HP CEO Whitman to Decide on PC Business This Month

 
 
By Jeffrey Burt  |  Posted 2011-10-05
 
 
 

Hewlett-Packard CEO Meg Whitman reportedly will decide this month what will happen with the tech vendor's $41 billion market-leading PC business.

Whitman, speaking at a conference on women in leadership sponsored by Forbes Oct. 4, reportedly told the audience that "uncertainty is not our friend here" and said she wanted to settle the matter faster than the company previously had planned, according to a report by Bloomberg Businessweek.

"We have to make a final decision about what to do with the PC division," she said. "It's a decision I want to make much faster than my predecessor. I want to make it before the end of October."

Whitman, who was appointed to HP's board of directors earlier this year, was named CEO Sept. 22 after Leo Apotheker-who had been in the job for less than a year-was forced out amid months of downward financial forecasts, spiraling stock prices and several strategic decisions and reversals. One of those decisions, which Apotheker announced in August, was to spin off or sell the company's Personal Systems Group to enable HP to more easily focus on enterprise software and services.

The decision was met with mixed reviews, with some analysts agreeing with it and others saying Apotheker was making a mistake by ditching such a business with such a large customer base. When Whitman was brought on board, speculation about the PC business arose, with some wondering if the move meant HP would keep it.

HP under Apotheker was to decide by the end of the year what to do with the PC business.

After the talk at the conference, Whitman told Reuters that the October timeline for a decision on the PC unit "may slip a little bit." However, she stressed that the process for evaluating the issue was going faster that it had under Apotheker, and that she was remaining "open-minded" about the PC business' future.

The PC industry is seeing sales slow, to the point that several analyst firms have cut their market forecasts for the year and into 2012. They have pointed to several factors, including the uncertain economy and the growing popularity of other devices, including tablets and smartphones.

"Moving forward, PCs will no longer be a market by themselves, but part of a larger device market that ranges from smart televisions to the most-basic-feature phones," Ranjit Atwal, research director at Gartner, said in a statement in June. "Within this market, consumers and professionals will increasingly use the combination of devices that best suits their particular needs."

Apotheker in announcing his decision to spin off the PC business noted the commoditization of hardware and the low margins. However, others in the tech industry have said they see a bright future for PCs. Mooly Eden, vice president and general manager of Intel's PC Client Group, noted last month during the Intel Developer Forum that the industry currently sells about 1 million PCs a day, and that that number is expected to grow. Dell CEO Michael Dell said in September that PCs remain a key part of his company's business.

"There are a billion and a half PCs in the world, and while Gartner [analysts] change their estimates here and there, they also estimate there will be 2 billion PCs in the world by 2014," Dell said in an interview with the Financial Times at the time. "When I look at that, I think the idea that the PC is no longer here is complete nonsense. You see PCs, tablets, you see smartphones. But those other devices aren't necessarily replacing the PCs, so we are very committed to that part of the business, as part of this broader, end-to-end IT solutions company."


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