Can Hewlett-Packard Company (HPQ) Succeed Where Nokia Corporation (ADR) (NOK) is Failing?

The tell is in the company’s press release. Notice the phrase “consumer tablet” in the headline? That’s a tech term meaning, essentially low end.

That segment does not exist in computing. Because Moore’s Law constantly pushes value up and prices down, anything aimed at the “low end” is basically fighting free. Today’s value product is tomorrow’s trade show giveaway.

HP has been around long enough to know this. I remember getting real excited when they launched calculators that ran on solar power back in the 1980s. By the 1990s the children of those calculators were landing in my trade show gimme bag. It’s a cliché, a cliché that originated at HP, and here they are delivering the same song again. Different verse? Not likely

The Foolish Play is To Aim High

It’s in the nature of technology that it drives down the cost curve, and through the marketplace. The profits are at the top end, the volume at the low end, but when you’re buying volume you’re also fighting obsolescence.

After following technology for three decades this lesson is deeply ingrained in me. Every once in a while someone questions the relevance of Moore’s Law, but then I wait a year or two before reminding them that it does, indeed, remain relevant, the basic law of the industry.

Don’t fight the basic law of the industry. When you see someone doing that, you know they’re in a rowboat that is sinking. They are bailing as fast as they can. But you don’t want to be there.

If and when Nokia or HP gains traction on the high end of the market, I would be interested. Not before.

The article Can Hewlett-Packard (NYSE:HPQ) Succeed Where Nokia is Failing? originally appeared on Fool.com and is written by Dana Blankenhorn.

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