Hewlett-Packard (HPQ) has not had a good going of late. Its stock is down over 14% in 2012 and most analysts are lukewarm to its prospects. When HP reports its first quarter earnings next week, it’s expected to report earnings of 91 cents per share — down around 27% from a year earlier.

The Personal Computer maker is clearly not a stock market darling. HP’s Price-Earnings (P/E) ratio is just below 8, which is below that of the S&P500 (21) and the PC Sector (14). Like its chief competitors, Dell (DELL), Lenovo (LNVGY.PK) and Acer, HP has plugged away in an industry stuck in a vicious cycle of product commodification, tight margins and poor business prospects.

The silver lining for HP is that it regained the top spot in the PC market in the first quarter. Moreover, PC shipments actually increased by 21% — and shipments of Desktop and Notebook PCs, which represent HP’s staple, actually exhibited growth of 8% and 11%, respectively.

Unfortunately for HP, it missed out on the best-performing portion of the PC industry– Tablets, which grew by 200% during the same period. That represents a missed opportunity and is partially a self-inflicted wound as HP cancelled its WebOS-based HP Touchpad and shuttered its WebOS division less than two years after acquiring Palm for $1.2B.

To make matters worse, with the ascendancy of smartphones and the advent of high-speed mobile Internet, consumer preferences have shifted. Notwithstanding the fillip in the first quarter, the PC industry is expected to remain in the doldrums this year, rising by only 4.4%, while shipments of Tablets are expected to rise by 90% in 2012 before eclipsing shipments of traditional PCs by 2013.To continue reading, click here.