Why You Should Give Hewlett-Packard Company (HPQ) Another Chance!

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With solutions like the new convertible ultrabooks, Microsoft will win over a lot of people and businesses that value tablets, but also want to use them as a tool for their work. Companies worldwide are already adopting Windows 8, including Johnson & Johnson, British Telecom, 20th Century Fox Television DistributionBank of America and Seton Hall University. Earlier this year, Microsoftannounced a new $617 million licensing agreement that will bring its Window 8 and related devices to 75% of the U.S. Department of Defense.

In a survey of 175 small businesses by
iYogi Insights
, 29% had no tablet and are considering Windows 8 and Windows RT tablets rather than an iPad.  Of those that already had an iPad, 38% said they are considering changing to Windows 8. The Windows store has already surpassed the 40,000 mark for Windows 8 applications, and a new app called
Bluestacks
can bring to your Windows 8 device every one of the 750,000 existing Android apps. Bing now owns essentially
28.6% of the search engine market
since it also powers Yahoo’s results.

Two months into 2013, and Windows 8 continues its slow but steady growth. Windows 8 made some more gains in the overall PC operating system market share in February. Windows 8 was installed on
2.79 %
of all PCs last month, up from 2.26% for January. February’s numbers show that Windows 8 is installed on more PCs than the current Mac OS version, 10.8, which claimed 2.61 % of the market share. Windows 8 represents a fundamental change for Microsoft’s OS, and as such, it is quite normal that people didn’t rush to buy. It will take some time for users to feel comfortable with Windows 8, and then sales are sure to surge upwards.

Tech journalists are saying Windows 8 had a mediocre release compared to the release of the previous version, Windows 7. Well Windows 7 was launched after the Windows Vista failure, and people bought it in large to get rid of Vista. However that isn’t the case with Windows 8, since Windows 7 was a very successful windows version. So the slow growth rate does not suggest that Windows 8 is a failure.

HP’s touch-enabled laptops (Spectre XT and ENVY TouchSmart Ultrabooks), all-in-one touch-enabled PCs (ENVY TouchSmart 23 and 20), and a Windows 8 Pro tablet hybrid (HP Envy x2) should bring the company right back at par with its peers. Hewlett-Packard’s new initiatives will improve the company’s standing, especially the shifting to the internal innovation model, and the invitation of application developers to the WebOS – both policies have worked for Microsoft as well.

Foolish conclusion

Whitman is taking the right steps by reducing debt, ramping up R&D spending, and streamlining the company towards the products and services where Hewlett-Packard can add real value. It remains a well-financed company with an excellent client base, who remain loyal to the company. It is trading at a huge discount to any reasonable assessment of intrinsic value that is always appealing. If the company continues to innovate and capture new segments, then I believe the investors could double their money in 3-5 years along with earning the lofty 3.09% dividend.

The article Why You Should Give This American Dream Another Chance! originally appeared on Fool.com and is written by Manoj Kochar

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