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Hewlett-Packard Co. (HPQ - Analyst Report) recently announced additions to its retail solutions portfolio, which includes six new digital signage displays (DSDs) and a new set of value-priced displays. The company also upgraded its mobile and fixed point of sale (POS) solutions.

Equipped with larger touch and non-touch displays, the new H-P DSDs will enhance customer experience and boost the company’s results in the long term. The new offering will add variety to its existing product portfolio, which in turn will help H-P to attract more customers. The DSDs are budget-friendly, flexible and help to manage and control business applications securely.

The company’s latest offerings include HP LD4245tm, the HP LD4235, HP B321 and a 42-inch diagonal HP B421 that features a high-definition (HD) screen for an enhanced web experience and high-quality visuals.

In today's technology-driven world, smartphones and online shopping hold strong potential for growth. According to a recent survey by Gartner, the PC industry is going through difficult times as annual sales declined 6.9% on a year-over year basis to 85.6 million units in the fourth quarter of 2013. The decline in global PC shipments is largely due to a shift in consumer preference toward tablets and mobile devices in emerging markets.

According to IDC, PC shipments contracted 5.6% on a year-over year basis to 82.2 million units in the fourth quarter of 2013. The decline was narrower than the research firm’s forecast of a 6.0% drop in 2013, aided by growth in the commercial market. Moreover, for full year 2013, PC shipments declined 10.0% on a year-over-year basis, primarily due to the continued shift in consumer preferences toward mobile devices.

Hence, we believe that the deployment of these products will boost H-P’s retail solutions portfolio and act as a tailwind for the company’s near-term financial performance.  .

Apart from this, we remain optimistic about H-P’s strong business model, as well as its leadership position in both PC and Server segments. The company is also expected to benefit from an increase in IT spending and PC refresh cycles.

However, increasing competition from companies like Accenture plc (ACN - Analyst Report), International Business Machines Corporation (IBM - Analyst Report) and Oracle Corp. (ORCL - Analyst Report) coupled with continuing macroeconomic challenges and tepid IT spending will pose challenges, going forward.

Currently, H-P has a Zacks Rank #3 (Hold).

 

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