TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentral TechCentral
    NEWSLETTER
    • News

      The load shedding prognosis for the week ahead

      23 May 2022

      Broadcom ‘in talks to buy VMware’

      23 May 2022

      Saboteurs threaten South Africa’s power supply

      20 May 2022

      Prosus to sell Russia’s Avito

      20 May 2022

      Curro pilots artificial intelligence for learning in its schools

      20 May 2022
    • World

      Tencent’s Pony Ma airs rare frustration during China slowdown

      23 May 2022

      Is it time to buy bitcoin again?

      23 May 2022

      Chip giant ASML places big bets on a tiny future

      20 May 2022

      Musk moves to soothe investor fears over Tesla

      20 May 2022

      Apple is almost ready to show off its mixed-reality headset

      20 May 2022
    • In-depth

      Elon Musk is becoming like Henry Ford – and that’s not a good thing

      17 May 2022

      Stablecoins wend wobbly way into the unknown

      17 May 2022

      The standard model of particle physics may be broken

      11 May 2022

      Meet Jared Birchall, Elon Musk’s personal ‘fixer’

      6 May 2022

      Twitter takeover was brash and fast, with Musk calling the shots

      26 April 2022
    • Podcasts

      Dean Broadley on why product design at Yoco is an evolving art

      18 May 2022

      Everything PC S01E02 – ‘AMD: Ryzen from the dead – part 2’

      17 May 2022

      Everything PC S01E01 – ‘AMD: Ryzen from the dead – part 1’

      10 May 2022

      Llew Claasen on how exchange controls are harming SA tech start-ups

      2 May 2022

      The inside scoop on OVEX’s big expansion plans

      20 April 2022
    • Opinion

      A proposed solution to crypto’s stablecoin problem

      19 May 2022

      From spectrum to roads, why fixing SA’s problems is an uphill battle

      19 April 2022

      How AI is being deployed in the fight against cybercriminals

      8 April 2022

      Cash is still king … but not for much longer

      31 March 2022

      Icasa on the role of TV white spaces and dynamic spectrum access

      31 March 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»In-depth»HP ‘unlikely’ to sell PC unit after all

    HP ‘unlikely’ to sell PC unit after all

    In-depth By Editor21 September 2011
    Facebook Twitter LinkedIn WhatsApp Telegram Email
    Frank van Rees

    Hewlett-Packard is unlikely to sell its PC business and will probably choose to spin it off into a separate company still owned by HP, says Frank van Rees, the company’s SA MD.

    HP shocked the markets a month ago when it said it was considering spinning off or even selling its consumer PC division to focus more attention on enterprise software.

    The Personal Systems Group (PSG), which houses HP’s desktop PC and notebook business, generates annual sales of about $40bn, making it arguably too big for another PC maker to buy, Van Rees says. HP is the world’s largest PC manufacturer.

    By spinning off PSG into a separate business, it would be in a better position to innovate in a fast-moving market. “In a large company like HP, decisions aren’t made that fast,” Van Rees says. “What the board has said is we are looking at strategic alternatives for PSG [and] the preferred option is a spin-off of the division as a separate entity inside HP that is more focused on innovation in its products so it can become a more responsive company in the PC market.”

    Van Rees downplays suggestions that HP is simply following in IBM’s footsteps. IBM sold its PC division to China’s Lenovo in 2005 for $1,75bn and has focused relentlessly on growing high-margin services as a percentage of its sales. “IBM’s PC business was loss making,” he says. “We have a profitable, market-leading business, so there’s no way it’s comparable.”

    He says HP would be foolish to get out of the PC business. “We just think it will be more successful as a separate business under the HP umbrella.”

    The company is expected to make a decision about PSG by the end of the year.

    Last month, HP also surprised investors when it said it would buy the UK’s Autonomy, a developer of data analysis and search tools, for US$10,3bn and said it would stop developing the TouchPad, its rival to Apple’s iPad that ran Palm’s WebOS operating system.

    The decision to kill the TouchPad came just a year after HP bought Palm for $1,2bn, ostensibly so it could get WebOS. The company plans to continue developing the software and integrating it into products like printers.

    Van Rees says it makes more sense to invest in high-margin businesses like Autonomy that pour money into commodity products like tablets. He says PSG could get back into the tablet game — possibly with Windows 8 tablets — assuming the business is spun off from the mother ship.

    “If we want a strategic relationship with our enterprise (business) customers we have to talk about high-value software instead of low-margin commodity products,” he says, adding that HP wants to focus more on the “i” and less on the “t” in IT.

    However, last month’s announcements weren’t received well by investors. They sent HP’s share price plummeting: it is now trading at its lowest levels since early 2005.

    Van Rees says the share price fell so sharply because HP’s communication wasn’t clear and this caused confusion. “Several analysts do recognise the value of the moves [HP is making] and the fact that we are not investing too much anymore in commodity, low-margin markets,” he says.

    With a market value of $45bn, HP is worth less than a quarter of long-time rival IBM, despite having higher annual sales. That fact has to be exercising the mind of Léo Apotheker, HP’s new CEO recruited a year ago from German software giant SAP.  — Duncan McLeod, TechCentral

    • Update: Reports suggest HP’s board may oust Apotheker as CEO, replacing him with former eBay boss Meg Whitman. The news sent HP’s share price soaring on Wednesday.
    • Subscribe to our free daily newsletter
    • Follow us on Twitter or on Facebook
    • Visit our sister website, SportsCentral (still in beta)
    Autonomy eBay Frank van Rees Hewlett-Packard HP Leo Apotheker Meg Whitman Palm
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleAfrican Internet continues to fall behind
    Next Article MTN staffers arrested over alleged R200m fraud

    Related Posts

    Elon Musk is becoming like Henry Ford – and that’s not a good thing

    17 May 2022

    Stablecoins wend wobbly way into the unknown

    17 May 2022

    The standard model of particle physics may be broken

    11 May 2022
    Add A Comment

    Comments are closed.

    Promoted

    Fast-rising fintech Bankingly closes $11m investment round

    20 May 2022

    Creating an effective employer value proposition for the new era of work

    20 May 2022

    Why fibre is the new utility – and what it means for South Africa

    19 May 2022
    Opinion

    A proposed solution to crypto’s stablecoin problem

    19 May 2022

    From spectrum to roads, why fixing SA’s problems is an uphill battle

    19 April 2022

    How AI is being deployed in the fight against cybercriminals

    8 April 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.