Hewlett-Packard’s (NYSE: HPQ) new CEO Leo Apotheker can rearrange his management team as much as he likes. He can also push out his most talented executive, Ann Livermore, who has been at HP for over 20 years.
None of this solves HP’s core problem. It is in several no-growth business–particularly PCs. The sector is under siege by tablet PCs, led by Apple’s (NYSE: AAPL) iPad and the Samsung Galaxy, and smartphones which now operate as portable computers
The firm’s Personal Systems Group manufacturers and sells commercial PCs, consumer PCs, workstations and calculators. In the quarter which ended April 30, revenue from this group fell from $10 billion last year to $9.4 billion. Operating income rose from $465 million to $533 million.
The PC operation is a legacy one. It was formed when HP bought Compaq in 20o1 for $25 billion. The business is now trapped in a sector with Dell (NASDAQ: DELL), Acer, and Lenovo.PCs have become commodities with especially low margins.
HPQ can focus on its more valuable and faster growing enterprise businesses with PCs gone.
What is the unit worth? Based on Dell’s valuable, about $20 billion. As a matter of fact, Dell might be a buyer.
Douglas A. McIntyre
ALERT: Take This Retirement Quiz Now (Sponsored)
Take the quiz below to get matched with a financial advisor today.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Take the retirement quiz right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
