HP Set to Decide the Destiny of PC Unit by End of Month

HP's PSG Fate to Be Clear by End of October

by Anton Shilov
10/07/2011 | 01:03 PM

The fate of Hewlett-Packard's  personal systems group (PSG) will be decided by the end of the month. Although the new chief executive officer of HP said that she would not reconsider principal decision of her predecessor, Meg Whitman will still have a new look onto the spin-off of the PC business.


“We have to make a final decision about what to do with the PC division. It’s a decision I want to make much faster than my predecessor. I want to make it before the end of October," said Meg Whitman, the new CEO of HP, in an interview with Bloomberg news-agency.

HP announced in mid-August that its board of directors had authorized the evaluation of strategic alternatives for its Personal Systems Group (PSG), including the exploration of the separation of its PC business into a separate company through a spin-off or other transaction. HP's PSG is the leading manufacturer of personal computers in the world and had annual revenues of approximately $41 billion in fiscal year 2010.

HP is implementing a plan to fundamentally transform the company. An important component of the plan is focusing its investments, resources and management attention to drive higher value solutions to enterprise, small and midsize business and public sector customers. HP believed that the exploration of alternatives for PSG will help the company accomplish its strategic goals and pursue profitable growth and enhanced shareholder value.

It is widely believed that HP’s BoD fired Leo Apotheker, the former chief exec of HP, for his “jarring” decisions in regards of personal systems groups and questionable decisions about other strategically important factors. However, Mrs. Whitman does not think about changing the direction of the company.

Mrs. Whitman does not have experience in hardware companies and is indeed a person known as a successful executive at a company aimed at consumers, not enterprises. She was a director of the board for eight months and she hardly knows the company from inside. It remains to be seen how successful she will be at HP and whether she does spin-off the PSG, which will be a turning point for HP.

Rahul Sood, an ex high-ranking HP employee and the founder of Voodoo PC, said earlier this month that the personal systems group (PSG) was HP's biggest strength.

Meg Whitman is an ex-Ebay CEO; she joined Ebay in March, 1998, when it had staff of 30 and revenues of approximately $4 million. During her time as chief executive officer, the company grew to approximately 15 000 employees and $8 billion in annual revenue by 2008.