HP Won't Finalize PC Spin-Off Until End of 2011

News
By
published

Industry insiders have backed up CEO Meg Whitman's prediction that any kind of spin-off won't be finalized until the end of the year.

Unnamed sources from "upstream suppliers" report that HP won't finalize any kind of spin-off company of its Personal Systems Group (PSG) until the end of the year, backing up a statement made last week by the new CEO, Meg Whitman. Sources state that HP will continue to serve as the world's top notebook vendor in 2012, with 40 million units expected to ship next year.

However right now HP is struggling to "revive morale" among its employees due to the recent changes and the company’s uncertain future. All the talk and speculation about HP spinning off the PC division as a separate entity has reportedly hurt sales across the United States and Europe -- HP's two main markets -- with notebook shipments this year only averaging around 37 to 38 million units.

But if HP's decision to halt TouchPad development, throw webOS into limbo and launch an external PC division wasn't enough to cause investors anxiety, former CEO Leo Apotheker has recently been replaced by Meg Whitman. Sources note that this change in power indicates that the company's board didn't agree with Apotheker's spin-off plan, yet Whitman has now vowed to continue the former CEO's strategy.

"With regard to the potential spin off of PSG, we're committed to doing the work right now to determine the best path forward and we expect the board to make a determination by the end of the calendar year if not sooner," Whitman promised last week in a conference call. "This decision is solely based on the value to investors and value to customers."

But because of the previous clash between the board and Apotheker, there's some uncertainty amongst suppliers whether the company will continue as planned, or keep the PC division within the HP collective. HP is seemingly struggling to find its footing after the TouchPad blunder, enough so that the company feels that it needs to somehow boost morale amongst its workers, to assure them of a bright future (and a steady paycheck).

According to reports, nearly 50-percent of the company's 2012 volume will be supplied by Quanta Computer. HP is reportedly cutting back the number of orders it typically sends over to Flextronics and Foxconn Electronics (Hon Hai Precision Industry), and sending them over to Quanta and Wistron instead.

Kevin Parrish
10 Comments Comment from the forums
  • legacy7955
    But wait I though Ms Whitman stated a week ago that HP was committed to the PSG division and that HP had no intention of spinning off or selling the division ...What is going on here?
    Reply
  • dark_knight33
    Whitman is an idiot, with no skills for leading a company like HP. She's in the driver's seat, because the board of Directors in all it's infinite wisdom believe they can control her. Problem is, the board can't agree what to do, so Whitman won't get anything done. It's like congress right now. If she were the CEO HP needed, she'd simply admit to the mistakes of her predecessor, and revive the company's previously profitable direction. Imagine that, a CEO admitting a mistake was made, then reversing course. If she could pull it off, she'd be hailed as a savior, and Leo would be demonized like Fiorina. If she just walked away from fixing a much smaller company, what kind of dedication or skill can they really expect from her?

    I'm ashamed to admit that I bought HP stock prior to the release of the touchpad, because I believed in the product. I believed it would be a big success. After having one for a few weeks, I can see why it didn't blow up the market, but it's hardly unsalvageable. Mostly, it's a bland product, but if the money they should have spent on R&D went to marketing it creatively, and courting developers, it would have been a moderate success, setting the stage for a second, better built device.

    The Kindle Fire is unimpressive hardware wise, yet Amazon managed to drum up a huge buzz, and were smart enough to price it low. HP's arrogance led them to believe the touchpad should automatically be entitled to a #2 status under the iPad (and at a similar price), just because it had the HP name. What did they really *think* would happen? They over estimate their brand, significantly. Who really even owns a webos phone? Can you think of a single webos phone that's been advertised a lot? Instead, they should have priced it at cost, or a loss, and made money on the their App Catalog to break even. Use the first device to build the market, then sell a better product later for more money. They didn't have the hordes of idevice owners waiting with bated breath to shell out a small fortune for what should have been marketed as an entry level entertainment device.
    Reply
  • tacoslave
    their software is shit and i would never buy any all they had were pc's and printers, anything else flops but they're selling their pc division. Nice choice Hp im glad someone still does crack.
    Reply
  • legacy7955
    @dark_knight:

    I have been saying that the ENTIRE BoD need to resign for the good of the company.

    I also believe that the families of Bill and Dave need to find a way to regain control of the company and take it private to save it.
    Has anyone heard from any of the Hewlett or Packard family members lately? I know they must be sick about the destruction of what was once a very vibrant and strong company.
    Reply
  • smashley
    Sources note that this change in power indicates that the company's board didn't agree with Apotheker's spin-off plan, yet Whitman has now vowed to continue the former CEO's strategy.

    "With regard to the potential spin off of PSG, we're committed to doing the work right now to determine the best path forward and we expect the board to make a determination by the end of the calendar year if not sooner," Whitman promised last week in a conference call. "This decision is solely based on the value to investors and value to customers."

    Uh, I read this as Whitman promising that they are re-evaluating the situation, (and may or may not proceed with the spin-off) not that she intends to follow through with Apotheker's plan. Maybe I'm reading out of context. I'm too lazy to look up the full statement/transcript.
    Reply
  • mrmike_49
    legacy7955@dark_knight:I have been saying that the ENTIRE BoD need to resign for the good of the company. I also believe that the families of Bill and Dave need to find a way to regain control of the company and take it private to save it.Has anyone heard from any of the Hewlett or Packard family members lately? I know they must be sick about the destruction of what was once a very vibrant and strong company.
    Yeah, need a new Board entirely
    Reply
  • someonewhoknowsalittle
    HP has decided to come out with a new line of desktop, notebook, netbook and tablet PCs and smart phones that will replace its entire current lineup.

    The new lineup of products will exclusively use HP's tried and true "RPN or Reverse Polish Notation".

    HP hopes this new move will help HP file for Chapter 11 Bankruptcy by 2013 and join RIM as the latest casualties in the IT wars.
    Reply
  • wlachan
    Does she really care? In the worst case she will just walk away with millions in her pocket. Just the American way to reward retarded CEOs.
    Reply
  • eddieroolz
    I've done my part already by letting friends that are looking for a new PC about the uncertain future of HP.
    Reply
  • halcyon
    Is anyone really going to miss HP's PC business? ...didn't think so.
    Reply