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.
