HP Changes Its Mind, Won’t Spin Off PC Division

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Hewlett Packard is reversing its decision to spin off its Personal Systems Group (PSG). The company announced in mid-August that it was looking to get out of the low-margin consumer market to adopt a more IBM-like approach revolving around enterprise consulting and infrastructure services.

That was under former CEO Leo Apotheker, however, who was recently ousted by HP’s board. His replacement, former eBay CEO Meg Whitman has wasted little time restoring HP’s PC division.

Says Whitman:

“HP objectively evaluated the strategic, financial and operational impact of spinning off PSG. It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees. HP is committed to PSG, and together we are stronger.”

Aside from the fact that spinning off the Personal Systems Group for possible sale would disrupt “the depth of the integration that has occurred across key operations such as supply chain, IT and procurement,” and hurt the company’s “solutions portfolio and overall brand value,” says HP, internal analysis “also showed that the cost to recreate these in a standalone company outweighed any benefits of separation.”

So HP’s consumer products will live to see another day. While the company has been releasing new models of computers recently, it’ll be interesting to see what happens with its mobile products. You’ll recall that the HP TouchPad tablet was killed off before it really even had a chance, making HP’s $1.2 acquisition of Palm seem unnecessary. Perhaps we’re in for a renaissance of sorts.

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