Beleaguered Hewlett-Packard to split in two

“Hewlett-Packard Co. plans to separate its personal-computer and printer businesses from its corporate hardware and services operations, the latest attempt by the technology company to improve its fortunes by breaking itself in two,” Joann S. Lublin, Dana Mattioli and Dana Cimilluca report for The Wall Street Journal. “”

“The company intends to announce the move on Monday, people familiar with the plan said. It is expected to make the split through a tax-free distribution of shares to stockholders next year, said one of the people,” Lublin, Mattioli and Cimilluca report. “If the division goes off as planned, it would give rise to two publicly traded companies, each with more than $50 billion in annual revenue.”

“H-P, which has suffered sharp sales declines, sees better long-term potential for its corporate hardware and services business than for its printer and PC unit, said one person familiar with the plan,” Lublin, Mattioli and Cimilluca report. “The Journal recently reported that for much of the past year, H-P held talks to merge with data-storage equipment maker EMC Corp., a deal that would have created an industry giant with a market value of roughly $130 billion. Although the talks recently ended, the separation could pave the way for H-P’s corporate hardware and services business to ultimately be combined with EMC, industry observers said.”

Read more in the full article here.

MacDailyNews Take:

When we were an agrarian nation, all cars were trucks. But as people moved more towards urban centers, people started to get into cars. I think PCs are going to be like trucks. Fewer people will need them. And this transformation is going to make some people uneasy… because the personal computer has taken us a long way… But it changes. Vested interests are going to change. And, I think we’ve embarked on that change… We like to talk about the post-PC era, but when it really starts to happen, it’s uncomfortable. – Steve Jobs, June 1, 2010

Related articles:
Beleaguered HP to ax up to 16,000 more employees over the 34,000 cuts already announced – May 23, 2014

25 Comments

    1. Ok, “corporate hardware” and “services business than for its printer and PC unit”. Ok, what is “corporate hardware” vs “printer and PC unit”? Is the “corporate hardware” going to sell the PC turds and the other company is going to “service” the PC turds? Why would the second company service a turd dropped by the first? This doesn’t sound correct. Who would buy crap and hope someone else will “service” your new crap?

  1. Face the music: Without innovation, vision and excellence in execution, there’s no catching or competing with Apple.

    Until this lame industry realizes that FID will get them nowhere in a hurry it is doomed to failiure.

      1. Ah yes, i worked at the Bay Area Analytical Group portion of HP while the spinoff to Agilent was in progress, I was troubleshooting their research grade mass spectrometers, i was very sad to see this technical icon being ripped apart with the founders names going to a commodity branch (PC’s and Printers) and instrumentation, which was the heart of their amazing technological creativity and engineering getting sold off to the highest bidder , sigh…….

      2. Agilent themselves are about to split in two. The test equipment division (which I consider the *real* HP) will become Keysight Technologies, while the other half will remain Agilent, and be dedicated to life sciences.

        As far as the company calling itself HP today, I can’t help but wonder what will become of their calculator division (yes, they *do* still make them). In any case, I imagine Bill and David are rolling over in their graves at a high rate of speed these days…

  2. If I’m not mistaken, this is the first time ‘beleaguered’ has been applied to Hewlett-Packard. The swatch of destruction continues as Apple remakes the world.

  3. Both halves will probably be owned by some presently obscure Chinese company in the not distant future or if they are very lucky an increasingly obscure division of some Western conglomerate. Otherwise its just wandering around in the dark knocking against brick walls.

  4. Kind of strange that they can do this since both corporations and consumers need PCs and printers. The divestiture of Agilent made sense (and I’m very familiar with HP test and analytical equipment and have always found it to be of the highest quality). I like their printers but how are they going to split their remaining divisions? I can see servers splitting off, but how do you split PCs and printers? Aside from huge shared printers, which no company I ever worked for ever used, the home and work environments use pretty much the same equipment.

    Any ideas?

  5. I remember when Mark Hurd took over as CEO. The news reported that he cancelled any Research and Development effort that would not lead to a marketable product in 3 months, and no R&D would start without the same 3 month timeframe. At that time, I concluded that HP was starting on a long downhill slide due to the lack of any significant R&D. It would appear that I was correct.

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