HP plans to spin-off PC biz; to buy UK's Autonomy for $10.3 bn

Aug 19, 2011 |

New York

Tags:

Embarking on drastic restructuring efforts, technology major Hewlett-Packard is planning to spin off its personal computer business, while deciding to discontinue tablet offerings.

Hewlett-Packard (HP), which saw its July quarter profit rising 9 per cent to $1.93 billion, also announced plans to snap up UK-based software firm Autonomy Corp in a deal worth about $10.25 billion.

Grappling with stiff competition and rising prominence of tablets, PC maker HP's latest plans are aimed at fundamental transformation to bolster profitability.

The board of directors have approved the evaluation of strategic alternatives for HP's 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", it said in a statement.

HP has a significant market position in India's growing PC market.

Regarding HP's proposed spin off of PC business, research group Gartner's Principal Research Analyst Vishal Tripathi said that the company has not given any clarity on the plan.

"This probably going to impact both their consumer and enterprise businesses. All their enterprise clients will be very watchful on process of spin-off. It definitely going to impact their business...," Tripathi noted.

He pointed out that HP is looking to focus more on the profitable software business, which is what IBM did few years back.

The Personal Systems Group is a leading manufacturer of consumer and commercial PCs worldwide and raked in annual revenues of $41 billion in 2010.

"We believe the acquisition of Autonomy, combined with the exploration of alternatives for PSG, would allow HP to more effectively compete and better execute its focused strategy," HP President and CEO Leo Apotheker said.

HP would be discontinuing operations for webOS devices -- specifically the TouchPad and webOS phones. These tablet and smartphone offerings were in direct competition with Apple's popular iPad and iPhones.

Post new comment

<form action="/comment/reply/91530" accept-charset="UTF-8" method="post" id="comment-form"> <div><div class="form-item" id="edit-name-wrapper"> <label for="edit-name">Your name: <span class="form-required" title="This field is required.">*</span></label> <input type="text" maxlength="60" name="name" id="edit-name" size="30" value="Reader" class="form-text required" /> </div> <div class="form-item" id="edit-mail-wrapper"> <label for="edit-mail">E-Mail Address: <span class="form-required" title="This field is required.">*</span></label> <input type="text" maxlength="64" name="mail" id="edit-mail" size="30" value="" class="form-text required" /> <div class="description">The content of this field is kept private and will not be shown publicly.</div> </div> <div class="form-item" id="edit-comment-wrapper"> <label for="edit-comment">Comment: <span class="form-required" title="This field is required.">*</span></label> <textarea cols="60" rows="15" name="comment" id="edit-comment" class="form-textarea resizable required"></textarea> </div> <fieldset class=" collapsible collapsed"><legend>Input format</legend><div class="form-item" id="edit-format-1-wrapper"> <label class="option" for="edit-format-1"><input type="radio" id="edit-format-1" name="format" value="1" class="form-radio" /> Filtered HTML</label> <div class="description"><ul class="tips"><li>Web page addresses and e-mail addresses turn into links automatically.</li><li>Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd></li><li>Lines and paragraphs break automatically.</li></ul></div> </div> <div class="form-item" id="edit-format-2-wrapper"> <label class="option" for="edit-format-2"><input type="radio" id="edit-format-2" name="format" value="2" checked="checked" class="form-radio" /> Full HTML</label> <div class="description"><ul class="tips"><li>Web page addresses and e-mail addresses turn into links automatically.</li><li>Lines and paragraphs break automatically.</li></ul></div> </div> </fieldset> <input type="hidden" name="form_build_id" id="form-6fb1251a7408ab3a17a9003bf0953474" value="form-6fb1251a7408ab3a17a9003bf0953474" /> <input type="hidden" name="form_id" id="edit-comment-form" value="comment_form" /> <fieldset class="captcha"><legend>CAPTCHA</legend><div class="description">This question is for testing whether you are a human visitor and to prevent automated spam submissions.</div><input type="hidden" name="captcha_sid" id="edit-captcha-sid" value="86880736" /> <input type="hidden" name="captcha_response" id="edit-captcha-response" value="NLPCaptcha" /> <div class="form-item"> <div id="nlpcaptcha_ajax_api_container"><script type="text/javascript"> var NLPOptions = {key:'c4823cf77a2526b0fba265e2af75c1b5'};</script><script type="text/javascript" src="http://call.nlpcaptcha.in/js/captcha.js" ></script></div> </div> </fieldset> <span class="btn-left"><span class="btn-right"><input type="submit" name="op" id="edit-submit" value="Save" class="form-submit" /></span></span> </div></form>