Personal Systems –
Positioned for Growth
Ron Coughlin
September 15,2015
1
© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
Sizeable TAM market, operational leadership and disruptive innovation
Sizable TAM
and opportunity
to grow
$340B+ market,
with growth segments
2
Strong Share
Momentum
Driven by breakthrough
innovation, world class
cost structure, & leading
go-to-market
© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
Clear Strategy
to Expand
Leverage scale to drive
share growth, expand
into profitable
adjacencies, and create
new categories
Leading
Operational
Execution
Over $1B of cost
savings in last year
and a negative cash
conversion cycle
$340B+ Personal Systems TAM growing at 4%
+4%
358
53
49
51
4%
80
88
97
9%
5
5
5
6
9%
176
171
170
168
-2%
2015
2016
2017
2018
345
THIN CLIENT & RPOS
COMMERCIAL MOBILITY DEVICES
9
24
44
COMMERCIAL PC & MOBILITY SERVICES
45
9
36
45
47
DISPLAYS & ACCESSORIES
66
CONSUMER DETACHABLES
4
74
200
2014
387
10%
14%
347
PC CLIENTS
372
‘15-’18
CAGR
10
11
49
12
New PC form factors, mobility, and adjacencies are key growth drivers
PC CLIENT SOURCE: IDC WORLDWIDE QUARTERLY PC FORECAST (AUGUST 2015) NON-PC CLIENT SOURCE: HP INTERNAL MARKET ANALYSIS & PLANNING (3Q15) MOBILITY SERVICES TAM BASED ON HP PRIMARY RESEARCH (2H15) RPOS = RETAIL POINT OF SALE
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© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
A best seller available at Best Buy
HP 25vx 25” LED HD Monitor
HP 25vx
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© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
Oscar winning HP DreamColor Displays
HP DreamColor LP2480zx Professional Display
HP DreamColor LP2480ZX
$340B+ Personal Systems TAM growing at 4%
+4%
358
53
49
51
4%
80
88
97
9%
5
5
5
6
9%
176
171
170
168
-2%
2015
2016
2017
2018
345
THIN CLIENT & RPOS
COMMERCIAL MOBILITY DEVICES
9
24
44
COMMERCIAL PC & MOBILITY SERVICES
45
9
36
45
47
DISPLAYS & ACCESSORIES
66
CONSUMER DETACHABLES
4
74
200
2014
387
10%
14%
347
PC CLIENTS
372
‘15-’18
CAGR
10
11
49
12
New PC form factors, mobility, and adjacencies are key growth drivers
PC CLIENT SOURCE: IDC WORLDWIDE QUARTERLY PC FORECAST (AUGUST 2015) NON-PC CLIENT SOURCE: HP INTERNAL MARKET ANALYSIS & PLANNING (3Q15) MOBILITY SERVICES TAM BASED ON HP PRIMARY RESEARCH (2H15) RPOS = RETAIL POINT OF SALE
5
© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
PC market declines expected to moderate in second half 2016
PC market Y/Y trends
Factors shaping market trajectory
5%
Windows XP
migration
0%
2015
2016


NA
Currency driven
pricing



NA
-5%
Windows 8
-10%
Windows 10
launch

-15%
Core Processor
Architecture
Transition

FORECAST
CY14
CY15
SOURCE: IDC WORLDWIDE QUARTERLY PC FORECAST (AUGUST 2015)
6
2014
© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
CY16
New Form Factors


Clear opportunities for growth
Aged installed base drives
replacement opportunity
INSTALLED BASE OLDER
THAN 4 YRS (UNITS)
589M
Windows 10, Skylake, and new
form factors to catalyze growth
SOURCE: INTEL, 2015
•
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© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
Clear opportunities for growth
Further market
concentration
AGGREGATE PC CLIENT
VENDOR MIX (UNITS, %)
OTHERS
ACER, ASUS,
TOSHIBA, FUJITSU
13.6M
21%
11.5M
18%
40.2M
61%
HP, LENOVO, DELL, APPLE
2011 2012 2013 2014 2015
2Q15 UNITS/
SHR
Average Y/Y share gain
+1.9% pts Y/Y last 3 quarters
SOURCE: INTEL, 2015
•
8
SOURCE: IDC WORLDWIDE QUARTERLY PC TRACKER, 2Q15
© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
Clear opportunities for growth
Adjacencies & new
categories
PERSONAL SYSTEM GROWTH
CATEGORIES (TAM, $B)
11%
CAGR
$92
HP, LENOVO, DELL, APPLE
$14
$9
$24
$138
NEW
CATEGORIES
$23
$10
WORKSTATION,
THIN CLIENT
$53
COMMERCIAL
MOBILITY
$45
$51
2014
2018
PC & MOBILITY
SERVICES
HP Inc. Comm. Services & Mobility
YTD Revenue growth +21% Y/Y
SOURCE: INTEL, 2015
SOURCE: IDC WORLDWIDE QUARTERLY PC TRACKER, 2Q15
SOURCE: HP INTERNAL, MAP ( (2Q15)
NEW CATEGORIES = HOME AUTOMATION, DAAS, WEARABLES, IMMERSIVE COMPUTING
•
9
© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
Clear opportunities for growth
Under penetrated
segments
11%
CAGR
$92
HP, LENOVO, DELL, APPLE
$14
$9
$24
$138
NEW
CATEGORIES
$23
$10
WORKSTATION,
THIN CLIENT
$53
COMMERCIAL
MOBILITY
$45
$51
2014
2018
PC & MOBILITY
SERVICES
GEOGRAPHIES
Target
markets with
below average
share
PRODUCT
SEGMENTS
Focus on
Premium and
Detachables
ATTACH
Accelerate
Accessories &
Displays
Targeted share growth
plans underway
SOURCE: INTEL, 2015
SOURCE: IDC WORLDWIDE QUARTERLY PC TRACKER, 2Q15
SOURCE: HP INTERNAL, MAP ( (2Q15)
NEW CATEGORIES = HOME AUTOMATION, DAAS, WEARABLES, IMMERSIVE COMPUTING
•
10
© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
SOURCE: HP INTERNAL
Solid execution in the face of significant headwinds
Relentless focus on taking cost out, quality and customer satisfaction
Growing share in a
tough market
FY15 COMMERCIAL
PC SHARE CHANGE
+2.1
pts
SOURCE: IDC WORLDWIDE QUARTERLY PC TRACKER, Q2 2015
TIMEFRAME COVERS CQ4’14 THROUGH CQ2’15
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© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
Solid execution in the face of significant headwinds
Relentless focus on taking cost out, quality and customer satisfaction
Reducing costs
•
•
•
SOURCE: IDC WORLDWIDE QUARTERLY PC TRACKER, Q2 2015
TIMEFRAME COVERS CQ4’14 THROUGH CQ2’15
Warranty, logistics,
overhead cost reductions
Relentless focus on
Price-Feature-Value
Complexity reduction
FY15 Y/Y
PLATFORM
REDUCTION
FY15 Y/Y
COMPONENT
REDUCTION
-23%
-18%
SOURCE: HP INTERNAL
COMPONENT REDUCTION = NOTEBOOK ONLY
CONSUMER AND COMMERCIAL INCLUDED
© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
Solid execution in the face of significant headwinds
Relentless focus on taking cost out, quality and customer satisfaction
Relatively consistent
profitability
PS OPERATING PROFIT %
4.0% 4.0%
3.3%
14Q1
SOURCE: IDC WORLDWIDE QUARTERLY PC TRACKER, Q2 2015
TIMEFRAME COVERS CQ4’14 THROUGH CQ2’15
13
SOURCE: HP INTERNAL
COMPONENT REDUCTION = NOTEBOOK ONLY
CONSUMER AND COMMERCIAL INCLUDED
© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
3.5%
3.7%
3.0% 3.0%
15Q1
SOURCE:HP INTERNAL (HP FINANCIAL PLANNING & ANALYSIS)
15Q3
Solid execution in the face of significant headwinds
Relentless focus on taking cost out, quality and customer satisfaction
Improving customer
satisfaction
NET PROMOTER SCORE % CHANGE
(3Q15 VS FY14)
+23%
Consumer
SOURCE: IDC WORLDWIDE QUARTERLY PC TRACKER, Q2 2015
TIMEFRAME COVERS CQ4’14 THROUGH CQ2’15
14
SOURCE: HP INTERNAL
COMPONENT REDUCTION = NOTEBOOK ONLY
CONSUMER AND COMMERCIAL INCLUDED
© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
SOURCE:HP INTERNAL (HP FINANCIAL PLANNING & ANALYSIS)
+12%
Commercial
* We ask customers to rate how likely they would be to recommend HP based on
their recent purchase experience on an 11-point scale, from (0) not at all likely to
(10) extremely likely. We take the percentage of customers that gave a rating of 9
or 10 and subtract the percentage that gave a rating of 0-6 to obtain the net
promoter score (NPS).
Personal Systems PC client leadership & scale
Global share leadership
in major personal
computing categories
CQ215 Category Share
Commercial
Desktop
Commercial
Notebook
Workstation
20.7%
25.0%
42.0%
Thin Client
Consumer
PC Client
#1 #1 #1 #1 #2
27.9%
14.5%
HP ships 1.7 PCs
every second
SOURCE: HP INTERNAL FINANCIAL UNITS FISCAL 4Q14-3Q15,
PC CLIENTS, EXCLUDES WORKSTATIONS AND THIN CLIENTS
HP Inc.’s Commercial PCs
rank #1 or #2 in 44 of
the top 50 countries
CQ215 HP Inc.’s Commercial PC
client share by top 10 markets (%)
34% 33%
31% 28%
28% 27%
24% 23%
21% 19%
7%
ITA FRA AUS IND UK USA CAN WW DEU JPN CHN
SOURCE: : IDC WORLDWIDE QUARTERLY PC, ENTERPRISE CLIENT DEVICE AND WORKSTATION TRACKERS (CQ215).
BUSINESS DESKTOP AND NOTEBOOK SHARE INCLUDES WORKSTATIONS, EXCLUDES ENTERPRISE CLIENT DEVICE
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© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
#1| #2 3+
HP Inc.’s Commercial
PC Client Rank – CQ215
Leading edge products launched 1H15 – driving share gains
Spectre x360
“The HP Spectre x360 is the best HP laptop ever
and a top pick for any business user” - Inc. Mag
Elitebook 1020
“World’s thinnest lightest business-class notebook”
Zbook Workstation
Ultrabooks™
“HP’s ZBook 14 G2 and 15u G2 pack power for
productivity” – Digital Trends
Curved display
FIRST 34”
CURVED
DISPLAY
ElitePad
Healthcare Tablet
“HP's New Displays Push Curves, VR And A 5K
Priced So Low You MUST Read This Story” PCWorld
“The magic is the silver ions in the white frame,
which can kill germs on contact.” – betanews
ELITEBOOK THIN AND LIGHT CLAIM IS BASED ON BUSINESS CLASS NOTEBOOKS AS OF JANUARY 9, 2015 WITH >1 MILLION UNIT ANNUAL
SALES HAVING PRE-INSTALLED ENCRYPTION, AUTHENTICATION, MALWARE PROTECTION AND BIOS-LEVEL PROTECTION, PASSING MIL
STD 810G TESTS, WITH OPTIONAL DOCKING INCORPORATING POWER DELIVERY.
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© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
Breakthrough innovation across the portfolio
Core
HP ELITEBOOK 1020
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Growth
HP SPECTRE X360
© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
The Future
SPROUT BY HP
Personal systems strategy to drive profitable growth
We will empower and transform how customers work and play
Our foundation
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World Class Supply Chain, Go-to-Market & Marketing
© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
Personal systems strategy to drive profitable growth
We will empower and transform how customers work and play
Our market spaces
Core
Growth
The Future
Best Price-Feature Value
Most Innovative
Disruptive Innovation
Our strategic
priorities
Leverage scale advantages to drive share
World class E2E cost & quality
Leading innovation
Targeted country & segment growth
Our foundation
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2 in 1s & Premium
Commercial Mobility
PC & Mobility Services
Immersive Computing
Office, School and Home of the future
World Class Supply Chain, Go-to-Market & Marketing
© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
Winning in Core
Play to win in Commercial, and
play where attractive in Consumer
Growth actions
•
•
•
•
Industry leading Price-Feature-Value
Maniacal focus on end-to-end cost reduction
Leverage ecosystem partnerships
Innovation focused on sprinkles of magic
23.0%
22.8%
Commercial
22.7%
PC Client Share (%)
22.0%
21.6%
HP ELITEBOOK 1020
20.9%
Y/Y SHR
CHG
CQ114
+1.3%
CQ215
+1.2%
+1.3%
+2.9%
+2.2%
SOURCE: IDC WORLDWIDE QUARTERLY PC TRACKER (Q2 2015)
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© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
+1.0%
HP ELITEBOOK 840
#1 HP COMMERCIAL NOTEBOOK
HP ZBOOK WORKSTATION
ULTRABOOKS
HP ELITEDESK 700 MINI
HP CHROMEBOOK 11
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© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
HP STREAM
Growth – new form factors & premium
Growth actions
• Leading product & marketing innovation in 2-in-1s
• Security and serviceability in Commercial hybrids
• Premium growth through design & curated experience
HP US Convertible
Quarterly share trend (%)
+16
HP US Premium Notebook >$999
27.7%
+3
11.9%
CQ114
Quarterly share trend (%)
9.8%
CQ215
CQ114
SOURCE: THE NPD GROUP / RETAIL TRACKING SERVICE, NOTEBOOK COMPUTERS, JAN 2014-JUNE 2015
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© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
13.2%
CQ215
Growth and The Future to drive long term growth
Growth
Expanding the Commercial
Mobility Solutions portfolio
Healthcare
Retail
Field Service Education
Driving expansion in
Commercial Services
Commercial
Mobility
Revenue Growth
3Q15 Y/Y
2X
SOURCE: HP INTERNAL (HP FINANCIAL PLANNING & ANALYSIS)
*COMMERCIAL MOBILITY INCLUDES TABLET AND DETACHABLE
** HP SERVICEONE 2.0 PROGRAM LAUNCHED NOV 11, 2014
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The Future
© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
Immersive Computing – the
on-ramp for Blended Reality
20%+
growth in Commercial
Services since 2013
• Consumer
launched in ‘15
40%
• Commercial
launching in ‘16
growth in number of
Service One partners
since launch
HP positioned to win and capture growth opportunities
Leading
global brand
Powerful innovation
Inspired marketing
Over 45M views
Sprout by HP Presents “Jane”
Unparalleled go-tomarket coverage
World class
execution
19K+
• Product Life Cycle
management
• Portfolio simplification
• End to End cost structure
• Account planning
discipline
RETAIL
PARTNERS
200K+
#BendTheRules
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© Copyright 2015 HP Development Company, L.P. The information contained herein is subject to change without notice.
COMMERCIAL PARTNERS