Tag Archives: Hewlett Packard Co
Hewlett-Packard Co. finally decided to spin off and sell their PC division — a plan first brought to light in August by the technology multinational’s now former CEO.
HP said Thursday that they have come to the decision after a long evaluation regarding the impact to the company of jettisoning the business unit considered the world’s biggest manufacturer of desktop and notebook computers for consumers and businesses.
The unit supplies a third of HP’s proceeds, and PCs are a region where the company is a market leader. However, it is HP’s least beneficial division, and its disposal destined to be part of former CEO Leo Apotheker‘s plan in transforming the Silicon Valley stalwart into a twin of East Coast rival IBM Corp.: a company concentrated on businesses, rather than both businesses and consumers.
According to HP’s new CEO Meg Whitman, the company now determined to give the lost revenue and cost.
For Whitman making a decision about the future of the unit is one of the biggest challenges that she faces.
Back in August, Apotheker said, the PC business would go up for sale in a badly bungled announcement, which hastened his demise. At that point, HP also believes that it would exit the tablet computer and smartphone business and purchase business software maker Autonomy Corp. for around $10 billion.
Inscribing the PC business would have been a hard surgery, given its sheer size. Steve Diamond, an associate professor at Santa Clara University School of Law, informed The Associated Press last month that tearing apart a business unit can be compared to taking out organs.
The company stated that its assessment of the business unit unveiled a deep assimilation across key operations, which include its supply chain and procurement. Ultimately, the review discovered that the cost of re-establishing these operations in a single company overshadowed any profits of separating the PC unit.
Some analysts applauded HP’s decision as the right move they also added that when Whitman made the announcement so hastily. She had beforehand said the company would make a willpower regarding the business by the end of the year.
Forrester Research analyst Frank Gillett thinks HP should not remove its PC unit.
Gillett said he believes HP may manage in thinning out its PC family — Just like what Steve Jobs did at Apple so that he could resuscitate the company in the ’90s — and concentrate just a few devices with appealing features.
As part of PC spinoff announcement, HP also mentioned that it not make any tablet computers and smartphones this October — effectively killing thrashing smartphone pioneer Palm Inc., which HP purchased in 2010 for $1.8 billion.
Big U.S. Internet computing companies ought to surpass their plainer PC cousins when revenue season kicks off next week, as corporations and fast-growing Web players dramatically speed up their rate of hardware expenses.
Corporations are gradually more turning to new technology in making themselves more productive in a downtrodden global economy. In the meantime, a social networking and e-commerce boom spurs massive outlays on the giant server factories, powering Internet computing.
That is finest news for Intel Corp that supplies more of its microchips direct to companies building their own servers, and firms like EMC Corp and VMware whose businesses are essential to the storage and transmission of isolated data, known as “cloud computing”.
But it is less of a benefit for conventional hardware makers such as Dell Inc and Hewlett Packard Co, finding them selling PCs at low margins and struggling in coping with a hastening migration to smartphones and tablets.
Facebook, similar to online leaders Amazon.com and China’s Baidu, buys masses of equipment in filling l two main data centers in Oregon and North Carolina. However, they do not like to buy whole servers from HP or IBM. They are just going to build themselves with the component coming from top component makers such as Intel.
Apple Inc, which reports on Tuesday, continues in defying the economy and astounds Wall Street by luring ever more consumers in buying its newest gadgets.
However, most other hardware companies are shuffling along, with little sign of a recovery ahead.
Worldwide PC sales hardly rose over 3 percent last quarter over last year’s numbers, based on the research coming from leading research firms.
Gartner last month cut its yearly PC sales progress forecast to 3.8 percent, down from its earlier projection of 9.3 percent.
The knock-on effect upsets Intel’s conventional business of supplying chips for PCs, but it especially hits Microsoft Corp, relying on PC sales in keeping its core Windows and Office products growing, regardless of making modern inroads into the cloud market with its server software and Azure developer platform.
Wall Street is anticipating a modest 9 percent rise in IBM’s periodical net profit when it reports on Monday, and a 6 percent increase from Microsoft on Thursday. Intel, reporting on Tuesday, projected in posting a 12 percent increase.
VMware, the small but a fast-growing leader in analytical or “virtualizing” working systems onto computers via the Internet, also reports earnings on Monday, with analysts’ forecasting a 30 percent jump in net profit.