HP is Reinventing the PC

Forget Microsoft Surface and by all means ignore Apple’s Mac. Because it is once-staid HP that is reinventing the PC today. And the hits just keep on coming.

Today’s HP is the result of the corporate split of Hewlett-Packard last year, with the other uninteresting half of the company spinning off into something called Hewlett-Packard Enterprise, or HPE. It would be convenient if this story paralleled that event, if there was some way to explain that HP, the PC maker, “got its mojo back”, or experienced some kind of resurgence because of the failings of its predecessor.

But history is rarely that accommodating, and that’s not what happened. No, HP did’t experience a resurgence, it was never all that good to begin with. Instead, HP simply started over from scratch and transformed itself. It made a few mistakes, sure. But it also kept hitting them out of the park, again and again and again.

It started, perhaps, with that most modest of PCs, the HP Stream 11, which debuted in 2014. At the time, I described this $200 laptop as “the best tech deal of the year”, and HP as “the PC comeback story of 2014.” (See, even I was trying to fit the narrative.) The HP Stream proved that Chromebook wouldn’t own the low end of the market, and the device was copied endlessly by its competitors, the surest sign of success in this market there is.

From this humble beginning, HP then went churned up a torrid release cycle that saw it remake its product families from top to bottom, with stunning new premium, gaming, business, and consumer offerings. The hits are almost too numerous to name, from the stunning Spectre x360 to the EliteBook Folio 1020 (which arrived before Apple’s new MacBook), to the Spectre Notebook, which was the world’s thinnest—and arguably most beautiful—notebook at the time of its launch.

HP’s approach to the PC is fascinating to me, and it stands in sharp contrast to competitors like Apple, Microsoft, Lenovo, Dell and others. For starters, HP is one of the few “pure play” PC makers left standing, by which I mean that PCs are in fact HP’s primary business. Mobile is never going to save HP, so the firm won’t almost completely ignore its PC business for years—cough, Apple—so it can focus on the higher margins and steadier churn provided by smart phones. It needs to figure out a way to make money selling PCs. And if you’re a fan of the PC, as I am, you just gotta love them for that.

So what HP has done is figured out where it can make a difference, where it can make money, and to do so across its product segments. And that explains its push into premium PCs with the Spectre and Elite lines, in particular, and into gaming PCs with Omen. But HP will always churn out the volume products, too–Stream, Pavilion and so on—and even those products are generally of high quality and include thoughtful touches. This company has really turned up the volume on good design and meeting actual customer needs, across the board.

Let’s compare that approach to that of, say, Apple. Which, again, relies on high margins and constant upgrades—products that its customers have to re-buy very frequently, especially phones—to maintain its epic revenues. Apple will never enter markets in which it cannot replicate this success, and that explains why it has never released a TV, and will almost certainly never release a car: Those product lines have low margins and slow turnover, and that’s not the Apple way. In both cases, Apple tried and failed to replicate its model, so it moved on.

Put differently, Apple isn’t really about meeting customer needs. Apple is about cherry-picking those areas where it can make a lot of money on a very regular basis. Period. If this wasn’t the case, Apple would update its Mac products more rapidly. But it is too busy meeting the needs of higher margin products, so even though the Mac is a great business, it’s not as good as Apple’s other businesses. And it gets neglected.

How about Microsoft? I know many of you hold up Surface as a success story, and I was fascinated to see that the software giant has finally found someone gullible enough to parrot that story to the world. But here’s the real story: Microsoft doesn’t know what Surface is, and it never has.

Surface started as a way to convince customers and PC makers that Windows 8 wasn’t a joke and that hardware that could take advantage of its controversial features would somehow make sense. So we got Surface RT—a $900 million write-off due to unneeded inventory—and the original Surface Pro, a portly pig of a tablet PC with a tiny, wide screen and a middling keyboard.

Microsoft, to its credit, kept trying, and it listened to feedback. And after seeing some market success with Surface Pro 3 (and killing off the RT-based products, begrudgingly), the Surface team had an epiphany: Today, Surface is all about inventing new product categories.

In reality, Microsoft has never successfully created a product category, and Surface Pro wasn’t the first 2-in-1. But the design was reasonably successful, despite the limits of Windows on a tablet. And Microsoft clearly indicated to its PC maker partners—who, remember, were still reeling from the news that their biggest partner was suddenly competing with them—that they were free to copy the design of Surface Pro. (And boy, have they. Even HP.)

Laying a claim to product category creation is a smart move: It casts Microsoft in a positive light and, more important, puts them on even footing with Apple, which for the purposes of this discussion created the Ultrabook category with the second-generation MacBook Air in 2010. That’s exactly where they want to be.

But that’s all surface fluff (ahem). The reality is that this product family has been one disaster after another, from the cobra-like hissing of Surface Pro 3 to the unreliable Surface Pro 4 and Surface Book. These are beautiful products, yes. But Microsoft hasn’t yet found its PC maker footing, and it’s not clear if it ever will.

Dell? Please. The XPS 13 is often cited as some kind of super laptop, when in fact the first gen shipped with unreliable wireless radios and the product still provides an unusable up-the-nose webcam. Lenovo? Its ThinkPad products—especially the X1 series—are excellent. But Lenovo has had trouble moving past a few successful models, and its mass market products lack the features that make ThinkPads special.

HP is different. And this year, HP has only turned up the speed, and is releasing products so fast it’s almost hard to keep up. So rather than cover every single PC and PC-related release they’ve orchestrated this year, let’s look at a few that actually meet the needs of users where their competitors fall short.

Many Microsoft fans have been clamoring for a Surface phone for years. Microsoft responded, belatedly, last year, with flagship Lumia 950 and 950 XL that landed with a thud: Even the company’s biggest champions are unimpressed by these products, which compare poorly to previous Nokia smartphones. Today, Microsoft is draining the swap, and selling them off at a loss.

But Microsoft fans are still clamoring for a Surface phone. Well, great: The HP Elite x3 is the Surface phone everyone wants, and it’s already here. It offers the stunning design, the high-end specs, the high quality camera, and the 3-in-1 Continuum-based PC capabilities that truly differentiate it from the rest of the market.

Microsoft fans are also clamoring for a Surface desktop PC, and there are rumors of an All-in-One on the way. But the just-announced HP Elite Slice is the Surface desktop PC that everyone needs, a USB-C-based modular dynamo that can grow and expand with your needs. Forget the Surface AIO: What you really need—want—is this PC. It’s gorgeous.

Speaking of gorgeous, consider that new HP Pavilion Wave, which resembles an Amazon Echo and would look great anywhere in your home. Are you kidding me?

How many home runs does HP need to hit before we simply stand up and acknowledge that we’re seeing greatness? That the slow-moving beige box company of the past no longer exists? That the HP of today is … amazing.

Sure, there will be individual blunders. For example, that stunning new Spectre Notebook can only be powered by HP’s own power supply, a right-minded but incorrect decision that usurps the very point of USB-C. But I’m not talking about individual features, I’m talking about the big picture. And big picture, HP is leading the PC market today in all the ways that should matter to customers. And it has been amazing to watch this transformation occur.

Now I just need to figure out how to get my hands on the Elite Slice. Oh my.