Hewlett-Packard Keeps Slipping in Asia

Airou Zheng gave Hewlett-Packard any number of chances. Zheng, a designer for game developer Beijing Kingsoft, paid $740 for her HP laptop in 2006. She had to send it back for repairs repeatedly over the next three years, and the motherboard died twice. Fed up, she switched to a Dell in 2009. “I don’t want to use HP laptops anymore,” says Zheng, 24.

Getting Asian consumers such as Zheng to give HP another chance is going to be one of the toughest jobs facing new Chief Executive Officer Meg Whitman—or whoever ends up running the company’s $41 billion PC division, which HP is considering spinning off. The challenge will be to reverse a nasty market share decline in Asia’s two biggest countries, China and India. For years, HP was a leader in those markets, right behind local favorite Lenovo in China and ahead of all players in India. Now the company is slumping badly in both countries as it struggles with quality problems, management miscues, and increased competition. In China, HP is a distant No. 4, with less than 9 percent of the market, behind not only Lenovo but also Dell and Acer, according to Gartner. It’s a similar story in India, where HP had 11 percent of the market in the second quarter of 2011, compared with 15 percent two years ago. Dell is now the leader there, with 17 percent market share.