HP: Uh, on second thought, we’re going to keep our PC division

HP today announced that it has completed its evaluation of strategic alternatives for its Personal Systems Group (PSG) and has decided the unit will remain part of the company.

“HP objectively evaluated the strategic, financial and operational impact of spinning off PSG. It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees,” said Meg Whitman, HP president and chief executive officer, in the press release. “HP is committed to PSG, and together we are stronger.”

The strategic review involved subject matter experts from across the businesses and functions. The data-driven evaluation revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement. It also detailed the significant extent to which PSG contributes to HP’s solutions portfolio and overall brand value. Finally, it also showed that the cost to recreate these in a standalone company outweighed any benefits of separation.

The outcome of this exercise reaffirms HP’s model and the value for its customers and shareholders. PSG is a key component of HP’s strategy to deliver higher value, lasting relationships with consumers, small- and medium-sized businesses and enterprise customers. The HP board of directors is confident that PSG can drive profitable growth as part of the larger entity and accelerate solutions from other parts of HP’s business.

PSG has a history of innovation and technological leadership as well as an established record of industry-leading profitability. It is the No. 1 manufacturer of personal computers in the world with revenues totaling $40.7 billion for fiscal year 2010.

“As part of HP, PSG will continue to give customers and partners the advantages of product innovation and global scale across the industry’s broadest portfolio of PCs, workstations and more,” said Todd Bradley, executive vice president, Personal Systems Group, HP. “We intend to make the leading PC business in the world even better.”

Source: Hewlett-Packard Development Company, L.P.

MacDailyNews Take: “PSG has a history of innovation and technological leadership?” Since when is cobbling together thick plastic slabs/fugly towers and slapping in another company’s upside-down and backwards Mac knockoff OS considered to be “innovation and technological leadership?” Give us a break, HP. You’re nothing but Dell by another name. About the only thing you’ve led on over the last several decades is how to wildly overcharge for printer ink cartridges.

35 Comments

    1. John Gruber said is perfectly:

      You know what HP should do? They should acquire Netflix. Then a week later back away and say “Never mind.” Then a month later go ahead and buy Netflix. Those two are made for each other.

  1. Once upon a time HP did have a reputation for producing quality, reliable hardware. These days? I can never get my HP printer to pull in the first sheet of paper without me forcing it through.

    ——RM

    1. That’s right. My 1980’s era HP Laserjet II was heavy, $1800 and built like a tank to last. In fact it was still going strong when I got rid of it a few years ago. Nobody wants to spend that anymore. Can’t say I blame them.

      1. Right… Consumer demand for increasingly low prices has forced commoditization. Instead of an $1,800 printer that lasts 12 years you have a $99 printer (that does pretty much the same thing) that lasts two years.

        Cell phones used to be used for four years too. Now I don’t know anyone with a two year old cell phone. Who wins?

        1. I guess I’m one of the holdouts, because I’ve still got my first cell phone: a Samsung flip phone that I got about six years ago. Other than a diminishing battery, it still works like it did on day 1! But you’re probably right; they likely don’t make them like that any more.

    2. TOTALLY AGREE. My first HP printer broke in a lightning storm, the replacement won’t work now because it says there is no black ink cartridge in, though there is on in. Cleaning, etc. doesn’t help. I don’t think they update their drivers very much either.

  2. > HP objectively evaluated the strategic, financial and operational impact of spinning off PSG.

    HP did not “objectively evaluate” anything. This “changing of mind” (by the Board) was an inevitable conclusion of firing the previous CEO and hiring Meg Whitman.

  3. MDN: “About the only thing you’ve led on over the last several decades is how to wildly overcharge for printer ink cartridges.”

    In that regard, they’re no different – no better, and no worse – from Epson, Canon, Lexmark or Brother. All have built their business model around cheap printers and expensive, high margin printer ink cartridges.

    1. I might interject that Epson seems to have much more reasonably priced ink, with printers that work well, as of late. Just got an Artisan 835 and the ink was way cheaper than Canon or HP’s by ml. And the printer is fantastic, and worked with AirPrint as soon as I nabbed the latest drivers.

      1. True. I have always liked Epson, and have a nice Epson photo printer. However, I now have a Canon all in one that I use for most, every day printing…

        Epsom can end up being more expensive, because you can’t ever use up all the ink. The cartridge chip has a page counter, and no matter how much ink you might actually use, once it says you have reached the end there is nothing you can do about it.

        The printer absolutely refuses to print until the offending cartridge is replaced. That’s the one thing I hate about Epsom printers.

        With Canon, and I presume others, you can jiggle, reseat the cartridge, override or something. It’s up to you if one color out of five or six goes a bit dodgy. And you can still print in greyscale, or if you know your page has blue, black and red, but no yellow. On Epsom, if one of the cartridges is “out”‘, you cannot print, whether you need the color or not.

        Also, I have found that Canon cartridges are easier to refill with generic ink. One of the things pioneered by these printing companies, as well as selling you ink and chipped cartridges, is the myth that you must use their ink or you foul up and ruin their printer somehow. I believed that one for years. In any case, the savings pays for a new printer. Unless, you are a photographer who is selling 200-dollar prints, get generic ink and teach these printer companies a lesson.

  4. MDNs harsh judgment of HP assumes HP is on a level playing field with Apple and we all know they aren’t, so, MDN that was unfair.

    A fair assessment would be that HP knows MS Windoze is the albatross around their neck, but there is NOT an alternative. Windows sufferers will continue to suffer.

    Where HP has led the way is in things like Beats Audio, SimplePass, CoolSense and ProtectSmart for PCs. (Please understand what these four things are before flaming.) In this way, HP is truly leading the way among PC assemblers that slum Windoze.

    On the printer side, HP was first to market with ePrint (undisputed innovation) and their partnership with Apple on AirPrint for iOS.

    I think MDN owes HP a little nod for these things, as it does set them apart from the Dells of the world.

    On a level playing field with Apple? Never, and they know it. That’s why you can buy a 17″ HP dv6 for $399.

    Think about it MDN. Love ya, but auto-hate rants are getting old.

    1. What I don’t get about the “there’s no alternative to Windows” argument is that other operating systems are possible, and it would be totally worth the investment to differentiate the brand from competitors and break dependency and Microsoft’s pungent spaghetti code. It would take a solid team of software engineers a couple years to make an HP OS based on an existing Unix kernel.

  5. I agree w/ LordRobin. I used to be a retail marketing rep for HP through a third party marketing company. HP has produced some good products. Admitedly having to depend on Windows as an OS limited them. HP was one of the first to provide plug and play slots for increasing HD capacity in their retail computers and they have consistently made some really nice monitors. Their printers used to be truly above most on the market, but i agree that they have also suffered with their recent reduction in costs. I can remember that you used to be able to put a HP Deskjet 890 printer on the floor and stand on it and it wouldn’t break. Try that with their cheesy printer cases today. Management decided they didn’t have to make their printers like “tanks” any more so not you have cheap, race to the bottom, me-too products. Managment abandoned HP’s research and development department

  6. So this was the belated, already-decided “We fired our CEO because he wanted to scuttle our $1B purchase of Palm, but we need to at least act like our new CEO reviewed it.”

    Actually a good decision. HP, given a little inspiration, could produce a solid tablet/phone with webOS, and could do well.

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