With Acer slowly creeping up
on their marketshare, HP is planning to take some aggressive action in the notebook market to keep and improve their lead. Though there are estimates of Acer potentially replacing HP as the number one vendor worldwide, HP sees things differently, and is prepared to slash notebook prices
all over their retail market. The move is intended to make HP's notebooks more attractive, which of course results in better sales.
The price cuts aren't necessarily coming at HP's expense, either. The sources cited suggest HP has been shopping for vendors with more aggressive pricing, at the cost of their own margin, and placing larger orders with vendors who offer such. Some of HP's production partners are expected to take profit hits because of this. How this will affect HP's earnings isn't mentioned; I suspect HP is attempting to minimize any impact to their bottom line while avoiding the loss of more ground to Acer.
At the moment HP is still very strong. They are number one in the notebook market, and Dell has been slipping slowly. Product strength will be key as well in the coming year, as the mobile market has been growing faster than ever before -- so pricing won't be everything.