Hewlett-Packard Co (HP), the world’s largest PC maker, will not sell its PC business unit, the US company’s Taipei branch said yesterday in a statement denying a local newspaper report.
The Palo Alto, California-based company dismissed the front-page report by the Chinese-language Commercial Times published on Thursday as “market rumor and speculation,” which said HP was considering selling its notebook division and that Samsung Electronics Co of South Korea was the most likely buyer.
The report also said HP chief executive officer Leo Apotheker would outline his plans to overhaul the company at an event in San Francisco on Monday, suggesting more details about the PC unit divestment to be available then.
“Irresponsible reporting by Taiwan’s Commercial Times, suggesting that HP might sell its PC business, should be dismissed as market rumor and speculation,” Bill Wohl, HP senior vice president and chief communications officer, said in the e-mailed statement.
“HP runs the world’s largest PC business and it is core to HP’s strategy for the connected world,” he said.
The statement did not elaborate what overhaul plans Apotheker was likely to disclose next week and officials at HP Taiwan declined to make further comments yesterday.
Hardware sales have long played an important role in HP’s business platform, making it the world’s No. 1 maker of PCs and printers, but dwindling margins in the hardware business has prompted the company to model IBM Corp’s shift into high-margin technology consultancy and analytics services to maintain profitability.
At the same time, Samsung is likely to strengthen its PC business, as this would likely be the last piece of the puzzle for the company’s dominance in the consumer electronics business after establishing a strong foothold in mobile phones and LCD TVs, JPMorgan said.
“Although PC market growth has been tepid, Samsung has shown very strong share gains over the last 12 months, shipping 11 million units [including 9.9 million notebooks, up 75 percent year-on-year] in 2010,” JPMorgan said in a report released yesterday.
Any move by HP to grow or streamline its PC business would have implications for its Taiwanese contract makers. Currently, Quanta Computer Inc (廣達電腦), the world’s biggest contract notebook computer maker, is a major supplier of HP’s line of notebooks. Other local notebook suppliers include Hon Hai Precision Industry Co (鴻海精密), Wistron Corp (緯創) and Inventec Corp (英業達), according to Citigroup.
Analysts said if Samsung were to acquire HP’s PC business as speculated, the South Korean company would also pose a rising threat to Taiwanese notebook brands such as Acer Inc (宏碁) and Asustek Computer Inc (華碩電腦).
“Samsung has also indicated that it aims to grow PC shipments to 17 million [55 percent growth] in 2011, approaching the scale of smaller vendors like Asustek. We believe that Samsung’s ascent in the PC rankings [especially in Europe] poses a clear threat for consumer notebook PC brands like Acer and Asustek,” JPMorgan said.
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