HP Backtracks and Keeps PC Unit

HP Backtracks and Keeps PC Unit

11/12/2011

 

Technology giant Hewlett-Packard, which is based in Palo Alto, California, announced on Thursday afternoon that it is keeping its PC business after all.

On August 19, the tech firm said that it would spin off or sell its PC division. At the time, company officials and industry experts explained that the PC division of HP leads all other competitors in terms of market share, but it is a low-margin field that has no significant growth potential.

As part of its reorganization, HP also bought for $10.3 billion unstructured data titan Autonomy, and abandoned its extensively advertised WebOS mobile devices. The ensuing market confusion caused CEO Léo Apotheker to be forced out and be replaced by Meg Whitman, a former eBay chief and political candidate. It also caused Goldman Sachs to be retained to defend against possible actions by activist investors.

But now, in a public statement Thursday, Whitman said, “HP objectively evaluated the strategic, financial and operational impact of spinning off PSG. It’s clear after our analysis that keeping [Personal Systems Group] within HP is right for customers and partners, right for shareholders, and right for employees.”

Whitman also stated that, “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.”

“The HP board of directors is confident that PSG can drive profitable growth as part of the larger entity and accelerate solutions from other parts of HP’s business,” the statement concluded.

WRITTEN BY:

blakeh@wellsdrew.com