Hewlett-Packard is the world's largest personal computer company, and this makes it hard for any of the smaller suppliers to buy its PC business. However, Taiwan's DigiTimes has suggested a possible solution: split the business into consumer and enterprise divisions, and sell off the consumer division. As Michael Dell and others humorously suggested when the news broke, they could even call it Compaq, though the brand has been devalued so much that this is unlikely.
In the statement, DigiTimes Research senior analyst Joanne Chien has provided independent confirmation of the point I made yesterday (in Will Samsung buy HP's PC division?) that Samsung was the most likely potential buyer for HP's Personal Systems Group (PSG). But as she says:
the huge scale of HP's PC business is unlikely to help the company find a buyer easily; therefore, DigiTimes Research believes that HP will have a high chance of further separating its PC business into consumer and enterprise segments with the enterprise segment to remain within the control of HP and later integrate with the company's IT service and software businesses, while the consumer segment can be sold independently.
We don't know how HP's PC sales are split, but there might be (say) 10 million PCs sold each year to business buyers, and 30m sold to consumers. Shifting consumer PC sales from HP to Samsung would make Samsung the leading supplier, shipping about 40m units a year. However, HP would retain a big enough PC business for it to make money the way Dell does: by selling services for consulting, customising, installing, maintaining and managing PCs in a corporate setting. (Dell bought Perot Systems for $3.9bn to help it win this sort of business, while HP bought EDS for $13.9bn.)
Samsung buying HP's PC business would also affect the Taiwanese companies who make HP's laptops and netbooks -- in an earlier post I mentioned Quanta, Foxconn, Compal, Wistron and Inventec. She says:
"If Samsung acquires HP's consumer PC business, it would greatly affect the current PC brand ecosystem as well as Taiwan's notebook industry. Since Samsung is prefers in-house production, and plays a major role in the global component supply industry, the acquisition will only help Samsung to become even stronger in both the notebook and component supply industries."
Another DigiTimes story (Samsung reportedly contacted Taiwan OEMs for evaluating notebook outsourcing) suggests Samsung might be exploring the market. It says Samsung "reportedly contacted Taiwan-based notebook makers Quanta Computer, Compal Electronics and Pegatron Technology in August to evaluate the possibility of outsourcing notebook orders". Later:
"The sources added that Samsung's actions seem like it is already in preparation to take up Hewlett-Packard's (HP's) PC business."
Of course, it may also mean so such thing. Samsung might simply want to expand its successful PC business using contract manufacturers rather than by investing in the expansion of its own factories. Given the problems at Acer and the growth of the tablet market, this sounds like Samsung being sensibly prudent, rather than planning a massive takeover.
Source: Digitimes Research, compiled by Digitimes, August 2011