HP reconsidering PC unit spinoff, report says

Cost of spinning off the world's largest PC unit might outweigh the benefits, sources tell The Wall Street Journal.

Hewlett-Packard is reconsidering its decision to spin off its personal computer business after new analysis indicated the spinoff costs might outweigh the benefits, according to a report in The Wall Street Journal.

The spinoff was announced during an earnings call in August by then-CEO Leo Apotheker as part of an effort to refocus its business around other core competencies. Apotheker used the same call to announce the company would discontinue WebOS devices, including the TouchPad tablet .

"The analysis is under way now," an HP representative told the Journal. "We said we would explore all options and that Meg would make a decision based on the data."

Meg Whitman, who took over the reins of the company following the ouster of Apotheker in August, hasn't publicly announced the fate of the PC unit but has said HP must determine whether it wants to spin off the PC unit "as fast as we can."

However, HP has reportedly been under pressure from manufacturing partners to keep the PC unit inside the company. Growing concern about the fate of HP's PC unit is pushing "channel operators" to switch their orders from HP to brands such as Dell, Acer, and Lenovo, Digitimes reported in September.

HP Executive Chairman Ray Lane held out the possibility that the Personal Systems Group would remain inside. "Our intent all along was to look at whether there was a benefit to investors or to customers," he said in a conference call last month. "[But] if it cannot be stronger on the outside--delivering better equipment and technology than our competitors--it stays inside."

HP is the world's largest PC maker, with revenue of $40.1 billion in the most recent fiscal year.

 

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