HP to exit PC business

August 19th, 2011 - 12:42 pm ICT by IANS  

Washington, Aug 19 (IANS) Computer major Hewlett-Packard is planning to spin off its industry-leading but struggling personal computer business as part of a major restructuring exercise.

In a surprise announcement Thursday, HP said it would also end the TouchPad tablet it launched last month, as well as its webOS smartphone line it got by acquiring Palm last year though it will continue trying to “optimize the value” of its purchase.

HP also said it has agreed to buy British software developer Autonomy for roughly $10.2 billion in cash. Autonomy specialises in database search and other enterprise software technologies.

The bold move to reshape HP, the world’s largest tech company by annual revenue, would be in line with the strategic vision CEO Leo Apotheker unveiled in March, CNNMoney said.

In May, Apotheker told analysts that the company needed to put greater investment into its “value-added services” or it will “be left with a business that is running out of steam.”

Consumer PC sales have slumped industry-wide for the last several quarters, as tablets like Apple’s iPad have slowed netbook and mini-notebook sales. The trend has hit HP particularly hard: sales to consumers fell 17 percent between May and July.

“The tablet effect is real,” Apotheker said on the call with analysts Thursday. “Consumers are changing how they use PCs.”

Despite its recent struggles, HP still sells more PCs than any other vendor, shipping 14.9 million PCs last quarter giving it control of 17.5 percent of the market.

Dell and Lenovo are in a near-tie for second place, each with more than a 12 percent share of the market and shipments in excess of 10 million units last quarter.

(Arun Kumar can be contacted at arun.kumar@ians.in)

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