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HP to Spin Off PC Business as Sales Stagnate

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Bloomberg reports that HP is set to announce plans to spin off its PC business in order to focus on cloud-based software and services. The plans come as HP is reportedly looking to acquire enterprise software company Autonomy Corp. for $10 billion.
Hewlett-Packard may announce the plans as early as today, said the people, who asked not to be identified before a statement. The Palo Alto, California-based company is scheduled to report quarterly earnings today after markets close.

Chief Executive Officer Leo Apotheker has said he wants to expand in software and services that help customers deliver computing over the Internet, through the so-called cloud. Hewlett-Packard has been aiming to lessen its dependence on lower-margin PCs, where growth has stalled as consumers flock to tablet-style computers like those made by Apple Inc. (AAPL).
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HP has long been a leading PC manufacturer, but has only recently stepped into the mobile market with its acquisition of Palm last year, pushing out several smartphones based on webOS and just last month officially launching its TouchPad tablet. The TouchPad had been regarded as one of the leading potential challengers to the iPad, but sales have reportedly been slow. Today's report does not mention whether HP's mobile efforts will be included in the PC spinoff company or remain with the core HP company.

Meanwhile, PC growth has stagnated or even reversed with weakness in the global economy over the past few years. Apple has, however, been able to maintain strong forward momentum amidst the weak overall market, and has further eaten into PC growth by launching the successful iPad as an alternative to the traditional PC for some customers. Earlier today, research firm DisplaySearch released data showing Apple handily leading the market for mobile PCs when tablets are included.

Article Link: HP to Spin Off PC Business as Sales Stagnate
 
Article Link
https://www.macrumors.com/2011/08/18/hp-to-spin-off-pc-business-as-sales-stagnate/
A Spin Off is the first step for another company to purchase part of your business. So, the million dollar question is, who is going to buy the HP PC Division?
 
Apple could, to ramp up production and grab any enterprise contracts that HP has. Maybe even some patents with it.

NoExpectations said:
A Spin Off is the first step for another company to purchase part of your business. So, the million dollar question is, who is going to buy the HP PC Division?
Click to expand...
 
Wow.

Knowing several people who work for HP, this is a surprise, but it makes sense--there's little margin and thus little profit in making PCs. I wonder what entity will agree to acquire the division--and at what price?

And the iPhone/iPad/iOS earthquake continues . . .
 
z3r0 said:
Apple could, to ramp up production and grab any enterprise contracts that HP has. Maybe even some patents with it.
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Apple has nothing to offer the Enterprise sector. Support being the key gap in Apple's portfolio. Everything Apple now has is aimed at the consumer or very small business.

My last computer purchase was a HP server. Would be sorry to see those go.
 
So, this is to say HP won't make computers, potentially? Or, that someone else will make them on their behalf but they'll still be badged as HPs?
 
I guess the billions they spent buying compaq was money well invested then :rolleyes:

IBM was very successful in spinning of their pc business and focusing on services, so I guess why not HP.
 
How about their ink/toner cartridge business? (the expensive things they sell to go along with their cheap, crap printers.)

EDIT: I'm fully aware that "crap printer" is a redundant statement.
 
weckart said:
Apple has nothing to offer the Enterprise sector. Support being the key gap in Apple's portfolio. Everything Apple now has is aimed at the consumer or very small business.

My last computer purchase was a HP server. Would be sorry to see those go.
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Yet I know of a few very large companies investing a lot in to iPads....
 
DavidLeblond said:
How about their ink/toner cartridge business? (the expensive things they sell to go along with their cheap, crap printers.)

EDIT: I'm fully aware that "crap printer" is a redundant statement.
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That's where they make money, they sell printers at a loss so yo buy their ink at inflated prices.
 
Last time I bought computers from HP was in 2008 and 2009. HP HDX 9000 Dragons, DV5Ts and a TX2500. All of which run perfectly and issue free to this day. That was probably the peak of HP's notebooks. Before that was the Nvidia issue.

However, I noted a sharp decline in quality over the last two years. Especially with the Envy line. A line designed to compete with the MacBook Pro. The quality control was erratic. and then the whole radiance screen debacle with the Envy 14 put a irreparable dent in HP's reputation.

It's probably best for HP to sell the PC business off. Hopefully whomever buys them will improve in innovation, quality control and customer service.
 
So HP is going to concentrate on its slow selling TouchPad/

Insert giving money back to shareholder joke here.
 
OS X Dude said:
So, this is to say HP won't make computers, potentially? Or, that someone else will make them on their behalf but they'll still be badged as HPs?
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We'll have to wait for the announcement.

It is likely that the people and assets of the PC business unit will be separated from the main company, so the people who were designing, building, marketing, selling, and servicing PCs yesterday, will do so tomorrow.

Whether or not they will do so under the HP name is something we'll see. HP spun off their testing instruments division in 1999, but did not let them take the HP name. The company is Agilent and it still a publicly traded company (NYSE:A).

If they just got someone to build the PCs, it really wouldn't be a spinoff. It would be HP shutting down their PC business and selling the brand. But that doesn't appear to be HP's intent.
 
maflynn said:
I guess the billions they spent buying compaq was money well invested then :rolleyes:

IBM was very successful in spinning of their pc business and focusing on services, so I guess why not HP.
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LOL on Compaq . . .

With respect to "Why not HP?", I think it's possible but not probable because they are entering a space that IBM effectively owns--rather like Samsung trying to make an iPad alternative. I'm sure some companies will go with HP, but I don't think it will be enough to keep HP from continuing on the long, slow slide it's been on for quite some time.

To me, this move does not represent the kind of vision represented by IBM's move to "services," or Apple's introduction of the iPhone/iPad, or, for that matter, Chrysler's introduction of the minivan. HP's claimed strength is innovation--and while it has a long and worthy track record, it's more recent record is mixed at best.
 
Apple wants palm. HP buys palm. Apple buys HP. Apple takes over the world.

Sn2nt.jpg


In reality, I can't imagine who would want HP's PC business, although this is definitely a step to being bought.

But, I'm glad HP is retaining their software division since their new webOS is doing so well :rolleyes:
 
That’s a shame: hardware and software designed together by ONE company has benefits you can’t match with multiple squabbling partners. WebOS had that benefit... and now it doesn’t.

(Google + Motorola? Android might have a shot at this same benefit, depending on how closely those two cultures can combine as a single process without their own competing priorities.)
 
They have plenty to offer if they can make "enterprise" software and integration simple. They just need the right person to head Apple Enterprise.

Apple could get back into the printer business as well by rebranding HP printers. Not to mention grab Palm IP etc... if its included in the spin off.

My guess is that Rubinstein will be CEO with the spin off. Apple could sweep in to acquire though, or who knows Google might do something crazy and make an offer.


weckart said:
Apple has nothing to offer the Enterprise sector. Support being the key gap in Apple's portfolio. Everything Apple now has is aimed at the consumer or very small business.

My last computer purchase was a HP server. Would be sorry to see those go.
Click to expand...
 
If this turns out to be true, I think HP will only sell off it's consumer line. With the acquisition of EDS a couple of years ago HP is now one of the major players in the enterprise services space. IBM has already done the same thing... when they spun off the thinkpad line.
 
Holy crap, HP exiting the smartphone and tablet business? So the Pre 3 is up for pre-order in Europe. Are those going to be honored? Who's going to buy a TouchPad now? It's a dead platform already. They just shot themselves in both feet with a bazooka.

No one in their right mind is going to license webOS for a phone or tablet when it's clear that Android is the way to go for any significant marketshare. Windows Phone is only a contender because of the great relationships that Microsoft has built up and those cash hordes they are sitting on.

webOS is dead. RIP.
 
maflynn said:
I guess the billions they spent buying compaq was money well invested then :rolleyes:

IBM was very successful in spinning of their pc business and focusing on services, so I guess why not HP.
Click to expand...

HP is finally free of Carly Fiorina. She forced that merger on them.
 
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