Thursday, August 25, 2011

Did HP goof in ditching its personal-computing division?

Hewlett-Packard sent a shock wave through the computing industry late last week when it announced it was doing away with its personal-computing division.

Much has been written in the past week about the decision. Today, the Financial Times is the latest to chime in; and, true to its style, it's less than impressed. Columnist John Gapper writes that no amount of spin-doctoring at this point can save HP from a poorly timed decision.
Even if the new strategy is vindicated, which it may eventually be, he needlessly alienated investors by thrusting so much unpalatable information and future uncertainty on them at once. He should have taken things steadily rather than making a big bang.
Perhaps, but the New York Times reports that the decision might not be a "big bang".
...it’s not hard to see the trends behind the revised thinking at the Silicon Valley headquarters of H.P., as the company retreats from PCs to focus more on selling more profitable data-serving computers and specialized software to corporations and governments — the so-called enterprise business.
Yet H.P.’s strategy also has a familiar look. It’s I.B.M.’s strategy, but embarked upon years later.
A fresh piece of evidence for the logic of an enterprise-first strategy came Tuesday evening. IDC reported that server computer shipments in the second quarter of 2011 increased 8.5 percent and revenue rose 17.9 percent from the year-earlier quarter. By contrast, PC shipments for the quarter inched up 2.6 percent in the quarter, while revenue rose 6 percent.
One potential suitor was thought to be Samsung, but today it indicated it's not interested. "Not interested" also is the way to describe one industry critic's opinion of HP's $99 sale on its basic tablet.

No comments: