HP to keep PC division

HP to keep PC division

Contributes to long-term relationship with customers, HP says

By | IDG News Service | Published 06:05,

HP has decided to keep its PC division after the company talked in recent weeks about spinning it off.

HP said that keeping its Personal Systems Group (PSG), which deals in PCs, smartphones and tablets, was "right for customers and partners, right for shareholders, and right for employees," Meg Whitman, HP's president and CEO, said in a statement.

HP conducted a strategic review of the group before deciding to keep it, the company said in a press release. HP decided that PSG is a key component of HP's efforts to create long-term relationships with consumers, including businesses, the company said.

Under former CEO Leo Apotheker, HP in mid-August said it would explore the sale or spinoff of the PSG. For HP, a slowdown in PC sales and its razor-thin margins became a drag as the company emphasized more profitable business areas such as enterprise software, services and hardware. HP also said then that it would kill webOS smartphones and tablets, and a buying frenzy ensued after HP sold remaining TouchPad tablets starting at US$99.

HP preferred the idea of spinning off PSG, launching a campaign for a separate PC company it tagged a "$40 billion startup." On her first day as CEO, Whitman, who replaced Apotheker, said the company would spin off the PC unit by the end of the year. The decision was "solely based on the value to investors and value to customers," Whitman said.

The original decision to sell or spin off the division was criticized by analysts, who said the PC business contributed to the company's bottom line and added purchasing power for enterprise hardware parts.

Some HP enterprise customers, including members of Connect, an independent HP's enterprise customer user community, wanted HP to retain the PC unit so they could go to one entity to purchase hardware, software and services. Some competitors like Dell preyed on the uncertainty around HP's business unit to gain new customers.

But some analysts said that if HP wanted to improve its profit margins, the PC business had to be the first domino to fall. With PC shipments dropping and HP having no clear mobile strategy, it would make sense to refocus the company's attention on high-margin enterprise businesses, much like IBM did when it completed the sale of its PC unit to Lenovo in 2005, they said.

Comments

  • CWUKWebmaster Mark you arent quite right In her first press conference Whitman refused to renounce the plan to separate the PC business From the Wall Street JOurnalOn Thursday Ms Whitman 55 years old said she endorsed the strategy put together by Mr Apotheker In addition to exploring a potential spinoff of its 40 billion-a-year PC business H-P has agreed to pay 103 billion to buy UK software maker Autonomy Corp and scrapped its TouchPad tablet computer moves that had sparked concern from customers and investors alike httponlinewsjcomarticle the mess HP made of the whole process
  • Mark On her first day as CEO Whitman who replaced Apotheker said the company would spin off the PC unit by the end of the year The decision was solely based on the value to investors and value to customers Whitman said is your articales quote this is incorrectWhitman said HP would only spin-off the PC division IF you missed this IF it made sense and that the result would be of a review she was drivingJournalism isnt what it used to be Which reminds me of a Theodore Roosevelt famous quote It is not the critic who counts not the man who points out how the strong man stumbles or where the doer of deeds could have done better The credit belongs to the man who is actually in the arena whose face is marred by dust and sweat and blood who strives valiantly who errs and comes up short again and again because there is no effort without error or shortcoming but who knows the great enthusiasms the great devotions who spends himself for a worthy cause who at the best knows in the end the triumph of high achievement and who at the worst if he fails at least he fails while daring greatly so that his place shall never be with those cold and timid souls who knew neither victory nor defeatYes I work at HP I am proud of it Get it right when you report on somethingand do what we do run in the enterprise arena the consumer arenawith hw sw and services then and only then comment To others with smart remarks I suggest you read Roosevelts quote again and then think of Kiplings poem IF before you say any more
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