HP PSG decision due by end of October

HP PC division developing new tablet road map, set to announce ultrabooks soon

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HP PSG decision due by end of October The HP board of directors is considering the best way for PSG to continue to grow, says Barre. (ITP Images)
By  Mark Sutton Published  October 18, 2011

A decision on the future of HP's PC business is due by the end of this month, according to Antoine Barre, vice president, Personal Systems Group, Middle East, Mediterranean & Africa.

Speaking to ITP.net, Barre said that a decision should be reached by the end of October, on the best way for HP PSG to continue to grow and be profitable.

"The board of directors is investigating what the preferred solution is, in terms of customer value, shareholder return, and the objective is by the end of this month, to have a decision made by the board," Barre said.

"HP has been very successful in growing the PC business over the past few years, reaching the number one position, with over 20% market share worldwide, the most profitable business model across the PC vendors, so we are in a position of strength. The question came up, that in looking to improve our position, should we continue to work as one company, or should we look at spinning off the PSG business?"

Barre rejects comparison's with IBM's sale of its PC business, pointing out that HP PSG is growing in both revenue and market share, which IBM's PC business was not when it was sold to Lenovo.

He also says that HP has not given up on the tablet sector, but rather is adjusting its strategy after the failure of the Touch Pad to sell, although it has no plans for smartphones.

"We have not backed out [of the tablet segment], we have backed out of WebOS tablet hardware. The WebOS tablet hardware that we came out with, did not sell to our expectations. We made the decision that rather than continue with a solution that was not appealing enough to customers, we wanted to review our strategy, and build a new tablet roadmap," he said.

"What we are doing now is putting together a new tablet road map... that is looking at various operating systems, Windows 8 we know is going to be very [tablet] focused; we are looking at multiple operating systems for future generations of tablet, including Windows 8," Barre added.

"We see tablets as devices that are a compliment, an add-on device compared to your notebook or smartphone, we see that as another category of device, that is mainly incremental, a bit is cannibalization, particularly on the netbook, so it is a market that we want to get into, but we need the right format to get into it," he said.

A standalone PSG would still be capable of turning out innovative products, Barre said, as most of its innovation in R&D comes from the PSG engineering teams themselves. He also points to innovations in the current PC line, such as integration of the Beats Audio processor, quad core speakers and TouchSmart desktops as proof of HP's ability to lead the market.

In the nascent ultrabook sector, HP doesn't expect to see much movement this year, and the company has yet to unveil any products in this segment. Barre said that HP has been shipping thin and light notebooks with only a single drive - no optical drive - for some time, and while these product make up only 5-7% of shipments, he expects ultrabook to account for around 20% of shipments by end of 2012.

HP PSG is also increasing its support to channel partners, Barre said. The current ‘Everybody On' marketing campaign collateral and deliverables are going to be opened up to channel partners, and HP continues to work with them in areas like co-marketing and collaboration on events.

"Channel partners are fundamental to the strategy of HP. HP was built on working together with channel partners, they are an extension of HP. The commitment that HP has to the channel is as strong as its ever been, and what you will see us do is continue to invest even more than we have before in working with the channel," Barre said.

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