HP's perilous PC dilemma

Company can't live with PCs, can't live without them (for now)

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Michael Dell stated the obvious on Monday, telling an audience at an enterprise server launch event in San Francisco that Dell is "not really a PC company; it's an end-to-end IT company."

Leo Apotheker essentially made that same argument about Hewlett-Packard last August when he announced that HP -- the world's largest PC manufacturer -- would try to spin off its PC group and forge a future as an enterprise product and services vendor.

The horrified reaction of Wall Street soon cost Apotheker his job, and within months new CEO Meg Whitman reversed his decision, announcing that HP now had no intentions of getting out of the PC business.

But in a fascinating post at MondayNote.com, Jean-Louis Gassée -- yes, that Jean-Louis Gassée -- wonders if Apotheker had the right idea.

While still the world's leading PC manufacturer, HP's computer market share and revenue are falling. And it’s relatively clear that the computing future belongs to mobile devices –- smartphones, tablets, even wearables. As Gassée asks, "Why stick with a declining product line within a declining industry?"

He partially answers the question himself by noting that, despite a 15% year-over-year drop, HP's Personal Services Group (the PC division) still was the company's top revenue generator, accounting for 29% of total sales.

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