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HP CEO Will Decide PC Division's Fate This Month

By - Source: Reuters | B 0 comment

HP's new CEO said that she will make a decision on whether to keep, sell, or spin off the PC division later this month.

Tuesday during Fortune Magazine's Most Powerful Women Summit in Laguna Niguel, California, Hewlett Packard CEO Meg Whitman said that she would decide the fate of the company's $45 billion PC business before the end of October.

The news arrives nearly two months after the company announced its possible intentions to sell or spin-off its Personal Systems Group. The final decision was expected to come from the board of directors by the end of the year, but Whitman said that she wanted to make the decision sooner rather than later.

"I want to make that decision much faster than the previous CEO,” said Whitman. "Uncertainty is not our friend. People are wondering whether to buy HP products."

Indeed, there has been much speculation surrounding both the company's PC business and the webOS platform. In August HP declared that it would no longer produce tablets based on Palm's operating system, and like the possible PC division sale or spin-off, the uncertainty of the company's direction has left the industry and consumers watching the fate of the company with a cautious eye.

A year ago former CEO Mark Hurd was ousted over ethics concerns. Then in September 2011 former CEO Leo Apotheker was ousted after just 11 months on the job because he didn't share the same views as the board of directors. "We are at a critical moment and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead," said executive chairman Ray Lane.

Now with Whitman at the helm, HP's new CEO feels confident about what needs to be done in order to get the company back on track. "I have quite a clear vision of what needs to be done here," she said. "After 35 years in business, I’m not in search of a manual. I’m far better equipped to run HP today than I was had I not run for governor. I’m a lot tougher. I’ve got a skin that’s 100 times thicker than when I left eBay."

During the conference, she outlined three main priorities: to meet fourth quarter projections, to make a swift decision regarding the PC division, and to fully integrate the $10 billion British software company Autonomy, an acquisition which officially closed on Tuesday.

Numerous suppliers and competitors are actually rooting for HP to keep its PC division in-house. Dell CEO Michael Dell has even reportedly spoken out against a sale or spin-off, indicating that leaving the PC business would actually harm HP's operations in other areas. It would also drive component prices upwards because suppliers will no longer have HP's money flow.

"The client business provides really enormous scale and if you give up that scale you go from being one of the largest buyers in the world of those components to not really being in the top five or perhaps even the top 10," said Dell. "That is a huge problem. It means the price of those products has to be raised."

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