HP's PC unit will be tough sell; rumors of Samsung takeover surface
The announcement last week by Hewlett-Packard (NYSE: HPQ) that it is looking at "strategic alternatives" for a sale or spin-off of its Personal Systems Group unit, which deals in PCs and mobile devices, came as a big surprise.
With an estimated value of $8 billion, some have pointed out that the PSG unit could be a tough sell given its high price and the traditionally razor-thin margins of the PC market.
As reported on Computerworld, Cassandra Mooshian, an analyst at Technology Business Research noted that "the margins are tighter, mature markets are riddled with economic uncertainty and components are increasingly more standardized across the industry."
Sentiments from existing customers appear to be unchanged though, due to confidence that support contracts and warranties will be carried over to a new owner much like in the IBM-Lenovo deal of 2005. HP's track record with tech support appears to help too.
In the meantime, rumors have surfaced that Samsung could be a potential buyer of HP.
A report on DIGITIMES cited recent visits by Taiwan notebook makers to the Korea-based Samsung, ostensibly to discuss the possibility of outsourcing notebook orders. The report speculated that Samsung would be unable to handle the additional 40 million PC units shipped by HP annually, and would require OEM partners in order to make the requisite parts.
For now though, the absence of any concrete plans will only make it difficult for a CIO or IT Manager to recommend HP for new desktops or laptops. Are you still buying HP products?