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HPQ= HPC + HPS: How HP Can Unleash Its Best Value for the Shareholders

  It is a well known consensus now that the stock market has basically flunked HP's current CEO.  The way he announced HP's thinking on possible options to divest its PC business couldn't be more improper during the conference call.  It fully indicates that he is not only an incompetent CEO with no sound strategic judgement, but also proves that he doesn't even possess the right caliber to handle the conference calls for investors.  

  From a Business Model Optimization perspective, HP can still realize the best value for its investors by splitting off its PC Business and Printer Business together as "HP Computer Inc." (HPC) and making it a separate public company entity.  The fundamental dividing line is the customer segment, not product line category.  HP's PC Business has the No. 1 market leader status, plus a well known image for solid product quality.  HP's Printer Business is also No.1 worldwide, with much higher margins and a strong IP portfolio.  They all serve primarily the consumer segment, and can share a lot of synergies together.  The new HPC will have much higher margins than pure PC companies; and HPC will continue to enjoy HP's legacy quality image and the well established Economy-of-Scale and global distribution channels, with its current PC and Printer business combined.  

  In essence, HPQ can be split into HPC and HPS (HP Solutions Inc.), similar to what Motorola went through to split the company.  This way, the new HPC can still command an attractive valuation, remain to be the No. 1 leader globally, continue to leverage its Economy-of-Scale, and reward HPQ's investors in the best outcome possible.

  If HPQ's Board and Mr. Apotheker do not have a good sense about this natural split strategy, they really don't deserve their ranks today.