Hewlett-Packard holds on to PC business for now

John Moe Oct 28, 2011

Hewlett-Packard holds on to PC business for now

John Moe Oct 28, 2011

Jeremy Hobson: HP is keeping its $40 billion personal computer business, just two months after proposing a separation of the PC division from the rest of the company.

The 180 came yesterday from HP’s new leader Meg Whitman — who used to run eBay — and made an unsuccessful run last year for the governorship of California.

For more on what this means for HP — and for PC’s in general — let’s bring in Marketplace Tech Report host John Moe, who is with us live. Good morning.

John Moe: Good morning.

Hobson: Well John, I feel like every time time we talk, we’re talking about a company that has decided to do just the opposite of what they just said they were going to do. Why this reversal for HP?

Moe: Money. It was going to cost a lot of money to spin off the PC unit — you gotta have real estate, you gotta have operations. You’re starting a whole new company that is already very, very active.

And because it is active in the PC market — HP buys a lot of components like semi-conducters. And right now, it can get a good price on those because it buys so many for PCs. And that helps on all the things HP really wants to build like servers and things that businesses have.

It’s more predictable business, that kind of stuff, and it’s not so fashion oriented — but the PC still needs to be a pawn in that game.

Hobson: But does the PC really have a future — it seems like all the movement these days is toward tablets and mobile devices?

Moe: Well, there’s a future for personal computers. Whether that’s an HP PC, remains to be seen.

But HP has also moved a lot towards cloud computing, and that’s where a lot of consumers are moving too — using your computer as a portal while everything is processed somewhere else. So HP has built up a lot of muscle in the cloud. If it can come up with a new kind of PC that connects well and works well, that might be a real opportunity for them.

Hobson: Marketplace Tech Report host John Moe. John, thanks.

Moe: Thanks, Jeremy.

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