The HP PC had a short, less-than-two-decade life. RIP HP PC.
This is as apt as it gets. After my HP Mini 110 got destroyed by me and my clumsiness, HP decides to slash prices on its webOS based tablets, selling them at $99. Surely, people who paid the original $400-plus price must be furious. The HP tablet is one of the shortest-living products in the history of computing, lasting only 49-days.
Nonetheless, today HP drops another bombshell – it will be getting rid of its personal computing business in a bid to go back to what its original founders did – invent things that aren’t mainstream.
HP’s Personal Systems Group (PSG) has announced that it will either be selling its PC business to someone else, or it will create a separate company that will handle the portfolio of the PSG.
“We believe exploring alternatives for PSG could enhance its performance, allow it to more effectively compete and provide greater value for HP shareholders,” said Léo Apotheker, HP’s president and CEO. “PSG is a world-class scale business with a leading market share position and a highly effective supply chain and broad reach and go-to-market capabilities. We believe there are alternatives that could afford PSG more autonomy and flexibility to make strategic investment decisions to better position the business for its customers, partners and employees.”
By now, HP would be finding other ways in which it can divest itself of its PSG. The whole process is expected to be completed in 12-18 months. Even though it is the second largest PC manufacturer after Apple, HP is faced with larger issues regarding sales quantity growth, contrary to what its market share might suggest. According to Bloomberg, the PC unit accoutned for 30% of HP’s sales last quarter, but only generated 5.9% operating margin, which is the lowest among all of HP’s divisions. The future of its PC business is also foggy, as American and European markets for PCs have declined in the last quarter, while Asian (excluding Japan) markets have grown by more than 12%, but HP stood to gain less from this growth than its Asian competitors such as Lenovo and Asustek Computer Inc which gained a 23% and 6% growth respectively, against a 3% gain for HP.
Ever since its founding in 1939, HP has never been too keen on being a company which sells mainstream products. However, the turning point was in the mid-90s when Carly Fiorina, then HP’s CEO, decide to close a $18.9 million deal to acquire Compaq, against the resistance of Walter Hewlett and reluctance of David Packard.
There is no further news on what will happen to the existing stock of HP’s current range, nor how long will HP support these products. However, what you can be assured is that HP will now focus on other areas of its business, such as enterprise solutions, cloud services and other more esoteric computing-related businesses, much like what IBM is doing now.
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