HP to Split PC, Printer Business

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UPDATED: HP’s new CEO, Mark Hurd, announced a major operations shift at the systems vendor, splitting the Personal
Systems Group (PSG) and Imaging and Personal Systems Group (IPG) into
stand alone units.

Hurd, who took
over for the ousted
Carly Fiorina with a mandate to improve some of HP’s sagging businesses, tapped former palmOne skipper Todd Bradley to lead PSG as executive vice president.

Vyomesh Joshi, who had served as executive vice president of the combined PSG group, will resume his former role as executive vice president of IPG. IPG sells printer, imaging and supplies, projectors and digital cameras.

Bradley will be responsible for the company’s notebook and desktop PCs, handhelds, monitors, workstations and related support services.

PSG had included those products, as well as printer, imaging and supplies, projectors and digital cameras, from IPG. Fiorina merged IPG with PSG in January, thinking the successful printer business would prop
up the stagnant PC unit, trim costs and speed growth.

But Hurd said managing PSG and IPG as separate organizations will help the
Palo Alto, Calif., outfit “sharpen our competitiveness and improve our cost
structures.”

Mike Hurd
Source: NCR

Pund-It analyst Charles King said the split and executive appointments point
to a more aggressive style from Hurd, who last week appointed Cathy Lyons,
formerly senior vice president of IPG, chief marketing officer.

“It looks like Mark Hurd is taking an increasingly aggressive marketplace
stance,” King said. “That’s probably a good thing for HP, since it gives
people something to talk about besides Hurd’s overall market strategy (still
unclear at this point) and might also put the competition on the defensive.”

Analysts from financial services firm SG Cowen praised the move in a
research note Tuesday.

“While this may not necessarily presage a partitioning of IPG, the
separation certainly makes it possible to optimize PC and Printing
businesses separately and one which we view positively, even as Mark Hurd
puts more of a personal stamp on the team.”

Personal stamp indeed. Since joining HP, Hurd has endured
rampant speculation about whether he might break the company up to shoot for
better profitability. As it is, HP has steadily reorganized since acquiring
Compaq in 2003.

Hurd praised Joshi’s performance and celebrated the appointment of Bradley,
who will also join the $83 billion company’s executive council.

“Under VJ’s leadership, the PC business has continued to grow and improve
its profit margins, and I’d like to congratulate him on those efforts,” Hurd
said.

“Todd Bradley is an outstanding executive with a long track record of
growing businesses, executing against plans and exceeding targets,” Hurd
continued. “His experience driving growth and profitability in highly
competitive hardware fields make him well-suited for this position.”

Bradley is coming off four years at palmOne, where he served as president and CEO for three of his years there. Before landing at palmOne, he spent three years as a top operations executive at Gateway, running its operations in Europe, Middle
East and Africa (EMEA).