HP to keep personal computer division

Announcement steps away from former CEO's suggestion of spinoff of Personal Systems Group

HP announced Thursday it will keep its personal computer operations, stepping away from a suggestion by a former CEO in August that the company might spin off the business.

"HP objectively evaluated the strategic, financial and operational impact of spinning off PSG (Personal Systems Group). It's clear after our analysis that keeping PSG within HP is right for our customers and partners, right for shareholders and right for employees," said Meg Whitman, who was named CEO of the company in September.

In a statement, HP said a review showed that costs to re-create the value of PSG in a stand-alone company outweighed any benefits of separation.

In August, former CEO Leo Apotheker had announced the company was considering a spinoff of PSG as part of "a plan to fundamentally transform the company."

In September, the HP board named Whitman to replace Apotheker, effective immediately. Whitman said at the time she would undertake a review of the company's strategic direction.

"The outcome of this exercise reaffirms HP's model and the value for its customers and shareholders," the company said in Thursday's statement.

"PSG is a key component of HP's strategy to deliver higher value, lasting relationships with consumers, small- and medium-sized businesses and enterprise customers."

PSG is the world's largest manufacturer of personal computers, with $40.7 billion in revenues in fiscal 2010, the company said.

— Palo Alto Online staff


Like this comment
Posted by Paul Losch
a resident of Community Center
on Oct 27, 2011 at 2:56 pm

"PSG is a key component of HP's strategy to deliver higher value, lasting relationships with consumers, small- and medium-sized businesses and enterprise customers."

Meg is no dummy.

But how the hell can a company do what she describes in such a

Answer: it cannot

Meg's announcement is just buying time until she and her closest advisors figure out how to break up HP. Then the market will judge the entire debacle.

This pre-dates Carly Fiorina, HP was conflicted before she got there. I credit Carly for accelerating HP's demise, and now it is up to Meg to figure out a dignified end to an entity that deserved better.


Like this comment
Posted by Sharon
a resident of Midtown
on Oct 27, 2011 at 3:18 pm

HP is trying to transform itself from a product focused to a systems and solutions focused company.

IBM did this successfully some time ago as did Oracle and Cisco.

IBM had to opportunity to buy PwC Consulting when it spun off from PwC -- Carly fumbled that opportunity.

HP is wise to keep PSG--$40.7 billion in revenues in fiscal 2010 is a big deal.

Apotheker was incompetent--that is SAS fired him.

HP still has a lot of great talent-it needs focus and rapid strategic execution and a functional Board of Directors.

Like this comment
Posted by Nayeli
a resident of Midtown
on Oct 27, 2011 at 3:39 pm

Will they still shut down the tablet division?

While the WebOS has effectively died at the hands of Google Android and Apple iOS, the TouchPad could still be a viable alternative to other tablets. It wouldn't cost much to simply move to Microsoft Windows 8 (tablet edition) or Google Android.

Of course, they could always simply place the tablet division on hiatus until further notice.

Like this comment
Posted by Charlie
a resident of Barron Park
on Oct 27, 2011 at 3:57 pm

Only a fool not to go after the consumer market! Just take a look at what AAPL did in the past few years. For touchpad, Hp needs to fully extend its viable features on the tablet in the coming releases. WebOS is not the issue.

Like this comment
Posted by Nayeli
a resident of Midtown
on Oct 27, 2011 at 7:29 pm

@ Charlie:

I disagree. WebOS was certainly a fantastic operating system, but its list of available apps is extremely limited. As a result, you can't truly use the Touch Pad or Palm phones with the versatility of Android of iOS.

I think that keeping the Touch Pad would be a good thing...but with a different operating system. It is a high quality device. With the right OS, it might still sell very well. In fact, it would be great if they could sell them with Android AND Windows 8.


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