HP's increasingly commodity business units---PCs and printers---will reportedly be combined in a sweeping reorganization.
According to AllThingsD, HP will combine the personal systems group and printing unit. Vyomesh Joshi, chief of the printing unit, will leave the company. Joshi has repeatedly been a CEO candidate as HP swapped leaders like NFL teams change out football coaches. Todd Bradley, head of the personal systems unit, will lead the new unit.
The larger question: Would this reorg make sense?
From a financial perspective, a combined unit could solve a few problems. Consider:
- The profit margin picture for the combined unit would improve. Printers are a cash cow, but facing slower growth.
- A combined unit would hide any troubles with the PC business should it stumble going forward.
- PCs and printers could be lumped into a slow-growth mature unit that would be easier to separate.
- Printers and PCs go together and a combined unit may be able to create bundles to entice IT buyers. A combined unit may also be able to drive more innovation between the two devices going forward.
Here's a look at the financial profiles for both units, which accounted for exactly 50 percent of HP's first quarter sales.