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Hewlett-Packard decides to stay in the PC business

October 27, 2011 |  2:54 pm

Meg Whitman, HP CEO

Hewlett-Packard is going to remain in the personal computer business after all.

The news comes after HP announced in August that it would kill off the HP TouchPad and pull out of the tablet and smartphone business and consider selling its PC business, which is the world's largest and pulled in $40.7 billion in revenue last year.

The decision was announced by HP's then-CEO Leo Apotheker. However, Apotheker was ousted in September and replaced by Meg Whitman as company president and CEO.

Whitman is best known for her former stint as EBay's chief executive, as well as a failed run for the California governor's office in 2010.

After taking the reins of HP, Whitman said she'd consider keeping HP's PC business. On Thursday, the word came down from Whitman that after a "strategic review" HP would indeed stay in the PC business.

"HP objectively evaluated the strategic, financial and operational impact of spinning off [the personal services group]," Whitman said in a statement. "It's clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees.... HP is committed to PSG, and together we are stronger."

HP said its strategic review was a "data-driven evaluation" that "revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement." HP also said that its PC business still adds tremendously to its "overall brand value." The review revealed "that the cost to re-create these in a standalone company outweighed any benefits of separation," HP said.

No word yet on what HP plans to do with its WebOS division. WebOS -- HP's smartphone and tablet operating system, acquired when HP bought Palm for in April 2010 for $1.2 billion -- was originally planned to run on PCs as well.

Those plans have largely been abandoned and HP has said it is exploring licensing the operating system out to other hardware makers. Rumors persist that other firms might be interested in buying WebOS outright as well.

RELATED:

Meg Whitman in at HP, Apotheker out 

Samsung will 'never' buy HP WebOS, CEO is reported saying

HP to kill TouchPad and stop making WebOS devices, may spin off PC business

-- Nathan Olivarez-Giles

twitter.com/nateog

Photo: Meg Whitman. Credit: Mario Anzuoni/Reuters

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