HP hangs onto PC unit but WebOS future uncertain

Changing gears.

Hewlett-Packard has abandoned plans to spin off its PC unit, just a month after former CEO Leo Apotheker proposed the idea. New CEO Meg Whitman and her management team have decided that the separation would be too costly, with one-time costs hitting $1.5 billion and ongoing annual costs hitting the $1-billion mark.

Analysts seemed to be in agreement that keeping the unit is the right idea as it will help benefit the company’s supply chain. Whitman said the integration of H-P’s supply chain and procurement was stronger than the PC unit itself.

Next on Whitman’s plate is the future of WebOS software. When Apotheker announced the termination of the TouchPad tablet, the future of WebOS, the tablet’s operating system, was put in jeopardy. Whitman said, “The question now before us is what do we do with WebOS software and do we come back to market with WebOS devise. It obviously will not be the same device but it will be version 2.0.”

Hewlett-Packard (HPQ : NYSE : US$27.94), Net Change: 0.85, % Change: 3.14%, Volume: 27,081,923

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

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