HP Keeps PC Division

In spite of rumors to the contrary, HP is not going to sell out it’s PC division Personal Systems Group (PSG). Apparently it was up for discussion, but the company decided against it. It was HP’s CEO Leo Apotheker (who has now apparently been given the boot), who for some reason or other raised the question of whether it would be wise to cut off the company’s PC business. The main reason not to sell was allegedly that increasing costs for components and other factors would have led to a negative spillover on other parts of the company.

According to Wall Street Journal, and later confirmed by a press release, HP will indeed stay in the personal computer business. Although the profitability of the computers themselves is not high enough, separating them from HP would have led to higher costs in other areas.

HP is the world’s largest PC manufacturer of and can thus get pretty decent prices on components from subcontractors when dealing in gargantuan volumes, and the same components as those in laptops and desktop PCs will, for example, end up in HP servers and other products.

The whole affair with the PC division was “part of a larger strategy change” but when Meg Whitman recently took over as CEO, it became clear that the shift would not be as great as first thought. Meg Whitman has nevertheless made it clear that the issue must be settled before the end of October. Wall Street Journal’s sources point out that a final decision has not yet been taken, but the latest press release from HP more or less settles the matter.

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