Report: HP May Be Merging Printer, PC Divisions
Sources claim that HP will announce its plans to merge its Imaging and Printing Group with its Personal Systems Group.
AllThingsD reports that HP will soon announce plans to move its Imaging and Printing Group under its PC-making Personal Systems Group. The combined business unit will report to Executive Vice President Todd Bradley while Vyomesh "VJ" Joshi, once the executive vice president in charge of IPG, will leave the company entirely.
The move actually makes sense. IPG sells printers to both the consumer and business sectors as does the PSG. Combining the two, HP will have a more streamlined, cost-cutting operation. The two businesses should even be more integrated so that HP can offer a more unified product to businesses and customers alike.
Sources reportedly agree, pointing to CEO Meg Whitman's discussion during HP’s last earnings conference call on Feb. 22 where she talked about ways to streamline HP's operations. "One thing I’m working on is bringing the entire product portfolio to customers as one HP. Our biggest customers want to buy from one HP, and not from different segments," she said.
At one time HP's IPG was the bread and butter, selling more printers than any other company in the world. The big revenue stemmed from the ink cartridges, USB cables and other supplies than the printers themselves. But the printer sector on a whole as seen a decline, and HP reported a 7 percent drop in sales during its most recent quarter.
"The sell-through of ink is at low levels, and it’s not just our ink, but industry-wide," Whitman said. "We do see pockets in decline. Consumers are printing fewer photos. We’re steady as she goes. Going to think hard about accelerating new business to compensate for the loss in ink sales. Also, the headwinds from the Japanese yen will remain. It’s a terrific business, but we’ve got some work to do."
With that in mind, having IPG serve as a standalone division would presently be more costly for HP than it has been in the past. That said, having Bradley controlling both the IPG and PSG as a single unit would undoubtedly reduce costs and free up funds for other areas. In 2011, IPG and PSG accounted for $65 billion in sales, or more than 51-percent of HP’s overall sales. Combined profits were $6.3 billion, and that number will likely increase if the two groups do in fact merge as reported.
HP has not released an official announcement as of this report, so stay tuned.