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HP Inc. outlines plans to disrupt African markets

By , Portals editor
Africa , 23 Jun 2017

HP Inc. outlines plans to disrupt African markets

In 2015 HP's separation into two entities, HP Inc. and HP Enterprise, heralded a new chapter in the company's development. HP Inc. has used an 18-month reassessment period to define a marketing strategy for Africa that it believes will entrench its position and disrupt markets ... a strategy based on investment in all-in-one devices, mobility and 3D printing, among other technologies.

According to the HP Inc. Q2 2017 earnings announcement, the company reported net revenue of US$12.4 billion, up 7% from the prior-year period, with the EMEA region contributing 34% of net revenue.

HP Inc. has offices in Angola, Morocco, Nigeria, South Africa and Tunisia, and this presence is used to manage and support its continent-wide operations.

Over the past year-and-a-half, the company has focused on reinventing itself, says David Rozzio, MD of HP South Africa, focusing on where to invest, how to innovate and how to develop the right culture to ensure that it is able to cope within an ever-changing IT market.

Three pillar strategy

HP Inc's strategy is based on three pillars, the first being its core business (PC and print). The company has focused on reigniting the consumer market, growing its office printing business (incorporating the integration of page wide technology), and on leading the commercial PC business and growing its branding in the premium space, that being both consumer and commercial.

The second pillar involves growth and bringing that back into the company. On the printing side, the focus is on disrupting the copier market and to this end the company recently launched a new A3 multifunctional in South Africa. The company intends to accelerate digital printing within the graphics or large format printing space, or printing on any type of support (wood, metal or latex).

The objective to accelerate this business is in response to a higher demand for digital printing within manufacturing, says Rozzio.

HP Inc. also wants to expand its mobility portfolio and in January 2017 introduced the HP Elite X3, a three-in-one device (combination phablet, phone and notebook), to the South African market.

"There is a strong demand from customers in terms of form factor... I think it is still a niche market from a volume perspective, but we think it will become mainstream. We are adding more vendors from the market that will go in the same direction as us," Rozzio adds.

Future investment

The third pillar is based on the company's future prospects, in terms of investment in product lines, form factors or IDs that it wants to bring to market, including 3D printing.

The focus is on how to commoditise its 3D printing service for mass production in a way that will introduce an open platform – not only in terms of software development, but also to drive down costs in manufacturing and print production.

While 3D printing is not yet established in Africa and will take some years before the continent has fully transitioned from traditional to digital printing, the HP executive believes 3D for mass production will happen soon and the company wants to leverage what it believes will be a great platform to develop new business models and entrepreneurship.

"There is accelerated innovation around this and there is a lot of research being done by many companies, and we are part of this as well," Rozzio adds.

Looking ahead the company plans to concentrate its efforts on creating a different user experience.

Rozzio speaks about HP's 3D Computer and Scanner System or Sprout: technology that blurs the physical and digital worlds using PCs, high-res cameras, as well as 2D & 3D scanning capability.

HP Inc. believes Sprout will help the company add value to various business models, including signing contracts, financial services etc.

Doubt over split

Rozzio acknowledges that the company's split may have caused some doubt in the market and at the time, the PC business was probably not at the right level in terms of growth.

However, today the situation is completely different he says. "We've gained back the number one market share worldwide on the PC business ... and that is just demonstrating that the strategy of being focused on what we want to deliver is working today."

Going forward, the intention is to continue to deliver on its core business and relevant focuses, but on a country-by-country basis.

In terms of the company's total addressable markets outside of South Africa (based on IT spend into the country and relevant potential), Nigeria is seen as very strong with Algeria, Morocco and Kenya also considered predominant markets.

The company enjoys a number one position in terms of PC and print market share in Morocco and it sees a lot of growth in terms of startup development and tech hubs in many of the regions it operates in, including oil-dependent markets like Nigeria and Angola.

"East Africa is still growing a lot ... and there is more development and demand from oil-dependent countries like Nigeria and Algeria, they are on the rise to come back out of the crisis. It is still difficult to do business there, but there are opportunities and demand as soon as you have the right partners working with you," said Rozzio. "From a core business perspective... we are everywhere on the core business, so our printing and PC business, we do deliver on the same strategy across Africa."

Although industry regulation and factors like currency exchange represents constraints to trade, the company is adamant that its strong partnerships do help to ensure that it is able to engage the markets it serves successfully.

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