HP plans to split into two businesses, one for PCs and printers and the other for corporate hardware and services
Hewlett-Packard Plans to Break in Two — H-P will separate its PC and printer operation from its corporate hardware and other units, sources say.
Context & Ripple Effects
HP has been circling this decision for years: back in August 2011 it said it preferred to spin off its PC unit, then in March 2012 reversed course and instead combined the printer and PC groups under one restructuring. The new plan, reported via unnamed sources and still unconfirmed by the company, revives that three-year-old breakup idea after attempts to sell off several business units individually failed, according to Re/code's pickup.
Why it matters now: the two halves have diverged economically — the enterprise arm just shipped ARM-based Moonshot servers and carries the ongoing Autonomy fraud allegations against Mike Lynch, while the consumer arm competes at Chromebook price points with the sub-$200 HP Stream line. Splitting lets investors value those very different businesses separately rather than as one blended hardware conglomerate.
First-order effects
- HP's PC-and-printer operation and its corporate hardware and services units would get separate management teams, capital-allocation priorities, and public valuations, ending the internal cross-subsidy between a high-volume consumer business and an enterprise infrastructure business.
- Because the plan comes from sources rather than a board announcement, HP's own confirmation — or denial — is the immediate open question for shareholders.
Second-order effects
- Enterprise buyers who currently purchase servers, services, and PCs from one vendor face a potential re-sourcing decision if contracts and account teams are divided between two companies.
- Rivals in both segments gain a targeting window: a competitor distracted by a multi-year legal separation is easier to poach customers from, particularly in the price-pressured consumer PC market where HP Stream is already fighting Chromebooks.
Third-order effects
- If the pattern holds, large diversified hardware companies increasingly separate consumer-device volume businesses from enterprise infrastructure and services, because public markets value the steady cash flows of one and the growth optionality of the other differently — making the conglomerate structure itself the thing being unwound.
- A completed split would also set a precedent that failed divestitures can be replaced by structural separations: when no buyer will take a unit whole, carving the company becomes the fallback exit.
The trend: Diversified hardware giants are breaking themselves along consumer-versus-enterprise lines, using structural splits to unlock valuations that single-stock conglomerates obscure.