PC and printer giant, Hewlett-Packard, is going for a restructuring by combining its printer and personal computer divisions. This news is gaining momentum globally quite rapidly. While speaking to dealers and solution providers this much talked about fusion, box pushers expressed their concerns. They predict that it may create a tough time for them to earn better margins. Solution providers (Sps), on the other hand, are hoping that this unity would help them in offering complete solutions to their customers at a much better price.

Sharing his opinion about the topic, Sunil Kakkad, CEO, Sai Infosystems said, “The likely combination of PC and printer business would definitely be opportuniate for solution providers. Through this merger, they can offer complete solutions to customers.”

This reasoning makes most sense as currently solution providers offer PCs along with servers. If the printer is also added to the solution, customers can get the whole service at a better price. After all, a printer has become the quintessential extension of this kit. However, this would create a tough time for the box pushers as it might create a drop in the margins and they will have to struggle to get higher profitability. This is one reason why dealers are wary of this development.

The positive and neutral aspect
But there are those in the channel who would like to take a positive spin on this restructuring, if and when it happens. PL Suhasaria, CEO, Caltron mentioned, “ If HP is actually considering such a move, it will be a better move for the company as well as the channel partners.”

But as always, the channel is adopting a cautious stance on this news. Few partners also opined that since it has been circulated without any official sources, it could be a rumour and one needs to wait and watch till HP officially announces their restructuring plans. RS Shanbagh, CEO, Value Point Systems and a leading HP partner stated, “I have just heard about this information and as such I have not got an official statement from HP. So it could be a rumour. It is difficult to predict the results till there is any confirmation on the report.”

But Devendra Taneja, CEO, PC Solutions said that one cannot expect much difference in the business profile of the channel who is selling HP. “PC addresses a generic market and multi-branded printers are also being driven by the OEM vendors. So it may add more competition in the market,” he said.

HP wants to move its PC business in the solution space. Till the time things are formalized finally, it will difficult to predict the market reaction. When contacted for a comment on the information, HP India declined to give a comment, mentioning it to be merely a rumor, a speculation at best.

In the Indian PC market, HP held the largest share during Q1 2009 (January–March 2009), according to IDC India's latest study. According to another IDC report, the overall global hard copy peripherals market fell 21 percent year over year in the second quarter to 24.1 million units shipped. Shipment value also declined, dipping down 23.2 percent during the same time period to $11.6 billion.

Amrita Tejasvi
amritat@cybermedia.co.in

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