HP slams Dell, plans to steal its customers
Just as Dell announced it had finalized its buyout deal,
Hewlett-Packard came out swinging, criticizing its rival and declaring it's
going after Dell's customers.
On Tuesday, Dell, the third-largest PC maker, said
executives had finalized a $24.4 billion buyout to take the company private.
The move is expected to enable Dell, which has been a public company for about
25 years, to operate without shareholder and Wall Street pressures.
However, while all industry eyes were on Dell, HP slammed
Dell's buyout decision.
"Dell has a very tough road ahead," HP wrote in
a released statement. "The company faces an extended period of uncertainty
and transition that will not be good for its customers. And with a significant
debt load, Dell's ability to invest in new products and services will be
extremely limited."
HP then said it will be working to pull Dell's users into
its corner.
"Leveraged buyouts tend to leave existing customers
and innovation at the curb," HP wrote. "We believe Dell's customers
will now be eager to explore alternatives, and HP plans to take full advantage
of that opportunity."
PC makers Lenovo and Acer did not respond to requests for
comment.
HP's statement, though, was a surprise since the company,
which has been struggling to retain its number one position in the PC market,
has had its own struggles over the past few years and late. On Tuesday, reports
surfaced that HP's board of directors may again be considering breaking up the
business.
It wouldn't be the first time that HP mulled splitting up
the company. In 2011, the company considered a spin-off of its PC arm.
HP later decided against the move but Dell chief
executive Michael Dell was quick to jump in, saying he saw HP's wavering as an
opportunity for his own company.
Dell and HP have a history of sparring in public and not
mincing words.
"This is a perfect reflection of the ongoing
transition of the PC market, which brings with it plenty of turmoil," said
Christian Perry, an analyst with Technology Business Research. "It's
certainly ironic, but not surprising that any competitor would label such a big
transition [at Dell] as indicative of an uncertain state. All PC makers are in
uncertain states to some extent."
That uncertainty likely is behind HP's harsh statement.
With the PC industry destabilized by the rising popularity of smartphones and
tablets, every PC maker will be scrambling for customers, even if it means
publicly bashing a competitor.
"HP's first salvo against Dell was remarkably
vicious," said Dan Olds, an analyst with the Gabriel Consulting Group.
"I don't think this kind of snarkiness will help HP in the market, but it
does show that HP is going to do its best to take advantage of the situation.
I'd expect to see HP wooing Dell corporate customers with sweet deals over the
next few months."
However, Olds said it won't be easy for HP since Dell
likely is prepared to fight to hold onto its customers.
Dell's rivals are well-positioned to make hay out of
Dell's buyout move, though perhaps not as publicly as HP has. Any time there's
change and customers become rattled, there's an opportunity for a competing
company to swoop in.
Mikako Kitagawa, an analyst with Gartner, said Dell
should be able to fend off most threats.
"For [the enterprise], the threat would be minimal
as the buyout would less likely affect Dell's corporate PC business in the
short term," Kitagawa said. "But for the consumer business, retailers
could be more careful about having a deal with Dell. However, consumer PCs are
not Dell's strength so it does not create a major threat for Dell there
either."
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