HP 2005 Annual Report Download - page 15

Download and view the complete annual report

Please find page 15 of the 2005 HP annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 155

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155

names. Our successful management of these competitive partner relationships will continue to be
critical to our future success. Moreover, we anticipate that we will have to continue to adjust prices on
many of our products and services to stay competitive.
On an overall basis we are among the largest U.S.-based companies offering our range of general
purpose computers and personal information, imaging and printing products for industrial, scientific,
business and consumer applications, and IT services. We are the leader or among the leaders in each of
our principal business segments.
The competitive environments in which each segment operates are described below:
Enterprise Storage and Servers. The areas in which ESS operates are intensely competitive and are
characterized by rapid and ongoing technological innovation and price reductions. Our competitors
range from broad solutions providers such as International Business Machines Corporation (‘‘IBM’’) to
more focused competitors such as EMC Corporation in storage, Dell, Inc. (‘‘Dell’’) in industry standard
servers, and Sun Microsystems, Inc. in Unix-based servers. Broad-based solutions providers benefit
from their existing customer base and the breadth of their product offerings, while more focused
competitors are able to concentrate their efforts on providing the most competitive product. We believe
that our important competitive advantages in this segment include our broad range of server and
storage products and related software and services, our global reach and our significant intellectual
property portfolio and research and development capabilities, which will contribute to further
enhancements of our product offerings.
HP Services. The principal areas in which HPS competes are technology services, consulting and
integration and managed services. The technology services and consulting and integration markets have
been under significant pressure as customers scrutinize their IT spending. However, this trend has
benefited the managed services business as customers attempt to reduce their IT costs and focus their
resources on their core businesses. Our key competitors in this segment include IBM Global Services
and the services businesses of other technology products organizations, as well as Electronic Data
Systems Corporation, Accenture and other systems integration firms. Many of our competitors are able
to offer a wide range of services through a global network of service providers, and some of our
competitors enjoy significant brand recognition. HPS teams with many services companies to extend our
reach and augment our capabilities. Our competitive advantages include our global delivery
organization, our deep technical expertise, our diagnostic and IT management tools, and the flexibility
and choice we offer our customers.
Software. Our software competitors include other companies focused on providing software
solutions for IT management, such as BMC Software Inc, Computer Associates International Inc.,
Mercury Interactive Corporation and IBM Tivoli Software.
Personal Systems Group. The areas in which PSG operates are intensely competitive and are
characterized by rapid price reductions and inventory depreciation. Our primary competitor in the
branded personal computers area is Dell with additional competition, particularly in niche markets,
from companies such as Toshiba Corporation, Apple Computer, Inc., Lenovo Group Limited and
Gateway, Inc. In particular regions, we also experience competition from companies such as Acer Inc.
and Fujitsu Limited, both of which are particularly strong in Europe. We also face competition from
generically-branded or ‘‘white box’’ manufacturers. Our competitive advantages include our broad
portfolio, our innovation and research and development capabilities, and the availability of our
products directly from HP or through our HP channel partners.
Imaging and Printing Group. We are the leading imaging and printing systems provider in the
world for printer hardware, printing supplies and scanning devices. We believe that our brand
recognition, reputation for quality, breadth of product offerings and large customer base are important
competitive advantages. However, the markets for printer hardware and associated supplies are highly
11