HP to keep Compaq brand; ditching "HP Compaq"

HP acquired the once massive Compaq PC company, and its brand, way back in 2002. Since then, HP has had something of a awkward relationship with having to use the Compaq branding. The company has released PCs with just the Compaq name since 2002, while other PCs, mostly made for business, have had the HP Compaq branding.

Today, The Verge reports that HP has decided to ditch the HP Compaq branding entirely for its line of products. This move will happen sometime in 2013, according to a statement from the company. HP will still use the Compaq name for some products but they will be for "basic computing at entry-level pricing." In other words, the super cheap PCs from HP will now have the Compaq name.

This decision does come at a rather high price. HP said in a filing today with the US Securities and Exchange Commission that it will take a whopping $1.2 billion "impairment charge" sometime later in 2012 as a result of ditching the HP Compaq branding. HP said the charge was due to "accounting rules" due to the change of its branding.  By contrast, HP bought Compaq 10 years ago for $24.2 billion.

Image via HP

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16 Comments

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At first I thought "WHY?", but then it makes sense. If they can sweep all the budget crap from the HP brand itself, they at least stand a chance of turning HP into a premium brand.

A chance.

mr lefleur said,
if i was running the company Compaq would do the $400-$900 laptops and have HP go after the high end market.

Did you read the article? That's what they are doing ;-)

HP will still use the Compaq name for some products but they will be for "basic computing at entry-level pricing." In other words, the super cheap PCs from HP will now have the Compaq name.

TRC said,
I thought Compaq was always their cheap budget brand.

Not really. My HP tablet pc is called the HP Compaq 2710p. At (originally) $1,500 retail, that's hardly cheap budget.

TRC said,
I thought Compaq was always their cheap budget brand.

I agree. I thought that "HP Compaq" was the cheaper/entry stuff. Though $1,500 isn't cheap so obviously not.

TheDisneyMagic said,
Why even keep the Compaq name now, it hasn't got the same recognition as it did years ago.

This, even newer brands such as Asus and MSi in the laptop markets have established themselves in only a few years

Compaq does nothing for hp

This is no good decision at all methinks...

Not a fan of "HP Compaq", but "Compaq" surely always ringed more of the quality bell to me than HP.
So yeah...
And they pay this ridiculous sum just to make that change?

HP, you should focus on other things right now, seriously.

GS:mac

Glassed Silver said,
This is no good decision at all methinks...

Not a fan of "HP Compaq", but "Compaq" surely always ringed more of the quality bell to me than HP.
So yeah...
And they pay this ridiculous sum just to make that change?

HP, you should focus on other things right now, seriously.

GS:mac


HP have been using Compaq for their low end products for quite a few years now, and Compaq products are not made separately to the HP-branded stuff - it's all the same. I think it would be good if they got rid of a bit of the brand confusion.

Not really sure if the cost can be justified though...

Glassed Silver said,
This is no good decision at all methinks...

Not a fan of "HP Compaq", but "Compaq" surely always ringed more of the quality bell to me than HP.
So yeah...
And they pay this ridiculous sum just to make that change?

HP, you should focus on other things right now, seriously.

GS:mac

Compaq was meant to be a 'range' within the HP product porfolion with Pavilion being their mid to high end range (desktop/laptop and other innovative stuff) with the Compaq range being the entry level, low cost product range. The problem is that they were never quite able to turn a company name into a product range name thus we had what we have today.

The biggest problem I have with with HP is this; try purchasing it where I live and it is next to impossible. Their range is constantly out of date, retailers never have their stock available to purchase, their range is extreme limited, there is no way to customise and buy direct like with the case of Dell. HP has more to be worried about than just where they're going to fit the Compaq brand in the grand scheme of things.

Glassed Silver said,
This is no good decision at all methinks...

Not a fan of "HP Compaq", but "Compaq" surely always ringed more of the quality bell to me than HP.
So yeah...
And they pay this ridiculous sum just to make that change?

HP, you should focus on other things right now, seriously.

GS:mac

They don't have to pay the impairment charge to anyone. It's a devaluation of an asset (the Compaq brand name) on their balance sheet. So it's kind of a virtual loss. If they theoretically would have sold the Compaq name a few years ago the could have gotten a lot more money for it than if they would sell it today. But HP apparently is not interested in selling the Compaq name, so they devaluate the asset, which is called an impairment charge.

PS. I must admit I'm no expert in this stuff, but I think it's correct...

Phasma said,

They don't have to pay the impairment charge to anyone. It's a devaluation of an asset (the Compaq brand name) on their balance sheet. So it's kind of a virtual loss. If they theoretically would have sold the Compaq name a few years ago the could have gotten a lot more money for it than if they would sell it today. But HP apparently is not interested in selling the Compaq name, so they devaluate the asset, which is called an impairment charge.

PS. I must admit I'm no expert in this stuff, but I think it's correct...


Wow ok, thank you.
If this is true, then the article could use an update, as this was my biggest concern with this change after I read the article.

GS:mac

Jimmy422 said,
I never quite understood the need for the joint branding, I get that they merged but it never really made sense.

I'm fairly certain they were planning on phasing out the Compaq brand way back when they bought it. I guess it just never happened.