HP: Will Fusing Printing, PC Units Matter?

Hewlett-Packard (HPQ) is reportedly about to fuse its PC and printing businesses together. The larger question is whether such a move is just cosmetic or a sign of a larger technology move.

According to the Wall Street Journal (Techmeme), HP CEO Mark Hurd is pondering a final call on the move. If the PC and printing groups were combined Todd Bradley, who runs HP’s PC unit would run the combined divisions. The Journal didn’t have any color on what would happen to current printer chief Vyomesh Joshi.

The Journal painted the move as a referendum of the fortunes of the printing business, which is a still a cash cow but isn’t delivering the growth it used to. HP has moved to entice folks to print more via widgets and other features. The company has also begun to focus on managing printing infrastructure for enterprises.

Here’s where the printing unit stands in the HP pecking order (slides from HP’s recent analyst meeting):

Indeed, the printing unit, which used to carry HP (now services via the EDS purchase does), isn’t what it used to be. However, it’s still a much better business than the PC business based on profit margins (supplies are wildly profitable). Granted, HP has thumped Dell as the big PC dog, but what would be gained by combining the units?

It could be that Hurd just wants a new guy—Bradley—in charge. But it’s not immediately clear what HP has to gain by lumping its personal systems group with the printing business.

The general theme for HP’s printing business is likely to remain the same. The strategy can be summed up in this slide:

HP maintains that printing will increase in the long run.

The other option is that Hurd sees PCs and printers essentially merging in the future. However, Hurd at HP’s analyst meeting didn’t give many hints to that effect. Hurd said that the printing market was coming to HP again.

Comments

[bobe:]

There's no more things to cut in HP so he has a new idea to boost his bonus for next year. The printing business has been delivering profits all these years while the PC business although big in revenue has very little profits and goes to zero time to time.

He should leave the printers alone. They have survived and supported HP all along the dark years. The PC group was a burden to HP all along.

Oct 01 09:22 PM