HP 2011 Annual Report Download - page 19

On a revenue basis we are the largest company 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:
Personal Systems Group. The areas in which PSG operates are intensely competitive and are
characterized by price competition and inventory depreciation. Our primary competitors for the
branded personal computers are Dell, Acer Inc., ASUSTeK Computer Inc., Apple Inc., Lenovo Group
Limited and Toshiba Corporation. In particular regions, we also experience competition from local
companies and from generically-branded or ‘‘white box’’ manufacturers. Our competitive advantages
include our broad product portfolio, our innovation and research and development capabilities, our
brand and procurement leverage, our ability to cross-sell our portfolio of offerings, our extensive
service and support offerings and the availability of our broad-based distribution of products from retail
and commercial channels to direct sales.
Services. Our service businesses, including HP Enterprise Services and Technology Services,
compete in IT support services, consulting and integration, infrastructure technology outsourcing,
business process outsourcing and application services. The IT support services and consulting and
integration markets have been under significant pressure as our customers have reduced their IT
budgets. However, this trend has benefited the outsourcing services business as customers drive toward
lower IT management costs to enable more strategic investments. Our competitors include IBM Global
Services, Computer Sciences Corporation, systems integration firms such as Accenture Ltd. and
offshore companies such as Fujitsu Limited and India-based competitors Wipro Limited, Infosys
Technologies Limited and Tata Consultancy Services Ltd. We also compete with other traditional
hardware providers, such as Dell, which are increasingly offering services to support their products.
Many of our competitors are able to offer a wide range of global services, and some of our competitors
enjoy significant brand recognition. Our service businesses team with many companies to offer services,
and those arrangements allow us to extend our reach and augment our capabilities. Our competitive
advantages are evident in our deep technology expertise, which includes multi-vendor environments,
virtualization and automation, our strong track record of collaboration with clients and partners, and
the combination of our expertise in infrastructure management with skilled global resources in SAP,
AG, Oracle Corporation and Microsoft platforms, among others.
Imaging and Printing Group. The markets for printer hardware and associated supplies are highly
competitive, especially with respect to pricing and the introduction of new products and features across
IPG’s consumer, small- to medium-sized business, graphics and enterprise customer segments. Key
competitors include Canon U.S.A., Inc., Lexmark International, Inc., Xerox Corporation, Seiko Epson
Corporation, Samsung Electronics Co., Ltd. and Brother Industries, Ltd. In addition, independent
suppliers offer refill and remanufactured alternatives for HP original inkjet and toner supplies which,
although generally offering lower print quality and reliability, are typically offered at lower prices and
put pressure on our supplies sales and margins. Other companies also have developed and marketed
new compatible cartridges for HP’s laser and inkjet products, particularly outside of the United States
where intellectual property protection is inadequate or ineffective. In recent years, we and our
competitors have regularly lowered prices on printer hardware to reach new customers and in response
to the competitive environment. Important opportunities for future growth include accelerating
high-usage unit share, pursuing long-term high-value recurring businesses, capitalizing on the analog to
digital transition in graphics, web and mobile content solutions, and continuing to develop cloud-based,
document-centric commercial solutions and services.
Enterprise Servers, Storage and Networking. The areas in which ESSN operates are intensely
competitive and are characterized by rapid and ongoing technological innovation and price competition.
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