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Head of HP's PC business reveals timeframe for spinoff decision

Says HP might keep its PC business and is not leaving the tablet market
Tue Aug 23 2011, 14:22

MAKER OF EXPENSIVE PRINTER INK HP will make a decision on what to do with its PC business, including whether or not it will spin it off, within eight to 12 weeks, according to a senior executive at the company.

Todd Bradley, former CEO of Palm and EVP of the personal systems group at HP, the division responsible for the company's PC and tablet business, told CNBC that HP is still undecided about what to do with its PC business and that it is looking at all the options, from spinning it off to doing nothing, suggesting that it's still possible that it might decide to hang onto it.

He said that over the last six years HP's PC division has become the "largest, most profitable PC business in the world" with more than $41bn in revenue. Of course, this raises the question why HP would sell this business if it's doing so well, but it might be that it is hyping the profitability of its PC business in order to attract a good potential sale price.

Bradley said he was certain that whatever decision is made in regards to the PC business will be taken "in the best interests of our shareholders," a view that might be hard to swallow by those who've seen their HP shares plummet over recent months and years and might be fearful of this sudden change in direction.

Bradley also strongly dismissed the suggestion that HP is leaving the tablet business. "So let's be real clear. What we said is we would stop manufacturing WebOS devices. We did not say we would get out of the tablet business."

As for the fate of WebOS, Bradley said it is "still a strategically important asset for us" and that "the ecosystem itself remains very strong". He said that the company has received a lot of interest from large parties considering licensing the software, which is likely to be HP's focus for WebOS in the future if it does not intend to sell that off as well.

Bradley said that sales of Touchpads were not what HP wanted or expected. The huge price cuts for the Touchpad in the US and Europe have led to it being sold out in most places, which we imagine HP also did not expect. It could have opted for a smaller price cut that would not have made a $400m dent in its bottom line and likely still have sold all of its tablet stock, although perhaps over weeks or months rather than days.

Bradley said that the company is moving towards a focus on services and software. He failed to answer questions about how the loss of PC maintenance, a huge part of its services business, would affect the company, but said that a major element of its new direction will be cloud computing. He also refused to comment on the acquisition of Autonomy, a move that many investors are sceptical about.

Bradley dismissed speculation that he was planning to leave HP over these sudden changes, saying that he intends to continue to run the PC business, either under HP or as a spin-off, depending on what decision is made. He criticised the "ridiculous rumours" about his and HP's plans, saying that they are completely unfounded. µ

 

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