HP was incorporated in 1947 under the laws of the State of California as the successor
to a partnership founded in 1939 by William R. Hewlett and David Packard. Effective
in May'1998, we changed our state of incorporation from California to Delaware.
We are a leading global provider of products, technologies, solutions and services
to consumers and businesses. Our offerings span information technology ("IT")
infrastructure, personal computing and other access devices, global services
and imaging and printing. Our products and services are available worldwide.
We seek to be the category leader with respect to each of the specific product
categories in which we compete and to expand actively into new and adjacent
markets.
Our business strategy revolves around the following four interrelated goals
and priorities:
' deliver to business customers the best return on information technology investments
in the industry;
' provide consumer customers with simple and rewarding experiences by making
different technologies work better together;
' build world class cost structures across our entire portfolio of businesses;
and
' focus our innovation and research and development investments on those areas
where we can make unique contributions and differentiation, while partnering
with other top providers to enable complete IT solutions.
Our operations were organized into six business segments: the Imaging and Printing
Group ("IPG"), the Personal Systems Group ("PSG"), the Enterprise
Systems Group ("ESG"), HP Services ("HPS"), HP Financial
Services ("HPFS") and Corporate Investments.
The competitive environments in which each segment operates are described below:
Imaging and Printing Group.'The markets for printer hardware and associated
supplies are highly competitive, especially with respect to pricing and the
introduction of new products and features. IPGs key competitors in this segment
include Lexmark International Group'Inc., Xerox Corporation ("Xerox"),
Seiko Epson Corporation, Sony Corporation of America, Canon USA,'Inc. and Dell'
Inc. ("Dell").
Personal Systems Group.'The areas in which PSG operates are intensely competitive
and are characterized by rapid price reductions and inventory depreciation.
Our primary competitor in the branded personal computers area is Dell, with
additional competition, particularly in niche markets, from companies such as
Toshiba Corporation, Apple Computer'Inc., International Business Machines Corporation
("IBM") and Gateway, Inc, and in particular regions from companies
such as Acer'Inc. and Fujitsu Limited, which are particularly strong in Europe,
and Legend Corporation, which is particularly strong in China. We also face
competition from generically-branded or "white box" manufacturers.
Enterprise Systems Group.'The areas in which ESG operates are intensely competitive,
characterized by rapid and ongoing technological innovation and price reductions.
Our competitors range from broad solutions providers such as IBM to more focused
competitors such as EMC Corporation in storage, Dell in industry standard servers,
and Sun Microsystems,'Inc. in servers. Broad-based solutions providers benefit
from their existing customer base and the breadth of their product offerings,
while more focused competitors are able to concentrate their efforts on providing
the most competitive product.
HP Services.'The principal areas in which HPS competes are customer support,
consulting and integration and managed services. The support and consulting
and integration markets have been under significant pressure as customers scrutinize
their IT spending. However, this trend has benefited the managed services business
as customers attempt to reduce their IT costs and focus their resources on their
core businesses. Our key competitors in this segment include IBM Global Services
and the services businesses of other technology products organizations, as well
as EDS Corporation and other systems integration firms.
HP Financial Services.'In our financing business, our competitors are captive
financing companies, mainly IBM Global Financing, banks and financial institutions.
We believe our competitive advantage in this business relative to banks and
financial institutions is our ability to finance products, services and total
solutions.