HP makes PSG U-turn

Vendor decides to keep PC division after all

HP's new chief announced last night that the company will be keeping its PSG arm after completing an "evaluation of strategic alternatives".

The firm's previous chief Léo Apotheker sent the markets into turmoil earlier this year after announcing that the giant was looking to spin off or sell its PC division.

But last night new chief Meg Whitman (pictured) said: "HP objectively evaluated the strategic, financial and operational impact of spinning off PSG.

"It is 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."

Todd Bradley, executive vice president of PSG, added: "As part of HP, PSG will continue to give customers and partners the advantages of product innovation and global scale across the industry's broadest portfolio of PCs, workstations and more.

"We intend to make the leading PC business in the world even better," he said.

Mark Fabbi, vice president and distinguished analyst at Gartner said the move was a wise one.

"It was a good move by Meg to make a quick and decision announcement on PSG. More than anything it's the uncertainty and confusion surrounding HP and its direction which has hurt HP over the past months.

"The change in CEO and decisive actions are a start - but they need to continue down this path to completely restore the faith."

When asked what impact the episode will have on HP's rivals such as Dell and Lenovo and whether they have capitalised on the situation, Fabbi said: "The uncertainty opened the doors for others. We will see how much of an impact it has had when we see Q3/Q4 shipment figures."