HP rides the storm with services rise

Hurd: HP's global position is a significant factor in its success

HP’s latest financial results show continued strength in the number of notebook PCs sold, but highlight continued price pressure that sees the supplier facing lower profit margins coupled with declining desktop PC and server sales.

HP saw its net earnings rise 14 per cent to $2bn (£1.1bn) for the financial quarter ended 31 July 2008, with net revenue up 10 per cent to $28bn (£15bn).

Chief executive Mark Hurd highlighted the firm’s “global position” as a significant factor in a success that has seen the organisation overcome particularly slow sales in the US, while HP goes from strength to strength in services revenue.

Notebook PC sales boosted revenue from the Personal Systems Group to $10.2bn (£5.5bn), though profit was just $587m (£316m).

HP is currently selling notebook PCs at various online and retail outlets for as little as £280 including VAT as it struggles to compete with competitors such as Acer, Dell, Fujitsu Siemens and Toshiba.

Desktop PC sales are in steep decline across the globe, with server revenue remaining static.

While server virtualisation software from VMware and Microsoft demand upgrades to higher performance systems, such products are still perceived by many as a way of consolidating a large number of servers into a smaller number of physical machines.

IDC predicts that global notebook and desktop PC shipments for all manufacturers will increase 15.2 per cent to 310 million this year, with a 9.6 per cent increase in value to more than $286bn (£146bn).