"In a commoditized world you wouldn't do it, because it just adds costs," explains Satjiv Chahil, the company's head of PC marketing. But HP analyzed a number of other consumer-product categories and
found that in each case, a company could make money selling low-price products and premium products, but that no one selling in the middle survived very long.
The new PC strategy has become a major driver of growth for HP. Overall revenue increased 12.7% from a year earlier, and revenue from notebook PCs rose 45%. The strong growth in the PC division is remarkable because after HP's merger with Compaq in 2002, many analysts did not think that doubling down on personal computers was going to pay off.
advertisement
advertisement