Originally Posted by Suddenly Newton
It sounds like HP is following IBM in an orderly exit from the hardware business. They're going to do software and services.
Indeed. And in that sense, it's overdue.
Originally Posted by AaronJ
Does "spin off" mean something along the lines of what IBM did with Lenovo? Or does it means something else entirely?
Sorry if this is a stupid question.
Originally Posted by cvaldes1831
Similar, but not exactly.
A more accurate comparison would be HP spinning off its testing instruments group as Agilent in 1999. A more recent scenario was Motorola Inc. separating into Motorola Solutions and Motorola Mobility (the former is considered the direct corporate descendant of Motorola, the latter the spinoff).
Lenovo had existed as a separate company for almost twenty years prior to their purchase of IBM's PC Division in 2005. There was no spinoff, it was a direct transfer from IBM to Lenovo. Same with IBM's exit from the hard drive business; I believe they sold the division to Hitachi.
This is among other businesses IBM left during their convulsive remake after MS essentially knifed the company that made MS a major company in the back.
Originally Posted by noexpectations
A Spin Off is the first step for another company to purchase part of your business. So, the million dollar question is, who is going to buy the HP PC Division?
If a sale rather than a spin-off, another once iconically American industry likely moving more into Asian ownership.
Originally Posted by cvaldes1831
In my earlier example, I mentioned HP spinning off Agilent in 1999. Agilent is still a separate corporation and trades publicly on the NYSE under the symbol A. No one acquired Agilent.
The attractiveness of the spun-off PC unit will be based on several factors, including things like the patent portfolio, transfer rights to the HP brand, etc. My guess is that some Chinese computer company would be most interested in picking up the brand.
Originally Posted by Maxseattle
This sounds like a smart move by HP. Reading the tea leaves over manufacturing PC hardware must be a grim reality these days.
This is good for Apple. One wonders what a major retraction in large name brand hardware vendors will mean for PC sales in general? When faced with PC brands that are unfamiliar will consumers pause and then go for a Mac instead?
It couldn't "hoit" Apple - unless a buyer (and as speculated by others and me, likely an Asian company) evolves it into something unexpectedly competitive. But the "truck business" does look to be shaking out rather more dramatically and quickly than many expected when the iPhone was released and then the iPad was thrown into (and decimated) netbook land.
Originally Posted by quinney
I wonder where the imaging and printing business and enterprise storage and servers business will wind up in the spinoff. Right now services and software are only about one third of HP's business. It would be strange if the company that existed after the spinoff was such a small piece of the current company. And who will replace HPQ in the Dow Jones Industrials?
I would certainly see HP hanging onto these assets for the time being - particularly the last two.
The sound of one hand clapping for its latest efforts to stay relevant with WebOS is likely a culminating (but not the original) force driving this major change in direction.Another article
notes "Apotheker has argued that HP should go more in the direction of his former employer, SAP, and focus more on services and enterprise-level software," but the move (if it happens) is more out of the playbook of another company HP's been long compared to in a number of ways, IBM, which dumped its PC ops - and that move - taken during a dark period in Armonk - has done much to help Big Blue regain its mojo, big mo and modern mission (in its second CENTURY of operation). And hasn't worked out badly for Lenovo to date.
The part of the personal computing/digital device industry dominated by HP is shrinking - first relatively and at the moment, absolutely. There were fairly high hopes WebOS could establish it as a player in the emerging consumer device markets of the future, but little of the first full 18 months of work on that has gone well at all (as, e.g., in yesterday's stories about Best Buy wanting HP to take back all the TouchPads sitting in BB warehouses even after price cuts and incentives). And probably the straw that broke......
I personally feel the TouchPad and Pre failues are more a case of failed execution on a number of fronts (e.g., the rushed roll out of the TP with slow, buggy, wanting software - which is the version that got reviewed instead of the 3.02 update which would have made a much better first impression) - rather than a fundamental flaw in WebOS, but in any case, the brand is tarnishing and looks like HP's feeling they better get out while the PC making/marketing asset still has some tangible value.
Interesting tho', that while killing WebOS devices, they're not making the software part of the property they want to dispose of.