Why HP Should Sell Its PC Business To Save It

packetrat writes "Hewlett Packard may not be in danger as a company, but its future in the PC business is in doubt, thanks to former CEO Leo Apotheker's maneuvers to turn HP into IBM. This article at Ars says Meg Whitman should go ahead and sell off the PC business — mostly because HP's management is so inept, it would likely do better without them. Agilent seems to be doing okay since it was spun off in 1999, but HP may have spun off its soul in the process."

Comments

HP Didn't Spin Off Its Soul

[14erCleaner]

It's soul was eaten by Carly.

Re:HP Didn't Spin Off Its Soul

[inviolet]

It's soul was eaten by Carly.

Some will consider you flippant or flamebait, but I think you've spoke more truth than you'll get credit for. The leader's personality percolates and pervades through an organization, driving out (directly and indirectly) those not orthogonal to it. HP had a different personality after her tenure than it did before.

It's not that they lack vision

[symbolset]

In the PC space there is no road to real innovation. Operating margins are 5 percent at best, in a good year. You cannot differentiate with your prime products because another company owns the entire user experience. One failed product and you've left the shareholders with no profits at all. And if you experiment with new ways of doing things like Android on ARM Microsoft is going to pull your co-marketing dollars and leave you with no profits at all and no hope of getting any. The path is really just not there.

Apple did it, but look how: they built their own brand and earned a brand premium through differentiation and outstanding design. With those premiums they invested in innovation without being sucked into the trap of surrendering the user experience. With each new thing they could charge more and better premiums until they could reach escape velocity with an ecosystem that's uniquely theirs.

No PC OEM can pull that off without letting go of those no-margin PC revenues. No doubt it's a tough sell to the shareholders and the board. But it's the right thing to do. Ultimately HP cut the chains it or we'll get our innovation from new players like Samsung, HTC and so on rather than traditional PC OEMs. We've seen the future, and it ain't this.