Pow! HP's post-PC plan: Purge PCs

By Richi Jennings (@richi ) - August 19, 2011.

Leo Apotheker
HP (NYSE:HPQ) plans to rid itself of its PC group. That's part of Leo Apotheker's strategy to focus the company on cloud and back-office services. It'll also throw in the towel on the Palm smartphones and tablets, although the future for webOS is uncertain. In IT Blogwatch, bloggers try not to make "prescription" puns.

Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention: Flying fish attacks cat...

Sharon Gaudin reports:

News that HP may get out of the PC business wasn't a surprise to some...especially given the decreasing focus...on desktops and laptops. The quick rise of tablets...is not good for companies that have invested billions of dollars in building...PCs.


[It] isn't all that different from what IBM did with its PC division. ... The difference here is that HP is on top of the PC manufacturing heap. IBM was not.


HP's PC unit delivers lower overall operating profit [margins] compared to its...business IT solutions and services. PC sales also tend to be more volatile.   

   Jeffrey McCracken, Serena Saitto, and Aaron Ricadela broke the story:

[CEO] Leo Apotheker...is lessening the company’s reliance on PCs as consumer demand wanes. ... He’s also expanding in so-called cloud services. ... Former CEO Carly Fiorina acquired Compaq in 2002...making Hewlett-Packard the world’s biggest seller of PCs. ... [R]esults have suffered amid diminishing consumer demand for PCs.


The shift underscores Apotheker’s background in software...he worked for more than two decades at...SAP AG, including a stint as sole CEO. ... [HP] is abandoning the mobile software it acquired in last year’s purchase of smartphone maker Palm...Apotheker said. ... The company is “looking at its options” in the smartphone market.   

But Joshua Topolsky says the webOS story inside HP is more nuanced:

webOS GBU VP Stephen DeWitt made it clear that HP intends to continue to work on webOS and likely intends to license it...saying several times “We are not walking away from webOS.” ... [He] reiterated HP’s commitment to developing webOS as a platform [and was] clear that the current business model of webOS wasn’t working primarily due to lackluster hardware.   

Robert Scoble quips, "This is a huge win for Windows 8":

HP clearly wanted to be free of the Microsoft ecosystem and wanted to have an OS...that it didn't need to pay Microsoft $40 to $200 for. ... Today, though, it is clear that strategy did not work.


Developers...keep telling me "Apple is first in my mind, Google is second, and I don't have time for #3, but if I do, looks like Microsoft has the best future." ... Windows 8...looks freaking awesome...and Microsoft still has lots of fans. ... You better believe that Steve Ballmer will be at CES pulling out all stops. ... Does HP have something in its research labs that will let it get back into bed with Microsoft?   

Returning to PCs, Galen Gruman gets giddy:

Prepare for a major shift in the tech business and an acceleration of the "consumerized IT" trend. ... Most of the time, for most people, an iPad, Chromebook, or Atrix Lapdock is all you need. ... [B]usinesses will start to treat PCs as special equipment for only those users who really need them [so] it would make sense for HP to get out of the PC business while it...can get a decent price for it.


[T]he real issue is...whether HP -- a company that has been reeling from...Carly Fiorina and Mark Hurd...for years -- can adjust internally. ... Apotheker is widely regarded as ruthless...[and this is] a ruthless move. ... By getting rid of the life raft that is the PC business, HP would have to truly make the transition [to services and back-office tech] or else fade away.   

   And Finally...
Flying fish attacks cat!
[hat tip: Josh Halliday]

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Richi Jennings, your humble blogwatcher

Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and security. He's the creator and main author of Computerworld's IT Blogwatch -- for which he has won American Society of Business Publication Editors and Jesse H. Neal awards on behalf of Computerworld. He also writes The Long View for IDG Enterprise. A cross-functional IT geek since 1985, you can follow him as @richi on Twitter, pretend to be richij's friend on Facebook, or just use good old email: itbw@richij.com. You can also read Richi's full profile and disclosure of his industry affiliations.

Copyright © 2011 IDG Communications, Inc.

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