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Samsung not buying; HP not quitting PC business

Samsung Electronics has said it's not buying Hewlett-Packard's PC business, and since companies can often deny what they are up to, it has now said it twice. Meanwhile, HP has had to issue statements to say it is not exiting the PC business, an impression that might have been gained from some shoddy reporting.

Samsung Electronics has said it's not buying Hewlett-Packard's PC business, and since companies can often deny what they are up to, it has now said it twice. Meanwhile, HP has had to issue statements to say it is not exiting the PC business, an impression that might have been gained from some shoddy reporting. In sum, the news is that there is no news, and everything continues more or less as before.

Samsung, the giant South Korean conglomerate, started with a brief blog post, Regarding Recent Rumors about Samsung’s PC Business. It said:

"The recent rumors that Samsung Electronics will be taking over Hewlett-Packard Co.'s personal computer business are not true. We hope this clarifies any confusion that may have occurred."

Samsung's chief executive Choi Gee-sung followed this up with a statement reported by Reuters:

"I would like to definitively state that Samsung Electronics will not acquire Hewlett-Packard's PC Business. Hewlett-Packard is the global leader in the PC business, while Samsung is an emerging player in the category. Based on the significant disparity in scale with Samsung's own PC business and lack of synergies, Samsung is not interested in the acquisition."

On Monday, I pointed out that Samsung was the most likely buyer for HP's Personal Systems Group -- see Will Samsung buy HP's PC division? -- but there is certainly a "significant disparity in scale": HP sells more than 40 million PCs a year, while Samsung ships about 10 million.

Whether there's a "lack of synergies" is another matter. Samsung is the world's biggest chip maker, one of the biggest and best LCD screen manufacturers, a Top 10 PC supplier, and on track to become the world's biggest mobile phone manufacturer. If that doesn't indicate "synergies" with PSG, it's hard to know what would.

However, what will happen to PSG remains a mystery. As I reported last week in HP kills WebOS, may sell off PC division, HP said

"its board of directors has authorized the exploration of strategic alternatives for its Personal Systems Group (PSG). HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction."

In my opinion, this was a stupid thing to say, in the absence of any viable spin-off plan or potential buyer, such as Samsung. It's bound to make business PC buyers consider their purchases, because they depend on long-term security and supply. However, it doesn't say that HP will actually do anything apart from consider its options, and you'd expect a rational company to consider its options all the time.

Further, even if HP did spin-off PSG, it doesn't necessarily mean that it would stop using the name or the HP and Compaq brands, since these are a significant part of the operation's value. (IBM wouldn't have been able to do the deal with Lenovo without Lenovo getting to use the ThinkPad brand name and products to reassure existing customers.) Apart from some corporate book-keeping, everything would be business as usual.

Yesterday, Paul Hunter, head of PSG UK and Ireland, sent out an email to this effect. He wrote:

"Regarding PSG activity in the UK, it's very much business as usual. Actually, it's more than business as usual. PSG is a $40B annual business. We operate in 170 countries and have more than 180,000 channel partners. Whatever the future strategy, we have a mission and responsibility to all of our employees, customers and partners to continue to deliver fantastic products. To that end, you will see a ramping up of marketing and advertising activity in the UK as we look to raise awareness of our great products ranges like ENVY and TouchSmart for consumer and Elite and ProBooks for business users."

You can understand Hunter's annoyance with shoddy reporting, and his attempt to provide reassurance. Ultimately, however, it was his own CEO, Léo Apotheker, who created the problem.

Sadly, this is not unusual for HP's recent bosses, who seem to have a remarkable record for shooting themselves in the foot.

@jackschofield