HP Inc.

HP Inc. is an American company that arose on November 1, 2015 as a result of the separation of HP. He is engaged in the development and sale of personal computers and printers.

Performance indicators

Main Article: HP Inc Financials

2023: Record 14.6% drop in revenue to $53.72 billion

At the end of fiscal year 2023, which was closed on October 31, 2023, HP received revenue of $53.72 billion. This is 14.6% less than the result for the previous fiscal year, when the figure was $62.91 billion. Such figures are reflected in a report published on November 21, 2023.

There are several reasons for the record decline in annual revenue. This is, in particular, a decrease in demand for personal computers after peak sales COVID-19 during the pandemic, when consumers around the world actively purchased equipment for working from home. In addition, a difficult macroeconomic situation, a crisis USA in and a high level have a negative impact on the HP business. inflations

We continue to see weak demand in China - both in the consumer and commercial segment. At the moment [as of November 2023], we do not expect the situation to change dramatically in the near future, "says Enrique Lores, President and CEO of the company.

In the division of personal systems, annual revenue was recorded at $35.68 billion: this is 19% less than the result for fiscal 2022, when HP received $44.01 billion. Of the total amount in this group, commercial products accounted for $24.71 billion, consumer solutions - $10.97 billion. The printing business in 2023 brought in $18.03 billion against $18.9 billion a year earlier: in this area, sales decreased by about 5%.

HP's net profit in fiscal 2023 was $3.26 billion against $3.13 billion a year earlier, which corresponds to a 4% increase. Profit in terms of one security was fixed at $3.26, while a year earlier it was $2.98. In fiscal 2023, long-term debt worth $1.6 billion was repaid.^[1]

Business in Russia

Main article: NR Inc. Russia

Acquisitions and divestment

Main item: Acquisitions and divestment of HP Inc assets

HP defective and hazardous products

Main article: Defective and hazardous HP products

History

2022

Dismissal of 6,000 employees

On November 22, 2022, HP Inc. announced its intention to reduce staff by about 10% over the next three years. The reason is the deterioration of financial indicators against the background of a sharply reduced demand for personal computers.

According to HP CEO Enrique Lores, the layoffs will affect about 6,000 employees (by November 2022, the company employs about 61 thousand people). In addition, the area of ​ ​ office space and other facilities will be reduced. Restructuring costs are estimated at $1 billion, of which 60% will fall on the 2023 fiscal year, which began in November 2022. It is expected that by the end of fiscal 2025, the reorganization and reduction of the labor force will provide savings of up to $1.4 billion per year.

It is noted that the current geopolitical situation and a high level of inflation provoked a steady decline in sales of HP computers, which bring the bulk of the company's revenue. Moreover, the decline in demand is recorded both in the consumer segment and in the corporate sector. HP's revenue for the last quarter of fiscal 2022 (it was closed on October 31, 2022) amounted to $14.8 billion, a fall in annual terms - 11.2%. At the same time, the company suffered about $2.0 billion in net losses against a profit of $3.1 billion in the fourth quarter of fiscal 2021.

In this situation, HP is forced to look for additional income items. The company, in particular, intends to invest in new lines of business, such as subscription services. According to Mr. Lores, according to this model, it is planned to distribute consumables for printers, as well as provide access to PCs.

The wave of layoffs has already affected other IT companies. Meta Platforms (recognized as an extremist organization; activities on the territory of Russia are prohibited) and Amazon began to cut about 10,000 jobs each, and the Twitter service cut more than half of its staff of 7,500 employees. Drive maker Seagate Technology Holdings has announced its intention to lay off about 3,000 workers.^[2]

An ex-HP employee received 3 years in prison for stealing $5 million from the company. She spent the money on a luxurious life

A former HP employee was sentenced to three years in prison for deceiving her employer and stealing almost $5 million from him. The 30-year-old woman's sentence became known in August 2022 from a statement by the US Department of Justice. Read more here.

2020

Payment of $6 million for deceiving investors in order to achieve financial results

At the end of September 2020, HP Inc. agreed to pay $6 million after the US Securities and Exchange Commission (SEC) accused the company of deceiving investors. During the year, HP Inc. misled them to achieve strong quarterly sales and profit numbers.

The Securities and Exchange Commission determined that HP Inc. violated federal securities law provisions relating to fraud control, reporting and disclosure. From early 2015 to mid-2016, HP's regional managers paid bribes to officials to speed up sales or to attribute the current quarter to sales that were expected to be realized in the future.

In an effort to meet revenue and profit targets, HP managers sold printing supplies at significant discounts to resellers known to sell HP products outside of designated territories, in violation of the policies of HP and its distributors, the U.S. Securities and Exchange Commission said.

Melissa Hodgman, deputy director of enforcement at the Securities and Exchange Commission, noted that investors have the right to receive accurate information about changes in business strategy that could have a significant impact on the company's future income or operating profit, and HP managers' actions have hidden the true picture of the company's financial situation. According to the Commission, HP partially changed its market entry model to hide similar sales methods, causing the company's net revenue to decline by about $450 million in the third and fourth quarters of 2016.

An HP spokesman noted that the company is pleased to close this unpleasant issue.^[3]

The beginning of printing on 3D printers of medical devices to combat coronavirus

At the end of March 2020, HP Inc. and its partners began using 3D printers to print medical devices needed to combat COVID-19. In addition, the companies plan to publicly release 3D drawings for "many parts that do not require complex assembly." Read more here.

Refusal to offer Xerox to sell for $35 billion

On March 5, 2020, HP Inc. officially rejected Xerox's offer to buy a printer and computer manufacturer for $35 billion. HP Inc. believes that this amount is too small for a company of this size.

The company's board of directors, in consultation with independent financial and legal experts, concluded that a non-binding offer to acquire all outstanding HP common stock for cash, Xerox common stock or a combination thereof is not in the interests of HP shareholders, HP said in a press release.

According to MarketWatch, citing an HP statement, the synergy estimates voiced by Xerox exceed reasonably achievable levels. In addition, the American manufacturer of printing equipment and document management systems is falling sales, and the exit from a joint venture with Fujifilm "raises serious concerns about its future position," HP noted.

Our message to HP Inc. shareholders is very clear: Xerox's proposal undervalues HP Inc., and it is incommensurably more beneficial to Xerox shareholders than to HP Inc shareholders, the chairman of HP Inc said. Chip Bergh.

According to him, the combined company will have a huge debt burden, which will require "unrealistic and impossible savings measures that will jeopardize the entire company."

It is possible that HP's decision was influenced by the pressure of partners who do not want to merge with Xerox. Among them is Canon, which threatened to sever partnerships with HP in the event of a deal with Xerox. This was stated in an interview with Nikkei in early March 2020 by the chairman of the board and CEO of Canon Fujio Mitarai^[4]

$16 billion share buyback to keep Xerox from selling

On February 24, 2020, HP announced the start of a share buyback of at least $15 billion. Approximately $8 billion is planned to be spent within 12 months, and another $7 billion by 2022. Also by this time, the manufacturer of printers and computers intends to cut costs by $1.2 billion.

The share buyback program was launched in response to a "hostile" merger proposal from Xerox. HP Inc. considers the proposed amount not high enough.

We want to find common ground with them. It's not about who buys whom, it's about profiting, "HP CEO Enrique Lores said in an interview with the Financial Times.

According to him, HP management still considers the terms proposed by Xerox unacceptable, as they "significantly underestimate HP, pose significant risks and jeopardize the future of the company."

One of the main problems is with the large debts that the combined company based on Xerox and HP will have. This situation will complicate for HP the process of returning capital to shareholders, which was started even before Xerox's proposal to merge.

HP will spend all of its free cash flow on share buybacks unless there are other opportunities with higher yield potential. The remainder of the buyout will be covered by debt, which will increase the company's debt-to-profit ratio EBITDA to double. The new debt makes HP less attractive to buy.

In total, HP is going to spend $16 billion over three years to return capital to shareholders (mainly through share buybacks), which corresponds to half of the vendor's market capitalization by February 25, 2020.

After this statement, HP quotes rose 5%, and Xerox securities rose 3%.^[5]

Xerox hosts HP shareholder dinner

On February 17, 2020, it became known that Xerox sent invitations to HP shareholders for dinner at a restaurant as a last-ditch attempt to enlist support for a merger deal. Read more here.

Xerox offered $35 billion for the purchase of HP

On February 10, 2020, Xerox Holdings raised its offer to buy HP Inc. from $22 to $24 per share of the computer and printer manufacturer. Thus, Xerox is ready to spend $35 billion on the deal instead of the previous $33.5 billion, taking into account HP's debts.

Xerox intends to pay for the acquisition with cash ($18.4 for each HP share) and its own shares (0.149 for each HP share). The previous proposal involved payment in cash and shares at a ratio of $18 and 0.137 per HP share, respectively.

According to Xerox, the new price is 40% higher than the average HP quotation rate for 30 days ($17). The company claims that HP shareholders support the merger, and the current value of the proposed transaction will push them to accept the offer, despite HP's "consistent refusal to use this opportunity."

Xerox has met many of HP's biggest shareholders and in some cases has done so many times. Shareholders have consistently said they want higher returns, better growth prospects and better-in-class human capital. This result can be achieved through the merger of Xerox and HP, Xerox said in a statement.

The company called combining with Xerox the best option for HP, which shortly before announced the reduction of several thousand jobs amid falling demand for consumables for printing equipment.

The value created by the synergy from the merger between Xerox and HP will be higher than any value HP can gain by revising its strategic plan or dramatically changing capital allocation policies by using additional share buybacks, Xerox added.

After a new offer from Xerox, HP shares rose 4.5% to $22.7.^[6]

2019

Xerox agreed with banks to provide $24 billion to buy HP

In early January 2020, Xerox announced that the company had agreed with three banks to provide $24 billion to take over HP. However, the manufacturer of computers and printing equipment still does not want to make a deal. Read more here.

Quanta Storage will pay HP $439 million for collusion in the sale of disk drives

In early January 2020, HP Inc. sued $439 million from Taiwanese drive supplier Quanta Storage for conspiring with Samsung, Sony and Panasonic to inflate prices. The US court ruled to make up for the losses that HP suffered as a result of these frauds in triple amounts. Read more here.

Xerox threatens to buy HP by force

On November 21, 2019, Xerox issued an ultimatum to HP Inc. as part of a proposed takeover deal for the PC and printer manufacturer. Xerox is threatening to turn its proposal into "hostile" unless HP agrees to a "friendly merger."

A hostile or unfriendly takeover (hostile bid) comes down to the fact that the company offering the purchase makes an offer directly to shareholders, while the management of the company being absorbed does not recommend that shareholders sell securities. An often unfriendly takeover, if successful, results in a board reshuffle of the absorbed company.

If by November 25, 5:00 PM ET, you and we do not agree on a mutually confirmed due diligence procedure to conduct a friendly merger, Xerox will resort to a promising scenario in which our shareholders will be in a better position than yours, Xerox CEO John Vicentin said in a letter to HP Chairman Chip Bergh and CEO of HP Inc. Enrique Lores.

The report also said Xerox's board is "determined to make the proposed acquisition of HP in a short time" because it sees "no reason to delay further."

Financial Times sources familiar with the talks between Xerox and HP say the two companies would be keen to find a way to merge as they are confident in the ability to complement each other.

John Vicentin, in a letter to HP, expressed surprise why the company refuses to sell for $22 per share, while its financial adviser, Goldman Sachs, has set the target rate at $14 and recommends that investors sell securities.^[7]

Refusal to sell Xerox for $33.5 billion

On November 17, 2019, HP Inc. officially announced its refusal to enter into a merger deal with Xerox on the latter's proposed terms. HP CEO Enrique Lores and Chairman of the Board of Directors Chip Bergh sent a letter to Xerox CEO John Visentin.

Xerox intended to absorb HP for $33.5 billion. HP considered this proposal "greatly underestimating" the company and "not in the interests of its shareholders."

In addition, HP management was concerned about the high level of Xerox debt, which would not have the best effect on the value of the shares of the combined company. Alertness was also raised about the decline in Xerox's profitability.

In making this decision, the board of directors also took into account the highly conditional and uncertain nature of the proposal, including the potential impact of excessive debt on the shares of the combined company, the letter said.

At the same time, according to Berg and Laures, HP is ready to continue to explore the possible benefits of the merger.

However, as we have already reported in connection with our previous inquiries regarding the due diligence procedure, we have fundamental issues to address as part of our study of Xerox, they wrote.

Xerox offered to pay $22 per HP share, which includes $17 cash plus 0.137 own shares. This is 20% more than HP quotes before the first rumors of a merger emerged. Up to that point, Xerox's market capitalization was three times smaller than HP's, complicating the deal.

Companies have intractable disagreements over who should buy and sell assets, which management team should run the combined company, and which business would be the main one, Bloomberg reported.^[8]

Rising prices for all printers in which third-party consumables can be installed

In October 2019, HP Inc. announced a change in strategy in the printing equipment market. The company began eliminating discounts on printers that can use third-party consumables.

Thus, customers will be able to continue to purchase HP equipment with support for non-original consumables, but it will be more expensive. At the same time, the American manufacturer has maintained the low cost of devices in which only branded cartridges, ink and toners can be installed.

As HP explained, the new printer sales model is similar to the one common in the smartphone market in some countries: phones are sold at a low price with reference to the services of a mobile operator, which must be paid for for several months or years. If the user does not want such a link, then he needs to pay the full cost for the gadget.

In this model, we are changing the balance of the profitability system, monetizing innovations by raising equipment prices, "said Tuan Tran, head of the HP printing business.

According to him, the company understands that the transition to a new sales scheme "will take some time" and may affect the market share and growth in equipment sales. But this will help "maximize long-term progress," he added.

The updated strategy is introduced only for sales transactions, that is, it does not affect the contractual print management services provided by partners in the channel.

Bernstein Research analyst Toni Sacconaghi says that by introducing a new printing equipment sales scheme, HP recognizes the difficulties in the printer business and tries to cope with them by taking decisive measures. However, changing the business model does not guarantee success and is fraught with risk, including the risk that "competitors will not follow, leaving HP a player with relatively high prices," the expert said.^[9]

Intention to cut 16% of employees

On October 4, 2019, it became known that the American manufacturer of personal computers HP Inc. intends to reduce up to 16% of employees as part of a restructuring plan, the purpose of which is to optimize costs.

In total, HP Inc. will reduce from 7 thousand to 9 thousand employees. This will include both direct layoffs and cases of voluntary early retirement. The reduction will begin in October 2019 and end in October 2022. According to management, as of October 4, 2019, the company has about 55 thousand employees.

According to HP Inc., the entire cost optimization plan will allow it to start saving about $1 billion a year by the end of fiscal 2022. Restructuring-related spending will also amount to approximately $1 billion. Of these, the statements for the fourth quarter of financial 2019 will reflect $100 million, and for financial 2020 - $500 million. At the end of 2018, the company's revenue amounted to 58.47 billion, and net profit - 5.32 billion, both indicators grew.

As a result of the restructuring, HP Inc. intends to start investing more in such growing segments as the production of A3 format printers and premium PCs, as well as contract services and 3D printing. In addition, the company intends to focus on opportunities in the field of software, data and innovation. Restructuring should bring the money needed to invest in these areas.

All this was announced at a press conference by Enrique Lores, who heads the company's print business for October 2019, but will take over as CEO of HP Inc. from November 1 instead of the current head of the company, Dion Weisler. The company explains the departure of the former CEO by the state of health of his family members.

During the restructuring, the HP Inc operating model will be simplified. Basically, internal operations will be simplified, that is, those employees who work with partners or consumers should not worry about their jobs until^[10].

Helena Herrero - New EMEA Representative Office President

On September 6, 2019, it became known about the departure of Nick Lazaridis from the post of president of the HP representative office in the EMEA region (Europe, Middle East, Africa). Helena Herrero took his place . The change of head took place as part of an international restructuring carried out by the company. Read more here.

Enrique Lores is the new CEO of HP Inc.

On August 22, 2019, HP Inc. announced the resignation of Dion Weisler as president and CEO of the company. He explained his dismissal by the desire to engage in "family health." Enrique Lores has been appointed the new head of HP Inc. Read more here.

Opening of the industrial 3D printing center in Barcelona

HP Inc. on June 14, 2019 announced the opening of its center for industrial 3D printing and digital production in Barcelona. As part of a state-of-the-art venture spanning more than 13,900 square meters, the Centre will bring together hundreds of global additive manufacturing experts to transform modern approaches to product development and production.

The facility is located on the HP campus in Barcelona. It was created to expand HP's portfolio of industrial 3D printing solutions. The center is a large-scale factory space where the company will be able to work with customers and partners on digital manufacturing technologies that transform various industries.

HP expects the center to bring together hundreds of specialists in areas such as 3D printing and digital manufacturing, as well as in systems design, data mining, software development, materials science, design and application creation.

Designed specifically for active interaction between engineers, R&D teams, customers and HP partners, the center has a flexible interactive layout with locations for joint development. According to HP, the center is equipped with the latest equipment, including HP production systems for 3D printing made of plastic and metal, which allows you to increase the speed and flexibility of product development and complex solutions for customers. Within the center, global companies such as BASF, GKN Metallurgy, Siemens, Volkswagen, as well as other enterprises from the automotive industry, various industries, the medical sector and the production of consumer goods, will be able to work with HP to develop innovations in 3D printing and digital production.

In addition, HP also demonstrated its commitment to environmental protection ideas when creating a research center:

• solar cells are installed on the roof of the building, which generate 110kW of energy;
• rainwater is used for watering and cleaning the area;
• the heating, ventilation and air conditioning system installed in the center uses optimized algorithms;
• the building is built of environmentally friendly materials, while its design implies the most efficient use of natural light.

These processes help to minimize the negative impact on the environment, as well as comply with LEED (Leadership in Energy and Environmental Design) certification. HP's corporate-wide goal is to shift all of its global operations to renewable energy over time, and the interim goal is to bring that level to 60% by 2025.

The newly created center in Barcelona as a whole expands HP's global 3D printing and digital manufacturing capabilities and complements the existing innovation centers in Corvallis, Oregon; Palo Alto, California; San Diego, California; Vancouver, Wash.; Barcelona, Spain; and in Singapore, where HP recently launched a groundbreaking collaboration with Nanyang University of Technology (NTU) and the Singapore National Research Foundation (NRF) in 3D printing, artificial intelligence, machine learning, materials and applications, and cybersecurity innovation.

Court found it legal to sell HP technology cartridges without manufacturer's permission

At the end of April 2019, a five-year trial between HP and a Dutch manufacturer of printer consumables ended 123inkt.nl.

HP accused the opponent of using without permission its patented technologies in memory chips installed in cartridges. In turn, the 123inkt.nl claims that the patents that HP is talking about are invalid and are designed to form a monopoly situation in the market for consumables for printing equipment.

HP filed a lawsuit against 123inkt.nl in 2014. In 2015 and 2017, the Hague Court and the Court of Appeal in The Hague respectively sided 123inkt.nl. In April 2019, the final verdict was issued by the Supreme Court - Holland the arguments of the 123inkt.nl turned out to be more convincing.

According to the court decision, HP will have to reimburse the legal costs of the 123inkt.nl in the amount of about 67 thousand euros.

I am pleased with the decision of the Supreme Court, which clearly shows what we are doing, is allowed, "said 123inkt.nl CEO Gerben Kreuning.

Thus, the 123inkt.nl can continue to offer cartridges using HP technologies. In addition, the Dutch company's range includes devices compatible with Brother, Canon and Epson printers.

In a conversation with CRN, the head of HP's printer division in the EMEA region, David Ryan, said that some third-party cartridges could cost less than official HP products, but in the end they could be more costly and harm the environment.

Many printer manufacturers prefer to develop the following business model: they offer the equipment itself at low prices, but then they sell expensive consumables. Customers who want to save money can choose consumables from third-party developers, but HP and other vendors try to interfere with this by introducing technologies that are difficult to fake into their cartridges or protecting them with patents.^[11]

HP caught longtime partners selling counterfeit printer consumables

In early April 2019, HP Inc. published a list of fraudulent firms as part of a campaign to combat the sale of counterfeit consumables.

The Do Not Trade list includes four longtime partners that HP says are engaged in counterfeit and/or illegal trade. Two of them are in Germany - Imcopex and Winterholt & Hering, one in Burkina Faso, and one company, Beta Distribution, is registered in the UK. The document says HP partners are "not allowed to directly or indirectly sell HP consumables to any of the blacklisted companies."

Violation of the ban can lead to serious consequences, including the return of bonuses, lump sum payments and even exclusion from the partner program. HP management reminds that the purpose of the Do Not Trade list is to help partners find a legitimate source of HP original consumables from trusted traders, and not limit their freedom. In the long term, cheap simulations may be less economical than more expensive HP originals due to poor quality and potential hardware damage. In addition, devices from other manufacturers do not pass tests for compliance with environmental standards.

HP set the task of stopping fraudulent trading operations after a drop in sales of consumables for printing equipment: for example, in the first fiscal quarter, revenue from the sale of such products fell by 3% in the world and by 9% in the region of Europe, the Middle East and Africa.

The American manufacturer seeks to protect consumers and partners from counterfeiting and other forms of illegal trade and takes various steps to identify such activities. It is known that the company works closely with local authorities, provides customers with the possibility of free inspections, and also conducts regular inspections of partners and safety tags on HP consumables.^[12]

2018

Launch of the 3D Printing Center in China

In June 2018, in Foshan, a major manufacturing city in China's Guangdong province, the company HP Inc. opened a center 3D printing based on HP Multi Jet Fusion's proprietary multi-jet melting technology. The center, created in collaboration with Guangdong Lanwan Intelligence Technology, is equipped with ten Multi Jet Fusion 3D printing systems and has begun to be used for large-scale projects in the automotive industry, industrial goods and other industries.

The opening ceremony of the new center was attended by senior representatives of national and local authorities, business and academia. HP Inc. has also signed a deal with Intelligence Guangdong Lanwan and two Chinese technological universities for wider adoption of 3D printing in the southern regions of China.

HP Inc. calls itself the largest supplier of 3D printing technology in the Asia-Pacific region and in Japan. China, in turn, is paying more and more attention to new technologies - large centers are opening, 3D printing is beginning to be used in a variety of fields. So HP Inc. did not choose Foshan as a platform for mastering new opportunities.

The new manufacturing center is noted to have been opened to meet the growing demand for manufacturing goods and functional prototypes. The launch of the HP Multi Jet Fusion multi-jet smelting technology in 2016 was a turning point in the 3D printing industry, making 3D printing used not only for prototyping, but also for the production of final products. HP Inc. hopes that the launched center will allow for economical and efficient production that will meet growing demand and become the basis for the technological development of the Chinese province.^[13]

Dismissal of up to 5,000 employees

On June 5, 2018, HP Inc. announced a reduction in the number of personnel by 4.5-5 thousand people until the end of October 2019. The company is laying off employees as part of a restructuring aimed at optimizing costs.

According to Bloomberg, citing a document sent by HP Inc. The US Securities and Exchange Commission (SEC), the cost of the reduction program will amount to $700 million (approximately 50% of this amount will be paid to employees who have fallen under the reduction), while the company previously planned costs at the level of $500 million.

During a conference on the publication of financial statements on May 29, 2018, HP Inc. management announced an increase in the number of employees who were fired. The top managers did not name any specific numbers. By October 31, 2017, HP Inc. employed about 49 thousand people.

According to HP Inc. plans, starting from fiscal 2020, the restructuring will allow the company to additionally save $75 million, and the total amount of saved funds in the future will be measured at $200-300 million.

The news agency notes that under the leadership of Diona Wysler HP Inc. has achieved steady growth amid falling demand for personal computers. The company has increased its share in the segment of the most desirable expensive PCs, including gaming systems, which are the most profitable. The printing business also began to generate profits for HP Inc. through sales of low-cost printing equipment to corporate customers after joining the printing division. Samsung For the 12-month period, the end of which fell at the beginning of June 2018, the quotes of the American company jumped by 25%.

HP Inc.'s financial performance is improving not without the restructuring assistance the company has started due to declining PC sales. According to Gartner for January-March 2018, the volume of the global computer market has been declining for 14 quarters in a row.^[14]

Third Party Cartridge Lock Penalty

In May 2018, HP Inc. agreed to compensate customers who bought printing equipment that blocked the use of third-party cartridges. The corresponding agreement was concluded between the Australian regulator and the "daughter" of the American company - HP PPS Australia.

According to a statement by the Australian Competition and Consumer Commission (ACCC), the court imposed an obligation on the manufacturer to reimburse users for part of the cost of buying the following printer and MFP models:

• HP OfficeJet Pro 6230;
• HP OfficeJet 6820;
• HP OfficeJet Pro 6830;
• HP OfficeJet Pro 8610;
• HP OfficeJet Pro 8620;
• HP OfficeJet Pro 8630;
• HP OfficeJet Pro X551dw;
• HP OfficeJet Pro X476dw MFP;
• HP OfficeJet Pro X576dw MFP;
• HP OfficeJet Pro X451dw.

HP PPS did not tell Australian consumers that certain printers were sold with Dynamic Security Feature (DSF) and that DSF prevented printing with non-HP cartridges. At the same time, HP PPS knew that some customers used or wanted to use cartridges other than HP products, the statement to regulators said.

In Australia, about 220 thousand DSF printing devices were sold. Some of the equipment received this technology by updating the firmware.

The manufacturer will pay $50 to buyers of printers. According to the ACCC, more than 2 thousand people can receive compensation.

HP Inc. created a separate page on its website dedicated to the compensation program, and also promised to release a software update that blocks the DSF. However, the feature will remain in some products under an agreement with the ACCC as it, in addition to negatives, protects HP Inc.'s intellectual property and reduces counterfeit consumables and warranty service fraud cases.^[15]

2017

Nearly 500 HP laptop models have keylogger

In December 2017, a keyboard spy was found in many HP Inc. laptops that attackers can use. The manufacturer hastened to eliminate the defect.

Independent information security specialist Michael Myng released a technical report in which he pointed out the existence of a keylogger in the SynTP.sys file, which is part of the Synaptics touchpad driver. The expert came across a vulnerability during experiments with keyboard backlight control in HP laptops. 

By default, the functionality that records keystrokes is disabled, but to activate, you only need to make minor changes to the registry. We are adding the following keys:

• HKLM\Software\Synaptics\%ProductName%
• HKLM\Software\Synaptics\%ProductName%\Default

This can be done by attackers, after which they will be able to monitor user clicks on keyboard buttons and steal personal data, the BBC reports.

According to Michael Ming, such a vulnerability affects more than 460 models of HP laptops, including devices of the EliteBook, ProBook, Pavilion and Envy series.

HP Inc. reported that the code with keyboard spy functions appeared by accident. It was originally embedded in Synaptics software to debug errors. The company admitted that due to the program, users may "lose their privacy," but assured that neither Synaptics nor HP Inc. received access to customer data through this defect in laptops.

The manufacturer has released software updates for its PCs that fix the problem with text typing surveillance. By December 11, 2017, not all models affected by this vulnerability received patches, but HP Inc. promised to remove potentially malicious functionality in all devices as soon as possible.^[16]

Alliance with Deloitte

HP Inc. and Deloitte on August 31, 2017 announced the creation of an alliance designed to accelerate the transition of industrial companies worldwide to digital technologies. Specifically, HP and Deloitte will collaborate on the implementation of 3D printing systems to help enterprises accelerate product development and launch, create more flexible supply chains, and optimize efficiency throughout the production cycle.

The alliance brings together HP JetFusion 3D Printing solutions and tools, a partner ecosystem and digital manufacturing transformation methods. Deloitte's global customer reach and strong business relationships, digital operations experience will help the alliance transform the work of global companies, according to HP.

HP's comprehensive technology ecosystem includes engineering, software, enterprise, and manufacturing solutions for workflows such as SAP, Siemens, Autodesk, and Materialize, as well as open 3D materials platforms including Arkema, BASF, Evonik, Henkel, Lehman & Voss, and Sinopec Yanshan Petrochemical Co.

Deloitte assists in applying digital business strategy to production initiatives. Thus, the company has created an ecosystem of partners that unites Amazon Web Services (AWS), Cloudera, Dassault Systèmes, Google Cloud, SAP and Siemens, and this allows you to accelerate the transition of customers to digital technologies. As part of its alliance with HP, Deloitte will help organizations incorporate 3D printing technologies into manufacturing and supply processes, enabling customers to fundamentally modernize the entire product launch process.

The HP-Deloitte alliance will begin its work in the United States and eventually cover other regions. The companies will offer Deloitte business transformation methods and advanced solutions from HP such as print outsourcing (MPS), DaaS, mobility and cybersecurity solutions.

Production of waste cartridges

In June 2017, HP Inc. announced the start of production of cartridges for printing equipment from waste. This project has become part of the company's broad strategy to reduce the negative impact on the environment.

HP Inc. has launched a program on the island of Haiti to collect plastic bottles that are recycled to make useful things. The company uses this waste to make cartridges for some printer models.

In this project, HP Inc. is partnering with Thread, which has long been recycling bottles in Haiti and Honduras for clothing.

In addition to taking care of the environment, recycling of plastic products contributes to the creation of works.Thread aims to minimize child labor, which is often used in poor countries, and to attract more adult people to work. Part of this initiative is a collaboration with HP Inc.

For decades, HP Inc. has been committed to taking a responsible approach to the selection of materials for the manufacture of products and treats all employees with respect, says the director of the HP Inc supply channel. Stuart Pann. - Our work in Haiti enables the recruitment of pickers from vulnerable populations and the inclusion of plastic in our supply chain, which in turn creates new economic opportunities and improves the quality of life of these families.

The production of printer cartridges from plastic bottles became part of HP Inc.'s big environmental program. In the coming years, the company promises to use only renewable energy sources, and also set itself a goal to reduce harmful emissions from its enterprises in the world by 25% by 2025 relative to 2015.

In 2016, HP Inc. recycled more than 17.1 thousand tons of printer cartridges and 102.8 thousand tons of equipment for the subsequent production of new goods.^[17]

Keyboard spy in laptops

In May 2017, experts from the Swiss information security consulting company Moderna reported the presence of a keyboard spy in HP Inc laptops.

The keylogger is included in the sound card driver for some laptop and tablet models. The driver itself was developed by Conexant and is used not only in HP products, but so far Moderna has reported the problem only in devices from an American manufacturer.

The executable file built into the driver, called MicTray64.exe, writes information about which buttons on the keyboard the user presses to a text document located at C :\Users\Public\MicTray.log.

This file is reset to zero when the computer is restarted, but if desired, it can be restored - for example, using special software or from backups, if they are made regularly. Thus, attackers can gain access to such information.

At the same time, the MicTray64.exe was not created as a tool for tracking users. The file is used to register certain keypad presses used to control the driver and sound settings.

According to the researchers, a similar debugging method successfully turns an audio driver into a spyware. Based on file metadata, the keylogger has been present on HP computers since at least Christmas 2015.

The existence of the keylogger is recorded in HP EliteBook, HP ProBook, HP ZBook and HP Elite computers. You can check for a spy yourself: the file is located at C :\Windows\System32\MicTray.exe or C :\Windows\System32\MicTray64.exe.

HP Inc. said it was aware of the problem and promised to fix it soon.

We have found a solution and will make it available to our users, the company noted.[18]

2016

Reduce up to 4,000 jobs

On October 13, 2016, HP Inc. announced mass layoffs. The company is restructuring to adapt to negative trends in the global personal computer market.

According to Reuters, citing a statement from HP Inc., the company will reduce from 3 to 4 thousand jobs. Personnel cleaning will begin in fiscal 2017 (starts on November 1, 2016 calendar year) and will last until 2019. The costs of these measures are estimated at $350-500 million, but in the future - from fiscal 2020 - the vendor plans to save $200-300 million annually.

HP Inc. reported that some workers who fell under the cuts will move to similar positions in other companies with which HP Inc. cooperates under outsourcing agreements. By mid-October 2016, HP Inc. employs about 50 thousand people.

HP Inc. is laying off employees amid a prolonged fall in the personal computer market, which brings the company most of its revenue. According to analysts, Gartner global shipments of desktops and laptops in July-September 2016 decreased by 5.7% compared to the same period last year and amounted to 68.9 million units. The quarterly drop in supplies turned out to be the eighth in a row - for so long the global PC market has never declined, the researchers note.

CEO of HP Inc. Dion Weisler says the market remains volatile and still faces uncertainty and various challenges.

After the announcement of mass layoffs, HP Inc. shares fell 1.3% by the close of the exchange in New York on October 14, 2016. Since the beginning of this year, quotes from the American manufacturer of computers and printers have risen by 28%. The company expanded its share buyback program to $3 billion.^[19]

Lock non-original cartridges in printers

In September 2016, it became known that HP Inc. had blocked the use of non-original cartridges in its office printers. In this regard, a large amount of criticism fell on the American manufacturer, and the company promised to return the possibility of working with unofficial consumables to those who need it. At the same time, HP Inc. made it clear that similar bans on third-party products are possible in the future.

On September 12, 2016, US non-original printing equipment cartridge retailer LD Products said the company was "inundated with calls and letters from frustrated customers whose cartridges had stopped working with some HP printers."

The reason was later named by the Dutch company 123ink (also specializes in the implementation of consumables): Officejet Pro printers stop recognizing non-original cartridges after installing the new firmware. Only at the end of September 2016, HP Inc. made an official statement:

We have updated the cartridge authentication process in some HP office printer models to provide customers with the best possible capabilities and protection against counterfeits and third-party cartridges that lack the HP security chip and encroach on our intellectual property.

HP Inc. reported that a software update that eliminates printer compatibility with non-company cartridges has been released for HP OfficeJet, OfficeJet Pro, and OfficeJet Pro X models.

Then the Electronic Freedom Foundation (EFF) sent the head of HP Inc. Dion Weisler wrote to ask printers to return compatibility with non-original consumables, because otherwise, according to human rights activists, customers will be afraid to update software in the future, which will increase the risk of hacking computer systems. The EFF created a petition on this occasion, which was signed by more than 10 thousand people.

Under this pressure, HP Inc. gave up: the company promised in October 2016 to release a software add-on for Officejet that returns support for third-party cartridges. The update will be optional for users.

Chief Operating Officer of HP Inc. Jon Flaxman, in an interview with The Wall Street Journal on behalf of the company, apologized to customers for the inconvenience caused, but at the same time stated that the manufacturer was going to continue to practice blocking unofficial products.^[20]

Buying Samsung's printing business for $1.05 billion

In September 2016, HP Inc. announced the signing of a binding agreement to buy Samsung Electronics' printing business, including printers and MFPs, for $1.05 billion. The company noted that this is the largest transaction in the print system market.

As part of the agreement, HP Inc. acquires all shares of Samsung Printing Business Unit, a new company will be created that will include all purchased assets. Samsung will continue to sell its own-brand printing devices in South Korea, buying them from HP.

It was planned to close the transaction within 12 months after the standard procedures were completed. After that, Samsung pledged to invest from $100 million to $300 million in HP by acquiring securities.

HP Inc. said the deal will allow the company to open a new page in the history of the $55 billion printing market, since existing copiers are obsolete, too difficult to maintain and unprofitable to maintain.

In addition to the production site in China, Samsung's acquired business includes a design bureau, which owns over 6.5 thousand patents, and 6 thousand employees, including 1.3 thousand developers and engineers, specialists in the field of laser printing, image capture and processing. The business also includes 50 representative offices in various countries. At the end of 2015, the unit brought in revenue in the amount of 2 trillion won ($1.8 billion).

In the Samsung line, the American company was interested primarily in multifunctional A3 devices. The buyer emphasized that they have the speed of copiers, the simplicity and reliability of printers and have only a few parts that need to be replaced.

Combined with our PageWide technologies, these devices will deliver an innovative line of solutions that are unmatched in hardware or software and offer market-leading security, HP Inc said.

The vendor also expects the deal to expand HP Inc.'s global laser printer business and strengthen customer relationships.

As a result, according to the company, new business areas and new sources of income will be opened. President and CEO of HP Inc. Dion Weisler emphasized that after splitting the business a little less than a year ago, HP Inc.'s main tasks included developing innovative solutions that could change the landscape of the high-tech industry. By acquiring Samsung's business, the company intends to follow this strategy.

Entering the 3D Printer Market

On May 17, 2016, HP Inc. announced its entry into the global 3D printer market. The first such equipment of the American manufacturer was the HP Jet Fusion 3D Printing Solution system. It is already being tested by a number of large companies. Read more here.

Sale of OpenText software assets for $170 million

In April 2016, OpenText announced the purchase of part of HP Inc.'s software business . We are talking about software related to Customer Experience Management (CEM) systems. Read more here.

Free Internet access for users of HP Inc. computers worldwide

On February 23, 2016, HP Inc. announced the start of a global partnership with iPass, which has the world's largest Wi-Fi network. As part of the partnership, owners of computers and mobile devices of the American manufacturer will be able to use free Internet access in Russia and other countries where this service works.

According to the HP website, buyers of laptops, large-sized smartphones and tablets (including hybrid ones) offered by the company will be able to access the Internet using the global wireless network iPass absolutely free of charge. It is noted that such functionality will not be available for all devices of the manufacturer. Which products will get access to iPass is not specified.

Depending on the HP PC or tablet model, users will be given access to the Network within one, two or three years. There are no restrictions on the volume of downloaded traffic and the time of Internet surfing in the iPass network for HP clients.

In order to connect to iPass hotspots around the world for free, owners of HP computers and gadgets need to activate this option within 12 months of purchasing the equipment.

With the new agreement, HP and iPass expanded the partnership. Previously, it concerned only the Asia-Pacific region and Japan.^[21]

We have heard from our customers that they, becoming more mobile, need an affordable and stable Internet connection anywhere in the world, "says Michael Park, vice president and general manager of HP Mobile. - We are excited to continue working with iPass and ensure access to the global Wi-Fi network for our customers so they can continue to do amazing things and stay connected in many places.

According to information from the iPass website, by February 25, 2016, the service has over 50 million access points deployed in more than 100 countries around the world, including Russia.

2015

Creating a 3D Printing Division

On September 2, 2015, it became known that HP was forming a new division called the 3D Printing Busness Group, which would be responsible for the development, production and sale of 3D printing solutions. This is reported by the CRN edition with reference to the notification letter sent to the employees of the American company.

3D Printing Busness Group will begin operations after HP's official split into two companies (scheduled for November 1, 2015) and will become part of one of them - HP Inc., which will focus on printers and personal computers. The new structure, which is responsible for the 3D printing business, will be headed by Stephen Nigro, senior vice president of printing and image processing devices at HP.

"As our

first product arrives in the commercial 3D printing market, I am creating a new 3D Printing Busness Group division and competence center," says Dion Weisler, CEO of HP Inc. "With this in mind, I have asked Stephen Nigro to fully focus on 3D printers while continuing to report to me."

As Fortune observers note in an article dated September 2, 2015, for many years HP has been developing 3D printing technologies, but the company has not yet released a 3D printer on the market. She plans to do so in 2016.^[22]

"When we announced the separation plans, we knew 3D printing would be a key area of innovation and growth for HP Inc. Our company is focused on successfully applying its intellectual property and know-how to transform industries and implement a new industrial revolution, "wrote Dion Weisler in an internal corporate letter

.

According to the head of Nth Generation, Jan Baldwin, HP sees a huge growth potential in 3D printing technologies in conditions when the corporation's computer business is declining.^[23]

Debt of $20 billion

On July 1, 2015, HP filed documents to register Hewlett-Packard Enterprise, based on the corporate business of the American IT giant. From the published materials it became known that the lion's share of HP's debts falls not on the corporate, but on the computer division.

It was officially announced that by November 1, 2015, two companies would appear on the market instead of HP: Hewlett-Packard Enterprise (will focus on selling corporate equipment and services) and HP Inc. (will be responsible for personal computers and printers).

HP's computer business piles up gigantic debt

According to Bloomberg, citing documents sent to the US Securities and Exchange Commission (SEC), by April 30, 2015, Hewlett-Packard Enterprise had accumulated a debt of $1.45 billion (excluding the work of the financial division). The total amount of debt on short-term and long-term loans and loans from HP is $21.06 billion. Thus, it turns out that HP Inc. accounts for most of the debt - almost $20 billion.^[24]

HP CFO Cathie Lesjak said earlier that Hewlett-Packard Enterprise's debt at the time of the start of the company will be small. Thanks to this, according to the top manager, the company will be able to grow organically and participate in M&A transactions.

However, the final distribution of debts between Hewlett-Packard Enterprise and HP Inc. has not yet been completed, and HP may transfer part of the debt to the balance sheet of the company responsible for corporate decisions after the separation procedure is completed.

From the documents provided by HP, it also follows that in 2014 Hewlett-Packard Enterprise received a net profit and revenue of $1.6 billion and $55.1 billion, respectively. In 2013, these financial indicators were $2.1 billion and $57.4 billion. This company will operate in markets whose total volume is measured in a trillion dollars.

As a result of the separation of HP, there will be a dissinergy, expressed in increased costs that it will be necessary to create two headquarters, two positions of the CFO, two human resources departments, etc. The annual costs for all this will be from $400 million to $450 million, the costs will be equally divided between Hewlett-Packard Enterprise and HP Inc., PCWorld reports.^[25]

Until 2015: Company history before HP spin-off

On November 2, 2015, instead of one HP, two companies appeared on the market: HP Inc. (computers and printers) and Hewlett-Packard Enterprise (HPE) (enterprise solutions). The story of the divided HP, which began in 1939, is here.

Notes