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HP TouchSmart 610
HP looks to get out of PC hardware business to focus on software solutions

The bombshells from HP continue to fall from the sky. Earlier today, it was confirmed that HP is abandoning the webOS platform which it acquired from Palm for $1.2 billion USD just over a year ago. Now, were hearing reports that HP plans to announce that it will sell off its Personal Systems Group (PSG) which is responsible for consumer and business PCs.

The company stated in a press release:

HP also reported that it plans to announce that its board of directors has authorized the exploration of strategic alternatives for its Personal Systems Group (PSG). HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction. 

To many, this may seem like a strange move considering that HP is the number one seller of computers in the world (we're sorry Apple, but we're not going to count the iPad).  According to Garner, HP shipped over 14.8 million PCs during the second quarter of 2011 to secure 17.5% of the market. Dell was the next closest with 10.6 million/12.5%.

IDC produced similar figures and reported that HP shipped 15.2 million PCs/18.1% compared to 10.9 million/12.9% for Dell.

Despite HP's beastly PC shipments, the never-ending race to the bottom when it comes to final transaction prices for consumers means that there's little room for profit in this cutthroat business. While Apple can get away with charging customers $999 for an 11" notebook or $2,499 for a 17" desktop replacement notebook, PC users tend to be more price sensitive.

A June report from The Loop suggests that Apple makes more money from selling just one computer than HP does from selling seven. 

Bloomberg reports that HP, which is helmed by Leo Apotheker, wants to leave the hardware business behind and focus on its more lucrative software and cloud services offerings. “This is the direction we want him to take,” stated ISI Group analyst Abhey Lamba. “Get out of a low- margin business and focus more on his core competency, which is software.”

More specifically, HP has laid out these three keys for its new "company transformation":

 

 

  • Move HP into higher value, higher margin growth categories
  • Sharpen HP's focus on its strategic priorities of cloud, solutions and software with an emphasis on enterprise, commercial and government markets
  • Increase investment in innovation to drive differentiation

 

HP also announced its earnings today, and revenue for the third fiscal quarter was up slightly to $31.2 billion USD compared to $30.7 billion USD during the same quarter last year.

 



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Voodoo
By Sazabi19 on 8/19/2011 9:19:05 AM , Rating: 2
These idiots took over VoodooPC which WAS a boutique gaming computer maker (like Alienware still is but now under Dell) that made very nice high end (very pricey too, but competitive with other boutique) machines. When HP bought them out they had 3 units in production I remember, their desktop system, a laptop, and a small form factor pc with an external power source. Once HP got their hands on it they killed off the desktop and laptop and now they have just the little tiny underpowered machine for a waaay too high outrageous price. HP tried the gaming computer thing once, their Blackbird failed hard and was also too pricey. When you look at a gaming machine and go whoa, this thing is expensive, I'll go back to Alienware, you know it’s expensive. HP ruins everything they touch. They should stick with making mediocre machines for the mass consumers.




RE: Voodoo
By Taft12 on 8/19/2011 11:35:56 AM , Rating: 2
That Voodoo acquisition resulted in the HP Envy laptop line which was great, but I don't know if it still exists.


RE: Voodoo
By Sazabi19 on 8/19/2011 3:00:24 PM , Rating: 2
Envy was the fruit of Voodoo. They had Envy (laptop), Omen (desktop) and i forgot the name of the small one just this minute but the point is that HP just took it from Voodoo and slapped their logo onto it, no new dev or anything.


"It's okay. The scenarios aren't that clear. But it's good looking. [Steve Jobs] does good design, and [the iPad] is absolutely a good example of that." -- Bill Gates on the Apple iPad














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