More than IBM or Oracle, IT supplier Hewlett-Packard is dependent on volume sales to make its top and bottom lines. And with the economy improving but still not in great shape, HP has reanimated some zero per cent financing deals from early last year in the hopes of helping it get a solid start to 2010 in North America. …
How does HP even make any money?
I used to work for a subsidiary of the telecoms company Vodafone, and any employee was able to get a 30% no-questions-asked discount on any HP appliance, laptop, desktop, or even things like print cartridges. That was on top of any other offers they had, and as far as I am aware, that deal is still ongoing - I worked there for about two years, and stopped working there in November, so that's a pretty substantial potential for loss, and the entire reason that was available is because the company itself used HP for its own computers.
I mean, surely there must be SOME profit in a deal like that, but someone has to ask just how much profit these companies are making from their hardware if there's still profit in it after possibly as much as a 50% price cut.
I know that on the other hand, any sale means moving stock, which would only depreciate if not sold - but the hardware that the company bought just 18 months ago is still very modern, and in all will have not depreciated by nearly as much in value as it was actually undercut by in the first place.
It just seems to make no sense to me.