Hewlett-Packard is staying in the PC business. That`s the decision from new CEO Meg Whitman, who says she is keeping that division as part of the company. In August, the previous CEO, Leo Apotheker, had announced H-P was evaluating possibly selling or spinning off its PC division.
The H-P Personal Systems Group generated almost a third of the company`s $126 billion in revenue last fiscal year. Whitman told The New York Times: "First and foremost, H-P is a hardware company. We want to build out our software, but I don`t think we are done yet on hardware."
$40.7 Billion in 2010
In a statement, the company said it had "completed its evaluation of strategic alternatives to its Personal Systems Group" and had decided to keep it.
H-P said its evaluation had involved subject-matter experts across the company`s businesses and functions, which had revealed "the depth of the integration" of PSG in the supply chain, IT, and procurement, as well as the "significant extent" to which the unit contributes to HP`s solutions portfolio and overall brand. The evaluation also showed that the cost to spin it off outweighed the benefits.
Some of those assessed benefits, according to news reports, include maintaining a diverse line of products, getting better deals on components and remaining a major hardware company. Whitman has also said that spinning off the PC unit would have meant a charge of $1.5 billion in one-time expenses and $1 billion annually in ongoing costs for maintaining similar functions, not to mention that the spun-off or sold company could have become a competitor for H-P`s remaining products.
The announcement by Apotheker had taken the computer industry by surprise, particularly because H-P is the top manufacturer of personal computers in the world, with revenue of $40.7 billion in 2010. Apotheker was ousted as CEO in September, and...
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