HP Inc. reports Q3 revenue of $14.3B, down 2.1% YoY, with notebook sales up 32% YoY but workstation revenue down 30% YoY and printing net revenue down 20% YoY
Stephanie Condon / ZDNet :
Context & Ripple Effects
This quarter marks a sharp reversal from the last comparable period in our coverage: three years earlier, HP's Q3 beat with printing sales up 6% alongside double-digit PC growth, whereas today printing net revenue is down 20% — the steepest print decline in any quarter we track — and workstations are down 30%.
The offset is notebooks, up 32% YoY, which fits the remote-work demand shift visible across the coverage window; later quarters confirm the mix problem persists, with HP still posting year-over-year revenue declines into early 2024.
First-order effects
- Notebook buyers — largely remote workers and students — are carrying the quarter at +32% YoY, while HP's commercial workstation customers and printing customers cut spending sharply (-30% and -20% respectively).
- HP's revenue base tilts further toward consumer/prosumer notebooks, the lowest-margin part of Personal Systems, replacing higher-value workstation and printing revenue.
Second-order effects
- A 20% print decline pressures the supplies annuity that has historically subsidized HP's PC business, forcing cost cuts or pricing action in the Printing segment to defend profitability.
- Rivals competing for the same notebook demand wave face a market where HP is volume-hungry, increasing price competition in consumer and commercial portables.
Third-order effects
- If the pattern holds — notebooks cyclical and volatile, printing structurally shrinking — HP becomes progressively more dependent on Personal Systems timing, with each refresh cycle swinging total company results.
- Sustained print erosion points toward consolidation of the printing market around fewer, larger players as the installed base and per-device supplies economics deteriorate.
The trend: PC makers' fortunes are decoupling segment by segment: portable computing rides remote-work cycles while printing and fixed high-end hardware enter structural decline, reshaping how diversified hardware vendors balance their portfolios.