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JimVanMeerten (62.60)

HP Cusomer Support---- F-

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May 05, 2010 – Comments (5) | RELATED TICKERS: HPQ

Here is a company I really have mixed feelings about. I read a posting on Marketocracy just after I had a bad customer support experience with my HP computers and printers. I read this posting: "What's behind this dinosaur? Not much!.....To me HPQ looks like a great short opportunity. Opinions?"

First let me tell you about my bad experience. I decided to upgrade my computer so I went to Best Buy and purchased a new HP Pavilion Entertainment PC. When I got home I tried to connect it to my old and trusty HP LaserJet III but there was no place to plug in the printer's 25 pin cable so back to Best Buy to get a converter cable to connect to the USB port. I log on and try to print but nothing happens. I call HP customer support to get assistance connecting my HP computer to my HP printer. To me that sounds like a logical step but boy was I wrong.

I don't know how many of you have ever had a problem with your computer -- do you believe that statement? I bet you all have had the same experience as I've had. The hardware people say the hardware is fine it's a software problem. The software people usually say the software is working properly it's a network problem. The network people say its not a network problem it must be a problem with connectivity to the peripheral devices. They send you round and round with no one taking responsibility and everyone passing the buck to a different department or vendor. I think this is a trick they all learn the first week of their IT training school.

This time though I think I've got them. This is an HP computer connected to an HP printer so HP customer support should be able to help. Right? Wrong! When I call the 800 number no one knows what to do. After several transfers and an hour and fifteen minutes later I'm transferred to a guy who claims to be the senior printer customer support person at the support center. He informs me that although there are millions of these Laserjet III printers still in use HP no longer provides customer support for that product. He asks me what software I have. Why Windows 7 of course. His reply is that the software does not provide a driver to connect to such an old printer. He says I should either load an old software version or better yet buy a new HP printer.

I decide to get a second and third opinion so I call again several times to see what other customer support reps will tell me and that all say that HP no longer supports that printer and my only option is to buy a new HP printer and then they will help me.

I decide to call the Geek Squad and get an appointment. There is no way that Mister Softy would design a software program that leaves out one of the most popular laser printers ever sold. They quote $129 for a diagnostic visit but don't promise they can fix it.

Now I'm really frustrated. I log onto the Microsoft website after a few clicks find a list of supplemental printer drivers and download the one for the HP Laserjet III. It asks what communication port I want it to connect to I click "USB" and out of my printer pops a test page.

How is this possible? I am a total computer illiterate but I can go to the on-line software site, spend less than 5 minutes, click a few tabs and correct a problem that is beyond the expertise of the best and most experienced customer support people at HP? Either they are total idiots or they have been told to lie and get you to buy new HP equipment. Either way I'm not pleased with HP customer support and because HP has made a decision to not properly support their products I'll never buy another HP product.

But what about the posted question? Should we be shorting HPQ at this time? Well the stock is trading down 5.88% for the month and has hit 7 new lows in the last 20 trading sessions. Barchart has technical sell signals on 9 of its 13 technical indicators of an overall 48% sell signal.

The Wall Street analysts have 28 buy and 5 hold reports published with no negative recommendations released. They think sales will increase 7.60% this year and 5.30% next year. EPS growth estimates are great with an increase of 15.60% for this year and 10.30% next year. They even think the 5 year compounded EPS growth rate will be 12.60%.

Investor sentiment is high on Motley Fool with CAPS members voting that the stock will beat the market by a vote of 2761 to 228 and the All Stars agree with a vote of 704 to 41. That is a very high and positive investor sentiment. The columnists Fool tracks have had favorable articles 33 to 1.

My opinion -- At this time I'm not going to sort HPQ no matter how bad their customer support is. Although there has been a negative price trend recently there are just too many brokerage firms recommending the stock so how can it continue to go down with such strong investor sentiment?

If you short at this point you'd better be prepared to cover at a moments notice.

Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email JimVanMeerten@gmail.com.

Disclosure: No positions in HPQ at the time of publication.

5 Comments – Post Your Own

#1) On May 05, 2010 at 3:41 PM, FracturedVision (< 20) wrote:

I would disagree on shorting a forward-thinking company for not focusing on the past.  While legacy support is useful for keeping long-term customers satisfied, it is contrary to Moore's Law and progressive technological standards from a cost-efficiency perspective.  Also, training and educating call center representatives about "ancient" technology doesn't seem like a logical use for resources.

As to your anecdote with the printer - its one thing to offer up-to-date drivers for newer operating systems, but another entirely when the hardware standard has expired as well (DB-25 to USB).  On the bright side, that printer should speak volumes as to quality.  The HP Laserjet III was introduced in 1990 and you're lucky enough to be worrying about this problem 20 years later - just giving a reason to buy HPQ.

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#2) On May 05, 2010 at 4:31 PM, lemoneater (79.19) wrote:

Glad you were able to load the right driver and fix your printer problem yourself.

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#3) On May 05, 2010 at 4:33 PM, JaysRage (88.77) wrote:

They don't suck because they have bad technical support.  They suck because they have no bridge to the future.   PCs and Printers are both becoming obsolete.   The world is moving fast toward a paperless society.   HP has big bets on PCs and Printers.   They just now realized what is happening and tried to jump in late with the purchase of Palm, but it will be too little too late as Palm itself was behind the game.    They are trying to wedge their way into the technology that will move us all forward with the purchase of PALM, but it will be an utter failure.   This company will die a slow and painful death as PCs become irrelevent and information is at the touch of a screen....not the flip of a paper......PCs will die.....going the way of 8 track tapes and VCRs.  

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#4) On May 05, 2010 at 5:35 PM, imobillc (< 20) wrote:

CRAP after writing a long story of my bad computer the blog failed me again.....

HP sucks! 

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#5) On May 05, 2010 at 6:13 PM, Turtleread (65.10) wrote:

HPs are designed for highly technical people--the nerds of the world.  Apples are for more right-brained graphics type people.  Dell, IBMs (when they made them, etc. are for the rest of us left-brain, mostly math and logic driven people.  Call center people are those that are placed in very, very entry level jobs--the McDonald's fry-o-lator (no disrespect) job, off the street, do only as you are told.  Sorry for your experience.  Next time Microsoft knows a lot about compatibility and AOL if you use them.  I got routed to a guy in Romania and he knew exactly what to do with my old Aptiva to make the AOL software run well on it and with my HP DeskJet 610CL.  See, even the ancient survive!

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