Is Samsung Buying Day-Old Fish?
Samsung is reportedly sniffing around HP’s for-sale computer division.
I can understand Samsung wanting to become the World’s Largest Computer Maker™, but I’m not sure how much sense it makes. HP is getting out of making computers, because tablets and mobile have just murdered their razor-thin margins. There just aren’t enough profits to justify HP staying in the business, after waving the white flag in the mobile space.
Samsung is enjoying success in mobile. They make some very nice Android phones, and their tablet is the best (surviving) iPad competitor. The latter isn’t saying much — but the tablet market is still quite young.
So why would Samsung want to take resources (cash, engineering talent, etc) away from mobile and devote it to a low-margin, dead-end mass market? Of course, the Google/Motorola deal still doesn’t make much sense to me, so maybe I’m too stodgy on M&A deals. What do you think?
Is it possible that they’re mining for patents? Both Google and Samsung.
Maybe they’re looking to build their own ecosystem. A Samsung PC that is capable of seamlessly talking to your Samsung TV, tablet, and cellphone might be valuable enough to warrant higher margins.
You have no idea how depressing this sentence is for me, but Hewlett-Packard failed because they stopped innovating. The accountants took over. Asus, Lenovo, Samsung, all continue to come out with new products that people want. The only value in H-P’s computer line is in the retail relationships and support infrastructure (they’ve long since trashed much of the brand value), but then those are things that Samsung would not have to develop for themselves.
I’m not seeing such a separation between PC and mobile markets, either. Anymore, PC means laptop in the consumer market. And in just a couple of years laptop will mean tablet (plus accessory monitor and keyboard), running whatever OS wins the competition. To paraphrase the animal rights folks, a PC is a tablet is a phone.
It all depends on the price they buy it for. HP is still a reasonably reputable brand name. If Samsung can buy the name of the brand for cheap it would probably be worth while. Samsung has a strong brand name also, but not so much in PC’s – more in mobile phones, TV’s and appliances. It may be that Samsung will take it’s existing PC’s and rebrand some of them as HP’s in markets where the HP brand name means more. It’s also possible that the HP retail distribution network is seen as an opportunity to get Samsung branded products into places where they currently aren’t. These things by themselves may not seem like they are worth much, but if you don’t pay much for them, maybe they are good enough to get.
HP is no longer a good name for me. I bought the TouchPad August 1, only to have the rug pulled out from under my feet within three weeks. And it’s not that the product itself is bad (on the contrary, I like the TouchPad) but because HP’s management is unreliable. Flaky even. Even on the enterprise level, I don’t trust them to not make such an abrupt change.
BTW, Best Buy did refund the difference I paid on Aug. 1, $549, and their last sales price, $149. So kudos to Best Buy (hey, it’s rare enough that I should mention it.)
Got a Touchpad closeout sale from HP online store for $99.
I went with the 32 GB version rather than the 16 GB one. you can never have too much memory.
PCs will continue to have strong sales for at least another decade, at least in the business market. Yes, there are disruptive technologies looking to take them out, but that’s been the case for over 20 years now. Even if the Perfect New Thing comes along tomorrow, the transition will still be very long and slow.
On the personal side they’ll go more quickly, but they’ll continue to sell well for at least another five years because there are plenty of things you can’t do well with tablets. Heck, I’m typing this on a PC with three monitors (and thinking hard about going to a 4- or 6-monitor setup) with about 60 applications open – tablets and laptops don’t do that and won’t for awhile.
So even if it’s a low-margin business, it’s still pretty reliable. I’ll take reliable 5% or even 3% margins in huge volumes all day long – that’s good business. It just happens to not be the kind of margins that excite certain classes of shareholders that enjoy buying stocks at insane multiples. So dumping the PC division and going into software / services is almost certainly all about goosing share price (by taking a fairly risky path) at the expense of safe if unexciting business. In a horrible economy, we call this “stupid.”
After Oracle bought Sun Micros, Java is no longer free. HP and other software firms have to pay a huge licensing fee to Oracle for the use of Java.
Google bought Motorola to make its own Tablet with Android. Bet Google will charge Motorola’s competitors an arm and a leg licensing fee. The fee is low now to rope in Tablet makers to popularize Android.
Apple has its own iPad operating system.
Samsung needs HP’s Palm to compete with Anroid and Apple. Alas, it may be too late, since most apps are developed for Apple and Android.