There's a lot of competition in printers and digital cameras. I think they need to find a new niche.
If I were running the show:
1) I'd spin off the PC business.
2) I'd get Hewlett back on the board.
3) I'd think really hard about what HP's people are good at and invest heavily in it to try to create a new market.
HP used to mean high quality instrumentation. Then it meant minicomputers. Then it meant laser printers. Then it meant PCs. I'm not sure what it means now, but the board needs to figure it out soon. I don't think they can support themselves on laser and inkjet printers and digital cameras.
The best thing, innovation-wise, is probably to split up HP and let the good people in each area find their new niche. As it stands, HP is a hodge-podge that doesn't do too much very well. The PC side of the business is a boat-anchor that is going to eat the rest of the company if they don't do something about it soon.
My $0.02.
Cheers,
Scott.