With a tsunami roaring toward Sendai, Japan, Hewlett-Packard’s (HPQ) Photon Engine software directs the response at a nearby command center. Collecting data from traffic cameras, first-responder vehicles, smartphones, and satellites, the software displays information on a huge touchscreen. It lets emergency personnel have what military types call “full situational awareness,” and quickly suggest escape routes.
It’s only a simulation, one that took place recently on HP’s Cupertino (Calif.) campus. Todd Bradley nods approval. The executive vice president of printing and personal systems at the computer giant’s newly merged PC and printer business says Photon Engine is a step toward renewing the company’s “heritage of innovation” and silencing critics who say its best days have passed. Bradley and Chief Executive Officer Meg Whitman say they plan to reverse the decline in research and development spending that occurred under previous CEOs. Last year, HP spent 2.6 percent of sales on R&D, down from more than 4 percent seven years ago. “We underinvested in innovation,” Whitman says.
The popularity of mobile computing—and HP’s inability to adapt to this new world—has left Bradley’s group producing commoditized gear with dwindling profits. Operating margins have fallen from 8 percent a decade ago to 5.2 percent in January. The increasingly paperless offices that mobile devices make possible have weakened HP’s once highly profitable printer business. The company’s attempt to enter more lucrative markets by spending $1.2 billion on mobile device maker Palm in 2010 fell flat. HP stopped making devices using Palm’s webOS software in 2011.
Bradley acknowledges that the company is behind in integrating hardware and software into “really compelling packages that can compete with Apple (AAPL) and anyone out there.” Photon Engine is an early attempt at catch-up. The package varies, but typically includes projectors, screens, and a high-powered PC and costs $10,000 to $125,00. At the heart of it is software called Pluribus, which is geared to taking disparate forms of data—video streams, GPS coordinates overlaid on a map, Web pages, even 3D footage—and then instantly formatting high-resolution versions for screens of any size. The data can come from iPads, traffic cameras, or other sources, and the output can be displayed with cheap projectors or on $100,000 screens appropriate for concert stages.
Thanks to Photon Engine, HP is “years ahead” of rivals in the so-called immersive displays business, says Richard Doherty, co-founder and director of consulting firm Envisioneering Group. “It should be named the emotion engine because it gives people the ability to see motion, and process information, with the same depth and connection that you’d get from looking at something with your naked eye,” he says.
Fashion house Marchesa recently used Photon Engine at a Bergdorf Goodman store in Florida. Shoppers wore glasses to watch 3D images of models wearing Marchesa’s spring line saunter across a huge screen. Marchesa marketing director Allison Lubin credits the technology with doubling sales that weekend. IMS Research expects the immersive displays business to grow 40 percent annually and reach $7 billion worldwide by 2013. Photon Engine could also help HP sell monitors, projectors, and high-powered PCs, lines that brought in $3 billion in sales last year.
HP is waiting for the fall launch of Windows 8, with its new touch-optimized Metro interface, to have another go at the consumer mobile market. Bradley hints a big emphasis will be on convertible laptops—lightweight PCs with swiveling or detachable touchscreens—to compete with Apple’s iPad and other tablets. Whitman says HP’s turnaround will take three to five years. “It took us a while to get into this, and it’s going to take us a while to get out,” she said in February.