We took the opportunity to also ask Mr. Awasthi some tricky questions about vendor relations now that Microsoft has entered the hardware domain, and why product launches happen late in India etc.
How has HP been innovating from a personal systems standpoint?
HP has a huge history of innovation in a variety of products. If you analyse us today, HP is at the forefront of innovation be it desktop innovations, laptop innovations, touch innovations that we got into desktops we were one of the first ones to bring that in. From the printing side most of the innovations in ink and laser are proprietary HP. And recently we have put a lot of effort in coming up with some new technology based on the Intel roadmap. What we have seen it in the computing arena is the move towards multimode or hybrid type of products. What we are seeing is that the customers are more and more looking at operating in two different modes, one is the consumption from that you get from Tablets and the other is full computing.
That’s where the Envy X2 comes in, we’re guessing
The Envy X2 yes… That’s the beginning of products we bring in that area and the category we’ve been working on. But when we look at the commercial type of products also, we have very, very strong innovation say in Workstations. In our Workstations for example have a completely tool less design – you can open our Workstations down to the last component without having any tool and put it back together. Which in the Workstation area, that kind of space is very important because the professionals who operate Workstations need configurability and upgradability. Our Z series product line we have developed in conjunction with BMW Design Works.
In thin-clients we have recently introduced products that are integrated completely into the monitor so you don’t need to have a separate box for using the thin-client. We have come up with a low watt or lower power consumption thin-client. To give you a comparison, usually you need a 250 watt power supply but our thin-client can operate at 15 watt. So given that kind of a parameter especially where power being a major issue in countries like India, these are the kind of products that we are bringing to the market.
Another innovation that we have is pure power on Ethernet. So with a thin-client you don’t need to put a power cable. It just draws power from the Ethernet cable. It operates like your landline phone you don’t have a separate power cord. So these are the types of innovations we are bringing into the country keeping pace with what i have known from our commercial customers. This is just a simple example – if you look at the BPOs in the country where their installment costs are pretty high and the time it takes to deploy is pretty high. When you look at this kind of power on Ethernet type of thin-clients, the infrastructure required is lesser – they don’t have to put power lines, they only need to drop Ethernet cables and roll out products right? So to conclude a lot of innovation also happens to be at the commercial side as you know more than half the market in India is commercial right. So that’s a pretty critical chunk of overall demand. I’d also like to mention that we are coming up with innovative easy to install Printers and MSPs.
In the printing space, HP stands at what market share?
Almost 50% plus in the ink space. We can give you the exact numbers later.
In the coming year, what can we expect from HP in the Ultrabook space? Are there any innovations that HP specifically has that no other competitor offers. We’ve been following Ultrabooks since 2011 and Intel has some strong guidelines as to what qualifies as an Ultrabook. As a principle, standards are good, but is it stifling innovation when it comes to vendors making their own products?
Let’s for a moment keep Ultrabook’s definition as Intel has put it. We both know that the market is far beyond that. And the innovation that goes into making Ultrabooks happen are also leveraged to drive to a larger space of market right? So if you look at what is happening with Ultrabooks – they have 3 or 4 things – one is that Ultrabooks are thinner, the second is that they’re lighter, the third is the battery life is phenomenally high, the boot time is very very fast because an SSD installed.
From our side we have leveraged three innovations – sleek and slim, longer battery life, and lightweight – into what we call our Sleekbook collection. By doing that we could bring the prices of the products far lower and we have seen success because of that. Similarly using these innovations we are doing the hybrid or X2 type of innovation that is very very unique to HP. Let’s talk a little bit about X2. If you look at other people who are doing Hybrid. I am not naming any specific competitors but you can easily find out who I am talking about. There is a flip mode in which you can flip the screen and operate it as a tablet. So no part of the notebook was removed which means when you are operating it as a tablet so you’re also carrying the weight of the non-tablet portion. When we look at something like the X2, its very very easy to remove.
And the other innovation we have done is with the use case in mind, we have put batteries in both the base unit as well as the screen and when you operate without a power connection, the base unit battery is used first. So even after using it for 7-8 hours, when you remove the screen portion and use it as a tablet, it still has another 8 hours of battery life so together you have 17 to 18 hours of battery life which the X2 can provide you. So those are the unique ways in which we are innovating.
Technology is pretty universal these days but how you use the technology to drive innovation is important. We thought about a customer who wants to have a tablet but cannot give up his laptop because of the productivity. How do we make it easy for him? So that he doesn’t have to worry about keeping data in the devices, worrying about the syncing them, or bear the cost of two products. Those are some of the areas that we are looking at.
Is the Envy X2 a mass market device or is it a geeky product something that only enthusiasts or early adopters would go for? A large part of this depends on what the price is…
So any product of this nature starts off with a high price. Even Ultrabooks started off with a high price point right? But as time goes by, they do get affordable. At the beginning of our endeavour in this phase, as you know many of these technologies that are being used whether it is long-life battery technology, whether it is the pure scale that drives the cost down and as the need and demand and the usage of such products grow, the cost will come down to a main mainstream price point.
We’ve seen a couple of other players having cloud storage utility bundled. So X2 is like a tablet as well. So will HP bundle any cloud storage utility with that product?
At this moment we’re not bundling anything per se. But we are looking at our own cloud storage solution not typically for X2 but for our clients across. But as of now the X2 has enough storage. If I look at my laptop I can say that I don’t need cloud storage because there is enough space in the hard drive itself.
The rationale behind cloud storage what most people believe is that even if you switch devices or you’re using another device temporarily, all your data is in the cloud and is easily accessible. So considering that perspective, a cloud solution might be relevant.
Not at the moment.
Since Microsoft is making its own Surface devices, has it affected relations with players like HP? What is your perspective on that?
I haven’t seen surface to be honest, and from whatever I’ve heard, I don’t think it has impacted anything between HP and Microsoft. It’s just one of the devices that’s been introduced. And I think it’s going to be an interesting time for Microsoft to get into the Hardware business.
You don’t see it eating into the PC pie eventually?
I don’t think so i hope it does well for them because it will only help establish the overall category. One product doesn’t on its own succeed. Usually, there are two, three successful stories and it grows a category far bigger. I don’t feel threatened by it all. In fact microsoft will try to put in a huge amount of effort to create awareness for the category which will benefit all the players involved.
Coming back to the Envy X2, who is HP targeting exactly with this product?
See if I look at it two or three years down the line, I believe these products will become mainstream products. But initially there are two types of people who will agree to this. One is anybody who is considering buying a Tablet, you know the upper-end of the consumer notebook spectrum, you will know that those people definitely consider going into this rather than having two devices.
The fact that you are having two devices is a pretty inconvenient thing and not to mention the fact that you have to pay a lot to buy a good quality notebook and a good quality tablet. With that point of view we believe that middle-class consumers and the youth will show a significant amount of interest in this because it is very innovative right? And in the corporate sales we believe the CXO domain will definitely want these kinds of products for three different reasons: one is it’s a Windows based product which is far easier to integrate into the corporate environment. It will be a product that retains the ability to be used as a notebook for work. And plus you have the Tablet portion where they can have the convenience of having a consumption device.
Today there are very few products which can give you a 17-18 hour battery life right? Practically you are not carrying your adapter, you are taking your Envy X2 and moving and doing work all day, then in the night you are enjoying it as a consumption device if you want to read, watch videos, movies or whatever. Typically those are the segments which will actually look at the hybrid innovation but eventually it will be a mass market thing.
As far as connectivity, does it have a 3G SIM as well or it has only Wi-Fi?
It’s a Wi-Fi product right now. But we are coming up with a version for 3G.
We’ve seen a couple of devices that were radically innovative. A while ago, Acer had an Iconia product with a dual screen. The keyboard was also on a screen. And what usually ends up happening with these products is that they become proof of concept, they don’t become commercially viable because though they are radically innovative, they fail miserably in terms of pricing or some other critical aspect like weight or speed. Do you have a comment on this?
I’ll let you judge the Envy X2 from your own perspective. Like today what is the weight of the laptop that you carry. Will it be about 3 pounds?
Yes, approximately.
Well X2 is 1.56 pounds. So that itself is not going to be an issue. And judge it for yourself, when you have a two screen laptop and one screen doubling up as a keyboard versus a detachable 2 in 1 form factor where you can use it as a laptop and use it purely as a tablet as much as you want. I believe there is a different level of usability that comes with the price.Our niche is that some innovations are very youth savvy, and some other innovations have genuine customer usage scenarios. So I’ll leave it to you to judge it and tell me how you feel about the X2.
Which is part of the reason why we wanted to get the device a couple of days before the launch. So that we can play with the device and have our review as soon as the launch news comes.
About the products well, we don’t have them as yet in India so don’t worry it’s on our radar but I don’t want to promise you that we can get it before the event. It’ll take just a few days, and I think I already told you that we’ll try in a week’s time of the launch to try and have this. But the review might have to wait a little bit.
Okay, so Vinay as an offshoot of that I have another question. Many manufacturers have started coinciding their launch dates. Worldwide launches have started to catch on. So, why this delay (of about a month) between U.S. and India launches still?
When you look at it, one month here and there is not a big deal.
As the traditional digital divide or information gap reduces, people here know about the products that are being launched abroad. They are going to want to get their hands on them and these thought leaders are the first to purchase these products but they never get to. And a lot of brands have started launching simultaneously. So, why is HP lagging here?
Many countries in the Asian region even the big ones are behind India now. So India is now one of the top few countries in the world in terms of the product launches. Sequencing of launches happens for a variety of reasons because the versions required to adapt it to specific countries whether it is the power cord, whether it is software, whether it is language. They do require work.
If it’s a known problem can’t the Research and Development processes factor in all these contingencies? Within a few years, we don’t think there will be a regional launch. Don’t you agree?
Could be. But personally I don’t see it as a major issue because within practically weeks of launching, our products are available almost everywhere.
Does HP have some kind of policy of not participating in comparison tests. If so, why is that?
I will have to find out more about this. I am not completely up to speed on this issue. Let me take that as a follow up item?
Thanks for speaking to us Vinay. We’ll be looking forward to speaking with you later.
Vinay Awasthi Sr. Director – Product Category, Printing and Personal Systems Group, HP India