Tech Industry

HP faces iPad entrenchment at businesses, say observers

Hewlett-Packard will have to grapple with the iPad's successful incursion into business when it brings out a Windows 8 tablet later this year.

HP is expected to enter the Windows 8 tablet market with an Intel-based product aimed at businesses.

Ahead of its third-quarter earnings Wednesday, Hewlett-Packard is virtually absent in tablets, one of the hottest device markets today. And its fresh entry into the market will face an entrenched iPad ecosystem at businesses.

There's no guarantee that HP's upcoming Windows 8 Pro tablet aimed at corporate enterprise customers will stop the iPad's march into businesses, according to Rhoda Alexander at IHS iSuppli.

"It is the established leader in all of the markets. It has more of a reach into business, into education than its competitors," Alexander said, referring to the iPad. "The consistency in terms of establishing a product with a unified look, feel, style, progression to it has been much clearer than it has been in the Android universe to date."

HP currently offers a Slate PC that is hobbled by a Windows 7 interface not optimized for tablets and by a high price tag, starting at $699.

Even with Windows 8, an IT company executive says the iPad is going to be difficult to dislodge at corporations. "HP doesn't have a great track record historically," said Travis Fisher, executive vice president at Inacom Information Systems, an IT solutions provider Salisbury, Md.

Fisher said the iPad is the tablet of choice for customers he works with. "There's synergy with [iPhone] applications. And [the iPad] is a great piece of engineering," Fisher said. "I didn't think the TouchPad was a bad device but they weren't willing to stick with it and build market share. You have to have an ecosystem and be in it for the long haul," he said, referring to the iPad.

On the consumer side, HP's PC business is already hurting because of "iPad cannibalization," according to Deutsche Bank analyst Chris Whitmore in a research note released today previewing HP's earnings announcement.

HP is expected to post a quarterly loss of nearly $9 billion on Wednesday, the largest in its history.

The world's biggest PC maker disclosed earlier this month that it will take massive charges to account for an acquisition and a program that will see the elimination of 27,000 jobs.

HP's $13 billion acquisition of Electronic Data Systems in 2008 has turned out to be extremely costly, prompting the company to write down the value of its Enterprise Services division.