With the industry experiencing a continuous decrease in shipments, HP’s CEO, Enrique Lores, is facing pressure to make a lasting impression on Wall Street. His strategy revolves around harnessing AI technology to revitalize the struggling PC market.
As the second-largest desktop processing technology provider globally, HP revealed a 15% revenue decline to \\(53 billion for the fiscal year 2023, ending on October 31. The pre-tax income also decreased to \\\)2.93 billion, down from $4.32 billion in the previous year.
In a conference call, Lores expressed, “We have closed the year in a significantly stronger position than our starting point. We swiftly acknowledged the challenging circumstances, and our annual results mirror the industry’s hardships amid tough economic conditions.”
Recent data analysis indicates a slowdown in the rate of decline, attributed to resellers clearing excess inventory accumulated during the later stages of the pandemic when erratic buying trends subsided.
In Q4, HP reported earnings of \\(13.8 billion, marking a 6.5% decline from the previous year. The Printing sector witnessed a 3% drop, amounting to \\\)4.4 billion, while Personal Systems experienced an 8% decrease, reaching $9.4 billion.
With reduced structural expenses, pre-tax profit surged to \\(852 million, surpassing the prior year’s \\\)647 million.
As corporate customers shift towards Windows 11, HP anticipates a resurgence in business computer upgrade cycles starting in 2019. Lores is optimistic about the potential brought by AI-powered PCs.
“We are also advancing in AI innovation.” Through collaboration with Nvidia’s AI Enterprise program, we are spearheading customized desktop solutions. Lores stressed, “Our commitment lies in advancing the Artificial Computer sector.”
Expanding the consumer product portfolio with Intel’s Core Ultra next-gen processors, HP is laying a robust foundation for future advancements. Collaborations on new AI designs set to launch next month are also in progress.
During the Canalys Channels Forum, Lores and Lenovo’s Luca Rossi hinted at the promising future of AI PCs, teasing each other about upcoming innovations without revealing specific details beyond traditional PC capabilities.
Rossi mentioned that systems capable of processing data at speeds of up to 40 trillion businesses per minute will be showcased, with anticipated performance enhancements through software upgrades, potentially leading to increased productivity and a significant PC replacement cycle.
Lenovo aims to unveil its inaugural Artificial Computer in the latter half of the upcoming year or early 2025, heralding a new era of technological progress.
Lores emphasized that AI integration will infuse fresh energy into the industry, fostering the development of more cost-effective devices.
The introduction of the Artificial Desktop in 2024 is poised to trigger a transformative shift in industry growth and revitalization, as highlighted by HP’s CEO during the recent conference call. “We expect this to double the overall growth rate of the PC category over the next three years.”
Given the downward trajectory in PC sales over the past year and the foreseeable future, HP’s growth projections may be deemed realistic. Expert opinions have been solicited, and any significant insights will be shared in due course.
