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HP dismisses rumours of PC business sale

by Janani Krishnaswamy on 11 March 2011, 11:20

Tags: Hewlett Packard (NYSE:HPQ)

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‘Irresponsible reporting’

HP will not sell off its PC business, at least for now. HP SVP and chief communications officer Bill Wohl issued a statement dismissing recent rumours.

"Irresponsible reporting by Taiwan's Commercial Times, suggesting that HP might sell its PC business, should be dismissed as market rumor and speculation. HP runs the world's largest PC business and it is core to HP's strategy for the connected world," he said in a statement.

Earlier, DigiTimes reported that HP is planning to sell its PC business. Quoting the Chinese-language Commercial Times report, the report also suggested that the acquisition is likely to happen if HP strikes a deal with Samsung.  It noted that rumours have been rife as early as Q4 of 2010.  

Reuters reported that shares in Taiwan's Quanta Computer Inc, Inventec Corp and Hon Hai immediately fell on hearing rumours amount the deal.

However, HP's plans of integrating Palm's webOS on its PC products were not suggestive of its intentions to sell off. In fact, HP's motives were to reach the webOS platform to more users and expand in the software market according to a Bloomberg interview with CEO Leo Apotheker.

However, according to a Tech Trader Daily report, Barclays Capital's Ben Reitzes noted that "over the long term the potential sale of HP's PC business (IBM-like move to shed lower-margin businesses) would be a positive event given persistent secular threats in PCs."

Given the fact that Samsung has been quite aggressive with its notebook division, acquiring HP's PC business would have only boosted its prospects. After Apple, RBC Capital Markets analyst Mike Abramsky sees RIM, HTC, Motorola, Samsung, and HP as strong contenders in the booming tablet market.

 



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