Hewlett-Packard NZ's marketing sent back 20 years

OPINION: The first press conference I attended, in London in 1990, was for the launch of a digital audio tape device designed to back up data from HP3000 minicomputers.

It stored hundred of megabytes of data, maybe even a gigabyte.

The marketing manager in charge of that product line used to joke that if Hewlett-Packard invented sushi, it would market it as "cold, dead wet fish".

Hewlett-Packard still derived more than 10 per cent of its revenues then from manufacturing medical devices and its roots as an engineering company originally founded in a garage poked through with pride.

It was, of course, more savvy than it made out, playing self- depreciatingly on its image for being staid and serious by making a marketing virtue out of its supposed lack of marketing nous.

The fact HP climbed to the top of the laser printing market during the 1990s reselling technology owned by Canon in Japan gave the lie to its reputation as a poor marketer.

As the 1990s progressed and HP's old guard was retired, its culture became increasingly driven by quarterly earnings reports and sales commissions, just like its peers.

Now, though, I think the marketing manager's sushi comment could probably be taken at face value.

Although the New Zealand subsidiaries of Hewlett-Packard and EDS were only legally merged in November, they have really been operating as a single entity for about a year. Hewlett-Packard New Zealand has yet to effectively present its new face to the market, perhaps its financial results show why.

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Too much may be being read into Communications Minister Steven Joyce's decision to seek public submissions on the Commerce Commission's recommendation that he accept voluntary offers from Vodafone and Telecom to cut mobile termination charges.

The Telecommunications Users Association has sided with 2degrees in appealing for him to set aside the commission's majority opinion and instead regulate the charges.

But the extra cuts that might be forthcoming from regulation are small - there would probably be no more than two cents in it from 2014.

Vodafone and Telecom have made a big concession in agreeing to do away with termination charges for text messages so long as traffic flows between networks are relatively even. There is sense in imposing charges if traffic charges are uneven and customers of one network are texting-spamming customers of another.

The commission could have driven a harder bargain by insisting the proposed voluntary cuts were brought forward from October, but the offers are good enough.

If Vodafone or Telecom attempt to unfairly use their market power to thwart competition by charging customers more to call and text people on other networks than their own, the commission could and should take action under Part II of the Commerce Act to address that.

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