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Will HP Hold On to Its PC Business? Maybe

Those who thought the spinoff of Hewlett-Packard's PC business was all but certain will be surprised to learn that the company may opt to hold on to its Personal Systems Group.

HP's analysis is showing that it might be more beneficial to keep the PC business, according to a report published Tuesday in The Wall Street Journal. Looking to stem the uncertainty that resulted from its Aug. 18 announcement that HP was considering the divesture of its PC business, new CEO Meg Whitman last week said that the company is aiming to announce a decision by the end of October.

PCs count for more than $40 billion of HP's revenues and, while only marginally profitable, give the company huge buying power in the form of components for its servers, storage and networking gear.

According to the WSJ report, divesting PCs would substantially diminish HP's buying clout with suppliers, impact its supply chain and cut into profit margins on other products.

I started to suspect that HP might be having second thoughts about divesting its PC business -- not based on what the company has said, but more on what it wasn't saying. There was just something about the tone coming out of Palo Alto since HP appointed Whitman as CEO last month.

Of course, the company hasn't made a final decision and it could still go either way. Would you like to see HP keep its PC business, or do you think the company would be better spinning it off? Leave a comment below or drop me a line at jschwartz@rcpmag.com.

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Posted by Jeffrey Schwartz on October 12, 2011 at 11:59 AM


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Reader Comments

Thu, Oct 20, 2011

Of course HP should hang onto it $40 billion PC business. I love HP workstation & server products. My biggest fear when HP bought Compaq was that HP would ruin Compaqs terrific workstation products & tech support. Instead they maintained it really well. The business wouldn't change in terms of where things were manufactured if sold but one couldn't be sure that the excellent tech support would continue.

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