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HP's business restructure, too fast or too smart?

08-22-2011 13:48 BJT

SAN FRANCISCO, Aug. 18 (Xinhua) -- Three days after Google's blockbuster engagement with Motorola Mobility, Hewlett-Packard Co. (HP) on Thursday announced to kill its mobile business and a possible spin off of its PC division. In an age when iPad and iPhone make money everywhere, does this business restructure come too fast, or it is simply too smart?

PC SPIN OFF

In its newsy statements on Thursday, HP said its board has authorized the exploration of strategic options for its PC business, which could include a "full or partial separation."

HP is currently the world's largest maker of personal computers. Its business has been expanding since it merged with Compaq almost ten year ago, but it is now the lower-margin division in the company.

"Consumers are changing the use of the PC and the plan to separate PSG (Personal System Group) is to sharpen HP's focus on cloud and other services," HP CEO Leo Apotheker said on a conference call Thursday afternoon.

Under the influence of diminishing PC consumer demand, PC sales in the current quarter is expected to be 32.1 billion to 32.5 billion U.S. dollars, HP reported in its quarterly earnings on Thursday. The number is below the average 34 billion-dollar projection of Wall Street.

For most analysts, HP is making a bold move before the PC business become an anchor for the future development of the company. If it works out well, HP's decision may echo IBM, which sold off its ThinkPad computer business to Lenovo, the biggest PC maker in China.

Apotheker said during the conference call that HP anticipates it will take 12 to 18 months to complete the process of PC spin off.


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