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Face-Off: Does HP's PC Business Affect Us Enthusiasts?

Potential Suitors: Dell, Acer, Lenovo, Or Samsung?

Alan: I'm a creator. Definitely in that camp.

I don't think Dell is going to buy HP's business. HP does not have access to unique system building technology that isn't already available in-house at Dell. The HP brand name for computers (or even VoodooPC brand) isn't inherently bigger or better than Dell/Alienware. If Dell does absolutely nothing, it’ll still be able to pick up HP customers without any extra work. Dell doesn't need the manufacturing or the distribution network that HP can offer.

Chris: Agreed. Dell wins here by keeping its mouth shut and not suggesting to its customers that it might sell off its PC business.

Alan: That takes us to Acer. As the number two computer manufacturer in the country, you might think that Acer is a prime candidate for an HP acquisition. The brand isn't as well-known as Dell or IBM and Acer has already shown an interest in buying up PC brands: Gateway, E-Machines, and Packard Bell are all part of Acer's umbrella. Acer has not made significant inroads in business computing and this is where acquiring HP's EliteBook and HP's Z-series workstation family could pay dividends. There's just one problem. Acer's leaders, J.T. Wang and Jim Wong, have already talked about transitioning Acer away from PCs and focusing on mobile and tablet sales. It seems unlikely that Acer would acquire all of HP's PC business unless it was being sold at a fire sale price. Unlike Dell, Acer is not likely to be the "automatic" next choice.

Chris: Depending on the damage done to HP's business, a fire sale might not be far-fetched.

Alan: And if it's a fire sale like the $100 TouchPads, then it's open season for countless companies. So then we have Lenovo.

Lenovo has already shown its success with the IBM acquisition. Buying HP introduces a considerable amount of risk with little gain. The ThinkPad/ThinkCentre/ThinkStation brand has a lot of traction in business and the IdeaPad/IdeaCentre consumer line offers very good value. Lenovo has had a good track record of profits and has shown that it can maintain a brand's identity even after an acquisition. Customers would trust the company that has shepherded the IBM brand, and although you can talk about pre-Lenovo and post-Lenovo build quality of ThinkPads, Lenovo ThinkPads are still in the upper tier of PCs. Depending on the price of HP's consumer business, Lenovo is on the short list of potential suitors.

Chris: I think the best fit would involve a business with a strong server group, and I'm not certain Lenovo's necessary qualify. With that said, I don't see Lenovo as being any more or less likely to benefit from HP's PCs than Acer.

Alan: Yeah, I just don't know that Lenovo needs two American brands. So I have two companies that we normally don't think about when it comes to PCs. The first is Samsung.

Samsung has shown some innovative new products, such as its Series 9 notebook, but it has almost no role in the desktop PC business. An acquisition of HP would be pretty valuable in engaging in this role. With its LCD, DRAM, HDD, SSD, and optical drive businesses, I could very much see Samsung as a potential suitor for HP, as it could achieve economies of scale that even HP would not have had access to. It even has reason to purchase webOS. That would be an excellent platform to run on its smart TVs, phones, and tablets. Samsung could do what HP couldn't by using Samsung memory, displays, and storage.

Chris: No argument here. Samsung is involved in enough of the supply side that this situation could make sense. Could Samsung extract enough margin from such an arrangement to make the deal worthwhile, though? Again, the lack of a server offering means Samsung is unlikely to succeed with resellers in the same way HP currently does. Then, there's always the recent news that Samsung says it has no interest in HP's PC business.

Chris Angelini
Chris Angelini is an Editor Emeritus at Tom's Hardware US. He edits hardware reviews and covers high-profile CPU and GPU launches.
  • mayankleoboy1
    who is alan dang?
    Reply
  • AlanDang
    Who is Alan Dang? He is supposed to be Turkish. Some say his father was German. Nobody believed he was real. Nobody ever saw him or knew anybody that ever worked directly for him, but to hear Kobayashi tell it, anybody could have worked for Soze. You never knew. That was his power.
    Reply
  • tacoslave
    AlanDangWho is Alan Dang? He is supposed to be Turkish. Some say his father was German. Nobody believed he was real. Nobody ever saw him or knew anybody that ever worked directly for him, but to hear Kobayashi tell it, anybody could have worked for Soze. You never knew. That was his power.calm down kevin spacey
    Reply
  • cmcghee358
    Good analysis. The last bit really made me like HP, even though their consumer PCs are cheap enough to justify custom builds to my customers.
    Reply
  • nevertell
    Does HP's PC Business Affect Us Enthusiasts?

    No, it doesn't.
    Reply
  • demonhorde665
    nevertellNo, it doesn't. cheers TO THAT , dumbesta rticle ehader i've seen on tom's todate

    NO real enthusiast buys name brand , they build thier own period. pfft , alien ware, lenovo HP just pffft only a wanna be enthusiast would bther with any of these
    Reply
  • nerrawg
    Good article on a topic that I think a lot of enthusiasts have been dreading. I find it interesting that you guys often metaphorically relate hardware development back to the automotive industry. If PC hardware is the cars, then software is the road network that people driving have to put up with. At the moment I believe that in both cases it is the roadnetwork/software that is the limiting factor. This decade has given us the most thrilling performance cars with incredible bang-for-buck such as the GTR, Corvette, Camaro, M3, Focus RS etc etc. However most of these cars are so fast that most people could never really use them to their potential on a day to day basis. The same can be said about modern PC hardware - its overpowered for the average user. Only the relative handful of consumers who take their GTR to the track on weekends/spend their weekend playing FPS games, can actually take advantage of these products. This in turn is severely limiting the market potential of what on the surface looks like such an amazing product base. People know that even though 0-60 in 3.5 and top 180 is incredible, it makes no difference when your stuck starring at fenders and red lights all day.

    Really, the development in hardware tech is amazing, but what we need to keep it moving is a new class of ubiquitous productivity software that demands better hardware. My suggestion for this is to create more advanced interfaces between the user and the PC - we need to replace the mouse and keyboard with motion detection devices and speech recog that actually works. Once the software can do this I believe we will see a drastic increase in performance demand for office software.
    Reply
  • ZakTheEvil
    If you buy HP computers you're not an enthusiast. PC enthusiasts don't give rat's ass about HP.
    Reply
  • christop
    Enthusiasts and H.P don't go together..
    Reply
  • legacy7955
    This so called article sounds like "marketing" to me
    Clearly an agenda going on here, excessive greed by Leo Apotheker and his clown posse.

    Notice that "they" keep trying to "INFER" that the PSG division is NOT profitable without saying so, but then have to admit that it IS profitable.
    Reply