HP’s Weisler to Navigate PC Business as Slowdown Looms
Hewlett-Packard Co. (HPQ)’s Dion Weisler took an in-development $1,899 computer home for several months this year, tinkering with features and contacting engineers on evenings and weekends with ways to improve it.
He’ll have a $55.9 billion-a-year business to work with next, in his role as chief executive officer of a printer and personal-computer business that will be spun off from Hewlett-Packard next year. A two-decade industry veteran who joined the company in 2012, Weisler is facing shrinking demand for PCs, rising component prices and narrowing margins.
Weisler previously worked at Acer Inc. (2353) and Lenovo Group Ltd. (992), which overtook Hewlett-Packard in PC market share last year. He’s taking the helm amid struggles to fend off competition from Apple Inc. and other makers of mobile devices and former employers. An outsider’s perspective helps, said Jayson Noland, a senior analyst at Robert W. Baird & Co.
“He’s not your typical HP executive; he’s much more willing to step outside of the mainstream expectation for that,” said Noland, who has the equivalent of a hold rating on the stock.
Hewlett-Packard’s fiscal fourth-quarter results, due to be released tomorrow, will show the challenge Weisler faces. The company is projected to show sales falling or little changed for the third straight year, according to the average of analysts’ estimates compiled by Bloomberg.
PCs, Printers
Worldwide PC shipments are projected to decline 2.3 percent in 2015 for the fourth straight year, according to IDC. HP’s PC unit saw sales drop more than 10 percent to $32.1 billion in 2013, matching the industry’s total decline that year, while printing revenue fell 2.6 percent to $23.9 billion.
After years of management turmoil and acquisitions that failed to add to income, Weisler is counting on products like the one he worked on, called Sprout, to revitalize revenue, along with 3-D-enabled printers.
A prototype of the computer, which lets users scan objects in three dimensions and manipulate them digitally, was in Weisler’s home while he raised issues with the machine, such as the number of steps for scanning and editing images. By the time the product went on sale, it was more streamlined due to Weisler’s “active role throughout Sprout’s development process,” according to Louis Kim, a Hewlett-Packard vice president of product management.
Hewlett-Packard, based in Palo Alto, California, declined to make Weisler available for an interview.
HP Inc.
Weisler, 47, will lead a business that will be called HP Inc., while the other will be Hewlett-Packard Enterprise, a corporate-consulting and hardware company to be led by current Hewlett-Packard CEO Meg Whitman.
While PCs have done better this year, with Hewlett-Packard’s shipments rising in the past three quarters on demand for low-cost notebooks and companies upgrading older PCs, the outlook isn’t positive.
“We expect business-PC shipment momentum to slow down after the conclusion of Windows XP migration projects, while on the consumer side things still look grim,” said Jay Chou, a research analyst at IDC, referring to upgrades fueled by Microsoft Corp. ending support for an older version of Windows.
Black Belt
Weisler, an Australian who has been running Hewlett-Packard’s PC business since mid-2013, has so far overseen the debut of two key products, Sprout and Multi-Jet Fusion technology for printing 3-D objects. He’s also leading Hewlett-Packard’s renewed effort to make tablets and maintain its lead in PCs, which requires a lot of back-and-forth with partners such as Microsoft.
“I find him to be incredibly candid,” said Terry Myerson, executive vice president of Microsoft’s Operating Systems group. “If something’s not right, he shares it clearly and quickly.”
Weisler, who has a black belt in karate, studied applied science in computing at Monash University in Melbourne, focusing on information systems and programming. After graduating in 1990, he
joined Acer as an engineer and rose through the ranks to become managing director of the company’s U.K. business.
He then spent time at Vantage Systems Pty and Telstra Corp. (TLS) before returning to PC manufacturing by joining Lenovo in in 2007, working in Singapore and Beijing. At Lenovo, he worked with Rory Read, who later went on to become CEO of Advanced Micro Devices Inc. Weisler “learned an unbelievable amount of operational discipline” at Lenovo, according to AMD Chief Sales Officer John Byrne, who negotiated with Weisler over PC components.
Plastic, Metal
After joining Hewlett-Packard, Weisler put those skills to work on winning a contract to supply 1.5 million PCs to a buyer in India.
Hewlett-Packard wasn’t going to bid on the contract because the company’s managers thought it would lose money, Weisler told attendees at an analyst meeting a year ago. He asked to see the bill of materials and found it wasn’t detailed enough.
“Show me the screws,” Weisler told analysts, recounting conversations with the customer. “Show me the plastic. Show me the metal.” He and his team went through every line item and took $67.40 out of the PC’s cost, and won the contract.
Weisler also pushed to lower costs in low-end notebooks, according to Mark Romanowski, executive vice president at ASI System Integration Inc., an outsourcing company.
“They were really not very competitive on the low-end,” Romanowski said.
Since 2011, Hewlett-Packard’s share of the market for PCs that cost less than $300 has jumped to 30.1 percent, from 10.3 percent in 2011, according to IDC. Acer and Asustek Computer Inc. (2357) have seen their share of the affordable PC market decline in that period.
“He has a real sense of detail and he still has it today, even driving a $60 billion revenue Fortune 50 company,” Byrne said.
Source: Bloomberg
