Hp printing and personal systems presentation

Printing and Personal
Systems
Dion Weisler
Executive Vice President
Printing and Personal Systems

© Copyright 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Three waves

Wave one

Capitalize
PCs & printing
Multi-OS /
architecture
Detachables / hybrids

Wave two

Anticipate
Internet of things
3D printing
Digital packaging
Services
New ecosystems

Solutions
2


Wave three

Create
New categories
New ways to use
technology

Three waves

Wave one

Capitalize

Wave two

Anticipate
Investment
Segmentation
Execution

3


Wave three

Create

Ink in 2009
A case study

Wave one

Capitalize
Introduced first
Ink-in-the-Office
product

4

Wave two

Anticipate
Recognized SMB and
emerging-market
need for lower cost


Wave three

Create
Began investments:
- Page-wide array
- Ink chemistry

Ink in 2013
A case study

• Business ink market growing 9%1
• TAM expected to reach $10 billion by 2016
• OfficeJet Pro expected to achieve double-digit
unit growth
• Ink-in-the-Office represents ~1/3 of HP’s ink sales

1. Expected market revenue CAGR for '13 - '16
Source: HP internal analysis

5


Personal Systems

6

©2013 Hewlett-Packard Development Company, Company, L.P. The information contained herein is subject to change without notice.
© Copyright 2013 Hewlett-Packard Development L.P. The information contained herein is subject to change without notice.

Personal Systems accomplishments

1

+

600

#

#

Commercial player1

New partners in China

1. CQ2'13 IDC PC Tracker (units)
2. HP internal analysis of Q3 FY13 year-over-year improvement

7

3pts.

13pts.

1

4

Outgrew PC market1

In India1


Quality improvement2

Operating systems

Personal Systems market continues to evolve
Market expected to reach $400B by 2016 with 3% CAGR
PCs

Tablets

$170B / -4%

Hybrids

Services

HP SmartFriend
Services

$112B / 10%
Commercial Tablets

All-in-One

$12B / 65%
$15B / 4%

$22B / 8%

$21B / 23%

$46B / 12%

8

Accessories

Source: HP internal analysis, Sept. 2013 (does not include smartphones)
All data: Market revenue in 2016 and market revenue CAGR from ’13 – ’16

Emerging markets
3% (HW, PCs + tablets)


$43B / 12%

Commercial personal systems
Market expected to reach $160B and grow 2%1
Market share2

Core
strength

#1

+1.6 pts.

Competition2

+8 pts.

HP

5%

Lenovo

0%

Dell

-2%

Acer

-35%
-2%

(CQ2’13)

(CQ2’13)

Patents3

14K
1. HP internal analysis: Market revenue in 2016 and market revenue CAGR from ’13 – ’16
3. Number of pan-PPS Patents in portfolio

9

$

Outgrew the market2

Apple

Profitability

Channel partners

Customer base

150K

#1


(Y/Y unit growth)

Synergies

Pan-HP

Commercial personal systems
Market expected to reach $160B and grow 2%
Workstations

Thin clients

Notebooks

Tablets

Desktops

#1

#1

#2

#4

#1

• 47% share

• 27% share

• 21% share

• 2% unit share

• 20% share

• First
Ultrabook

• Lowest power

• Elitebook 800

• VDI trend

• Self-healing
BIOS

• Hardened OS
& security

• Opportunity
at entry-level

• First
all-in-one

Sources: Market revenue in 2016 and market revenue CAGR from CY ’13 – ’16 based on HP internal analysis; market share data: CQ2'13 IDC PC Trackers (units)

10


Opportunity

Commercial desktop share
Desktop unit mix for 1H131
Premium: >$1,000
Mainstream: $700-$1,000

Value: $400-$699

Entry: <$399

9%
12%

38%

41%

Market

HP share1

10%

Units ’13 - ’16

23%

-6%

30%

-11%

22%

-3%

15%

+4%

17%

42%

31%

HP

1. 2Q'13 IDC PC Tracker units share
2. Market units CAGR % based on internal HP analysis

11

1H13 units

Market CAGR2


Consumer personal systems
Crossover

Platforms

Form factors

First at home,
then at work

Pipeline for
commercial

Multi-OS

Windows
Chrome
Android
Ubuntu

Intel
AMD
Nvidia
Rockchip

Rove
Split x2
Revolve

Industry “firsts”

Ecosystem

Retail

Market share (PCs)2

Chrome on Intel

HP Connected
Smart Friend
SMB IT in a Box

160K

Detachable with
Haswell
Embedded LEAP
1. HP internal analysis; market revenue in 2016 and market revenue CAGR from ’13 – ’16

12


Retail stores

#2

Consumer personal systems
Form factors

Tablets

Multi-OS

Services

HP SmartFriend

• Targeted bursts
• Profitable
• Segmented

1. HP internal analysis; market revenue in 2016 and market revenue CAGR from ’13 – ’16

13


Bring your own
device & SMB

In summary
Commercial is core strength
Consumer is strategic to crossover from home to work
Segmenting to attack the “heat” in the market
Continuing operational excellence
Driving strategy to “capitalize, anticipate and create” across all waves

14


Printing

15


Printing accomplishments

1

16

Double-digit

New multi-function printers

Growth in Ink-in-the-Office2

15%

30%

2 pts.

#

Market share1

Reduction in ink SKUs

Fewer nodes

1. CQ2'13 IDC Hardcopy Tracker
2. Expected year-over-year revenue growth in FY13
3. Year-over-year operating margin improvement in Q1-Q3 FY13
All other data: HP internal analysis

16


Enhanced profitability3

Printing market presents opportunity
Printing market expected to reach $260B by 2016 with a 3%
CAGR
Hardware

Supplies

$60B / 0%
Laser MFPs

Business Ink

Managed Print Services
Emerging markets

Software & Services

$120B / 0%

$50B / 3%

$56B / 11%
$10B / 9%

$45B / 11%

Graphics

4% or 2X the growth in developed markets

Source: HP internal analysis, Sept. 2013
All data: Market revenue in 2016 and market revenue CAGR from ’13 – ’16

17


$40B / 4%

Extending HP leadership
Hardware

Laser MFPs

#1 Laser | Inkjet
Supplies (ink & toner)

#1

Business Ink

#1

#3

Sources: Hardware, Laser MFPs, and Graphics - IDC Hardcopy Tracker CQ2'13; Business Ink and Supplies - HP Internal analysis; Managed Print Services IDC WW Managed Print Services (doc #241884) June 2013

18


#1
Graphics

#1

Driving innovation
Stephen Nigro

Senior Vice President
Inkjet and Printing Solutions

19


HP targeted print growth
Innovation
Growth markets

New business models

New Style of IT

• Multi-Function Printers (MFP)

• Ink Advantage

• ePrint

• Ink-in-the-Office (IITO)

• Instant Ink

• Indigo

• Managed Print Services (MPS)

• Cloud, Mobility & Security
Solutions

Cost savings
Quality
20


Growing LaserJet MFP share
• Growth market
• Expanded portfolio of MFPs;
launched 16 new MFPs
• #1 in MFP share (+1.5 pts. share gain Y/Y)1
• HW unit growth of 34% Y/Y1
• Outgrew the market for last 5
consecutive quarters
• Expect to continue the momentum

1. IDC Worldwide Quarterly HCP Tracker, August 2013; and HP internal data CQ2'13

21


New NFC-enabled HP flow MFPs
• Simple and secured mobile
printing with wireless direct
and Touch-to-Print
• Extending flow capabilities
into department MFPs

Accelerating business ink momentum
• Expecting double-digit growth in
IITO revenue in FY13 and FY14;
represents roughly 1/3 of ink sales

“The HP Officejet Pro X576dw will be not only a viable
replacement, but in many cases a better choice, than
laser models in environments with up to 10 users and
monthly volumes up to 5,000 pages.” - Buyers Lab Inc. 1

• OJ Pro units expected to grow
double-digits in FY13
• OJ Pro X expected to expand
market share in FY13

1. INKJET vs. LASER. A BLI whitepaper, July 2013

22


Accelerating growth in graphics
Indigo business growth — driven by innovation
Growth and market share

Innovation: Indigo packaging

Indigo has an installed base of over
6,000 presses, driving…

Both new packaging platforms being launched are based
on the new Indigo 10000 platform launched this year

19%
64%

CAGR in
page growth
since 2010

Indigo 20000
• May 2014
• Intro into $3B flexible
packaging market

Market share

Indigo 30000
• May 2014
• Intro into $2B folding carton
packaging market

Digital press / CQ2'13

+6% points over CQ2'12

Source: Market share and size based on HP estimates

23


Making ink more affordable with new ink models
HP Ink Advantage

Exceeding our connect rate, usage and after-market share objectives
• Expecting triple-digit year-over-year unit growth for FY13
• Available in more than 130 countries
• HP ink usage connect rate is more than 2.3X that of
comparable products1
• Estimated gross margin improvement
of more than 30 ppts. on hardware

(Combined hardware + supplies = 15 ppts. estimated
gross margin improvement)

1. HP internal analysis, usage connect rate data based on usage improvement 2012-2013

24


Instant Ink expansion addresses customer needs

Customers save up to 50%1 on original HP Ink, enjoy convenience of never running out of
ink2, and lower their carbon footprint for cartridge consumption by ~65%3

•

~93% customer retention rate4

•

Nationwide rollout underway in Best
Buy, Office Max, HP Shopping

•

Improves system model with 100%
supplies aftermarket share

Monthly printing plans:
Occasional
Moderate

Frequent

$2.99

$4.99

$9.99

• Up to 50 rollover pages
• $1 for 15 more pages

• Up to 100 rollover
pages

• Up to 300 rollover
pages

for 50 pages

for 100 pages

for 300 pages

hp.com

25

1. Savings do not apply for Officejet Pro printers used in $2.99 plan. Savings are based on the HP Instant Ink service plan price for 12 months, using all pages in the plan without purchasing additional blocks of pages, compared to the
estimated street price of Original HP standard-size in cartridges and published yield printing ISO/IEC 24711 pages, ISO pages are a mix of text and graphics, color and black, 8.5” x 11” pages that meet ISO testing guidelines. Actual savings
may vary depending on the number of pages printed per month, print resolution, type and size of pages printed, plan, and printer platform. For more information on ISO standards, see hp.com/go/pageyield
2. Based on plan usage, internet connection to an eligible HP printer, valid credit/debit card, email address, and delivery service in your geographic area
3. Source: "Summary of Data and Assumptions for Instant Ink Program Carbon Footprint Analysis" 2013 study performed by Four Elements Consulting. Analysis includes the CO2 equivalent associated with customer trips to purchase ink
cartridges at a retail store versus delivering directly to a customer’s house, and it includes recycling empty ink cartridges versus throwing them away
4. Instant Ink Pilot results as of Sept 1, 2013


Capturing the growing MPS market
Market dynamics

Strategic focus

Advantage HP

• Expect $45B TAM in 2016

• Strategic partner

• 23% MPS TCV growth1

• Expect 11% revenue CAGR '13 - '16

• Automation and intelligence

• Partner-MPS growth = 4x market2

• Printer and copier convergence

• Global scale and flexibility

• Partnering for reach

• Contractual model expanding to
solutions

• Service delivery

• Global expansion

Service Delivery Excellence

Source: HP internal analysis
1. Cumulative growth from 2012-1H’13
2. Results from 1H'13

26


Print solutions for the New Style of IT
Mobility
• 37% of WW workforce mobile by
20151
• 1/3 of wireless printers are receiving
prints from mobile devices2
• Total U.S. mobile pages expected to
grow 12.5% from CY12 – CY163
• 700M print-enabled tablets and
smartphones

Cloud

Security

• 1 trillion pages to be
digitized by 20154
• ePrint shows 69% '11 – '13
CAGR4

• $5.5M average cost per incident
of corporation information
theft5
• Simple and secured mobile
printing for SMB/Enterprise

Access Control
Flow CM

1. IDC, Mobile Printing Landscape: Transition to Early Adopters, August, 2012
2. Pages and printers estimated
3. IDC Multi-client Study: Mobile Devices and Impact on Print – and End-User Analysis and Print Volume Forecast, 2012
4. HP internal research
5. U.S. Cost of a Data Breach report, Ponemon Institute, 2012

27


Imaging and Printing
Security Center

28


Strong momentum to win
• Accelerating in print
• Applying three “waves” in personal systems
• Leveraging commercial strength
• Segmenting maniacally
• Creating market “crossovers”
• Innovating across the business
29


Profitability

Thank you


Hp printing and personal systems presentation

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