Rumor: HP to spin off its PC business

Hewlett-Packard, the single biggest PC maker in the world, could be getting ready to spin off its PC side of the business. Bloomberg reports via unnamed sources that the company could announced its decision to get rid of its PC division as early as today as part of its quarterly financial announcement. The same article also claims that HP is planning to acquire the UK based company Autonomy Corp. for $10 billion. The company creates software for database search efforts. An HP spokesperson would not comment on Bloomberg's announcement.

If true, HP's decision could send shock waves in the entire PC business. The company still leads in PC sales, followed closely by Dell, so a move to spin off its PC business would be a massive shift in the industry. HP actually created what is considered the first personal computer, the Hewlett-Packard 9100A, way back in 1968 for $5,000. Later, Steve Wozniak offered HP the chance to purchase his design for what turned out to be the Apple 1 PC (he worked at HP at the time) but HP turned him down.

HP released PCs as well as a successful series of printers for much of the rest of the 20th century and in 2001 it acquired another large PC maker, Compaq. It later acquired the gaming PC maker Voodoo, but that move turned out to be unsuccessful. Most recently, HP acquired the Palm smartphone maker and its WebOS operating system. The company has been heavily pushing its HP TouchPad tablet since launching it in July, but there are reports that sales of the tablet have been poor so far.

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OK, it is official; read the email this morning. It doesn't mention servers though, everything else is though, include printers aswell

Ironic if HP sells off its hardware division to focus on software and does so to a software company who would be drastically increasing their investment in hardware . . .

HP PC and Laptops are the best and affordable for everyone. Another stupid decision just like purchasing Palm???

I would like to see a Microhard division of Microsoft

What odds on Microsoft acquiring HP's PC group? It would provide a way for Microsoft to integrate vertically and build tigher hardware and software platforms (and tie up nicely with the Xbox division). On the other hand other OEMs might not like this one jot.

I'm sorry, but is this April 1st or something? After all the years that HP have built this company up they are basically going to fall on their sword?

As others have said, this CEO clearly has no idea what he is doing, he comes from a software background and seems to only want to focus on this area and forget hardware, d espite the fact that HP was built on hardware.

As someone who works in IT and ordering many HP systems through the years on behalf of my company I'm very worried - like others we've also dabbled with Dell over the last 10 years or so but have never been impressed - HP have offered us with much better build quality and service.

I'm absolutely astonished - really don't see any sense in doing this. I can see getting rid of the WebOS and mobile divisions as being possibly good ideas, but the PC and Notebook division? Why would you want to destroy something that has been so successful.

People may be drawing comparisons to IBM spinning off Lenovo, but if I remember correctly IBM's computing business was struggling anyway, something that HP for sure is not. I really don't see the idea of selling off a well functioning business unit.

You have to ask questions if the board have appointed the right man now - for me it seems they could be paying the price for a big mistake for years to come.

OK, I think there is some serious confusion going on here. The actual press release says they are looking at options for the Personal Systems Group (PSG). Is that just the consumer PC side or does that also include the business PC and/or server side? The title of this story seems to suggest more than just the consumer PC side.

CNN is reporting thats its true.
The biggest problem with the PC is the PC. Most novice users see PCs as the classic low design lots of cables desktop. The industry mainly because of Apple is moving to a much simpler and even more mobile design. I have seen very little innovation out of the PC industry. The biggest I have seen is the HP Touchsmart, a spin off of the iMac but with touch options. PC makers really need to get on it, the industry is changing and Apple seems to be leading the way.

jasondefaoite said,
Huh? Woz was a HP employee.

Steve Wozniak offered HP the chance to purchase his design for what turned out to be the Apple 1 PC (he worked at HP at the time) but HP turned him down.

Oops, I took this line from the article to mean that HP refused to hire him.

Wait... What else does hp do? Printers? Ink cartridges? It didn't say get rid of, just spin-off. Maybe make Compaq their computer division?

I know that HP slashed their revenue predictions this year because of the slow consumer market so perhaps this could be consumer PCs only? I highly doubt they'll scrap their commercial lines.

Simmilarly to what IBM did with Lenovo I guess, for similar reasons. PC hardware is cut-throat business. PC manufacturers can't work on 50% margins like Apple can, as there is no "monopoly" on hardware manufacturing.

It's more the sign of falling margins and lowering prices than death of the PC I think.

That sounds like a really bizarre decision. At my company, we use HP because we have been extremely disappointed and frustrated with Dell.
If HP leaves the PC field, who large corporations and governments organizations are going to turn to for hardware?

not a rumor anymore, HP announced it, their current CEO is going to run them into the ground, first WebOS now this....

I don't think HP has as strong of a business outside of PCs as IBM did, but getting rid of the consumer PC business has worked well for IBM. They were able to better focus their efforts in key areas and not be subjected to the low margin PC business. It might work out for HP.. or it could be an utter failure.. you know either one.

CNNMoney says it's because they're looking for better margins by moving to a more software driven approach. Basically the same move IBM made a few years ago. However in HP's case it doesn't make any sense since they have been profitable in the hardware space and their market is huge, they'd be throwing away so much revenue. But who knows, CEOs tend to do stupid things sometimes.

helios01 said,
CNNMoney says it's because they're looking for better margins by moving to a more software driven approach. Basically the same move IBM made a few years ago. However in HP's case it doesn't make any sense since they have been profitable in the hardware space and their market is huge, they'd be throwing away so much revenue. But who knows, CEOs tend to do stupid things sometimes.

IBM though makes hardware still, on LARGE scale, not personal scale... gov contracts are a major source of their money

Yeah I work for Avnet, and we have orders through January for thousand of HP Proliant servers and z6000 workstations that we resell. Yeah I doubt we would have those orders in place is this **** was gonna go down.

I work for HP and I've heard nothing of the sort. Usually we get confidential emails about such things

Dan~ said,
I work for HP and I've heard nothing of the sort. Usually we get confidential emails about such things

Unfortunately news websites like CNET broke the news first before even I or you who work at HP were notified via emails

Hp better get their rears in gear and release a decent webos phone before t
he end of webos comes. I dont even know why they bought palm.

A lot of people want the PC die... well, here is the truth: It won't. Best case scenario that it's gonna be achieved is, processors that are finally low power enough to become part of a tablet. ARM may still be a king on that, but the power of a x86-x64 processor far excels the one of the ARMs. Even for basic tasks.

Arceles said,
A lot of people want the PC die... well, here is the truth: It won't. Best case scenario that it's gonna be achieved is, processors that are finally low power enough to become part of a tablet. ARM may still be a king on that, but the power of a x86-x64 processor far excels the one of the ARMs. Even for basic tasks.

Nobody wants the pc to die and it wont anytime soon.

smooth3006 said,

Nobody wants the pc to die and it wont anytime soon.

Just see some comments above, and I've seen such comments in other occasions. What the tablets are doing indeed it's giving a false idea of how powerful the processors really are...

It would be the consumer part the desktop/notebooks/compaqs etc HP probably see's more long term potential in server and enterprise market which is fair enough if they're fed up with instability of consumer market. Honestly, imo, wouldn't surprise me if Dell even put their hand up to take it on since it's more their speciality

Makes perfect sense. They obviously have a very successful and profitable smartphone, tablet and OS business.....oh wait.

alexalex said,
HP sees the future as PC sales decline due to high tablets sales.

no they don't, heck their own tablet sales suck, like I said above this is as likely as apple selling their computer divison off... even they know tablets wont replace mac's

Stewart Gilligan Griffin said,

no they don't, heck their own tablet sales suck, like I said above this is as likely as apple selling their computer divison off... even they know tablets wont replace mac's

Well two things one.

1. The Mac computer side is the least profitable of Apple and does seem to get less focus

2. Apple has higher margins on their computers then HP

evo_spook said,

Well two things one.

1. The Mac computer side is the least profitable of Apple and does seem to get less focus

2. Apple has higher margins on their computers then HP

and yet, Apple would never spin off their computer business... HP's major source of income is their computers, servers and printers, why would they want to go from the number 1 or 2 (depending on time) spot to dead last in a heart beat and lose all their revenue in the process


I see them spinning off WebOS before anything else as they realize it was a bad idea to purchase

Stewart Gilligan Griffin said,

and yet, Apple would never spin off their computer business... HP's major source of income is their computers, servers and printers, why would they want to go from the number 1 or 2 (depending on time) spot to dead last in a heart beat and lose all their revenue in the process


I see them spinning off WebOS before anything else as they realize it was a bad idea to purchase

I think it would be a daft move, maybe it would be sold but set up as a seperate unit.

If I was apple/MS/Google I would give HP a cut price offer to take the remains of WebOS off their hands

alexalex said,
HP sees the future as PC sales decline due to high tablets sales.

If you think tablets are going to replace PCs you're kidding yourself. Not even close. Just about anybody that works in just about any major computer related field will tell you the same thing. Tablets just aren't practical for a number of things.

Amarok said,

If you think tablets are going to replace PCs you're kidding yourself. Not even close. Just about anybody that works in just about any major computer related field will tell you the same thing. Tablets just aren't practical for a number of things.


Mhmm... You know what the where telling us a couple of years back? Stuff like we will only ever need 13 computers in the world... And we might be able to get their weight down to a KG, but no lower... Times change.

Leonick said,

Mhmm... You know what the where telling us a couple of years back? Stuff like we will only ever need 13 computers in the world... And we might be able to get their weight down to a KG, but no lower... Times change.

Tablets are fun toys and they can be very useful, but they won't replace the traditional PC. Just due to the nature of tablets they cannot. They're weaker PCs designed for convenience. People have been saying "[X] is the new PC" and "[X] will kill the PC" - but they never do.

Stewart Gilligan Griffin said,
This is about as likely as apple spinning off their computer business

It make complete sense. IBM did it. Consider these 2 things:

First, HP is doing an awful lots of stuff that you don't see. Like medical instruments, laboratory and research machines and robots. Also HP bought EDS a few year back, so now they are in the service and consulting business. They make tons of money with this.

Second the PC and laptop business is generating laser thin profit margin because of the ferocious competition.

So if you are sitting on the HP board of directors, you see the profit eaten away by the PC division and the best thing to do is sell it.