Katy Huberty

Katy Huberty asked about HP's PC pricing strategy, specifically if there's a framework for how much of a price increase customers can absorb before demand is negatively impacted, beyond the ASP uplift from mix shift to AI PCs and premium devices. She also inquired about any observed correlation between demand in the PC market and opportunities in peripherals or print, and whether weakness in PC industry unit shipments is expected to weigh on the attach rates of monitors, keyboards, and headsets.

Answer

Karen Parkhill, CFO, confirmed that HP is driving price increases in addition to ASP uplift from mix. Ketan Patel, President of Personal Systems, explained that demand-to-price elasticity is constantly observed and adjusted based on customer use case and type. He highlighted Windows 11 and AI PCs as tailwinds, driving productivity gains, security, and local AI application development, which contribute to the total cost of ownership value proposition. Regarding peripherals, Ketan Patel noted that historically, attach rates follow post-PC refresh cycles, presenting a significant opportunity as budgetary needs shift, and HP aims to gain share in these categories.

Katy Huberty asked about HP's framework for PC systems price increases, specifically how much customers can absorb before demand is impacted, given efforts to limit overall system price increases while seeing ASP uplift from mix shifts to AI PCs and premium devices. She also inquired about any observed correlation between demand in the PC market and opportunities in peripherals or print, and whether weakness in PC industry unit shipments would weigh on the attach rates of monitors, keyboards, and headsets.

Answer

Karen Parkhill, HP Inc.'s Chief Financial Officer, confirmed that HP is increasing prices, with ASP uplift coming from both mix and direct price increases. Ketan Patel, President of Personal Systems, explained that demand elasticity is constantly observed and adjusted by customer use case and type. He highlighted Windows 11 and AI PCs as tailwinds driving continued demand due to productivity gains, security, compliance, and local AI application development, emphasizing a focus on total cost of ownership in pricing. Regarding peripherals, Ketan Patel stated that historically, attach rates follow post-PC refresh cycles, with 2025 being the start of the Windows refresh, presenting a significant opportunity for peripherals as budgetary needs shift, and HP also has headroom to gain share in these categories.