HP's PC at a trade show in Beijing. (File photo/CNS)
Hewlett-Packard, which has reported five consecutive quarterly sales declines, is planning to streamline operations and expand distribution in China, the Chinese-language Economic Observer newspaper reported.
HP reported a loss of US$6.9 billion during its fiscal fourth quarter ending Oct. 31, and a 7% drop in revenue from last year, the newspaper said.
While HP CEO Meg Whitman initiated a multi-year program to restructure the company in May, its Chinese operations unveiled its 2013 strategy for the local market on Dec. 13.
On that same day, Yi Xiaohui, who was appointed as president for HP's Printers and Personal Systems China in July, also met with the media for the first time, the newspaper noted.
According to Yi, with HP's printer and personal computer business having been combined since March, the company is aiming to rebuild distributor and consumer confidence in its brand.
Even though China is now the world's largest internet and PC market, HP has been unable to make gains in the country during the past year, the newspaper said.
Market researcher IDC's report for the third quarter of 2012 showed that HP's PC business' market share grew 2 percentage points to 7.3% from the previous quarter, and was ranked fourth in the Chinese market, behind Lenovo, Acer, and Dell.
HP's printer business, on the other hand, performed well in China, taking the top spot in the laser printing segment with a 38.3% market share and the second place in inkjet printers with a 30% share, the newspaper said.
Besides merging the sales teams of its PC and printer business, HP also plans to have its distributors sell both PCs and printers, instead of just one of them. Additionally, Whitman said in May that the company will launch products designed specifically for the Chinese market.
HP also plans to expand into the fourth to sixth-tier markets in China, and increase the number of its licensed service centers from the current 1,100 to 1,500 by the end of 2013.
The newspaper added that HP would also have to rely on its business targeting enterprises to revitalize its China operations, since over 70% of the company's business relied on sales of hardware, which was higher than the global average.
Foo Piau Phang, head of HP Enterprise Group's China operations, said the company plans to create a new business model by highlighting the cloud computing business and expanding the geographic coverage in China.
HP's Enterprise Group has signed a two-year service deal with Shanghai General Motors on Dec. 10 to help boost the auto company's expansion efforts in China, the newspaper noted.