After weeks of speculation, Hewlett-Packard has decided to keep its PC business instead of selling it or spinning it off. The company determined that spinning the PC unit – or Personal Systems Group, as HP calls it – will be too costly, and that the brand value of keeping it outweighed the tedium of working with those razor thin margins.

In the press release, new HP CEO Meg Whitman explained the decision, saying: ‘HP objectively evaluated the strategic, financial and operational impact of spinning off PSG. It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees.’ She continued, saying: ‘HP is committed to PSG, and together we are stronger.’

Value reevaluated

In the press release announcing the decision to keep the division, HP says that they used various analysts to look at what value the HP Personal Systems Group brought to the company, concluding that the brand value alone made it worth keeping, and that the unit played an important relationship in Hewlett-Packard’s supply chain and procurement relationships. Furthermore, the company admitted that spinning it off, rebranding and reincorporating the HP PC unit would be more costly than it would be beneficial.

Margin hurting

Todd Bradley, who is the EVP of the Personal Systems Group was, unsurprisingly, pleased with this decision. He said ‘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.’

Bradley had previously indicated that if the HP PC unit were indeed spun off, he would want to head it up. For new HP CEO Meg Whitman, this is the first high stakes decision she’s made, and though the damage the strategic indecisiveness has had on the company is done, the road to returning HP’s share price to where it previously was has begun.

Global PC shipments and sales have been slowing quite dramatically in the last few months, and the latest report from research firm Gartner shows that they’re now lagging behind industry estimates, too. Gartner says PC shipments during the quarter jumped 3.2 percent year-on-year, well short of the 5.2 percent growth the firm estimated the industry would see.

Weak Western European market to blame

Research firm Gartner attributes the slow sales growth to the weak Western European PC market, which is being exacerbated by the current Eurozone crisis. Speaking on the slowing growth, Garnter principal analyst Mikako Kitagawa said [via BGR]: ‘The inventory buildup, which slowed growth the last four quarters, mostly cleared out during the third quarter of this year; however, the PC industry has been performing below normal seasonality’.

Tablets and smartphones to blame, too

He continued, saying: ‘As expected, back-to-school PC sales were disappointing in mature markets, confirming that the consumer PC market continues to be weak. The popularity of non-PC devices, including media tablets, such as the iPad and smartphones, took consumers’ spending away from PCs.’

So tablets and smartphones are beginning to have a material effect on PC sales, even though it was initially believed they would only supplement sales of PCs. Gartner says a secondary effect of the slowing of the market will be industry consolidation. Kitagawa says: ‘As the PC market faced a slowdown, vendor consolidation has become a more apparent trend in the industry. Lenovo’s recent merger with NEC, and its acquisition of Medion, as well as HP’s announcement that it may spin off or sell its PC business, underlined this trend during the quarter.’

With HP considering a sales or spinoff of their PC business, this consolidation could be happening at the very top of the food chain. Who could have reasonably predicted PC sales would slow this much in 2011 while looking at the rapid industry growth in 2007?

Newly appointed HP CEO Meg Whitman has had to hit the ground running. One of her first orders of business is to finally make a decision on what is going to happen to the HP PC business, which has been caught in limbo since plans of spinning off or selling the unit completely surfaced. She’s announced that her firm will finally make a decision on what will happen to the unit before the end of the year.

That long to decide

The new HP CEO was speaking on a conference call, following the announcement that she was replacing Leo Apotheker as the company’s leader. Addressing the HP PC business mess, she said: ‘With regard to the potential spin-off of PSG, we’re committed to doing the work right now to determine the best path forward and we expect the board to make a determination by the end of the calendar year if not sooner. This decision is solely based on the value to investors and value to customers.’

Still uneasy about this board

Two things stand out regarding what Whitman said here. The first is how could it possibly take until the end of the year to decide what is best? What would they be researching and investigating that they did not research and investigate when they first announced plans to sell or spin-off the HP PC unit? This decision, all things considered, should be possible within the next week or two, if HP was prudent in the very first place.

Secondly, the Hewlett-Packard board is not looking good here. Not only have they fired a leader they appointed less than a year ago, and are still reeling from loss of investor and customer confidence in their recent hash ups, they now need even more time to decide what they’re going to do about the biggest PC making business in the world? Things will not be easy for new HP CEO Meg Whitman.

With HP turning its back on its PC hardware business, many wondered what Dell computers – the second biggest computer manufacturer in the world, behind only HP – would do. Dell founder and CEO Michael Dell has since insisted that his firm has no intentions of following HP’s lead, saying that the PC business remains lucrative and interesting.

Built different

Speaking to the Financial Times, Dell said: ‘We are very distinct from some of our competitors.’ He continued, saying: ‘We believe the devices and the hardware still matter as part of the complete, end-to-end solution.’

The sheer size of the PC industry and the volumes people buy computers in are what precludes a similar move, explained Dell. ‘Think about the scale economies in our business. As a company spins off its PC business, it goes from one of the top buyers in the world of disk drives and processors and memory chips to not being one of the top five.’

HP’s exit, Dell’s opportunity

The problem, explains Dell, is that with less volume, the cost of buying components goes up – and given HP was a big buyer of storage and servers, this represents a big business opportunity.

He added that: ‘Ultimately we believe that presents an enormous opportunity for us and you can be sure we are going to seize it.’

Where to next?

HP recently unveiled plans to spin off its PC unit, as well as shutting its webOS hardware unit, which makes tablet PCs and smartphones. The company said it would instead focus on services and software. Dell, on the other hand, has continually struggled to make headway with its smartphone or tablet business, but has bounced back amongst PC makers in recent years.

It will be interesting to see how HP’s departure affects the overall PC industry and if Dell CEO Michael Dell’s position on pushing on in the high revenue, low profit margins PC business pays off.

Great uncertainty surrounds Hewlett-Packard’s future, mostly because the company’s long-term strategy is seeing fundamental changes. A secondary factor is that its PC business, which has long gone hand-in-hand in people’s minds with what HP does, is being put up for sale, or will be spun out, or something of the sort once HP decides what it actually wants to do with it. Apparently Hewlett-Packard approached both LG and Samsung about potentially selling its PC business to them.

Is it PC to ask you to beg you to take our PCs?

The news comes courtesy of CNET, citing an unnamed source. Apparently Hewlett-Packard approached the Korean consumer electronics giant late last year about the potential sale of the business. This of course, is long before the HP PC spinoff/sale was even confirmed – or, rather, what the company calls the evaluation of ‘strategic alternatives’ regarding the unit.

Why Samsung and LG, though?

Samsung and LG, being consumer electronics giants, seem strange targets for something as specialised as computers. Hewlett-Packard was apparently positioning the sale strategically, in the sense that PCs would ‘complement other portions of the target companies’ business’. Clearly LG and Samsung weren’t moved by the prospect of purchasing the high-volume but low profit HP PC unit.

What’s next?

As things have developed, it is looking increasingly likely HP will not find a buyer at anything but a fire sale price, since few companies have the capacity to acquire a business unit that large, and would instead spinoff the PC business. HP Exec and head of the Personal Systems group Todd Bradley intimated as much, when he said he’d prefer to see an HP spinoff, and that his: ‘intention would be to lead it through this transaction… and if it’s a standalone public company, to lead that.’

It will be interesting to see what happens in the immediate future of the HP PC unit and the business as a whole. While perhaps necessary, it’s a big change from the company’s previous strategy.

Hewlett-Packard is still mulling over what it will do with its PC business. Now HP exec Todd Bradley has weighed in on the matter, saying that a spin-off of the unit would be the best decision.

Make a decision, already

After making the shocking announcement that HP was pulling out of the smartphone and tablet PC business with webOS, as well as exploring options with the HP PC unit, the company has been in a seeming limbo about what to do next.

Todd Bradley, who heads up the Personal Systems group, has since come forward to say that he thinks spinning the business out is best for investors and that he sees tablet PCs being ‘relevant’ in the future of this spun-off unit.

‘Sure, of course. Tablet computing is a segment of the market that’s relevant, absolutely,’ he told Reuters. He added that the spin-off would be most beneficial for the firm’s investors, saying: ‘My intention would be to lead it through this transaction… and if it’s a standalone public company, to lead that.’

Must push on

The seeming indecisiveness around the HP PC unit has put significant pressure on the firm, and has seen Hewlett-Packard customers rethinking their purchasing decisions with the firm. Bradley is keenly aware how this kind of change can affect a team’s performance. ‘Regardless of what happens, we’re the largest PC company in the world. We need everybody energized, and while this isn’t business as usual, we need people to go out and sell products every day,’ he said.

Yet this doesn’t negate how tricky navigating the waters will be for HP in the coming months. HP exec Todd Bradley is going to need all the help he can get from the parent company, a reality the continued indecisiveness around the firm is not helping with at all.

With HP stepping away from its PC business, Dell CEO Michael Dell has come forward, saying that his firm does not share Hewlett-Packard’s intentions and that Dell remained committed to the PC business.

We’re quite happy

In a post on Google+, Michael Dell wrote that: ‘Dell remains very committed to PC solutions and beyond.’ He added that ‘We’re focused on meeting your needs with proven migration services and support for multi-vendor environments.’ That in itself could be a dangling carrot for HP customers who are either confused or feel slighted by Hewlett-Packard’s sudden change of heart about its PC business.

Investing everywhere

Given various parts of the PC business – most notably netbooks – have been tanking while other parts of the PC – most notably tablet PCs – are virtually a one-player market at this point, what Dell computers will continue to invest in is equally interesting. Dell CEO Michael Dell says that consumers could count on his firm to continue to invest in: ‘Notebook, desktop, workstation, smartphone, and tablet innovations.’ He said that these products will have ‘Sustainable end-user roadmaps and long-term device availability,’ and that ‘ProSupport services that manage and secure your multi-vendor client requirements.’

Well, that’s a relief, I think

Dell CEO Michael Dell’s well-timed and likely strategic post draws immediate contrasts between how he says his firm will keep running and how Hewlett-Packard is perceived as running. Where HP’s indecisiveness and communication blunders in recent weeks has created uncharacteristic uncertainty around a publicly traded company, Dell affirms his company has ‘sustainable end-user roadmaps’, which, one look at the death of the HP TouchPad, buyers no longer expect as a minimum.

To think we’re even writing a post about colossal tech icons spinning out their PC business out and having to commit publicly to regular buyers and enterprises to support them for the long haul is crazy. Nobody could have predicted this three or four years ago.

While TV dinners are nothing new, according to a recent study, Brits everywhere are fueling the rise of the PC dinner. If nothing but highlight a bad habit, the study shows the growing influence desktop and laptop PCs have on our lives.

Shocking habits

In fact, half is being generous. The study found three-fifths of the population had at some point eaten their dinner in front of either a desktop or laptop computer. In addition over 20 per cent of all respondents frequently had meals haunched over computers, says online viewing service SeeSaw.com [via The Telegraph].

More shocking stats

The SeeSaw survey involved 2,000 people, with the shocking stats not stopping there. Fifteen per cent of all respondents admitted they watched TV shows on their PCs while eating dinner, creating a strange TV/PC dinner hybrid. It looks like the trend is heading upwards, with a third of the respondents saying the likelihood of them eating a PC dinner was greater than it was a year prior.

PC replacing TV

In addition to pointing out the growing number of PC dinners out there, the survey also found that eating in front of the computer was replacing TV dinners. Twenty-three per cent of the respondents said that the PC had surpassed the television as their main source of entertainment in the evening. It’s like an addiction, with SeeSaw’s John Keeling saying: ‘Millions of British people cannot tear themselves away from the internet, even for dinner. The growth of the PC dinner is a remarkable new trend and for many across the nation, has now replaced the traditional TV dinner’.

Kill the bad habits now

We Brits have many bad habits, but TV dinners are easily one of the worst. The value of eating at the table cannot be stressed enough. The rise of PC dinners will only further entrench this shocking habit into society with no visible way of stopping it.

The heart of Silicon Valley seemed to be the ideal venue to build a museum chronicling the history of computing, and that is just what happened when the Computer History Museum recently unveiled their new £15 million renovated premises.

Revolution

Apart from the renovated building, the Computer History Museum also unveiled a new exhibition, entitled ‘Revolution’, which will feature over 1,200 items, unbelievably only representing 1 per cent of the museum’s entire stock!

Included among the iconic computing artefacts are IBM’s 026 punch card machine, dated from 1946, and a Data General Nova from 1969, which Apple founder Steve Wozniak claimed to his father that he would own one day, including it’s 4K memory processor.

Inspiring history

The full name of the exhibition is ‘Revolution: The First 2,000 Years of Computing’ and is about more than just dates and numbers, as president and CEO John Hollar explained in an interview.

‘Computing is so much a part of our lives today. It touches everything we do,’ Hollar told reporters. ‘When you think about how quickly computing is moving, [its] history can be lost in an instant. So we work really hard to make sure that those important stories and the things that have been built are preserved and presented to the world.’

Massive display

The exhibition’s space consists of roughly 25,000 square feet, out of the total 125,000 square feet of museum space, and opens visitors’ eyes as to how far humankind has come in the past 2,000 years. It’s easy to forget that the computing didn’t begin with the Apple I or II or even the highly successful IBM PC all those years ago, but rather with the simple abacus, the first working calculator dating as far back as 2700-2300 BC.

The museum opened its doors last Thursday, in Silicon Valley, California.

As PCs get faster and faster and the chips inside them get smaller and smaller, we’re seeing the desktop tower slowly disappear and now we have all-in-one PCs. As it is with most pieces of technology, it can be a bit of a nightmare to find the right device. Helping those in need, we’re taking a look at the simple yet functional Acer Aspire all-in-one PC and the higher end creative beast, the Apple iMac.

The Acer Aspire Z5600 is quick and reliable

The Acer Aspire Z5600 is generally impressive all-in-one PC; it looks great with its silver finishing and provides excellent computing speeds. The Z5600 is powered by an Intel Core 2 Quad Q8200 which clocks in at 2.33GHz. Acer have also thrown in 4GB of DDR3 memory to keep the machine running smoothly and efficiently. The Acer’s touch screen display shows off some wonderful clarity, and the graphics chipset supports high definition which is a definite plus. The Z5600 is performs wonderfully well and those looking for an all-in-one PC that can handle a bit of everything at speed should consider the Acer Aspire Z5600. The Acer Aspire Z5600 retails at £699.99.

The Apple iMac – perfect for creatives

Photo: Apple

The Apple iMac is one of the best performing, if not the best, all-in-one PC available on the market today. Apple has designed the iMac to look industrially smart while remaining sleek. It’s powered by an Intel Core 3 Duo 3.06GHz processor, which ensures that iMac is one of the fastest machines to either process images on Photoshop, encode music files in Apple’s iTunes, do a bit of media multitasking or even for those who want try out a few games on the Apple iMac. The display is immaculate is supported by an ATI Radeon HD 4670, which is a more than capable HD graphics card. The 21.5-inch Apple iMac retails at £892.06 and is highly recommended for those who like to edit anything from videos, music to images.

All-in-one PCs are definitely the way to go for those looking for computing power and looking to keep everything minimal and stylish. They definitely go a long way in meeting a whole lot of different uses and the Apple iMac, though being a little more expensive, is definitely one of the better machines available out there on the market.