Carly Fiorina: PC Is Not Dead, But PC Makers Need to Consolidate

Former HP Chief Exec Muses Combination of Dell’s and HP’s PC Businesses

by Anton Shilov
02/06/2013 | 11:18 PM

Carly Fiorina, perhaps the most ambitious and productive chief executive of Hewlett-Packard of the last decade, like most of her colleagues believes that personal computers are far from dead, but PC makers need to consolidate if they want to successfully compete against companies like Lenovo Group or Asustek Computer. While a combination of Dell’s and HP’s PC businesses would result in an ultimate firm, both companies would lose from spinning-off their PC businesses.

 

“I do not think the PC is dead, but I think the PC business is ripe for consolidation. Dell’s move to go private opens up some new possibilities. In general the PC business is one that has to consolidate. Dell bought itself some time, and I think they will be more aggressive in the market [as a private company]. […] The PC business is now a shrinking business, not a growing business. Potentially you could combine and HP and a Dell PC business. Lenovo is now the big competitor. Because of the milking of these product lines in the past, they do not have an iPad, they do not have a product for where the market is going, which is mobile,” said Carly Fiorina, chief executive officer of HP from 1999 to 2005, in an interview with CNBC, reports Tech Trader Daily.

   

Mrs. Fiorina does not generally share a view that Hewlett-Packard needs to be split up to better serve the markets it addresses now. She reckons that HP has a lot of internal synergies as one huge company and spinning off PC or printer businesses will make the remaining company weaker.

“I have always come down on the side of saying HP is more powerful, more valuable together. But certainly I have said that HP is a point now where they should be considering every alternative. We got so much synergy out of our supply chain, out of our customer relationships. However, the times have changed. […] Never forget that HPs’ supply chain is a huge advantage to them. Once you rip that apart, HP loses that advantage,” said the former head of HP, who managed to merge the company with rival Compaq in the early 2000s.

On the other hand, the times are changing and HP has a history of both acquisitions and spin-offs. Back in 1999, HP spun-off all of the businesses not related to PCs, storage, and imaging to form Agilent. Agilent's spin-off, which created an $8 billion company with about 30 000 employees, was the largest initial public offering in the history of Silicon Valley at the time.