Head of company's Personal Systems Group says move would create '$40bn startup'
Hewlett-Packard's PC boss says that it would prefer to spin off its gigantic PC division, creating a "$40bn startup" which would be the world's biggest seller of Windows PCs in its own right.
In an announcement on the company's website, Todd Bradley, the head of the Personal Systems Group (PSG) says that doing so would be a return to the startup thinking from which HP grew. "The new organisation would be a $40bn business with the agility and freedom of a startup. That's an exciting prospect," said Bradley.
In a separate post, Bradley says that "Our preferred course to harness our vision of the future is to build a separate, more agile company. It's time to think like a startup again. It's time to be nimble and revolutionary. It's time again for world-changing innovation. And so, it's time we realised we're at a crossroads in an evolving HP."
The latest comment from the company suggests that it is moving towards pushing its PC business, which generates up to $40bn in revenues annually – but only about $2bn in profits, a 5% profit margin, far lower than any other division within HP.
In a sample advert posted on its corporate blog, HP notes that "every second, we sell two PCs somewhere in 170 countries around the globe" and that "on its own, the HP PC business is a $40bn company". It says that "our preferred course is to spin off our PC business into a separate company, creating a more agile organisation to help us better anticipate change and quickly respond to customers. This will give us the freedom to deliver the best new products at the best prices faster than we ever have before."
Bradley, a former chief executive of Palm – which HP subsequently bought after he had joined it – would be the natural chief executive for a separate PSG company.
It is not clear, however, whether PSG would also take with it the rights and intellectual property of the WebOS mobile operating system used on the now-discontinued HP TouchPad tablet and Pre smartphones. Those might enable the company to stand on its own outside of HP by giving it the ability to sell the OS or find hardware partners who wanted to build on it.
Interviewed on Bloomberg about whether he had endorsed the move to discontinue the TouchPad, Bradley said last week: "I think we lost some of the clarity around what we announced. We had around 600 engineers working to make the WebOS software compelling and we'll be in the marketplace for a long time … we have a lot of potential partners looking to work with us on it." But he said that "sales of the TouchPad were not what we had expected for various reasons … It was a prudent business decision."
HP is carrying out a review of the role of PSG inside the business, while it plans to purchase UK-based Autonomy for about $10bn. Samsung was touted as a possible buyer for PSG – which would probably attract a price tag of more than $10bn – but said on its own blog that it was not interested.
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Source: http://www.guardian.co.uk/business/2011/aug/31/hp-spin-off-pc-division
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