Hewlett-Packard (HP) has been warned that the replacement for ousted chief executive Carly Fiorina will need to initiate significant cost cutting to fight off rivals such as IBM and Dell.
HP is currently the largest manufacturer of IT hardware in the world, with $13.5bn worth of shipments in Q1 2005, according to Martin Reynolds, vice-president of Gartner Dataquest.
But he warned HP could lose its leadership position. "Dell came a close second during the same period, and is growing faster and showing more profit," Reynolds said. "Faced with intense competition from Dell, and the threat of China's Lenovo Group, HP will have to undertake significant cost-cutting efforts."
However, Greg Carlow, managing director of reseller Repton, disagreed. "There is every opportunity for HP, so it shouldn't just cut costs. Spending should be realigned to establish HP as the natural competitor to IBM. It should also drive focus on product and service delivery," he said.
Mike Gill, director at reseller European Electronique, said: "Over the past year, our HP account has been doing well. HP's reputation in the enterprise and corporate sector remains strong."
But Sean Parsons, managing director of Computer World Wales, said HP has problems other than just pricing. "The main problem is a lack of account managers. Unless we commit to £1m-plus of turnover, we don't get any support from HP," he said.
"Our business is primarily IBM. It has stuck its neck out for us in terms of support. HP's new chief executive will have to cut costs, but it needs the channel to survive."
HP declined to comment.
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