HP exec sees PC unit flourishing, even as spinoff

The head of the company's Personal Systems Group, Todd Bradley, says he wants to lead the division regardless of whether it's spun out on its own.

HP's PSG head is ready for what comes.
HP's PSG head is ready for what comes. HP

The head of Hewlett-Packard's Personal Systems Group believes that his division will lead the PC market even after it might be spun off from its parent company.

Speaking to Reuters in an interview published today, PSG chief Todd Bradley told the news outlet that he expects his division to continue to reign supreme in the PC business in the coming months and years, adding that the firm will also be "one of, if not the largest customers of all of our major suppliers, be it Samsung to LG to Microsoft to Intel."

HP earlier this month made the surprising announcement that it was refocusing its business around other core competencies. It discontinued its HP TouchPad tablet, and said that it would find new ways to employ the WebOS software. The company also announced that it planned on finding a new way to deal with its PSG, potentially spinning it off into its own firm.

Bradley didn't specify whether the PC operation will be spun off from HP, but he did acknowledge that he doesn't believe HP will sell it off. Responding to rumors that Acer might be interested in acquiring HP's PC business, Bradley told Reuters that "the numbers don't support that that strategy works."

The comments on HP's decision to not sell off its PC business follow a report yesterday claiming that the company had nixed the idea of a sale .

Related stories:
• HP halts WebOS business, spins off PC unit
• What will HP do with its PC business?
• HP prefers to spin off PC unit

HP's problems in the PC business certainly have nothing to do with popularity. According to research firm Gartner, during the second quarter of 2011, HP shipped nearly 15 million PCs worldwide, earning it 17.5 percent of the market. The company easily outstripped Dell's 10.6 million shipments and 12.5 percent market share. Lenovo and Acer came in third and fourth, shipping 10.2 million and 9.3 million PC units, respectively. Lenovo had 12 percent market share, while Acer had 10.9 percent share.

The trouble for HP is the low margins. The PC business is extremely competitive, and from laptops to desktops, there is a race to the bottom to see which firm can offer the most for as little as possible. That means companies like HP and Dell are earning an inordinately small amount of profit per computer they sell. And HP wants to try to bolster its business in software and solutions--two places where it ostensibly believes it can become a healthier company.

Regardless of what happens, Bradley says he's prepared. He told Reuters that he plans to lead the PSG through the likely tumultuous next several months, "and if it's a standalone company, to lead that."

Whether HP will actually follow through on any spinoff of the PC business, however, remains to be seen. The company plans to make that decision in December. If the decision is to push the PC business out of the corporate nest, HP believes the process will take 12 to 18 months to complete.

 

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