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By 28 October 2011 | Categories: news

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Finally, the fate of HP’s Personal Systems Group (PSG) has been decided. The latest news from HP is that the company has decided to keep its Personal Systems Group and not spin it off into a separate division as was being considered.

The company’s PSG is responsible for PCs and mobile devices, and reported plans to close or spin off this segment sent shockwaves through the industry earlier this year.  

Considering that HP is a leading manufacturer of personal computers in the world, with revenues totalling a very substantial $40.7 billion (R314 billion) for 2010, it seemed somewhat ominous at the time. This was exacerbated by the fact that it came off the back of HP’s decision to cease production of its TouchPad and seemingly abandon webOS, at least for mobile devices.

All things considered...

“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.

She elaborated that the review involved examining the depth of the integration that has occurred across key operations such as supply chain, IT and procurement, while detailing the “significant extent to which PSG contributes to HP’s solutions portfolio and overall brand value”. The review further indicated that the cost to recreate these in a standalone company outweighed any benefits of separation.

Fortunes rising

The decision is a 180 degree reversal of the former chief executive officer of the company, Leo Apotheker’s, plans to sell or spin off the division. Apotheker was ousted late last month and replaced by Whitman, who clearly has a different vision for the company.

To date, the new leadership appears to be working. According to the International Business Times, HP’s shares have gained 14.4% since Whitman took the reins. Following the announcement, the company’s shares rose 1%.

Additionally, a recent report by information technology research and advisory company Gartner, placed HP as the number one vendor of global PC shipments, while enjoying faster growth than the industry average.

To the point

“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,” pledged Todd Bradley, executive vice president, Personal Systems Group, HP. “HP is committed to PSG, and together we are stronger,” concluded Whitman.

In recent news, Gartner has reported that worldwide PC shipments were growing, even as smartphones and tablets continued to eat into their sales.

  

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