Tablets Indirectly Threaten HP's Business Model

Tablets are not a direct cause of HP's strategic disarray. PCs and the consumer hardware business arguably are the problem, clashing with HP's ability to become a pure-play enterprise services supplier. 

But tablets represent both a threat to the PC revenues and a device that relies on the cloud services that HP might alternatively focus upon. The problem remains that HP is a firm with conflicting pressures and interests. 

HP is still the biggest maker of PCs in the world – excluding tablets – but Steven Milunovich at UBS Investment Research reckons the tech giant should get rid of its PC hardware business and focus on services related to cloud computing and business products. 

Of course, that course has been at least temporarily rejected. Former CEO Leo Apotheker proposed doing so and was dumped. New CEO Meg Whitman reversed course. And now Milunovich essentially argues Apotheker was right. 

Doing two things stops HP doing either well, he argues: "HP lacks the pure enterprise focus of IBM and EMC yet will have trouble competing for consumers without strong tablet and phone businesses like Apple and Samsung," 

So, indirectly, tablets represent the latest twist in the rather lengthy story of HP vacillating about its strategy. Without a robust tablet and smart phone business, the consumer business looks vulnerable, longer term. But since the PC and printer business is about half of HP, the continual debate about remaining in the consumer and enterprise businesses 
is tough to resolve.