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After a year as Hewlett-Packard’s (NYSE:HPQ) Chief Executive Officer, Meg Whitman has decided to refine the company’s current strategy, rather than make a radical shift, in hopes of reversing a four-quarter long sales slump.
According to her plan, the company will focus on corporate clients with a lineup of new products: software and tablets for businesses and an as-of-yet-unnamed machine that will have storage, computing, and networking functions.
Following years of management upheaval, increasing competition, and disappointing acquisitions, her plan must convince investors that it details an evolutionary approach strong enough to withstand threats from EMC (NYSE:EMC), Oracle (NASDAQ:ORCL), and International Business Machines (NYSE:IBM). As of Thursday, shares in the company have fallen 31 percent since the beginning of the year. The company’s growth has been particularly hampered by the industry’s shift away from personal computers, toward mobile devices.
Analysts, including Abhey Lamba of Mizuho Securities, believe Hewlett-Packard needs to restructure the firm. “All in, 80 percent of their business could decline,” said Lamba in an interview.
Whitman’s strategy to refine the company rests of a system that combines server computers, data storage, and networking components in a single machine, which would run Intel (NASDAQ:INTC) chips and software from IBM. A new division has been created to support the effort. Analysts predict the combination storage and networking device could cost between $100,00 and several hundred thousand dollars.
Hewlett-Packard has also been in the process of developing a package of software that allows companies to set up HP servers, storage, and networking equipment with minimal human intervention.
Whitman has said her strategy will be fully explained in a meeting with analysts in San Francisco, on October 3.
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