Is HP dumping PC business like McDonald's Dumping Hamburgers?

I worked at the HP Personal System Division (PSD) 20 years ago when the division grew out of the data terminals business, and haven't spent much time thinking about the impact of that division.  The news of HP considering spinning off the PC business has a variety of views.  The WSJ has an intense critique of HP's business practices.  The one comment that most caught my eye was comparing the PCs to Hamburgers.

Never mind the years of effort H-P spent -- including a controversial merger with Compaq -- becoming the world's largest PC maker. Never mind that the PC business feeds H-P's more profitable businesses. Dumping it is a beautiful absurdity that one analyst, Jayson Noland of Robert W. Baird & Co., described as "like McDonald's getting out of the hamburger business."

You can make a variety of arguments whether HP was right or not, but the market definitely did not agree.


Here are a few more summaries of HP's move over the past year.

Let's say you were given a year to kill Hewlett-Packard. Here's how you do it:

Fire well-performing CEO Mark Hurd over expense-report irregularities and a juicy sexual-harassment claim that you admit has no merit. Fire four board members, as publicly as possible. Foment a mass exodus of key executives who actually know how to run the giant computer company.

Hire new a CEO from German competitor, SAP, which sells business software, not consumer products. Tell the new CEO, Leo Apotheker, that Mr. Hurd "left H-P in great shape."


Provoke partners Microsoft and Oracle by threatening to put H-P's own operating software on PCs. Then decide not to. Remember that promising webOS software H-P bought in a $1.2 billion acquisition of Palm last year? Sideline it.

Bristle when Oracle's Larry Ellison tells the New York Times: "The H-P board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs." And file lawsuits when Mr. Ellison hires Mr. Hurd.

Boast that you're going to attack Apple's iPad with your $499 TouchPad. Then dump your TouchPad in a $99 fire sale and announce you're just not going to offer it anymore.

Telegraph to the world that you are just too dumb to make smartphones.


Announce plans to maybe sell the PC business. Or maybe spin off PCs as a stand-alone company. Uncertainty will damage the price.