HP may float PC unit as new entity

Hewlett-Packard (HP), the world's largest PC-maker by units shipped, aims to spin-off its personal systems group (PSG), which includes PCs, and shut down its tablet computer as part of a major revamp.

The entire process of spinning-off the unit could take a year to 18 months. The company has been facing tough challenges from viable alternatives to PCs, including tablets, especially Apple's iPads, that have hurt sales of desktops and laptops.

HP launched its own tablet computers, but sales failed to take-off, forcing it to shut down the unit. The TouchPad, its tablet, was based on the WebOS operating system, which it got following the acquisition of Palm, another tablet manufacturer.

"We prefer a spin-off as a separate company and the working hypotheses is that a spin-off will be in the best interests of HP's shareholders, customers and employees," said a spokeswoman for the company. "However, we have to complete the diligence process and validate this assumption, including fully understanding the dis-synergies in separating the PSG business from HP."

The PSG business accounts for about $40 billion in revenues, about a third of the company's total global revenues. HP operates in 170 countries, but non-US operations now account for two-thirds of its total revenues. The BRIC (Brazil, Russia, India and China) countries accounted for nearly four per cent of sales, a growth of 12 per cent.

According to Todd Bradley, executive vice-president, PSG unit, HP, "the new decision (of spinning-off the unit) is aimed at maximum value for shareholders. It will let HP focus on its cloud and data service and act more aggressive than today." He pointed out that the company will have to focus on what the PSG is good at: workstations and ultra-thin laptops will be its PC roadmap now.