Monday, August 20, 2012, 09:26 am PT (12:26 pm ET)
iPad demand expected to contribute to HP's largest-ever quarterly lossFacing declining PC sales in the wake of Apple's iPad, Hewlett-Packard this week is expected to report a record quarterly loss of nearly $9 billion.
HP will deliver its results after the market closes on Wednesday, but expectations are already low, as the company warned investors earlier this month that it will write down the cost of its $13 billion acquisition of Electronic Data Systems in 2008. Investors expect that HP lost between $4.39 and $4.49 per share during the three-month span that ended in July, according to the Associated Press, which would be a loss of between $8.5 billion and $8.9 billion, the company's worst quarterly performance in its history.
HP has seen its PC sales drop sharply in the face of Apple's iPad. In the second quarter of 2012, HP was the top PC vendor in the U.S., but its unit sales were down 12.7 percent, according to data from Gartner.
With the iPad included in PC sales, Apple is the No. 1 worldwide PC vendor, having accounted for 19.4 percent of all shipments, according to the latest data from Canalys. The iPad helped Apple achieve year-over-year sales growth of 59.6 percent, while HP's PC sales fell 11.3 percent worldwide, putting the company in second place with 12.5 percent of all PC shipments.
Things aren't expected to get much better for HP in the current quarter, which concludes in October. PC makers like HP are waiting on Microsoft to launch Windows 8, its next-generation operating system. Windows 8 will debut on October 26, nearly at the end of HP's current fiscal quarter.
HP made an initial push into the tablet market when it bought Palm and used the webOS mobile operating system for its TouchPad touchscreen tablet last year. But the TouchPad quickly faltered and HP abandoned the hardware with a $99 fire sale soon after the device debuted.
Some industry watchers expect that PC sales will continue on a downward trend through the rest of the year. Contributing to those losses is believed to be Apple's iPad, which is projected by one analyst to sell 69 million units this year alone.
As for HP's tablet plans going forward, one report in July claimed that the company had scrapped plans to build tablets based on Microsoft's Windows RT platform built for ARM-based touchscreen tablet devices. It was suggested that HP decided not to compete with Microsoft's own Surface, and could instead develop its own tablets based on Google's Android mobile operating system.
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