Is a PSG spin off the best route to HP's post-PC future?

Opinion

Is a PSG spin off the best route to HP's post-PC future?

This morning when I went into the garage to let my dog out, my nostrils were assaulted by a terrible smell. My dog wasn't to blame, however, the culprit being another dog who has been on an extended sleepover at our house for the last few days (you know who you are, Bob). Thank God I didn't step in it. Anyway, after some cleaning up (yeuch), the mess has gone and the smell is dissipating as we speak.

Which brings me to the immediate response to the announcement a couple of weeks ago that HP was looking at options for the future of its PC business, including selling it off. You may recall that HP's share price took a bit of a battering as analysts reacted to the announcement as if they had stepped in some of the stuff I found when I opened the garage door this morning.

The latest story is that a "spin off" is emerging as HP's preferred option for the PSG (Personal Systems Group) business. This raises the question of whether HP is leaning towards this option because a) no one else wants to buy the PSG operation or b) it thinks the company will get more money going down this path. At the moment, I don't know the answer but if I was HP I think I'd prefer to get rid of the business altogether as IBM did when it sold its PC operation to Lenovo.

That way, any smell lingering in the aftermath of the decision to dispose of the PC operation would be washed away (rather than hanging around in the atmosphere for years to come). At the same time, the PC business would be removed from the smell zone, analysts would shift their attention elsewhere and HP would be free to pursue its post-PC future.

Easier said than done, I know, but it makes sense. Now all I have to do is get Bob back to his own house tonight.

This was first published in August 2011

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