HP to split into two companies

HP to split into two companies
HP has been lacking anything resembling the “Midas” touch lately, particularly in mobile where the company, famous for getting started in a garage, has been absent for years.

That would not mean so much if the company had never ventured into the space to begin with, but HP used to have a rather robust, albeit business centric, mobile product line known as iPAQ. When that line-up was unceremoniously dropped, HP was not done, and it wanted to continue to play a role in mobile.

Riding on strong profits from some of its business services and peripherals units, HP bought Palm, and promised a plethora of services, content, apps, and integration of webOS and HP’s line-up of computing products. It goes without saying that while HP’s investment may have been wise, its execution was a complete disaster.

While webOS could certainly be seen as “manageable” for a company the size of HP, its acquisition of British software company, Autonomy, in 2011 has proven to be far more troublesome in a landscape of falling revenues, declining market share, and a falling stock price.  The write downs have continued since then.

When Meg Whitman took on the role of CEO, one of the things she announced (in addition to relegating webOS to open source, then selling it to LG), was keeping HP as a company together, and not spin off any business units while it reorganized. Well, two years later, that mindset has changed and HP will split its operations into two distinct companies, one for consumer hardware, and another for business hardware and services. The idea is that two ventures with a narrower focus will perform better.

HP’s stock had been taking a beating over the past couple years, but this year it has been making a comeback, thanks to the cost cutting measures that been made thus far. The official announcement about this change will be made on Monday. Since the demise of webOS, we have not seen anything from HP in the mobile game, aside from a series of forgettable Android powered tablets, and some Windows running 2-in-1 devices.  HP and its CEO have repeatedly stated that it will get back into the smartphone game, though this move likely means we will be waiting a bit longer.  Unfortunately, the competition is not holding its breath, and neither are we.

source: The Wall Street Journal

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16 Comments

1. medicci37

Posts: 1361; Member since: Nov 19, 2011

I'm guessing they'll both suck

3. AnTuTu

Posts: 1592; Member since: Oct 14, 2012

Don't forget that they have probably one of the best hardware in the markets.

10. fzacek

Posts: 2486; Member since: Jan 26, 2014

I would disagree with that. My HP Pavilion laptop started falling apart and malfunctioning after only a year...

13. brrunopt

Posts: 742; Member since: Aug 15, 2013

mine is 4y old and is perfectly fine

2. greenelektron

Posts: 537; Member since: Sep 10, 2014

I thought i'm reading about RIM. Good luck HP

4. sriuslywtf

Posts: 297; Member since: Jul 09, 2013

Problem was they lack marketing strategy and seems to forget that the best target market are the developing countries like India. Goodluck with them.

5. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

This is what happens when you get an airhead bureaucrat of a CEO who doesn't understand technology. Meg Whitman was challenged beyond her capabilities merely being the figurehead CEO of eBay. Instead of using technology from the advanced technology side of the company to innovate and drive value to market on the PC/consumer side of the company, all HP did was race to the bottom of the market. There was no coherent strategy, no powerful and clear marketing, no differentiation, basically nothing required for a successful business. It's sad to see a great company run onto the rocks by succession of moron CEOs.

7. quyenqchau0813 unregistered

If you add overprice products then it'll be a completey picture :D :D

16. QWIKSTRIKE

Posts: 1457; Member since: Mar 09, 2010

I have been saying this fur how long! I bought a laptop on 2007..... The worst thing I ever did was buy that.

6. DaveElliott

Posts: 146; Member since: Sep 20, 2012

Which of the two will be sold off to a foreign org first and in how many years from today? Are we allowed to wager on this?

8. wando77

Posts: 1166; Member since: Aug 23, 2012

They've been making computers and brown sauce for donkeys years

9. fzacek

Posts: 2486; Member since: Jan 26, 2014

Are the two companies going to be called Hewlett and Packard?...

11. tigermcm

Posts: 861; Member since: Sep 02, 2009

what happened to packard bell?

12. ssanders2k7

Posts: 40; Member since: Feb 25, 2010

Miserable and horrible company!!! Bill and Dave would be turning in their graves at this! Former employee here that knows a lot of internal crap, their home unit makes almost nothing on each product sold.

14. Chuck007

Posts: 1410; Member since: Mar 02, 2014

Their laptops haven't been cutting edge since 2011. Not surprising Dell and Lenovo ain't interested.

15. Genersis

Posts: 219; Member since: May 29, 2013

Pulling a Motorola? Well, hopefully things will get better for them.

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