HP won't spin off PC unit after all

HP said it will keep its personal systems group and that it will continue to sell PCs.
Written by Larry Dignan, Contributor

HP said it will keep its personal systems group and that it will continue to sell PCs.

HP, under former CEO Leo Apotheker, announced in August that it would spin off its PC business, while halting production of all webOS phone and tablet devices.

The company said today that a strategic review indicated that the supply chain and procurement hit was too much. Meanwhile, HP's PC unit performs well.

When Meg Whitman took over as CEO she promised a quick decision on the PC division. She delivered.

Overall, HP's move makes sense — at least in the short term. Keeping the PC unit removes a lot of uncertainty for corporate technology buyers who were likely to go with vendors such as Lenovo and Dell. By eliminating that uncertainty, HP can move ahead.

In the long run, HP's decision to keep the PC unit isn't a slam dunk. PCs are still a low-margin commodity business.

"HP is committed to PSG, and together we are stronger," Whitman said in a statement.

Whitman's review revolved around how PCs fit into the supply chain. Removing the PC business could mean that HP would lack the scale to get good component deals for its servers.

In a statement, HP said:

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.

Going forward, HP's Todd Bradley, who runs the PC unit, said the company is committed to the PC and intends to improve the business.

Via ZDNet US

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