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HP CEO Will Decide PC Division's Fate This Month

By - Source: Reuters | B 18 comments

HP's new CEO said that she will make a decision on whether to keep, sell, or spin off the PC division later this month.

Tuesday during Fortune Magazine's Most Powerful Women Summit in Laguna Niguel, California, Hewlett Packard CEO Meg Whitman said that she would decide the fate of the company's $45 billion PC business before the end of October.

The news arrives nearly two months after the company announced its possible intentions to sell or spin-off its Personal Systems Group. The final decision was expected to come from the board of directors by the end of the year, but Whitman said that she wanted to make the decision sooner rather than later.

"I want to make that decision much faster than the previous CEO,” said Whitman. "Uncertainty is not our friend. People are wondering whether to buy HP products."

Indeed, there has been much speculation surrounding both the company's PC business and the webOS platform. In August HP declared that it would no longer produce tablets based on Palm's operating system, and like the possible PC division sale or spin-off, the uncertainty of the company's direction has left the industry and consumers watching the fate of the company with a cautious eye.

A year ago former CEO Mark Hurd was ousted over ethics concerns. Then in September 2011 former CEO Leo Apotheker was ousted after just 11 months on the job because he didn't share the same views as the board of directors. "We are at a critical moment and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead," said executive chairman Ray Lane.

Now with Whitman at the helm, HP's new CEO feels confident about what needs to be done in order to get the company back on track. "I have quite a clear vision of what needs to be done here," she said. "After 35 years in business, I’m not in search of a manual. I’m far better equipped to run HP today than I was had I not run for governor. I’m a lot tougher. I’ve got a skin that’s 100 times thicker than when I left eBay."

During the conference, she outlined three main priorities: to meet fourth quarter projections, to make a swift decision regarding the PC division, and to fully integrate the $10 billion British software company Autonomy, an acquisition which officially closed on Tuesday.

Numerous suppliers and competitors are actually rooting for HP to keep its PC division in-house. Dell CEO Michael Dell has even reportedly spoken out against a sale or spin-off, indicating that leaving the PC business would actually harm HP's operations in other areas. It would also drive component prices upwards because suppliers will no longer have HP's money flow.

"The client business provides really enormous scale and if you give up that scale you go from being one of the largest buyers in the world of those components to not really being in the top five or perhaps even the top 10," said Dell. "That is a huge problem. It means the price of those products has to be raised."

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  • 6 Hide
    Marco925 , October 5, 2011 9:07 PM
    I have a great idea! Let's take our biggest money maker, and turn it into a company from which we wont make anything from!
  • 0 Hide
    stingstang , October 5, 2011 9:11 PM
    And thus, the beginning of the end of the PC starts... Oh woe is the PC user!
  • 5 Hide
    Inferno1217 , October 5, 2011 9:20 PM
    The only thing dying is HP if they keep making poor decisions.
  • Display all 18 comments.
  • 4 Hide
    stingstang , October 5, 2011 9:33 PM
    Ok, so after reading this article, I can say this: She's going to try and prove firstly that she is a 'tough' woman with 'thick skin', make swift decisions, and also meet the quarter's progected revenue all at the same time. It sounds like she's about to make brash decisions, overlook small, but important details, and completely fail to make the revenue because of this. A company would rather have a meticulous-thinker who takes care and time in to making decisions, and the ability to bend a few 'tried and true' methods of marketing and engineering in order to make the company grow. You can't make a bigger garden without first ripping up more ground.
  • 2 Hide
    drwho1 , October 5, 2011 9:52 PM
    The only thing that I have liked from HP are their PRINTERS.

    As far as HP-PC's ... meh.

    I build my own, always, never cared for pre built junk.
  • -4 Hide
    southernshark , October 5, 2011 10:02 PM
    HP is a crap company. The only people who buy their computers are nit wits.
  • 0 Hide
    Anonymous , October 5, 2011 10:05 PM
    Meg Whitman, the same lady who bought Skype for billions, and didn't actually buy anything. Good luck HP, you'll need it.
  • 4 Hide
    AbdullahG , October 5, 2011 10:15 PM
    southernsharkHP is a crap company. The only people who buy their computers are nit wits.

    And what company isn't? And that's a very broad statement you make about those who buy from HP. You expect everyone to build their own to run Microsoft Office or check email? Or do you recommend Dell?
  • 1 Hide
    bustapr , October 5, 2011 10:31 PM
    southernsharkHP is a crap company. The only people who buy their computers are nit wits.

    I suppose you build your own high quality, light weight laptops...

    I think they should stop making desktops and focus on laptops. Their desktops dont sell very well compared to acers and cheaper companies. Their laptops however are very good and alot of people buy them. If they focus more on laptops and design innovations at low cost, they can make more profits. there are good alternatives, but hp is not bad.
  • 0 Hide
    back_by_demand , October 5, 2011 10:42 PM
    First item on the agenda, should we tank a $45 billion business?
    Tough call, vote on it?
    Second item, shall we all have a 30% pay rise and double our pensions?
    Tabled, seconded, voted, passed.
    Third item, anyone for golf?
  • 0 Hide
    halcyon , October 5, 2011 10:45 PM
    I hope she decides correctly. ...and if she does, I won't miss HP's PCs.
  • 1 Hide
    wlachan , October 5, 2011 11:00 PM
    I think she's already decided to keep the PC division but just let the market to absorb the news instead of releasing another instant heart attack like her predecessor. Okay now, where to get the Touchpad botton spare part? Mine is merely 2 weeks old but already cracked around the speakers. Oh please, hire some competence engineers who don't design crappy products. HP was once a proud company but has turned into a junk maker in merely a decade. Wake up HP!
  • 0 Hide
    panto , October 5, 2011 11:27 PM
    HP is a heavyweight in PCs. Whatever difficulties the PC market is facing now, they are better positioned to absorb the impacts than the smaller companies. This can only mean that as the going gets tough, more and more lightweight companies will drop off the map and HP should be the last one standing.
  • 0 Hide
    halcyon , October 5, 2011 11:41 PM
    Looking at HP's desktops and laptops compared to Dell's doesn't leave a feeling that HP makes a great product. They do have a couple of reasonably built laptops in the Envy line, however.
  • 0 Hide
    eddieroolz , October 6, 2011 3:29 AM
    This is exactly the kind of news that should not be leaking out, because it does make potential buyers more anxious.
  • 0 Hide
    feeddagoat , October 6, 2011 8:16 AM
    I'm looking for a 13-14" llano laptop and guess which company is selling the only one I've found.....
    Truth is uncertainty is effecting my decision, its the fact that HP's laptops are build like crap and they've reliability and customer services to match. Regardless if the keep or sell the division, I've had so many run ins with the company and their products that I plain refuse to even touch them with a barge pole.
    The only people who do touch them are generally uninformed consumers, (or the case of palm a decent bargin and hope hp hasn't sunk its claws of death into it), in which case uncertainty doesn't effect them either. Most offices and uni's here use dell, apple or fujitsu. I haven't seen an HP computer in a long time outside of PC world.
  • 0 Hide
    Anonymous , October 6, 2011 6:32 PM
    Consumer products are quite crap but commercial PCs and laptops are superb. People saying that HP rigs are crap have never used or buyed their consumer products. In other words, they d better don't speak about products their never used
  • 0 Hide
    Anonymous , October 11, 2011 2:14 PM
    It's funny, HP pcs used to be EXPENSIVE business machines like IBM Digital. Hi Quality but EXPENSIVE.

    Then they merge with the that cancer called Compaq, and their PCs become useless junk. Hmmm It took some time the Compaq cancer got into all their PCs, especially laptops. I was involved in 1 of the class action lawsuits regarding nvidia chipsets and overheating laptops.


    But now we don't print as much......