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Investing

Rumors We Would Like To Hear: HP Sells PC Unit

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By Douglas A. McIntyre Published

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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

Contact [email protected] for any questions or corrections.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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