Hewlett-Packard Co's shares plunged to a nine-year low on Wednesday after Chief Executive Meg Whitman warned of an unexpectedly steep earnings slide in 2013, with revenue set to fall in every business division except software.

Wall Street had hoped for quicker signs of progress on Whitman's turnaround plan, which centers on transforming the former industry powerhouse into an enterprise computing corporation that can take on IBM and Dell Inc.

Whitman, who took the helm of HP just over a year ago after a failed bid to become governor of California, told investors that the company's recovery would start to become visible only in fiscal 2014, when investments begin to pay off.

She blamed unprecedented executive turnover in past years for dragging out the Silicon Valley company's turnaround.

Analysts say HP is struggling to shore up its credibility on Wall Street while battling crumbling margins in an increasingly cut-throat PC arena, tapering-off of IT spending, and an internal organizational overhaul that involves thousands of layoffs.

"I was surprised that nothing new was really said in terms of strategy, and the problem here is there is lack of investor confidence in the current strategy," said Shaw Wu, an analyst with Sterne Agee.

Shares of HP, the largest U.S. technology company by sales, tumbled 13 percent on Wednesday in the biggest single-day decline since August 2011.

Shares of some of HP's contract makers in Asia also fell when trading opened there on Thursday.

HP gave a particularly gloomy outlook for enterprise services, its business providing services to corporations and a key component of Whitman's rescue plan.

Revenue from that division will dive 11 to 13 percent in fiscal 2013 and be barely profitable, with operating margins of zero to 3 percent. That stands in stark contrast to IBM, which raised its full-year earnings outlook, reflecting its ability to manage costs, despite flat software revenue in the second quarter and a 2 percent decline in services.

Whitman became HP's third CEO in as many years after taking over following Leo Apotheker's abrupt dismissal just over one year ago. She is trying to revitalize the former industry icon via layoffs, cost cutting, and expansion into areas with longer-term potential such as enterprise computing services.

"The single biggest challenge facing Hewlett-Packard has been changes in CEOs and executive leadership, which has caused multiple inconsistent strategic choices, and frankly some significant executional miscues," Whitman told the investor conference in San Francisco.

"This is important because as a result it is going to take longer to right this ship than any of us would like," she added.

HP has lost more than two-thirds of its value since 2010, when its capitalization topped out at about $104.5 billion. Squeezed by crumbling demand for personal computers in a mobile era, significant leadership turbulence, and the advent of Apple Inc's iPad that year, HP's stock embarked on a steady decline. The company now has a market value around $30 billion.

Since Whitman took the helm in September 2011, the stock has fallen about 35 percent.

Musical chairs

HP has suffered through years of turbulence. Apotheker's 11-month tenure was marked by an acceleration of departures from various divisions, such as networking chief Marius Haas, as he brought in former coworkers from SAP AG.

Apotheker's predecessor, Mark Hurd, who is now president of Oracle Corp, also departed abruptly, after a sexual harassment scandal.

HP, like rival Dell, is trying to transform itself into a major enterprise computing provider in the mold of IBM, while slashing expenses to boost the bottom line. Shares of Dell, the No. 2 U.S. PC maker after HP, fell 4.7 percent on Wednesday, mired near nine-year lows.

HP is laying off 29,000 employees over the next two years and has written off $10.8 billion mostly related to the writedown of its EDS services business. Meantime, its business continues to be hit by a slowing in corporate spending and personal computer demand worldwide.

For 2013, the company forecast overall earnings, excluding restructuring charges and other items, at between $3.40 to $3.60 a share in fiscal 2013. That's well below the average forecast by Wall Street analyst of $4.18, according to Thomson Reuters I/B/E/S.

A large part of the shortfall rests on the projected plunge in enterprise revenue, a division that sells myriad services to businesses and has seen an erosion in profitability.

Operating profit fell 22 percent in the July quarter, surpassed only by a 28 percent slump in personal computers.

Mike Nefkens, HP's acting global enterprise leader ,said fiscal 2013 "will be a fix and build year."

"We expect long-term growth to be back in the 3-5 percent range and long-term profit to be in the 7-9 percent range," he said.

The heads of other business units also addressed Wednesday's conference, touting both new products and challenges facing the groups.

HP is battling formidable rivals on several fronts, particularly in cloud, or remote computing, products and services, with Oracle and IBM aggressively courting corporate customers.

China's Lenovo Group Ltd may overtake HP as the world's biggest PC seller this year.

"Asian brands will continue to outperform western brands," said Angela Hsiang, a Taiwan-based analyst at KGI Securities. "Western brands in general are lagging their Asian peers in terms of grabbing market share in fast-growing emerging markets."

Reflecting that brighter outlook, Lenovo shares were not badly hit by HP's profit warning, falling less than 1 percent. But Taiwan's Quanta Computer Inc and Compal Electronics Inc, both contract makers for HP, suffered more, with their shares dropping around 4 percent in Taipei.

Whitman vowed to reduce the number of product offerings and to cut costs as HP tries to recover in a worsening macro-economic environment. She has said it will take five years for the turnaround to be effective.

"All of this is fixable but it is going to take some time," she said.

She said HP eventually will have to compete in the smartphone market, but stopped short of laying out a plan and said there were no plans to introduce a smartphone in 2013.

Longer term, HP expects "to be a GDP-like growth company with key pockets of higher growth," said Cathie Lesjak, HP's chief financial officer.

Its stock closed down 13 percent at $14.91 on the New York Stock Exchange.

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I didn't need to spend a lot of time with the new Mac operating system to see that phones and tablet computers have won out over personal computers at Apple.

Mobile devices are already responsible for the bulk of Apple's sales and profits. Now, Apple is making the new Mac system even more like the iOS software that powers its iPhones and iPads. It's also casually dropping the "Mac" name from the Mac OS X operating software, though computers will still be called Macs, not "Super-sized iPads."

The new system, formally OS X 10.8 and dubbed Mountain Lion, went on sale Wednesday as a $19.99 download from Apple's App Store. It builds on the previous system, Lion, which came out last July.

Mountain Lion is made for a world where your computer is just one of your computing devices, along with your iPhone and your iPad. Apple wants to make it easier to switch from one to the other, several times a day.

It's already easy to switch between iPhone and iPad. For instance, songs and apps you buy on an iPad will automatically pop up on your iPhone through Apple's iCloud online-storage service. Lion has some iCloud features, but Mountain Lion really brings the Mac into the iPhone-iPad family.

That's what I like most about Mountain Lion. It borrows a lot from its mobile cousin.

The Mac already had such mobile-like features as the ability to zoom in or out on a MacBook by pinching your fingers on its touchpad. Mountain Lion goes a lot further:

• A notification center slides out from the right of the screen to offer calendar reminders and the latest mail items. It mimics, down to the background color, layout and font, the way you get Facebook updates, news alerts and other notices on your iPhone.
• The Mac's iChat app has been scrapped in favor of Messages, which is made phone friendly by incorporating the iMessage service for iPhone, iPad and iPod Touch users to exchange texts, photos and video. Now you can send messages from your Mountain Lion computer to your mobile friends, or reach another Mountain Lion user from your phone. The way conversations are presented feels more like texting than instant messaging.
• Mountain Lion borrows a "Share" button from iPhone and iPad apps. The iPhoto image organizer on Lion had that, but it's now built into other apps such as the Safari Web browser and the Preview document reader. The options change depending on the app. In Safari, for instance, you can send a Web page by email or post a link on Twitter. In Preview, you can share a photo on Flickr or add it to iPhoto.

Facebook integration is coming this fall. You'll be able to limit who sees your post and add your current location through that share button. No longer will you have to cut and paste links. Mountain Lion will also sync contact information on Facebook friends with your Mac's address book. You need to sign on to Facebook only once, and Mountain Lion takes care of the rest.

That "single sign-on" feature is available right away for other services, including Twitter and Flickr. Once you're signed in, you don't need to enter your username and password again when accessing that service from another app.

Mountain Lion brings over another philosophical change from the iPhone.

For the longest time, personal computers let you install anything without question. But with Apple's mobile devices, you are limited to pre-approved software from the company's App Store. Apple wants to protect you from bad experiences, but it has also rejected some apparently harmless apps for mysterious reasons.

Mountain Lion adopts that gatekeeper philosophy, though the restrictions aren't as severe. If software you try to install doesn't come from the App Store, it has to be from a software developer who has registered with Apple for $99. The company doesn't review software unless it goes through the App Store, but the Mac checks to make sure the registration is valid. A registration can be yanked if a developer turns out to be evil.

I was denied the ability to install Google's photo-editing software, Picasa, likely because it was written before the registration program began. It took some sleuthing to figure out how to override that.

Now back to iCloud, my favorite part about Mountain Lion. All you need is an Internet connection and an Apple ID - the same one you create for free to buy songs and apps on iTunes. That Apple ID links your experience across the various devices. The iCloud service comes with five gigabytes of free storage; you can pay for more.

Consider Pages, Numbers and Keynote - Apple's versions of Microsoft's popular Office programs for word processing, spreadsheets and presentations. Documents are automatically stored online through iCloud, unless you change the location to a folder on your computer. It's a tactic Microsoft plans with its just-announced Office upgrade.

That means your documents follow you wherever you go. Type a sentence in a document on your MacBook and see the changes on the iPad a half-minute or so later. You can access your files even if you don't have an Internet connection. Copies are stored on your computer, and changes will be replicated to the iCloud folder once you're back online.

It's not so graceful when you type on both devices at once, as you are stopped and asked to choose one. But it's a promising start, and it's not often you're working on both devices at once anyway.

You get the benefits of iCloud when surfing the Web on Safari as well. You see what websites are open on other devices, so if you started researching that dream vacation at home, you can quickly access those same Web pages in the office (Note to boss: I meant to say "financial balance sheet," not "dream vacation"). Think of it as automated bookmarks. For this to fully work, your mobile devices need the iOS 6 upgrade this fall.

A number of other features jumped out:

• The search and address bars are now combined on Safari, just as they are on Google's Chrome browser. Too often, I had wasted my time entering search terms in the box for the Web address.
• Safari's Reading List now works offline. If you are reading a Web page and need to go somewhere, just click the small "glasses" icon for the browser to store a copy. You can continue reading in the car or on a train, even if you don't have an Internet connection.
• Gamers will appreciate Game Center, which started out as a way for mobile users to find opponents and keep track of high scores. Mountain Lion users can now join in the fun.

I did run into a few hiccups using Mountain Lion, but none were deal-breakers. The iCloud features were easy to use once I signed in, but I had difficulty getting the startup screen to come up because of how my office Wi-Fi network is set up. I also had some trouble getting a new Notes program to sync, but it worked well once it did.

Apart from that, my experience was relatively pain-free and seamless.

If you're a Windows user, see what Microsoft has in store with Windows 8, which comes out Oct. 26. That system also promises to work well with tablet computers, but will it be as seamless as Mountain Lion?

If you already have a Mac, you can upgrade directly to Mountain Lion only if it's running Lion or its 2009 predecessor, Snow Leopard. It took a colleague an hour and a half to download and install Mountain Lion. You can upgrade for free if you bought your Mac since June 11.

Otherwise, shell out the $20. That's $20 for all your Macs, not each one. It's well worth the price just for the integration with iCloud, and you get a whole lot more. 

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Computer maker HP expects 15-20 percent of its notebook PC sales to come from the ultrabooks segment by the end of 2013 as a growing number of mobile workers opt for lighter and faster devices.

Ultrabooks are high-end notebooks designed to be lighter, have longer battery life and shorter booting time. The ultrabooks are powered by processors from Intel, which is the the driver of the concept.

"We expect that by the end of 2013, 15-20 percent of our volumes will be that of Ultrabook and by 2014-end, it should be around 40 per cent. We have a strong lineup of products and across price points, which we think, would be a crucial factor," HP India Vice President and General Manager (Printing and Personal Systems Group) Rajiv Srivastava told PTI.

At present, ultrabooks comprise less than 10 percent of shipments for HP India, he added.

Computer makers are betting big on the ultrabook segment as they present a bigger margin opportunity. With devices starting from Rs. 40,000, the prices go beyond Rs. 1 lakh depending on the configuration.

Almost all major players like Dell, HCL Infosystems and Toshiba have their products in the category and plan to add more products in the coming months.

"Currently, the contribution of ultrabooks to the overall notebook market is low. Its also a function of popularity and pricing. As more people go for ultrabooks keeping in mind the functionality and more affordable devices come out, the category will only grow," Srivastava said.

HP has about 8-9 devices in the category under its 'Envy' range and plans more launches in the coming months. He, however, declined to comment on the future product lineup.

"It is a very competitive market and this will only grow. The differentiator will be how technology is refreshed and what experience is provided to the end-consumer," he said.

He added that the ultrabook will not be a very price- sensitive category as the buyers are generally those who have owned a PC earlier and are ready to pay a premium for a good device.

HP has recently launched its Envy SpectreXT, priced Rs. 64,990 onwards.

PC sales in the country grew 16 percent in 2011-12 at 10.8 million units over the same period last year, according to hardware industry body MAIT.

Of this notebooks and netbooks sales grew 26 percent to 3.7 million units and 0.28 million units (down 11 per cent), respectively, driven by consumer segment. The remaining 6.7 million units was in the desktop category, which grew 11 percent in 2011-12.

For FY'13, MAIT estimates the PC sales to grow 15 percent to reach 12.4 million units.

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