Hewlett-Packard rethinks spinning-off PC unit

Hewlett-Packard (HP), the world's largest personal computer company, is reportedly rethinking its plan to spin-off its personal computer unit, according to a report in The Wall Street Journal.

Citing people familiar with the situation, it reported that the Palo Alto-based technology company is reconsidering its decision after new analysis shows the cost of spinning off the unit might outweigh the benefits.

HP's newly appointed CEO, Meg Whitman and the company's board are yet to make any final decision on the issue. Whitman is to take a final decision on the spin off by the end of October.

Plans for a spin off or a sale were first floated by the company in August by the company's then CEO Leo Apotheker as HP considered its strategic alternatives. The move however, did not go down very well with investors and analysts.

The people told the Journal that spinning off the PC unit would substantially reduce the company's buying power with component makers, complicating its supply chain and decreasing profits on some products.

However, some of the company's executives still favour a spin off.