An HP spokesperson has confirmed to us this afternoon that the company will be shifting its strategy around the Compaq brand starting sometime in 2013, eliminating "HP Compaq" phrasing altogether and concentrating solely on the low end of the market. That's not a drastic change — Compaq has long been relegated to the lower rungs of HP's consumer-facing product portfolio — but historically, those products have often been little more than reskinned HP models. Starting next year, we're told they'll bear the Compaq name alone and will be members a dedicated line of "basic" PCs at "entry-level pricing."
Compaq — the storied PC brand that HP acquired in 2002 — has been little more than an afterthought for HP in recent years, its divisions and intellectual property having long been absorbed into the mothership, so this could prove to be a meaningful rebirth for the marque at retail. It won't be free, though: HP noted in its earnings filing with the SEC today that the branding move would lead it to take a $1.2 billion "impairment charge" in the next quarter. It's said to be a necessary accounting move associated with a change in the way the company will use one of its brands — a material asset — and there's little question that "Compaq" means less to consumers today than it did before the acquisition a decade ago.
Here's HP's full statement on the matter:
This non-cash charge relates to a change in how HP plans to use the "Compaq" trade name in its branding strategy going forward. As part of our focus on simplifying our marketing and customer experience, beginning in 2013, HP will change how it uses the "Compaq" brand for certain computing products. We will continue using the Compaq brand, but it will be used for basic computing at entry-level pricing. In the past, we have used the jointly branded name "HP Compaq" to describe certain computing products, but that approach will be discontinued. As a result of these changes, accounting rules compel us to change the carrying value of the "Compaq" brand, resulting in what is called "goodwill impairment".