HP 2013 Annual Report Download - page 19

services. For example, European sales often are weaker in the summer months and consumer sales
often are stronger in the fourth calendar quarter. Demand during the spring and early summer months
also may be adversely impacted by market anticipation of seasonal trends. See ‘‘Risk Factors—Our
sales cycle makes planning and inventory management difficult and future financial results less
predictable,’’ in Item 1A, which is incorporated herein by reference.
Competition
We encounter aggressive competition in all areas of our business activity. We compete primarily on
the basis of technology, performance, price, quality, reliability, brand, reputation, distribution, range of
products and services, ease of use of our products, account relationships, customer training, service and
support, security, availability of application software, and internet infrastructure offerings.
The markets for each of our business segments are characterized by vigorous competition among
major corporations with long-established positions and a large number of new and rapidly growing
firms. Most product life cycles are short, and to remain competitive we must develop new products and
services, periodically enhance our existing products and services and compete effectively on the basis of
the factors listed above. In addition, we compete with many of our current and potential partners,
including OEMs that design, manufacture and often market their products under their own brand
names. Our successful management of these competitive partner relationships will 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.
We have a broad technology portfolio spanning personal computing and other access devices,
imaging and printing-related products and services, enterprise IT infrastructure products and solutions,
multi-vendor customer services and IT management software and solutions. We are the leader or
among the leaders in each of our business segments.
The competitive environments in which each segment operates are described below:
Personal Systems. The markets in which Personal Systems operates are intensely competitive and
are characterized by price competition and inventory depreciation. Contraction in the PC market and
the ongoing shift in customers to tablets and other form factors has further intensified competition in
the PC market. Our primary competitors are Lenovo Group Limited, Dell Inc. (‘‘Dell’’), Acer Inc.,
ASUSTeK Computer Inc., Apple Inc., Toshiba Corporation and Samsung Electronics Co., Ltd.
(‘‘Samsung’’) (for tablets). 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 accessibility of our products through a broad-based distribution strategy from
retail and commercial channels to direct sales.
Printing. The markets for printer hardware and associated supplies are highly competitive.
Printing’s key customer segments each face competitive market pressures in pricing and the
introduction of new products. Our primary competitors include Canon U.S.A., Inc., Lexmark
International, Inc., Xerox Corporation, Seiko Epson Corporation, Ricoh Company Ltd, Samsung and
Brother Industries, Ltd. In addition, independent suppliers offer refill and remanufactured alternatives
for HP original inkjet and toner supplies, which are often available for lower prices but generally offer
lower print quality and reliability. Other competitors 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. Printing is focused on growth through
innovation and growing long-term, high-value recurring business, accelerating the transition from analog
to digital printing in graphics, commercial and production environments, driving web and mobile
content solutions through our installed base of web-connected ePrinters and growing cloud-based,
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