HP planning to withdraw from PC market

The world’s largest PC manufacturers is looking to withdraw from the market and is looking for possibilities to break free from the PC section, or just sell it. HP instead wants to focus on business solutions like servers, service, printer and overall becoming a service oriented company, which has much wider margins. It will used the money to acquire software that can compete with companies like Oracle and IBM.

That HP is not doing well we understodd when the WebOS hardware got the can, but we were shocked to learn that is throwing in the towerl and stop developing tablets and smartphones without even really trying. We don’t what the future will be like for webOS, but the more shocking news was that it will also remove itself from the PC market.

HP’s PC section is one of few that is making a profit, with 567 million dollar last quarter with a revenue of 9.59 billion dollar, 3% lower than the same period 2010. HP is getting narrower margins and the growth is stagnating on the PC front, so HP VP Leo Apotheker sees that it is time to strengthen the company focus, and to do that it needs to make some serious changes.

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HP has been analyzing data on market trends for a long time and come to the conclusion it needs to invest its capital better. HP’s market for printers, servers and service are still doing well and continues to grow at a steady rate while maintaining the margins they are looking for. HP wants to invest more in software to become the sole supplier and offer complete solutions to its customers.

The longterm goal is to improve its position on the business market where the two big rivals are Oracle and IBM. HP will invest one billion dollar to restructure the copmany and what will happen to its PC section is still unclear, but there is talk about ”a complete or partial separation” which implies it will break free from the company or be sold to the highest bidder. Changes in the company are expected to give result in the coming 12 – 18 months.

Source: WSJ