Stephen Foley: Now Hewlett-Packard has decided it will not divest, it must decide that it will invest

 

US Outlook: The "data-driven evaluation" to which Hewlett-Packard has belatedly subjected the proposed spin-off of its personal computer business, probably did not need to go further than measuring the share-price decline on the day it was announced. It was 20 per cent.

New HP chief executive Meg Whitman (who was a non-executive when the board sanctioned the spin-off of the Personal Systems Group) says the evaluation "clearly" shows that PCs add value to the business overall and should be kept within the company. "The evaluation revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement. It also detailed the significant extent to which PSG contributes to HP's solutions portfolio and overall brand value."

So there you have it. The idea that everyone signed up to nine weeks ago has been comprehensively trashed. One wonders what kind of evaluation the board did in August, if it wasn't data-driven, but hey ho. Best only to look forward now.

The reasons why the board and its now-departed chief executive Leo Apotheker were tempted to rip the PC business out of HP are easy to identify. There is more profit opportunity over the long run in other areas of its business, from software to – increasingly – IT services. HP jealously eyes IBM's transition a decade ago from hardware to consulting (a successful transition, for which one of its architects, Ginni Rometty, was rewarded with the IBM chief executiveship this week), and it wants to follow suit.

As for the personal computer division, itself, it is a low-margin, commodity business at the best of times. HP has probably squeezed as much efficiency out of it as possible. As if recession-level consumer and business spending was not enough of a challenge, now it is under apparently mortal threat from gadgets such as tablets, just the kinds of electronic objects of desire that HP has a terrible track record developing.

It was disappointing, therefore, that Ms Whitman's swift and decisive decision to keep the PC division was not accompanied by a "data-driven evaluation" of how to improve it. Any battle plan will have to begin by recognising HP has been hobbled by years of under-investment under Mr Apotheker's predecessor, the also-sacked Mark Hurd.

HP went up an operational cul-de-sac by trying to launch tablet computers based on the WebOS software it acquired with Palm, but it need not give up on the market entirely, particularly since laptops are likely to become more "tablet-like" and tablets may well morph into something with as much functionality as a PC.

Ms Whitman has plenty of opportunity to catch up. Having now decided to keep the division, she must.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Stockbroker

£Basic (OTE) + Uncapped Commission: Guru Careers: A Stockbroker (qualified / p...

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence