Michael Dell Critical of Hewlett-Packard PC Strategy

By Ed Silverstein October 17, 2011

It comes as little surprise that Dell CEO Michael Dell is critical of Hewlett-Packard’s proposed spinoff or selloff of its PC division. In a recent Mashable story, Dell told reporters why the proposal is a bad one given some basic facts on the industry.

“It’s a growth market,” Dell noted. He estimates that there will be some 2 billion personal computers in a “few years.” That’s an increase of 500 million PCs currently around, Dell said.

He further explained most PC components are used in “client devices,” such as “95 percent of all hard drives,” Mashable said. “From a cost standpoint you can have enormous scale,” Dell said.

Dell added that such a move will also lessen the chance “employees of companies that are HP’s clients” will purchase products from HP, Dell said.

“We know from our history that there is enormous connection from one device to another,” Dell commented.

HP recently named former eBay CEO Meg Whitman as its CEO replacing Leo Apotheker, who was in the role for less than a year.

HP's share price dropped more than 45 percent from the time Apotheker took over in November 2010 to his exit, MarketWatch reported.

“Apotheker ... [was] under severe pressure since he took over, following a series of disappointing quarters and the growing perception that he does not have a clear idea of where to take the business,” MarketWatch commented in a recent story.

TechZone360 also reported that in August, HP announced the controversial plans to spin off or sell its personal-computer division and that it paid $10 billion for Autonomy, a price that was regarded as excessive by many industry watchers.  In addition, HP stopped the production of the TouchPad and of the webOS, according to media reports.

In recent weeks, HP said it “hasn’t yet decided whether it will spin off its Personal Systems Group,” reported Mashable.

“Our leadership is focused on getting this analysis done as quickly and accurately as possible, and we’ll communicate it as soon as we can,” the company said in a statement carried by Mashable.

Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

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