RUMOR: HP getting out of the PC business?

There isn't much risk of HP abandoning them. May I point at IBM/Lenovo?

I would prefer that Lenovo not acquire HP Personal Systems Group because there will be less competition in the business space. Lets face it, either Elitebook or Thinkpad needs to go, I'm betting on Elitebook disappearing, but either way from 3 major business notebook companies, there will be 2.

On the topic of buying a TouchPad. I wouldn't go for it. It lacks support. Tablets in general are useless except for a small group of people as it doesn't replace anything and is just a third device sitting between the smartphone and the laptop which shares the worst parts of both imho. I don't know an iPad buyer that is a regular iPad user.

 

1. IBM carefully planned its withdrawal from the PC market, and back in 2005, the PC notebook market was actually growing, not shrinking.


2. Apple is having surprising success in the business market, especially in companies that give their employees a choice between a Mac and a Windows PC for their personal notebook. Apple is succeeding in the business market even without business specific features - go figure.

3. There are plenty of business quality notebooks available, especially from brands that most people forget about in the consumer market. Personally, I think one less brand hardly matters.

 

Not really.

 

There's been talk of a HP spin-off or break-up for quite some time, but it looks like the decision to dump the Touchpad and WebOS came straight from the board of directors, and by all appearances, the decision was made in hurry.

When you think about it, WebOS wasn't just for tablets and phones, but was intended for every HP notebook and desktop - perhaps as "quick start" OS alongside Windows, but perhaps also as a sole OS to replace Windows, depending on the market segment. With WebOS gone, the phones and tablet were dead, but so was a major component of the conventional PC business.

I don't know how well WebOS would have performed on a X86 processor, but it's clear that HP couldn't turn around its PC business just by turning out the same commoditized Windows PC. With WebOS gone, perhaps HP couldn't turn around its PC business at all, hence the death of WebOS being tied to the announcement of the general PC spin-off.

HP getting out of the Windows PC market isn't all that important, since there are too many competing brands and one less doesn't matter, more or less.

This is catastrophic news for Microsoft. If the HP board of directors doesn't envision Windows 8 as being sufficiently successful to keep the biggest Windows PC maker in the business, it speaks volumes about the future of Windows.

 

I can't believe that HP would just sell-off their consumer products division? I mean,.. I "get" that it may actually happen. And that it may have been largely unprofitable for them to keep it on. What I don't get is how doing so and conceeding their portion of the market is going to make them more profitable. It doen't seem like the best thing to do when you are the top manufacturer to just give your client-base away. I am kind of leaning towards the "spin-off and creating a new company" theory. You just don't tell your customers: "sorry, we are nolonger in the business - but you can buy from our competitors".

I once read an article explaining that HP intended on putting WebOS onto every new notebook and desktop PC it sold. Instead they sort of gradually tried to feed to their customers with a limited product line and then didn't really do anything with it. IMO, they should have just included it with those purchases (new notebooks and desktops) as a freebie along side Windows. Let customers discover for themselves. Seems it would have reached more people that way. I dunno...

 

The whole thing seems very bizzare. I don't understand why HP would want to make this announcement so prematurely. Why not wait until after they have made up their mind as to how to "spin off" the PC division? That way, investors and the general public wouldn't have to speculate wildly and freak out, like they are doing right now.

 

HP planned a 2012 roll-out for WebOS on x86 PCs - and it seems quite likely that WebOS wasn't sufficiently developed as a desktop OS for an earlier rollout. Personally, I would have been far more interested in WebOS if it had been FOSS, but there again, I don't see all that much interest in the Chromium OS? So even if WebOS had worked out x86, at best it would have been HP's equivalent to Google's Chrome OS, and we all know how little interest consumers have in Chromebooks. About as much as the Touchpad, before the $99 liquidation.

The bottom line that HP was probably breaking even on the PC division, even taking into consideration the typically accounting shenanigans. It wasn't a money loser, although looking at the entire Windows PC industry, the future prospects were poor.

Right now, it's hard to imagine any serious bidders for the PC division, and if you consider the meaning of the term "spin-off," it might simply be a matter of giving each HP shareholder shares in a new standalone HP PC company. Have one HP share, get one HP PC share. The other option is to attempt an IPO, which seem ridiculous considering the economy and the stink from the Touchpad liquidation. There were rumors of splitting up HP and selling off the remains to Private Equities, but again, the Touchpad debacle makes that seem unlikely. Finally, there's the possibility of HP simply taking a huge writedown and shutting down the entire PC division. If HP could use the writedown against past, current or future corporate tax obligtations, this option could make the most sense. I don't think anyone would pay $10-12 billion in cash for HP's PC division, although if HP could offset that much in corporate taxes, it might make sense to shut the whole division down for good.

 

1. The situation is a bit different, I'll accept that, but HP, like IBM is going nowhere anytime soon. There really shouldn't be any fear about honoring of warranties on business machines.

2. What? Maybe Small Businesses, maybe executives who don't follow the advice of their IT staff, but Apple isn't in the enterprise at all.

3. There is Thinkpad, Latitude, and Elitebooks. Yes, Toughbooks and Tecras exist, but no where near the big three.

 

I've operating profit at anything from 13% from an MSNBC article that was pulled to ~5% ( Microsoft Explorer : Rumors of HP's Death are Ridiculously Exaggerated)

By comparison, HP's printer group pulled in a 14.7% operating profit for the last fiscal quarter.

 

That's the best article I have seen about HP's announcement. It clarifies lots of the misunderstandings and rumors.

BTW, I read somewhere that Dell's profit margin is even lower, like 2.6%. If that figure doesn't go up soon, I won't expect Dell's PC division to be around for much longer. Ten years from now, the only remaining PC makers will probably be Acer (Taiwanese), Apple (U.S.), Asus (Taiwanese), and Lenovo (Chinese). Sony, Samsung, Toshiba and Panasonic can make a lot more money by selling other products.

 

And what was the stock back than over $50 and now....almost under $20...sooo, your argument is invalid!

 

Probably because apple is more expensive. When you are given a choice of free notebooks, you would choose the most expensive one.

 

This announcement from an HP blog might also be of interest

HP Communities - Answering your Questions - HP Communities

Basically saying that they're not going anywhere and "excited" about future opportunity for the PSG group. Well, what else are they going to say really? Just hope it all works out for the best.

 

Samsung reportedly contacted Taiwan OEMs for evaluating notebook outsourcing

 

Hp is unreliable in my experiences.

 

Your statement, like the article doesn't really say much. They're unreliable in what way?

As for the articles, there gist is more conjecture and speculation than anything concrete. GM closed Pontiac, Oldsmobile and sold Saab. However, that did not disintegrate the core company; and I'm sure the other dealerships will be more than happy to take up the slack from the now discontinued brands.

Apple has a remarkable marking capacity: The ability to sell less, for more makes them second to none.

 

I kind of disagree to a point with that. I mean, it may be better for that model if all you are concerned about is a profit margin. However, sales in general is driven by "volume". And I for one, would rather sell 1000+ units and make 2%GP than sell 100 units making 5-7%GP. Which is somewhat of a Walmart model. And that has been known to be successful as well. Clearly, IMO, we are not getting the whole story from HP when they say that their PSG division is not being as profitable as they would like.

 

My cousin is about to buy a hp laptop, so do you guys think with the support going off soon, he should just stop thinking of buying a hp laptop?

 

Support will be going nowhere. HP PSG is going nowhere, its just not being HP PSG any more.

 

Right now, what you are saying is more or less correct. However, the numbers of iPads and Macbook Airs being sold are skyrocketing. Before long, the sales of these products will be impressive not only in terms of profit margin but also volume. In other words, Apple will soon achieve the best of both business models.

Or, it may continue to be HP PSG for many years. No one knows what will happen yet, not even HP itself.

 

http://www.crn.com/news/application...;jsessionid=g-9uNy2ntObd30m8LEkY5Q**.ecappj02

After reading a few articles, such as the one above, IMO, I think it is pretty clear that HP intends shift it's business model entirely. I think it will sell the PSG division to come up with the capital in order to invest into it's new strategy. Perhaps HP will still have some stake in it somewhere?.. I dunno. I am just speculating, but I think what is going on is part of some long-term shift in the business altogether. Perhaps HP sees Microsoft as vulnerable, at this point and is positioning itself to be the one toppling the "king" of that hill?

 

I just came across this interesting article about how the current HP CEO has screwed up HP: http://www.nytimes.com/2011/08/27/b...-at-the-top-dont-consult-hewlett-packard.html

 

I'd bet now is the best time to buy a HP laptop; once they're sold to China or whatever, quality will heavily decrease.

 

To note: IBM's Thinkpad division was sold to Lenovo back in 2005. Lenovo is a Chinese company.. quality is superb.

HP's are already manufactured in China anyway.

 

Lenovo Thinkpads are reported to have a worse quality than IBM Thinkpads. Manufacturing vs. design decisions - the latter are the important thing.

 

Thinkpads declining quality is the nostaligia filter of Thinkpad fans for IBM more than anything imho. My T400 has been great and its a Lenovo era machine.

 

I have owned 40+ Thinkpads over the years, including both IBM and Lenovo ones. On the average, Thinkpad quality has remained the same after Lenovo took over. However, people expect technologies to get better over time; also, most other brands have gotten better in the past several years. Consequently, Lenovo's merely maintaining the Thinkpads' quality is perceived as a decline in quality, relatively speaking. One aspect of Thinkpads has clearly gone downhill though: the reliability of the hinges.

Yep, very true. For example, it was Lenovo's decision to use the cheapest and worst LCD panels for some of the Thinkpad models (e.g. the R500 and X300). Whether or not these Thinkpads were assembled in China or the U.S. is relevant.

 

I'm sorry, but nothing from China is superb. Except maybe their fried rice.

And failure rate is quite high. I'm already on my third power adapter. These things are expensive and shouldn't be failing so quickly.

 

Fried rice... not so much. Stinky tofu; yes.

Failure rate is quite high with Dell as well.

 

Accord to this article, HP prefers to spin off its PC division as a separate company, rather than selling it:

http://www.reuters.com/article/2011/08/29/us-hp-pc-idUSTRE77S6FR20110829

Considering that HP is currently under such incompetent management, I think this is excellent news for the PC division!

 

Professional troll?

Anyway, this decision makes no sense to anyone. It's like McDonald's getting out of the hamburger business (borrowed that from a Wall Street guy).

 

In the past couple of days, HP has fired ('reassigned to special projects') their director of corporate communications (a crony of Apotheker who came over from SAP) and said that the PC businesses not for sale.

 

The PSG president had a pretty extensive video interview with Reuters this morning. It's on the web in various places. If you take off your linux glasses and watch the whole thing it's pretty interesting.

The guy is touring China and is heading to Europe to reassure contract manufacturers and key customers that HP has things under control.

 

The demand for PCs will continue to be high for a very long time. The recent slowdown in PC sales was partly because of the weak economy, and partly because certain uninformed consumers think the iPad/iPad2 can replace conventional computers. When the economy recovers and when these consumers realize they need "real" computers after all, PC sales will go back up.

But I agree that the future is bleak for the Windows PC industry, in the sense that competition is so fierce that profit margins are getting smaller and smaller. Like I said above, I think Dell's profit margin is less than 3%, even worse than HP's. IMO, in order for Dell and HP to start making big money again, they should focus on producing expensive, premium business-class machines and avoid competition with Acer, Asus and Lenovo in the consumer craptop market.

 

I'm tired of buying cheap and unreliable net/note-books. As a consumer I like to buy a 11.6 or 12.1 touchpad companion. A device with keyboard and has a nice screen.

About "Pluy lie" stir fried parboiled rice, I prefer to make my own because chinese made stuff is riddled with unnecessary stuff to make it palatable to the eyes.

 

Basically, OSX "PCs" are overpriced.

However, Elitebooks (for example) are more expensive than Pavilion because they have better quality, that metal case and so on. Right now I am sitting in front of a Dell Vostro 1510 that costed me 1/3 of an Elitebook 8560p back in 2008 but is quite much screwed up today. This does not mean that Dell's high-end laptops would only last three years.

If you want it durable, watch the price; simple as that.

 

Then stop buying netbooks and buy a legit ultraportable. Thinkpad X220, MacBook Air, that sorta stuff.

Actually. Toughbooks have proven themselves far better than Pavilions. Also, I don't really get what you mean when you say Windows PC, its not like Mac OS makes any difference on what runs below it.

 

At the risk of wading into some "PC vs Mac" fanboy ware all I'll say is this...

1) HP has made a series of really dumb and questionable decisions over the last couple of years.

2) The webOS debacle isn't really surprising but is disappointing all the same given all the potential that the OS had (and when you think of where it could have gone when combined with the power of a huge company like HP). While I appreciate that HP did do significant marketing for the Veer and even more widespread advertising/marketing for the TouchPad it still doesn't change the fact that webOS was set up to fail.

You don't announce a product and then wait a ridiculously long time to bring it to market. You especially don't do that with a product who's hardware is extremely underwhelming when compared to the iPad and iPhone. Even more important HP made the absolutely stupid approach of releasing the Veer first instead of the Pre. And then tney released a tablet before what is supposed to be their "flagship phone". In the end there was just too much working against webOS. Forget the fact they couldn't even create a simple 4.0+ inch slate phone without keyboard (where the majority of phone buyers are going).

Lastly as far as build quality for PCs I am not gonna say that all PCs are horrible (even the over $2,000 gaming rigs) but you can't argue that all Macs just feel solidily built and very well made. When the majority of the public is only interested in getting the cheap netbooks and the cheap laptops (which sometimes end up having issues and often do feel "cheap" you begin to understand why the whole price and quality thing may not ring true for PCs.

I really don't care what HP does with its PC business to be honest. I find it sad given their history with the PC industry but as far as my personal concerns? Its not that serious. In the end I won't be surprised if they completely separate themselves from it

 

How is that a problem that plagues Windows PCs exclusively? Does Apple apply some kind of dark magic to their components to make them less prone to failure? A Core i7 is a Core i7 and a Radeon is a Radeon.

 

I am seeing PC's being much more reliable now than say 4 years ago. Maybe one of the factors is the race for less energy consumption which drops heat which in turn benefits the whole product.
The only bad thing i find in "cheap" products is the the screen quality.

 

HP Communities - A $40 Billion Start-up - HP Communities

 

Screen quality is not related to the price, see Dell's "expensive" gaming notebooks. Great specs, but display is bleh.

 

Or the Vaio SA for that matter.

 

Face-Off: Does HP's PC Business Affect Us Enthusiasts? : Alan And Chris Face Off On HP

 

I would not say Lenovo quality is superb, i have owned several Lenovo Thinkpads, both T and W series and in my opinion quality sucks.

Ever heard of overheating problems with W-series? bad QC in China where they are assembled?

Lenovo is not IBM so don't pretend that Thinkpads are like they used to be when IBM had it

HP leaving the PC market is a disaster because that will mean we will not have any quality laptops anymore, even if Elitebooks are better than Thinkpads they are not top notch.

 

Calling Thinkpads superb was a general statement. Then again calling any computer company well off in the quality department is. Every manufacturer has its issues.

I did not pretend.

Make sure you have your facts right:
HP is not leaving the PC market. HP is spinning off their PSG division to remain as a standalone computer manufacturer. You may technically say that they are, and you make technically say that they aren't. They aren't.

Don't forget the other PC manufacturers out there as well. Dell is one. To be unfair Panasonic (Toughbook) is another.

 

Latest rumour: Apotheker is out, Whitman as interm, "re-evaluation" of PSG spin-off.

Meanwhile, Dell is laughing all the way to the bank, and Hurd is ROFLing at Oracle.

 

Read all about it here: Apotheker Out: Another Hewlett-Packard CEO Is Gone | Moneyland | TIME.com

 

I guess people interpreted this as good news since the stock went up, frankly if I were an employee at HP I might be looking elsewhere for work right now, it's tough to go anywhere but backwards when the people that are supposed to be leading are thrashing around indecisively. Another CEO (maybe), just great, and not like Meg Whitman didn't overpay for her own acquisition like Lee Apotheker wants to (cough, Skype). And it's so public, every IT buyer and even consumers (just look at these boards) are going to wonder what the h-e-double-hockey-stick is going on and walk across the street to buy instead. Unless you can get a really good deal on a purchase from HP that is, which in turn hurts the company profits more, but that's what they'll have to do to keep buyers.

 

Actually she did sold Skype for more, but the money still could be well spent better in another way.
Anyway the problem is not only the former CEO but this HP board.