too (but investors don't care).
  - throw0101a 6y ago
    > I think it's mostly change in markets. HP reputation (as IBM Thinkpad) came from serious devices for serious tasks. When you sell to the average consumer, a race to the bottom occurs. I wonder if this can be avoided or mitigated by creating a subsidiary or sub-brand to differentiate between the high-end and high-volume. Something like Toyota/Lexus, VW/Audi, etc.
    - jeffbee 6y ago
      That's what HP did. The "serious products for serious people" division became Agilent.
    - agumonkey 6y ago
      Maybe nowadays, after the last 4 decades, people learned some lessons. It's indeed very important to keep a core skillset, whenever the money cow dies.. if your smartest left for a better company your left with nothing.
jqpabc123 6y ago
Yes. When they decided to give you the printer but sell the ink for $1000 per gallon. This is what happens when you let accountants make business decisions. I'm sure it looked like a real golden opportunity at the time. But what it actually did was kill the home printer business --- or at least most of it. Now, most home printers aren't worth having.
zwieback 6y ago
I would say the hp-Agilent split was really the turning point but the seeds were planted much earlier. Apparently the board and various advisors realized that the PC market was going to be huge and wanted to grow that part of the company. hp PCs were okay but splitting off the instruments, which were really the original hp business and focussing the new hp on PCs and consumer products was effectively what ended the original company. It wasn't until the Compaq acquisition (which also brought the old DEC into the fold) that the transformation to consumer was complete. At that time injket was doing so obscenely well that a lot of mistakes were paid for and papered over from those profits. I joined right around that time, a few months before Carly was hired as CEO. She was okay at first but got worse and when she left we were singing "ding dong the witch is dead", you could actually hear it throughout the entire floor I was working on. Unfortunately, the CEOs up to Meg were a total disaster, I think with Meg the recovery started and now, after spinning off HPE it's been a super-fun place to work at again. Despite all the bad press there's actually a ton of interesting R&D going on still but the consumer doesn't really hear about it. It's a deal with the devil when you switch from selling to nerds to grumpy consumers around the world.

Where did HP step out of the path that changed their reputation? Was there a crucial decision where they made the "wrong choice"?

by mongol 6y ago

Where did HP step out of the path that changed their reputation? Was there a crucial decision where they made the "wrong choice"?

Gibbon1 6y ago

Hired Carly Fiorina as CEO

linguae 6y ago

The changes started in the late 1990s. Some blame this exclusively on Carly Fiorina, but I want to hear from more people knowledgeable about the situation at HP during this time, since I heard from somewhere that the board was interested in moving away from the HP Way, and they hired Fiorina precisely to change HP. From the 1970s until the late 1990s, HP's calculators were renowned for their build quality, similar to how IBM ThinkPads were renowned for their quality. However, in the late 1990s and early 2000s, some high-quality calculators such as the HP-32SII and HP-48GX were replaced by calculators like the HP-33S and HP-49G, respectively, that did not have the same build quality. This led to HP's older calculators being sold on eBay and other secondhand markets at high prices. (Thankfully HP's calculator quality would improve in the late 2000s with the HP-35S and HP-50g.) I've heard similar things about HP's printers and personal computers; there is a discernible difference in quality between those built before the late 1990s and those built afterwards.

lotsofpulp 6y ago
Seems like the typical strategy of arbitraging a brand’s reputation by cutting quality and therefore costs, but still charging the same price. Until information about the brand’s changes in quality pervade the market, the sellers can pocket the extra profit from lowered costs.
- iguy 6y ago
  I mostly agree. I guess the counter-argument is to claim that the market for the original quality was going away. This does happen, too: the first-mover can essentially spend monopoly profits on making something which makes engineers happy, if they choose to. But as competitors catch up, customers start to vote with their wallets for the minimum usable quality. The early leader may choose to sell the same low-quality items and charge 20% extra for their name, but they can't choose to sell the high-quality items at 3x the price, if there are no buyers.
- goatinaboat 6y ago
  Seems like the typical strategy of arbitraging a brand’s reputation by cutting quality and therefore costs, but still charging the same price. Again this is the MBA mindset, a company’s assets, of which the goodwill of its customers is one, are to be stripmined for personal gain, then they move onto the next company like locusts.
DaiPlusPlus 6y ago
Not to give my age away, but I grew-up with a Ti-83, and I prefer it to any HP calculator I’ve tried. It’s possible that HP saw that entire cohorts of kids were growing up exposed only to Ti and Casio calculators with their own proprietary ways-of-doing-things - and commoditisation in general - and HP didn’t have a way to lock-in consumers the way that Apple did with ITMS when MP3 player competition peaked.
- linguae 6y ago
  I also grew up with a TI-83, though in college I learned about HP calculators and RPN and ended up buying a HP-48S on eBay; those were the cheapest non-financial HP calculators I could find on eBay at the time. I love RPN, but I liked my TI-83's ease of use. Another factor that could have led to the demise of HP calculators was Texas Instruments' partnerships with textbook companies. When I was in high school, many textbooks had TI-83 examples and exercises. My impression is that HP's calculators were marketed to college students and engineers, while TI marketed its calculators to the much more lucrative middle and high school market. Thus turned out to be a winning strategy for Texas Instruments. As a computer scientist/software engineer, I seldom use handheld calculators anymore. I use the Unix dc command whenever I need to make quick calculations, and I have LibreOffice Calc, GNU Octane, and REPLs available (such as Python and Common Lisp) whenever I need to perform more complex calculations. If I must calculate something away from my computer, I can use my iPhone's calculator app. I would imagine that this killed the traditional market for HP calculators; why spend the money on a bespoke handheld calculator when most engineers have access to computers and smartphones? However, in a classroom setting I wouldn't be allowed to use my iPhone. Texas Instruments did a good job courting the classroom and standardized test markets. HP might have figured that it didn't want to compete against TI in this market. With that being said, I wish I didn't miss out on the HP-15c special edition that was on sale briefly in 2011; I didn't hear any announcements until it was already sold out.
  - jeffbee 6y ago
    I agree that it's hard to see how anyone gets $500 worth out of the HP-50G. I use i48, the HP-48 simulator for iOS. The only thing it lacks is that keyboard feel. When I was in high school virtually everyone had a TI calculator but I couldn't afford one. At college we were required to own an HP-48. I don't recall paying $500 for it, but maybe I did and I just forgot. It doesn't seem like the kind of money I would have had at that time. I still have it and it still works perfectly, which puts it in league with my Tektronix analog oscilloscopes in terms of legendary durability.
agumonkey 6y ago
I think it's mostly change in markets. HP reputation (as IBM Thinkpad) came from serious devices for serious tasks. When you sell to the average consumer, a race to the bottom occurs. Lower prices -> larger potential base -> no reason to make it fancy -> no research -> relying on brand name only .. and then large scale economics make you spend more time and resources on the more milkable segment of your sales so the core company suffers too (but investors don't care).
- throw0101a 6y ago
  > I think it's mostly change in markets. HP reputation (as IBM Thinkpad) came from serious devices for serious tasks. When you sell to the average consumer, a race to the bottom occurs. I wonder if this can be avoided or mitigated by creating a subsidiary or sub-brand to differentiate between the high-end and high-volume. Something like Toyota/Lexus, VW/Audi, etc.
  - jeffbee 6y ago
    That's what HP did. The "serious products for serious people" division became Agilent.
  - agumonkey 6y ago
    Maybe nowadays, after the last 4 decades, people learned some lessons. It's indeed very important to keep a core skillset, whenever the money cow dies.. if your smartest left for a better company your left with nothing.

jqpabc123 6y ago

Yes. When they decided to give you the printer but sell the ink for $1000 per gallon. This is what happens when you let accountants make business decisions. I'm sure it looked like a real golden opportunity at the time. But what it actually did was kill the home printer business --- or at least most of it. Now, most home printers aren't worth having.

zwieback 6y ago

I would say the hp-Agilent split was really the turning point but the seeds were planted much earlier. Apparently the board and various advisors realized that the PC market was going to be huge and wanted to grow that part of the company. hp PCs were okay but splitting off the instruments, which were really the original hp business and focussing the new hp on PCs and consumer products was effectively what ended the original company. It wasn't until the Compaq acquisition (which also brought the old DEC into the fold) that the transformation to consumer was complete. At that time injket was doing so obscenely well that a lot of mistakes were paid for and papered over from those profits. I joined right around that time, a few months before Carly was hired as CEO. She was okay at first but got worse and when she left we were singing "ding dong the witch is dead", you could actually hear it throughout the entire floor I was working on. Unfortunately, the CEOs up to Meg were a total disaster, I think with Meg the recovery started and now, after spinning off HPE it's been a super-fun place to work at again. Despite all the bad press there's actually a ton of interesting R&D going on still but the consumer doesn't really hear about it. It's a deal with the devil when you switch from selling to nerds to grumpy consumers around the world.