HP's divestment of PC biz may be disastrous -analysts

As HP rocked the PC market on Friday with its announcement that it would possibly sell its PC business, prominent tech analysts Ovum and IDC said the mere disclosure could already proved disastrous for the Silicon Valley icon. Carter Lusher, research fellow at Ovum, said that while the divestiture by HP of its Personal Systems Group (PSG) might make strategic sense – after all, IBM sold its PC Division in late 2004 with minimal negative impact – in the short run, the move could impact HP’s credibility as a predictable strategic IT supplier. That is because it was only on March 15, 2011 – a scant five months ago – at the HP Analyst Summit that CEO Léo Apotheker re-confirmed the strategic importance of PCs to HP, according to Lusher. “For enterprise and public sector IT executives, predictability is a critical trait for major technology vendors and HP continues to reinforce the impression that it is unpredictable," the Ovum analyst said. HP’s plan to spin off the PSG will have ripple effects far beyond the products in PSG, some of which can be anticipated while others cannot, he pointed out. Areas that will be impacted include the overall supply chain that also feeds the enterprise server, storage, and networking products; partner ecosystem; commitment to countries and regions; enterprise services, and strategic customer relationships. IDC, on the other hand, said that by announcing its intention to spin off or sell PSG without a clear plan or buyer in place, the company effectively set the clock ticking on the profitable PC business’s viability – and value. “The uncertainty introduced from today’s announcement will undoubtedly lead to an exodus of top talent from PSG. This is the same group that made HP the number one PC vendor in the world," IDC said. “Three months from today PSG will likely look a bit different from today. In 18 months, PSG as an organization may be unrecognizable," it added. The analyst firm added: “In our opinion, today’s announcements brought about more questions than answers. As more details are revealed, the importance of HP’s statements today will become clearer." IDC also noted Apotheker’s statement that there’s a possibility that HP won’t sell its PSG business. “If that turns out to be the case, HP may well have seriously damaged PSG and its future profitability in an attempt to appease Wall Street," it said. Apotheker is a former chief executive of German software giant SAP. IDC also said he company’s actions have effectively killed the already slim chance WebOS had in the mobile OS market. Aside form revealing that it may exit the PC business, the company also announced it would be killing the WebOS hardware, including the less than 60-day old TouchPad, and exploring alternatives for the WebOS operating system. — Newsbytes.ph