HP may oust CEO after less than a year on the job
After HP's TouchPad quickly flamed out against Apple's iPad and the company announced a controversial decision to spin off its low-margin PC business, Hewlett-Packard's board is now set to meet and consider ousting Leo Apotheker as its chief executive.
Citing two people familiar with the matter, Bloomberg reported Wednesday that HP's board has planned a meeting, and will discuss whether to remove Apotheker after he spent less than 11 months on the job. It was said that HP may appoint former eBay CEO Meg Whitman as a successor, potentially on an interim basis.
The rumors come just a month after HP announced that it would spin off its PC business, and scrap hardware based on the webOS mobile operating system. HP initiated a $99 fire sale of its recently released webOS-based TouchPad, a device that had debuted just months before at a $499 starting price, but failed to compete against Apple's iPad 2.
HP also recently announced it would acquire Autonomy Corporation in a $10 billion deal that irked some investors. Headquartered in Cambridge, Autonomy is the second-largest software maker in the U.K.
With Apotheker at the helm, HP's stock has plunged 47 percent. The former CEO of German software maker SAP has been head of HP since November of 2010.
Commenting on the potential ouster of Apotheker, analyst Brian White with Ticonderoga Securities said Wednesday that he wouldn't be surprised if the current CEO became the "fall guy" for HP's ongoing woes.
"We have always thought that Leo was placed in the role on a short-term basis to take the fall for the company's under investment under the previous CEO," White said. "At the same time, we believe a new CEO could begin to build credibility for HP and join the company after quite a bit of damage has already been done."
Whitman, rumored to be Apotheker's potential replacement, has served on HP's board since this January. Prior to that, she made a failed attempt to become the governor of California.
Under Apotheker's leadership, HP decided to spin off its PC business and rethink its focus on webOS in an effort to sell products with higher margins. HP is the top-selling PC maker in the world, but its margins of just 5.7 percent are dwarfed by competitors like Apple, which has been estimated to make more on the sale of just one Mac than HP does from selling seven PCs.
With an estimated 28 percent gross margin and average selling price of $1,323.40 per Mac, Apple is presumed to earn a profit of $370.55 for every Mac sold. HP, meanwhile, has an average selling price of $650 and a presumed profit margin of 8 percent, which nets the company about $52 on the sale of each PC.
HP's previous CEO, Mark Hurd, left the company after an investigation into sexual harassment claims against him found the company's standards of business conduct were violated. Oracle Chief Executive Larry Ellison publicly lashed HP for their decision, comparing it to when Steve Jobs was run out of Apple in the 1980s by people Ellison referred to as "idiots." Soon after, Hurd was hired as co-president of Oracle.
Citing two people familiar with the matter, Bloomberg reported Wednesday that HP's board has planned a meeting, and will discuss whether to remove Apotheker after he spent less than 11 months on the job. It was said that HP may appoint former eBay CEO Meg Whitman as a successor, potentially on an interim basis.
The rumors come just a month after HP announced that it would spin off its PC business, and scrap hardware based on the webOS mobile operating system. HP initiated a $99 fire sale of its recently released webOS-based TouchPad, a device that had debuted just months before at a $499 starting price, but failed to compete against Apple's iPad 2.
HP also recently announced it would acquire Autonomy Corporation in a $10 billion deal that irked some investors. Headquartered in Cambridge, Autonomy is the second-largest software maker in the U.K.
With Apotheker at the helm, HP's stock has plunged 47 percent. The former CEO of German software maker SAP has been head of HP since November of 2010.
Commenting on the potential ouster of Apotheker, analyst Brian White with Ticonderoga Securities said Wednesday that he wouldn't be surprised if the current CEO became the "fall guy" for HP's ongoing woes.
"We have always thought that Leo was placed in the role on a short-term basis to take the fall for the company's under investment under the previous CEO," White said. "At the same time, we believe a new CEO could begin to build credibility for HP and join the company after quite a bit of damage has already been done."
Whitman, rumored to be Apotheker's potential replacement, has served on HP's board since this January. Prior to that, she made a failed attempt to become the governor of California.
Under Apotheker's leadership, HP decided to spin off its PC business and rethink its focus on webOS in an effort to sell products with higher margins. HP is the top-selling PC maker in the world, but its margins of just 5.7 percent are dwarfed by competitors like Apple, which has been estimated to make more on the sale of just one Mac than HP does from selling seven PCs.
With an estimated 28 percent gross margin and average selling price of $1,323.40 per Mac, Apple is presumed to earn a profit of $370.55 for every Mac sold. HP, meanwhile, has an average selling price of $650 and a presumed profit margin of 8 percent, which nets the company about $52 on the sale of each PC.
HP's previous CEO, Mark Hurd, left the company after an investigation into sexual harassment claims against him found the company's standards of business conduct were violated. Oracle Chief Executive Larry Ellison publicly lashed HP for their decision, comparing it to when Steve Jobs was run out of Apple in the 1980s by people Ellison referred to as "idiots." Soon after, Hurd was hired as co-president of Oracle.
Comments
Of course the intelligent person realizes it will just make people avoid HP in the future.
Witless rode eBay (a good idea, which naturally she didn't originate) thru the dot com bubble. Once the bubble burst, eBay went pretty much nowhere for a decade under Witless and her successor. The only good decision she made during her tenure was to purchase PayPal, which I believe is where eBay makes most of its money now. That was a no-brainer which everybody in the industry suggested eBay do - I give her zero credit for doing the obvious.
Whitman's attempt to turn eBay into a "me-too" cut-rate Amazon clone has failed miserably, and her lame management seriously eroded eBay's core auction business, destroying the company's goodwill with its customers.
I guess by hiring Whitman, HP's incompetent board wants to finish the job they started. And by that I mean they want to ensure they destroy HP entirely.
Of course he may have and they are just CYAing.
I guess by hiring Whitman, HP's incompetent board wants to finish the job they started. And by that I mean they want to ensure they destroy HP entirely.
Amen to this. Well said.
Are you kidding me?
Witless rode eBay (a good idea, which naturally she didn't originate) thru the dot com bubble. Once the bubble burst, eBay went pretty much nowhere for a decade under Witless and her successor. The only good decision she made during her tenure was to purchase PayPal, which I believe is where eBay makes most of its money now. That was a no-brainer which everybody in the industry suggested eBay do - I give her zero credit for doing the obvious.
Whitman's attempt to turn eBay into a "me-too" cut-rate Amazon clone has failed miserably, and her lame management seriously eroded eBay's core auction business, destroying the company's goodwill with its customers.
I guess by hiring Whitman, HP's incompetent board wants to finish the job they started. And by that I mean they want to ensure they destroy HP entirely.
1) She is PART OF this incompetent HP board.
2) She was terrible at eBay. Just the Skype acquisition was a joke (eBay may net even on it, simply because the world's largest SW company is run by an even worse CEO in Ballmer). I mean who goes and buys a company from the founders of the company, without even buying the patents that the company's products run on (yup....She bought Skype from the founders, only to get sued right after because the founders still owned the patents to Skype's technology!).
Why the heck would he not have run his decisions by the board before taking them to get their buy-in? Seems prudent for an FOB CEO.
Of course he may have and they are just CYAing.
This IS CYAing. These are the moves the board WANTED HP to make. Why else do you think they hired the CEO of SAP (a consulting firm) to run HP? They wanted Apotheker to mold HP after IBM, which exit its HW business in favor of going largely consulting.
But now that the markets are panicking, he is the fall guy.
Super confused. The guy made two de decisions that will determine the future of hp for many years to come. Killing webos and killing the pc market. So why the hell would anyone want to come in after major decision have already been made, unless there is a big stock growth anticipated from the decisions that the new CEO can capitalize on without having to make any divisions.
It makes no sense at all, so that's what makes me think this is basically a boardroom fight. A sort of revolt by the faction that was surprised by the two moves in question.
It probably won't work. It just shows how chaotic the whole situation is. HP is eating itself alive it seems.
http://allthingsd.com/20110921/forme...ace-apotheker/
He is one of those CEOs like Carly Fiorina. Little knowledge of technology. Their idea of a great moneymaking idea is to half the amount of ink in a printer cartridge and sell it for the same price as the old one. New 564XL cartridges are a good example.
Of course the intelligent person realizes it will just make people avoid HP in the future.
more like have it alert you of low toner while you still have 3 months of toner left
This has to be the real reason why Steve left Apple
Maybe Steve Jobs wil be the new CEO of HP?
This has to be the real reason why Steve left Apple
Yes, I know you're joking, but he stepped down as CEO. He didn't leave.