Thursday, March 22, 2012

HP Combines PC and Printer Businesses

HP announced yesterday that it will combine its personal computer and printer units. The firm tried this once before, under CEO Carly Fiorina. Her successor reversed course just a short time later. What are the benefits of such a move? HP believes that they can achieve substantial cost savings from such moves. Perhaps they also can coordinate their sales and distribution strategies more effectively. What are the risks? First, this move may make it more difficult/costly to divest the PC unit in the future, if the firm decides that it really can't make a go of it for the long haul in PCs. Second, investors may lose some much desired visibility into segment financial performance. If HP reports PC and printer financials combined, then printer earnings may mask weakness in the PC unit. Lack of transparency may cause investors to discount their valuation of the firm.


Jeremy said...

I just don't see much potential in this move. I still find having it separated much easier, it's been that way for long no reason to change it now unless it's a huge convenience.
Printing Brisbane

Jagadeesh Venugopal said...

Its akin to arranging deck chairs on HMS Titanic. HP has multiple challenges it needs to address, and what do they do? Play musical chairs with departments.

I'd be curious to hear of their services strategy and whether they plan to be a consumer player any more. If not, then they have competition from the likes of IBM and Dell. If so, then they have to reckon with the Apple steamroller.

At the end of the day, I don't know how HP differentiates itself. All its products seem to be commodities.

Christina said...

great news! Can you please tell me that, will I still have the Managed Print Services from this new printer for my company? thanks :)