HP exits low-margin PC biz, shoots down TouchPad and webOS phones

Prescient image courtesy of Gizmodo

The Wall Street Journal reports that Hewlett-Packard, the leading computer maker in the world, is about to announce that it will be spinning off its personal computer business, excluding printers, storage or networking. In a just released statement via BusinessWire, the computer maker offically confirmed its board of directors has authorized “the exploration of strategic alternatives for its Personal Systems Group (PSG), which may include “a full or partial separation of PSG from HP through a spin-off or other transaction.

Quoting the obligatory “people familiar with the matter”, the paper further writes that HP “is close to a $10 billion deal to acquire U.K. software firm Autonomy Corp.” The spin off announcement is expected later today as the computer maker reports quarterly earnings. Shockingly, HP is abandoning its webOS devices, from their release:

In addition, HP reported that it plans to announce that it will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. HP will continue to explore options to optimize the value of webOS software going forward.

And here’s the most interesting bit from the Journal’s story:

As part of Hewlett-Packard’s planned spin off of its personal computer business, it will keep the webOS software business but let go of the hardware, meaning HP is shutting down its tablets business, people familiar with the matter said. H-P’s tablet is the TouchPad, an iPad rival that went on sale in July starting at $499. Earlier this month, HP cut its price 20 percent.  HP got webOS when it acquired Palm Inc. in April 2010 for $1.2 billion. H-P may license the webOS software to others, the people added.

Mind you, not that HP pulling Kin matters in the greater scheme of things because the TouchPad didn’t even blip on Apple’s radar, but separating the personal computer business from their enterprise group could present Apple with an ample opportunity to grow Mac sales. Earlier today, a DisplaySearch survey revealed that – if you count tablets as PCs – Apple has now officially become the world’s leading PC manufacturer with a 21.4 percent share, passing HP in sales by four million units.

As our Seth Weintraub puts it, “the leading PC hardware company just exited all hardware”. And here’s your food for thought if you’re still tripping on this: Perhaps HP will be selling their intellectual property to Google, Apple or Microsoft, giving a potential suitor plenty of ammo for patent battles. Dang, talk about slow news day!
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