Hewlett Packard announce loses of 8.8 billion. Another old world company misses the bus.

Another sign of the times, HP (Hewlett Packard) have announced very bad numbers. Whilst most were expecting a profit of 2.2 billion usd, it actually was a loss of 8.8 billion. Its shares are in downward mode nearly at 2001 levels.

Like Sony, Sharp, Panasonic and others, HP is again an "old world" brand that is being killed by lack of innovation in the digital space.

Blogged here  http://streamabout.blogspot.ie/2012/04/sony-64billion-loss-and-death-of-brands.html and here http://streamabout.blogspot.ie/2012/11/sony-sharp-panasonic-brands-in-shocking.html

Acquisitions of Palm and Autonomy (which they paid nearly 80% more than the market cap at the time - 11 billion usd, last October) have gone badly. Last night they claimed Autonomy had overstated numbers and inflated values and to whit, they were informing the fraud office. The former co-founder of Autonomy, an Irishman, dismissed the claims and said the acquisition has simply been mismanaged by HP. However, either way HP didn't do their due diligence properly or are trying to divert attention following awful numbers. HP has shut down Palm. Those acquisition write-downs (5 billion) have contributed to these awful results.

But they do not account for the revolving doors of CEO's, constant management turnover and poor product design/marketing. Poor form too of Meg Whitman current CEO (and former head of Ebay) to blame past colleagues for the Autonomy purchase yesterday when it was approved by the overall Board who are still there. Nor the reductions in net revenue - which is where Whitman should be focused, surely. After all, it's the 5th straight quarter of decline.

Revenue in all its business units declined and most notably by -14% in its personal computing - the place where everyone else sees opportunity.

None of that has anything to do with Palm or Autonomy, now does it.

HP are now claiming that they're committed to "new products". A little after the horse has bolted don't you think? One analyst described it all as a "train wreck" on Reuters.com. The headline in the HP story on Wall Street Journal is, "analysts throw in the towel". It has become hard to read company expectations with results like this which are so much at variance from expectations. And the brand is just, well, boring.....and I used to look after their advertising once upon a time.

Whitman said today that they were "one year into a five year journey" but I'd except to see a lot of people stop travelling. Notably investors and you'll now see downgrades and sell/neutral recommendations.

So many times I've blogged and blogged about companies like these.
They just don't get the revolution that's upon them and don't get on board. With about 300,000 employees they've already planned to shed 27,000 whom deserve better which you can read here  http://streamabout.blogspot.ie/2012/08/hp-losing-27000-staff-and-9-billion.html

What a pity for what was once, a great company.

Sony, Sharp, Panasonic. Brands in a shocking downward spiral. Lessons to be learnt here for marketeers.

 

Anybody with a doubt in their head about how brands can suffer, who aren't prepared for the digital age, should look at the demise of Japanese electronics. Once held up in universities worldwide in the 80's, as the model for enterprise are now in deep trouble. They weren't prepared.

The continuing decline of brands like Panasonic, Sharp and Sony, and the incline of Samsung, show how the world has changed. And it's a lesson.

Sharp, a 100 year old company, has now raised concerns that it might no longer be a "going concern". Posting a loss of over 3 billion usd for the last quarter, Sharp it estimated to reach combined losses of 10 billion usd and now has problems raising finance. As well as, share price declines.

Because Sharp is burning through cash, it had approached private equity to shore up its position but rumours abound that it has failed and instead, has turned to the Japanese government for what is, a 'bailout'. 

Sony has just posted its 7th straight quarter loss (this one was 194 million usd) and is cutting 10,000 jobs. Sony was for so many years, the dominant premium brand. Panasonic is also forecasting dramatic losses.

All three are having nightmares on the Japanese stock market and reaching "junk status" quickly.

These brands have been wiped out by companies like Apple and Samsung in the new world order. Whilst they remained part of the old world order, they did not settle into the Internet world quickly enough. 

Sony, inventor of the Walkman, Bravia TV and so much else, took a back seat because they felt that their position was "too big to fail". Most Japanese producers did the same as you can see as indeed have Nokia.

The Internet has become a great brand leveller.

Who'd ever have thought that a South Korean company (not exactly silicon valley is it?) like Samsung, would outsell Apple by a big margin? Never mind leave the Japanese in its wake.

It's extraordinary stuff but extraordinary lessons.

Brands that ignore the online revolution will pay a heavy price.

The decline of these, once world class brands, only illustrate how quickly it can happen through a lack of innovation but also, a pooh-poohing of the online marketplace. 

So many established brands have such a poor online strategy that they'll be doomed to fail. Most even still, have poor websites. 

Has yours?