HP may keep PC unit after all

HP may keep PC unit after all

Summary: The longer HP's personal systems division remains in limbo the easier it is for rivals to poach sales.

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HP is reportedly having second thoughts about its plan to spin off its PC unit and may wind up keeping the business.

According to the Wall Street Journal, HP's CEO Meg Whitman is looking over the figures behind the spin-off proposal. Whitman has said she wants to make a decision on the PC unit soon and she really doesn't have a choice. The longer HP's personal systems division remains in limbo the easier it is for rivals to poach sales.

The biggest reason to keep the PC unit is related to the supply chain. If HP spun off the PC unit it would have less buying power for components. The lack of purchasing power would hurt margins on HP's servers, which are delivering solid sales for the company.

HP is rerunning numbers used to justify the PC spinoff because it's possible that Leo Apotheker, the former CEO, was predisposed to ditching the unit because his background revolved around software.

The balancing act for HP revolves around the short-term and long-term implications of keeping the PC business. For now, HP would keep the PC unit to preserve margins and the server business. However, it's unclear whether keeping the PC unit would result in long-term pain. PC demand is under fire from tablets and mobile devices. That onslaught could only get worse.

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Topics: Hardware, Hewlett-Packard

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29 comments
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  • Depends what they call a PC

    The new "All-In-One" PC's running Windows 8 is going to re-energize the PC market in the corporate environment.



    Now watch the nay sayers show up and rant, and in a year have to eat crow. ;-)
    No_Ax_to_Grind
    • Nah

      Not exactly the first time they've tried those all-in-ones, they just don't sell. Windows 8 adds Metro, but HP already had a touch friendly UI for it, so it isn't the UI part that's the problem.<br><br><a href="http://www.shopping.hp.com/webapp/shopping/series_can.do?storeName=computer_store&landing=desktops&a1=Category&v1=TouchSmart+PCs&jumpid=in_R329_prodexp/hhoslp/psg/desktops/TouchSmart_PCs" target="_blank" rel="nofollow"><a href="http://www.shopping.hp.com/webapp/shopping/series_can.do?storeName=computer_store&landing=desktops&a1=Category&v1=TouchSmart+PCs&jumpid=in_R329_prodexp/hhoslp/psg/desktops/TouchSmart_PCs" target="_blank" rel="nofollow">http://www.shopping.hp.com/webapp/shopping/series_can.do?storeName=computer_store&landing=desktops&a1=Category&v1=TouchSmart+PCs&jumpid=in_R329_prodexp/hhoslp/psg/desktops/TouchSmart_PCs</a></a><br><br><br>I think it's the form factor, and the fingerprints. If you have the screen vertical, it just doesn't feel right to operate the screen, you're stretching out constantly, but if you put the screen closer, then it's too close for comfort.<br><br>I think HP would be better not wasting anymore time and money on these hybrids and making pure tablets. The success of tablets once they cut the price showed that they simply mis-priced it. If the Chinese can make and sell them at $106 (see Alibaba Android tablets) then HP needed to get retail down, something Hurd was good at and HP currently isn't (Amazon seem to understand the price sensitive nature here).<br><br>Too late now for WebOS mind you, once you dis your own OS, its as good as dead, see Symbian for another example of that.<br><br>---<br>The 2% richest Americans, own 98% of US wealth, yet pay only 70% of US taxes because they control 100% of the GOP.
      guihombre
      • HP painted themselves into a corner

        @guihombre Not sure how they will clean up the mess that the HP board created.

        PS: Many of those 2% vote Democrat. The sooner you see that the Democrats and the Repubs are 2 sides of the same coin, the wiser you will become.
        otaddy
      • @many vote democrat

        It isn't the 2%'s *vote* that gives them control of the GOP, it's the *money* used to market the candidates. Koch brothers are only 2 votes, yet Gov Walker (Republican) acts like they're his boss.<br><br>That's why you see Fox essentially marketing a lie and talk radio use the same talking points. The media is bought with money so the message is controlled by the money of the 2%.<br><br><br>Oh and the Republicans have just blocked Obama's Jobs package because it requires the super rich be taxed more.<br><br><a href="http://www.bbc.co.uk/news/world-us-canada-15267269" target="_blank" rel="nofollow"><a href="http://www.bbc.co.uk/news/world-us-canada-15267269" target="_blank" rel="nofollow">http://www.bbc.co.uk/news/world-us-canada-15267269</a></a><br><br>"Republicans oppose the measure citing its spending to stimulate the economy and its tax rise on millionaires"<br><br><br>---<br>The 2% richest Americans, own 98% of US wealth, yet pay only 70% of US taxes because they control 100% of the GOP.
        guihombre
      • 2% richest Americans

        @guihombre

        More BS from the marxists. Due to tax brackets, highest income earners pay higher income tax rate. If you really wanted everyone to pay their "fair share", you would demand a flat tax; *everyone* pays the same rate. Including the nearly 50% of wage earners that currently pay no federal income tax at all.
        mjollnir
      • 2%

        @guihombre
        Name a country where the rich are not in charge. Overthrow them, and just a new bunch of them rise to the top. Even in the Soviet Union, there were super rich at the top of the party. The problem is not the taxing, that class warfare stuff is misdirection, the problem is the spending.
        zmud
      • Wow. Here I fixed it for you!

        @guihombre
        The 2% richest Americans, own 98% of US wealth, yet pay only 70% of US taxes because they control 100% of the DNC

        You see, when it comes to keeping their money, Democrats will throw you to the wolves before giving away their billions, too.

        Or are you so nieve that you think otherwise, that the rich Democrats in congress really care any more about your finacial status then the Republicans do?
        William Farrell
      • RE: HP may keep PC unit after all

        @guihombre
        The problem with the touch smart stuff is that it was terrible. It was slow laggy and for the most part unusable. They really needed MS to provide strong underpinnings for this type of UI at the OS level. MS is doing this with WinRT. I think the next generation of TouchSmarts built for Win 8 will be more interesting to consumers.
        sharkboyjohn
      • RE: HP may keep PC unit after all

        @guihombre

        I agreed with everything you said, until I got to here:

        <i>---
        The 2% richest Americans, own 98% of US wealth, yet pay only 70% of US taxes because they control 100% of the GOP. </i>

        While I <b>do agree with that assertion,</b> don't you believe it is a 'bit off topic'??
        fatman65536
      • At least half of those richest Americans are democrats,

        and therefore, not part of the GOP.

        Now, how about looking at who creates the wealth and who creates the jobs? Those 2% of wealthy Americans create more jobs than the 47% who don't pay taxes at all. The 2% are paying their fair share, and are making up for the taxes not being paid by the 47%.
        adornoe
        • guihombre: Use your head for a change....

          Obama's jobs plan was more of the same recipes for spending which the democrats are good at, but, none of those recipes have ever resulted in creating actual jobs.

          The trillion dollar stimulus plan was a complete bust, so, why would more of the same be any better?

          Government does not create jobs. Government destroys wealth and as a result, jobs. Obama's "jobs plan" was a spending bill, with temporary jobs which don't actually stimulate economic growth, and in reality, ends up sucking wealth from the free market, and therefore, killing real jobs.

          Your kind of economics is being practiced in Cuba and in Venezuela. Try your luck there.
          adornoe
    • RE: HP may keep PC unit after all

      @No_Ax_to_Grind
      wet dreams! only Linux or Android can re-energize the PC market not windoze.
      The Linux Geek
      • RE: HP may keep PC unit after all

        @The Linux Geek

        Fail
        Qbt
  • Face It, PCs Are Boring

    The Microsoft-compatible PC is a dead-end market. Too much control by Intel and Microsoft has stifled most of the potential for innovation. Which is why that innovation has gone elsewhere, into the ultramobile market--smartphones, tablets, and everything in-between.
    ldo17
    • RE: HP may keep PC unit after all

      @ldo17 ...where Google and/or Apple have too much control, stifling innovation? :-)
      jgm@...
      • Re: Google? Too Much Control??

        @jgm@... Apple, yes. Google, no. Just look at the amazing variety of Android devices, quite a lot of them clearly without Google's blessing (CyanogenMod, tablets running Android 2.x, and of course the Kindle Fire). Google lacks the vendor lock-in to control the Android platform the way Microsoft controls Windows, and Intel controls x86. That's why Android is thriving.
        ldo17
      • ldo17, I give that a hearty LOL!

        @jgm@...
        I don't see android "thriving" on tablets? Given the choice between a 499 iPad and 499 Android tablet, consumers are overwhelmingly choosing iOS.

        On smart phones, yeah, I can see someone getting a cheap $39 phone over that of a $200 iPhone, but then to most of these people, gmail, phone calls, and Angry Birds are all they're really looking for.
        William Farrell
    • RE: HP may keep PC unit after all

      @ldo17
      Really?!?
      x I'm tc
  • RE: HP may keep PC unit after all

    If HP is smart, and they are not, they would keep the PC unit, pare back the number of SKU's, continue to develop WebOS, a platform that they totally control, and not buy any more service companies. You are not IBM and will never be, so be a great HP and be satisfied with that.
    DAMANgoldberg
  • RE: HP may keep PC unit after all

    I remember reading an article decades ago that said a touchscreen is a disaster if the person is seated (as in an office) and the screen is vertical in front of them, because the ergonomics are horrible. Your forearms get tired after just a few pokes.
    Dorkyman