Home HP: PC Business Not Moving Anywhere, WebOS ‘the Next Piece of Work’

HP: PC Business Not Moving Anywhere, WebOS ‘the Next Piece of Work’

It’s no surprise that the new-and-re-improved Hewlett-Packard has come to the conclusion this afternoon, under newly-minted President and CEO Meg Whitman, that it will not spin off the Personal Systems Group (PSG) division responsible for producing PCs and tablets. This move was announced after the close of stock trading Thursday afternoon.

But one of the first questions analysts asked during an HP investors’ press conference this afternoon was the fate of its tablet unit. Today, Whitman made it absolutely clear that any tablet PCs HP may produce in the coming year will center around Windows 8, not the webOS platform that HP acquired in the Palm buyout just over one year ago.

In the face of what PSG division EVP Todd Bradley called “enormous economic pressure,” he added that the company’s thinking on tablet PC manufacturing “hasn’t changed” since Whitman took over the badly-damaged CEO position from Léo Apotheker just five weeks ago. When asked to clarify how that thinking did not change from, and where it’s not going, Bradley reiterated that the company will focus on Windows 8-based tablets — in so doing, almost intimating that a Win8 tablet is more imminent than Microsoft’s preview process might lead customers to believe.

But Bradley added that HP is continuing to work with former Palm CEO Jon Rubinstein — still an HP employee, though no longer an executive — to determine the ultimate fate of webOS.

“We’re continuing to focus on a Microsoft-based tablet that we have, and ones that’ll develop on Windows 8,” Bradley told one analyst. “I think from a webOS perspective, that’s kind of the next piece of work to complete. The whole team — Meg, Cathie [Lesjak, HP CFO], myself, Jon Rubinstein working very, very hard and as quickly as we can to make the right decisions about that product.”

To which CEO Whitman added the following: “I think we need to be in the tablet business. We’re certainly going to be there with Windows 8. So we’re going to make another run at this business, and we’re going to make a decision about the long-term future of webOS within HP over the next couple of months. As soon as we make that decision, we’ll let you know on that, because many people have said to me, ‘Isn’t the webOS decision just completely tied to PSG?’ The answer to that is actually, no. WebOS has obviously use in the PSG business, but also in other businesses that we have. We have to make a more holistic decision around webOS, which is coming to a town near you soon, I hope.”

Whatever that last bit of coming attractions meant, Whitman later reiterated that “soon” did not mean any time prior to November 21, when the company is scheduled to issue its next quarterly earnings report. HP made no warnings with respect to that report today, although CFO Lesjak did report that the key reason for HP’s decision to keep PSG centered around the $1 billion of annual revenue it’s certain to continue adding to the company, and the $1.5 billion it would cost to spin it off.


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“As you know, we are one of the largest purchasers of components worldwide,” stated Lesjak. “We ship two PCs every second, and a server about every 15 seconds. This scale helps our gross margins for both PSG and enterprise server, storage, and networking.”

Although CEO Whitman did imply that one possibility still being considered for webOS was a transfer to another division (evidently one that does not produce tablets), toward the end of today’s analysts’ conference, she gave an awfully strong hint that her final inclination would be to somehow transfer webOS out of the company altogether.

“One of my observations is that HP tries to do a lot of things,” remarked Whitman. “And I am a big believer in doing a small number of things really, really well — set ’em up, knock ’em down, set ’em up, knock ’em down. So Cathie [Lesjak] and I are trying to lead a process, which is, what are the real bets we’re going to make in 2012, and let’s do those really well, and position the company for a better 2013 and a better 2014.”

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