Leo Apotheker, HP

The tech field shifts so quickly that once-great companies can turn into afterthoughts in the blink of an eye.

That's a pressing problem for a number of top CEOs right now. The industry is confronting a post-PC, mobile, social and highly inter-connected world -- one that may leave some existing giants behind.

Hewlett-Packard is a prime example. With a heavy reliance on low-margin businesses like personal computers and printing, as well as an under-investment in its flat-lining services unit, HP is badly in need of a makeover.

CEO Leo Apotheker has started his overhaul. Last week, he announced an accelerated plan to ramp up HP's services business -- after blaming former CEO Mark Hurd for the division's woes. In March, Apotheker unveiled the company's new strategy, which puts a greater focus on software and servers.

But investors remain unconvinced. HP's stock has fallen 16% since Apotheker took over as CEO in November, and shares nosedived after his latest outlook came in below Wall Street's and HP's prior forecasts.

Many analysts urged patience, saying that investors are overreacting to HP's struggles. The company's current market capitalization is about two-thirds its annual revenue.

But others believe Apotheker simply isn't the right man for the job. He doesn't carry the greatest track record: He was ousted as the head of German software giant SAP last February.

"He's going to have to take more risks," said Joel Achramowicz, analyst at Blaylock Robert Van. "After two quarters of tenure it's still the same HP. He's applied a thin patina of cloud to the equation, but I just don't think he can do what's necessary there without shaking up the cart and doing something aggressive and provocative."



Last updated May 27 2011: 3:35 PM ET
Join the Conversation
Most Popular
 
 
 
 
 

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.