HP to exit PC business

Company announces shock decision to drop hardware group to focus on software and services; buys UK software firm Autonomy for $11.7bn

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HP to exit PC business HP has announced plans to drop its hardware business (Getty Images)
By  Ben Furfie Published  August 19, 2011

HP, the world's largest PC manufacturer, is to drop its hardware business, including desktops, laptops, tablets, and phones, in order to focus on software and services.

The company is also purchasing UK software company Autonomy for $11.7bn, as part of its new strategy.

The vendor confirmed that it is considering selling its personal systems group, which includes its PC manufacturing business. It also confirmed that it is to close its webOS business, despite paying $1.2bn to buy Palm just over one year ago.

HP only launched the Touchpad in July of this year. However, the device failed to gain traction amongst enterprises and consumers, and was met with mixed reviews by critics.

The move to focus on software and services had been on the cards ever since the company announced the hiring of former SAP chief executive Leo Apotheker in September 2010. HP had previously quashed rumours that Apotheker had been planning to refocus the company away from its traditional hardware business, towards software and services.

The move is reminiscent of IBM's decision to leave the hardware business, albeit one that is far more rapid.

HP's shares responded negatively to the news falling 6% by the end of trading. They had shed a further 4% in after-hour trading.

More to follow...

2221 days ago
Mohamed Hanno

Describing HP's move as quitting the hardware business is a misrepresentation. They are only quitting the PC/notebook business. Servers, storage and printers are also hardware but are not part of their PSG unit, the subject of this article.

2222 days ago
mohamed

Since the revolution of Apple Hardware other companies start to quit from this industry, which shows the acquisitions on the market by Apple products

2222 days ago
Mbanshee

Sell on a high tide is always a good strategy! specifically that the market is going to face paradigm shifts and cutting edge will be costly and risky

Cloud computing, tablets, network advancements will open the opportunity for software and end to end services

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