HP Exiting The PC Business: What Does It Mean?

by | Aug 19, 2011 | In The News, Practical Tips

As reported yesterday, HP (http://www.hp.com/) has announced their intent to exit the personal computer Business.  This move comes as the company struggles to stay relevant in the ever dynamic consumer products marketplace.

For years, HP has attempted to build upon its successful printer business by acquiring other consumer product companies such as Compaq and (most recently) Palm.  The move to now exit those businesses is a win for Apple computer with its hugely successful iPhone and iPad products which have been competing with HP’s Palm Pre and the just released HP TouchPad.  Another big winner is Dell who is already the leading PC manufacturer.  Based on HP’s exit, Dell can only expect to continue to  gain market share.

As I was reading the blogs and news websites yesterday, I couldn’t help but recall IBM making a similar move in 2004 when it sold its PC business to then-rival Lenovo. I’m sure that HP is hoping to see a similar success story.

So what does this mean for you and your business?  In all likelihood, not a whole lot.  It sounds like HP intends to keep the Server and Networking products side of their business in-house.  And if you do happen to own a HP computer, I am certain that your warranty will be as good as it ever was.  That said, there is no need to go out and replace those HP computers.  However, this news may effect some purchasing decisions if you were considering HP computers.  You may want to look elsewhere as it is yet unknown what the new company may have to offer in terms of customer service and technical support.  If you are purchasing HP Computers through your IT Consultant/VAR, I wouldn’t be surprised if they recommended a new Dell or Lenovo next time you ask for a quote.

In the short term, I wouldn’t  be surprised to see a slight uptick in pricing from Dell and Lenovo capitalizing on the reduced competition and consumer choice.  Likewise, a price cut from those looking to sell off their inventory of HP computers is probably forthcoming.

Decisions like this have a long tail.  Frankly, it would have been better for HP to hold off on an announcement until a suitor could be found (IBM was in the late stages of a deal before it released the news) to quell any concerns that current customers may have.  HP expects the process for the transition to take 12-18 months.  With the speed at which the PC business moves, the longer a deal takes the less the brand would be worth.