Meg Whitman Explains Why HP's Stock Hasn't Performed Like Apple's

Meg Whitman

Photo: AP

Shareholders at HP’s annual meeting peppered CEO Meg Whitman with questions about why HP’s stock hasn’t performed like Apple’s yesterday.They wanted to know why Apple, with a much smaller portion of the PC market, is now trading at $600 a share while HPQ is down to the mid $20’s  … a price AAPL hasn’t seen since around 2004.

They wanted to know why HP hasn’t adopted many of Apple’s proven strategies like …

  • creating a reputation that HP PCs are the highest possible quality in every detail.
  • opening up HP stores where a person can not only buy consumer products like PCs and printers but get them repaired.

They also wanted to know why, with HP’s annual R&D budget of $3.3 billion a year, versus Apple’s $2.4 billion, that HP isn’t considered more innovative than Apple.

One gentlemen said that HP should have, by now, developed a PC that can’t be taken down by a virus. He even suggested how … by putting more of the software in a protected area of memory.

Whitman’s response? Steve Jobs doesn’t work for HP.

“We all have to applaud Apple for their success. This is one of the biggest renaissance stories of our generation. Steve Jobs is the business genius of our generation,” Whitman said.

As to her plans to beat Apple in at least some of its own game. She answered …

On being innovative “If you look across our product portfolio, we are  No. 1 or No. 2 in each of our businesses. That doesn’t mean we don’t need incremental R&D” spending for individual products. She reiterated that her immediate goal, however, was to trim down the number of products HP makes. The money saved can then be spent on more R&D.

As for opening up HP stores, she said HP has done this in Brazil through a sales partner. In the U.S. her focus is going to be to improve HP’s e-commerce web site. “I do have some experience” with selling stuff to consumers over the web, she quipped. 

The investor pointed out that a nicer web site won’t help him fix his broken LaserJet printer. Whitman conceded the point, but said it will help him get the parts faster so he can fix it himself.

As for virus-proof PCs, Whitman said that she feels the pain. Or at least her husband did.  She’s married to Griffith Harsh, a neurosurgeon at Stanford, and just last weekend, his PC was bricked by a virus,  she said. It took the folks at Stanford a couple of days to get his PC working again.

Security products are one of the big growth areas for HP, Whitman says. She has previously promised that HP will deliver secure Windows 8 tablets. So maybe a virus-proof PC will also be in the list.

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