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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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

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.

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

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.

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

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?

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.

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.

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?

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.

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.

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.

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.

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.

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

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 . . .

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

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