Tech vendor financial reports this week painted a portrait of the state of the hardware, peripheral and chip markets this year: smartphone-related products are selling well, but technology tied to PCs is having a rough time.

At its annual financial analyst day Wednesday, a blunt Hewlett-Packard CEO Meg Whitman said the company has some tough choices to make and a game of catch-up to play over the next few years. The company said it now expects earnings per share of US$3.40 to $3.60 this fiscal year. That's significantly below the estimate of $4.18 from analysts polled by Thomson Reuters.

"I believe that five years from now, if we don't have a smartphone or whatever the next generation of that device is, we'll be locked out of a huge segment of the population in many countries of the world,"

HP's turnaround plan includes cutting the number of PC models it sells by 25 percent over the next two years.

Revenue is expected to fall in every business division, with the exception of software. "The single biggest challenge facing Hewlett-Packard has been changes in CEOs and executive leadership, which has caused multiple inconsistent strategic choices, and frankly some significant executional miscues. This is important because as a result it is going to take longer to right the ship than any of us would like," Whitman said.