HP's bad quarter could prove bad for America

China on verge of being world's top PC maker, and the PC business of HP or Dell could be headed there too

By , Computerworld |  IT Management, HP

"The problem is that if a Chinese company bought them, the odds are quite high that they would be backed either directly or indirectly by the [Chinese] government," said Robert Atkinson, who heads the Information Technology and Innovation Foundation in Washington.

Atkinson, who has testified before Congress on global competition issues, will release in two weeks Innovation Economics: The Race for Global Advantage (Yale University Press), a book written with Stephen Ezell, .

Atkinson contends "that the future Chinese strategy will rely on an aggressive foreign acquisition strategy, backed by the deep pockets of the Chinese government designed to gain advantage in key technology areas."

A spin-off of the HP or Dell PC units could make short-term sense from a Wall Street perspective, "but would have long term negative implications for the US," Atkinson said.

"At some point you draw a line in the sand and say no more retreat, we stand and fight here. If PCs go, what's next? Semiconductors? Other components? At some point the United States has to say what are we not willing to lose in foreign competition," he said.

For the record, Lenovo says it has a dual headquarters in Beijing and Morrisville, North Carolina, but it is ostensibly a China-based firm.

For now, Dell and HP seem committed to keeping their PC divisions.

The current troubles are still being blamed on strong "headwinds" ranging from continuing trouble in the global economy to the Apple's ongoing tablet dominance.

But we'll see what the next quarter brings and what Wall Street has to say about it.

And if HP loses its top position, an even larger conversation may begin in America.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed. His e-mail address is pthibodeau@computerworld.com.


Originally published on Computerworld |  Click here to read the original story.
Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

IT ManagementWhite Papers & Webcasts

Webcast On Demand

Transform Your IT Service Management

Sponsor: EasyVista

See more White Papers | Webcasts

Answers - Powered by ITworld

ITworld Answers helps you solve problems and share expertise. Ask a question or take a crack at answering the new questions below.

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Ask a Question
randomness