HP confirms plan to split into separate consumer and enterprise companies

Hewlett-Packard has confirmed yesterday's reports that it will split into two companies, with one focused on consumer products and the other targeting enterprises.

As part of the plan, officially unveiled today in a press release, a new company called Hewlett-Packard Enterprise will consist of HP's current corporate-focused software, infrastructure and services. The company that will retain the HP name and logo will focus on printers and consumer devices such as PCs and tablets.

According to HP's press release, the split is expected to be completed late in the company's 2015 fiscal year, which ends on Oct. 31, 2015.

As reported yesterday, current HP CEO Meg Whitman will helm the enterprise company, while Dion Weisler, head of HP's printing and personal systems unit, will run the consumer company. Whitman will continue to help guide the latter company by serving as the head of its board.

In the following statement issued as part of HP's press release, Whitman described the plan as a way to benefit both the company's shareholders and consumers:

"The decision to separate into two market-leading companies underscores our commitment to [our] turnaround plan. It will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders. In short, by transitioning now from one HP to two new companies, created out of our successful turnaround efforts, we will be in an even better position to compete in the market, support our customers and partners, and deliver maximum value to our shareholders."

HP noted that the split will see new product lines introduced at each company, such as 3D printing in the consumer-focused company. How the deal will impact its relationships with Google and Microsoft remains to be seen, however. HP uses operating systems from both companies in its consumer products, including Google's Chrome and Android and Microsoft's Windows. Sales of consumer computing devices have seen their profit margins decrease with intense competition from the likes of Apple and Samsung.

Weisler said the new HP will attempt to create "new computing experiences," though the press release doesn't cite any specific types of products.

Source: HP

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