We're tracking shares of HP following the company's latest earnings report. Let's bring in Enrique Lores, CEO of HP. Always nice to get some time with you. Talk to us a little bit about—normally I always start on the PC business with you, but I want to start on the printing business because it looks like sales rebounded a bit quarter over quarter. What did you see there in the quarter?
Let me start by saying that we had a strong quarter overall, but actually also strongly in print. What we have seen is that the market grew in both home and office hardware, and within that growth we were able to grow our market share. This drove the results that we saw. Also, the supplies business performed well; we executed well, we continue to grow share in supplies. So the combination of growing share in hardware and growing share in supplies drove the results that you saw.
Enrique, I know you're not going to say this, but I guess I can say it. I mean, what are your competitors in the market? Xerox is falling apart, I mean they're really going through a lot of restructuring. Are you getting market share from them in the printing business?
We are growing share in the printing business, and we stay very focused on executing our strategy. We see opportunities to continue to grow here, to expand especially on the office side into the segment that we call contractual. It is performing better than the more transactional space, and this is where we see opportunities for us to continue to grow next year.
The results from this quarter in print, are they sustainable as more companies bring workers back to the office?
Well, we think that the overall print market in 2025 will slightly decline. The decline will be less than what we saw this year, but our goal continues to be to perform better than the market, to grow category, to grow share in profitable categories, and to continue to drive the transformation to subscription and service models that we have been doing over two, three, or four years now.
We were also watching Best Buy, of course you go into Best Buy you can buy an HP computer there. They struck a cautious tone on their electronics business. What are you seeing in terms of electronics demand on the part of consumers as we lead into the holiday season?
Well, they were talking about electronics being soft, but they highlighted laptops as a category that was doing well. From our perspective, the PC market grew, our PC business grew in Q4, especially in revenue. The growth in our side was mostly driven by the commercial categories, but we saw growth in the premium categories, which is where Best Buy is more focused.
Are consumers just waiting for some of these AI PCs to hit the market?
No, we are not seeing consumers waiting. We have seen growth, penetration, and good growth of the AI PC category in Q4. They represent about slightly more than 15% of our total PC shipments, and I would say the expansion and the growth of AI PCs is going as per plan. We also started to launch and introduce some of the new next-generation AI PCs, those that have the higher-performing NPUs, and we are really pleased. As we see new software developing, companies taking advantage of the new capabilities and delivering great new experiences for our customers, that confirms the opportunity that AI PCs have in the future.
How many AI PCs will you have in the market over the next 12 months? And as you look out towards the back half of your new fiscal year, what are some of the AI PCs, what are the specs on them, what do they look like?
Well, we will have AI PCs in most of the medium-range and high-end categories, which is really where we see the opportunity for them. They are going to be available, and we will have them in multiple form factors, from traditional notebooks to all-in-ones. So really a strong push to diversify and to expand the AI business. What these PCs include is the ability to run small language models locally, which means customers can do inferencing at the edge, which means they can do it at lower cost than doing it in the cloud, it will be more secure, and it will also be faster. These are the key three attributes that the AI PC is going to have. And we are starting to see very quick applications, from real-time translation, real-time feedback, local processing of large documents—things that today you can only do in the cloud, but you will be able to do it locally, much faster, much better, and secure.
