Asia impact unclear in HP PC-printer merger

Spokesperson says no news on whether merger of PC and printer business units will affect headcount in Asia-Pacific, while analysts describe consolidation as good move for Hewlett-Packard.
Written by Liau Yun Qing, Contributor

Hewlett-Packard has confirmed it will be consolidating its PC and printer business groups, but a Singapore-based spokesperson says the company is not ready yet to share details on how the move will affect jobs in the Asia-Pacific region.

The tech giant on Wednesday said the new business unit, combining its PC and printer groups, would be called the Printing and Personal Systems Group. In an e-mail to ZDNet Asia, the HP spokesperson reiterated the company's statement that the merger was part of its "ongoing effort to streamline operations, remove complexity and gain efficiency to invest in research and development (R&D) and other growth driving priorities".

The spokesperson added that the move would benefit its customers, partners, shareholders and employees across Asia-Pacific, including Japan, and worldwide.

Asked if the move would have any impact on its headcount in the region, he said: "HP is working to align our cost structure in order to invest in the company's growth. We have nothing further to announce at this time, but will continue to explore all options." He also declined to reveal the company's employee headcount by region.

'About time' for merger
Commenting on the merger, Amy Cheah, market analyst at IDC ANZ, noted that HP's PC and printer business units shared similar channel and operational processes so it was "about time" the company looked to drive greater synergy between the two.

Referring to HP CEO Meg Whitman's statement that the company had been running its business in silos, Cheah told ZDNet Asia that greater synergy between the business units would help HP optimize its internal resources and adopt a leaner and clearer strategy.

In a statement, TBR noted that consolidating the PC and printer units was a "good place to start" since they both served consumers and commercial customers. The merger could also "jumpstart" its PC unit's efforts in building a consumer-oriented cloud by combining its desktop and laptop technology with the printing unit's document and data management services.

"Creating a consumer service that allows near-instant access to cloud-hosted data from multiple computing devices will allow it to tether consumers to HP products, building brand loyalty that results in repeat business," said TBR.

Merger better than PC spinoff
Cheah said the merger did not come as a surprise. With HP's PC business unit close to being spun off last year, she said it was "evident" the company had been making changes in hopes of remaining relevant in the market.

In contrast to spinning off the PC unit, which would "undermine one of HP's biggest strengths", she noted that the merger made more business in terms of cost, go-to-market approach, channel management, and so on.

Cheah explained: "Internally, unifying high-volume businesses into one allows HP to leverage the unique strengths of each business while improving efficiency within areas of similarities. HP has always been known for having strong channel presence, and its broad range of products and services enables the vendor and its partners to go-to-market with a complete solution."

To ensure the merger was successful, she noted that HP would need to find "operating synergies" between the two business units to reduce redundancy and manage fundamental differences which might inhibit growth. "Given time, a successful merger will allow HP to free up operating and capital expenses to drive long-term innovation and shareholder value," she added.

TBR added that HP would face competitive challenges in the near-term while consolidating the business, as most organizations do when combining two large divisions. Thus, it would take time to establish effective resource sharing and allocation, it noted.

"During this time, HP will be susceptible to competing vendors looking to capitalize on partner relationships. It will also take time before customers see noticeable benefits of products that work better together," the research firm added.

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