Hewlett-Packard Company (HPQ): Why It Is a Good Long-Term Investment in Innovation

Hewlett-Packard Company (NYSE:HPQ) is the largest player in the personal computing market with 16.5% market share, while also holding a leading position in the server segment with 32% market share. As PC headwinds continue, the server business will become a larger part of the company.

PC headwinds are continuing. According to Gartner, first quarter worldwide PC unit shipments declined 11% year-over-year. Hewlett-Packard Company (NYSE:HPQ)’s 1Q PC unit shipments are forecast to have been down 24% year-over-year, but the company remained one of the leaders in PC market share, with HP and Lenovo having just under 15% market share each.

The recovery in HP’s end markets will likely continue to be strained, at least over the interim. However, its major growth opportunities include the cloud computing space and the development of new products to help it penetrate the tablet space.

Dell Inc. (NASDAQ:DELL) is another major global IT and PC company. It is making serious efforts to restructure its business as nearly 70% of its business is linked to the PC market. The PC market has been impacted by weak macro-economic concerns and tablet cannibalization. What’s more is that revenue from Dell Inc. (NASDAQ:DELL)’s consumer business declined by 24% year-over-year last quarter, a substantial fall compared to its other segments.