Unable to beat Apple, HP takes on IBM with major restructuring plan

“It’s official: Hewlett-Packard and IBM are twins!” Michael Comeau writes for Minyanville. “Well, soon to be, anyway.”

Yesterday, “HP dropped a number of bombs in the form of a major restructuring plan that will refocus the world’s No. 1 computer builder on to the enterprise,” Comeau writes. “HP is killing its mobile-device business, which was built on the $1.8 billion acquisition of Palm last year. The company’s troubled TouchPad tablet, and all smartphones, will disappear. It is bidding $10.3 billion for UK software company Autonomy, which specializes in unstructured-data management. HP is considering a spin-off or sale of its PC business, which is the world’s largest. This move echoes IBM’s sale of its PC division to Lenovo in 2004.”

Comeau writes, “The most important takeaway here is that HP’s abandonment of its consumer business is an acknowledgment that it simply can’t compete with Apple.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]


    1. The race to the bottom of PC profits is not nor has ever been the place to be for any length of time. In so many ways this past Microsoft “advantage” has disingenuously been the worst example for consumers and manufacturers. Even in volume it’s not a great model and buying too cheap is it’s own reward. And as soon as the Apple cart comes along to disrupt the model it all starts to unravel fast. I think Microsoft at some point will have to jump in and become their own hardware supplier and when that happens we can watch the hapless and clueless Redmond empire begin to dissolve even faster. They are no match for Cupertino.

    1. By next year, Microsoft’s Windows market share may be 25% or 50% smaller. The longer the delay they smaller their customer pool will be.

      Why invest in a dead OS? Does it work well with iPhones and iPads? This game is over. They just haven’t told Ballmer that someone will need to pull the plug in a few short years.

      1. day by day I have come to hate Microsoft and it’s outdated operating system. I love my iPad2 and for see the time when all of the Windows equipment manufacturing is discontinued. Why doesn’t Microsoft get the message?

    1. I think Apple’s own lawyers compete well (better than most anybody) against the company and has been since the early days.

      Apple would do well to poach a few lawyers (or a team) from MS one of these days.

  1. Will the new price targets for Apple’s stock now be closer to $750 or will they open their eyes and minds to see that even $750 is to low. A year from now AAPL could be at $800 or $1,000.

    If the box makers no longer are putting together HP boxes and WebOS devices for what was “the world’s No. 1 computer builder”. Those assemble resources can turn to Apple’s products. Apple keeps telling us, “we could have sold more if we could have made more.” Watch the jump in Apple product sales now! If people can no longer buy an HP, what will they turn to? Once you go Mac you never go back!

  2. Will Microsoft scoop up HP PC division so it can have software and hardware control after the Apple model? Or maybe Google has it’s other eye on that.

    Was the mobile division really built on the Palm acquisition? I had an iPAQ years ago and was fairly happy with it. It was a big hassle in some ways (freezes, recalibrating the screen, the stylus, and who even knew about apps like the iPhone has now) but it was nice for e-mails and web browsing (for the time). The iPAQ was long before their Palm purchase, so while Palm enhanced or augmented their mobile efforts, I wouldn’t say it was the start of them at HP.

    And I can’t imagine HP with no PC division. That’s just sad.

  3. MS, RIM, etc just seem to be blind to what they need to do. This is tough on HP, but it looks like they’re doing the radical (stop competing with Apple) thinking it takes to have a shot at success. Who knows whether or not it’ll work.

  4. This is good news and probably a wise move for HP. Software has better margins than hardware, generally, and HP’s DNA seems more oriented towards enterprise services and software than consumer hardware anyway.

    Better to do it now than later, right?

  5. I know IBM and HP is no IBM. IBM came from a background of serving enterprise as the main, often only, supplier of computing solutions, with mainframe systems. IBM still builds, sells and supports mainframe systems. It only exited the laptop business. Where are HPs mainframes? They already sold off their original claim to fame, the instrument division. They’ve got nothing left but printers and ink cartridges. How much have you printed recently? I’m down to 6 pages or so per month.

    1. Yea, and the quality of HP printers has gone right down the crapper. I bought an HP all in one about 2.5 years ago, and it lasted only 1 year (maybe printed a total of 500 pages). Cost was so high to repair print head that I junked it and got a lexmark. I’m done with HP products.

    2. The HP 9000 series is still in production. It is a workstation to small mainframe line of computers, often used for servers. And they run HP-UX, HP’s variant of Unix.

    3. Don’t get me started on HP cartridges 🙂 The cost was verging on the criminal, so I only print if absolutely vital now. I think I’ll get our notepaper litho-printed again, like the old days, instead of using colour print-outs for letters.

  6. Clear leadership vision and effective, sustainable execution have never been more important in the global economy. HP is on its third CEO in a decade — what vision, or Bayesian Inference pattern, if we consider Autonomy’s product(s), signal other than portending circumstances?

  7. Good luck with that. With no UNIX strategy, no real high end servers and no middleware software, why do they think that they will achieve significant sinergies out of their Autonomy acquisition that will allow them to challenge IBM (or Oracle). They will be eaten alive. It is sad to see a once great company go down in flames due to poor management.

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