HP won't sell its PC business after all

By on October 27, 2011, 6:00 PM

HP won't sell its PC business after all. The company finished evaluating strategic alternatives for its Personal Systems Group (PSG) today and decided that its customers, partners and shareholders would be best served if the unit remained at home. This marks one of the first major changes rubberstamped by newly appointed CEO Meg Whitman.

The spin-off proposal was made in August by former CEO Leo Apotheker as part of a plan that was intended to reduce HP's reliance on low-margin computers and guide the company toward more profitable markets such as software and services. The move was made in conjunction with a $10.3 billion agreement to buy software firm Autonomy Corp.

Apotheker's ideas proved unpopular among shareholders, especially because it was revealed prematurely. In August, HP admitted the process -- if pursued -- could take up to 18 months to complete and would cost $1.5 billion. Even if HP secured a buyer and shared the decision more carefully, many analysts believe it would have been a risky endeavor.

HP is the world's largest PC vendor and while profits are slim on end-user machines, losing a business the size of its PSG would be felt company-wide. Among other benefits, its high-ranking status in PC sales grants the company leverage over suppliers such as Intel and AMD. Forfeiting this advantage would surely affect HP's profitable server business.

"The strategic review involved subject matter experts from across the businesses and functions. The data-driven evaluation revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement. It also detailed the significant extent to which PSG contributes to HP’s solutions portfolio and overall brand value. Finally, it also showed that the cost to recreate these in a standalone company outweighed any benefits of separation."

Ms. Whitman, the former chief executive of eBay, replaced Apotheker at the helm of HP only a month after he unveiled his restructuring strategies. Prior to today's announcement, Whitman said she would reduce the number of large acquisitions following the Autonomy takeover and focus on using the assets already at HP's disposal. "You don't transform $129 billion companies," she said. "We have to take the most incredible assets we have and make them great."




User Comments: 13

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Burty117 Burty117, TechSpot Chancellor, said:

Well there's a suprise...

Leeky Leeky said:

I wonder which of us will be reporting that its sold next week then!

We want to sell... Oh wait, we don't know... Oh lets do it... Erm, no we need to think... should we? Yeah? No? Maybe? Oh the shareholders aren't happy and we need to make them smiley faces again...Lets keep it... But hey, we got PR in the meantime!!

Xclusiveitalian Xclusiveitalian said:

It's funny I have an HP laptop, and desktop. My last 2 computers were HP's. I speak from the heart when I say...I will never ever again buy an HP =) They can keep the business, but there quality is horrible and i'm done with it.

Guest said:

To the above poster talking about HP quality...:

Why are you blaming HP?

Blame MSI for the mainboard

Seagate for the hard drive

Intel for the CPU

and nVidia or ATI/AMD for the graphics card..

All they do is put all that stuff into a tower and sell it. How is the quality from HP bad?

nelldnine nelldnine said:

Guest said:

To the above poster talking about HP quality...:

Why are you blaming HP?

Blame MSI for the mainboard

Seagate for the hard drive

Intel for the CPU

and nVidia or ATI/AMD for the graphics card..

All they do is put all that stuff into a tower and sell it. How is the quality from HP bad?

+1 :)

I agree, HP is a fine brand indeed. I bought a Pavilion dm1-3205au and after 3 months the hard disk became non-functional. I never blamed HP for the fault but I was blaming myself for not taking care of my good laptop (also blamed Hitachi for their lame hard drives ;)). Took the laptop to a repair center and currently waiting for it to be done. Anyways, hooray for HP!

waterytowers said:

If you want a good HP laptop get an EliteBook ($$), the rest are all rubbish that will last a year if you are lucky. I think all PC manufacturers are making a lot of poor quality laptops now. There are a handful of laptops that are at least double the price, but at least they are a descent quality.

Xclusiveitalian Xclusiveitalian said:

(-)can't overclock cpu

(-)Every single HP computer I have ever owned has had a hard drive fail within 6 months, also my dv7 motherboard failed on me and it took them a month to ship it back to me. I many times can i invest in an HP product only to have it fail? I'm talking more than 6 different computers, laptops, and desktops.

(-)packed cases, hard for upgrades(desktop)

(-)horrible customer support

Next time i'm either building my own or getting an Alienware as my desktop is primarily for gaming. While my laptop is for everyday use and college.

Leeky Leeky said:

My HP laptops used to just chew through batteries and chargers really, other than that and the occasional overheating they were largely okay.

CryVer CryVer said:

Guest said:

To the above poster talking about HP quality...:

Why are you blaming HP?

Blame MSI for the mainboard

Seagate for the hard drive

Intel for the CPU

and nVidia or ATI/AMD for the graphics card..

All they do is put all that stuff into a tower and sell it. How is the quality from HP bad?

In my case, when I sent my laptop in for repair, they "accidentally" switch my CPU to an inferior one (100 USD in difference). My laptop also had scratches on the outside, when they returned it.

Guest said:

Well, I love HP notebooks

Lately their notebook only got better. Our company also gets them at awesome prices through their portal.

I will take HP over Dell any day of the week !

Guest said:

I guess peoples personal experience dictates their preferences and prejudices.

I have had or have Dell, Compaq, Acer, HP, Lenovo, and even an old NEC PC/laptops.

I currently have 2 HP desktops, 1 Imac (dual boot, use windows 95% of the time)

3 HP laptops, transformer and ASUS EP121 tablet.

My experience with HP has been fine. Outside of disks dying (normal if you have them long enough), no problems.

If people ask me I suggest HP, Dell. Of course my recommendations are based on experience.

I prefer Epson printers over HP, but I've had positive experiences with HP printers also.

I actually had two problems with my Imac, and eventually Apple replaced the Imac.

Negative experience with ACER.

Guest said:

HP needs to make an Executive decision and grabs the Magic 8-Ball and asks the question:

Old CEO:

Should we sell the PC business?

Signs point to yes

The Board asks:

Should we keep this CEO?

Outlook not so good

New CEO:

Should we sell the PC business?

My sources say no

The Board asks:

Should we keep this CEO?

Better not tell you now

...

Guest said:

whitman looks like a creepy old man

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