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Krishna G.

Does HP's decision to exit the personal computer business make sense?

Harvard Business School Professor, Senior Advisor to the President of Harvard University for International Strategy

  • Comment (4)
  • August 26, 2011
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  • Mahesh N.

    Mahesh

    Mahesh N.

    Big Data & Analytics Professional

    According to me it does. The PC margins are dwindling/people are moving away from PCs (http://www.forbes.com/sites/sap/2011/08/11/personal-computers-becoming-obsolete-says-ibm-pc-architect/), innovation is drying (http://allthingsd.com/20110822/is-innovation-at-hp-dead/)

    The three businesses Servers & Services, Printers and PCs will be best run seperatly as there ain't any synergy (be it costs, marketing or sales). There could be arguments given for providing a bundle of IT solutions to clients we need to see the benefits of that against the costs. such arrangements can still happen in a partnership.

  • John A.

    John

    John A.

    Inventor & Entrepreneur: Bringing New Products to the World

    HP is in a real bind - if they give up computers their left with printers and that market isn't all that lucrative. HP should decide what they want to be and put all their resources behind getting there fast. They can take their computer business and take it to the next level - computers aren't going away they are converging into other products - once HP understands that there is a greet future here then they can rebuild and generate the margins they once did.

  • Paul K.

    Paul

    Paul K.

    Executive Advisor to http://www.equityscore.com, http://veggiegreenexpress.com/ & http://eepurl.com/Q0qrv

    “HP is in a real bind” HP cannot not Think and Plan Big because its management does not understand the fundamentals of finance so that it can compete effectively.

    The problem with HP is that it is underwater and management does not know how or why.

    For some strange reason this ‘underwater public companies’ observation is not taught in ‘B’ Schools?

    This is most likely the first time that the readers would have heard of the ‘underwater public company’?

    If HP can master, quietly frankly exactly what capitalism is. It will survive, and survive very big.

    Take a quick look at HP and Apple’s financial statistical comparisons.

    HP has $122 billion in revenue but its market value is only $28.23 billion
    Apple has $148 billion in revenue and its market value is $589 billion

    What is wrong with this picture?

    HP is a whopping $93.77 billion undervalued and underwater based on the difference between revenue and market value and is $363 billion undervalued when measured against apple!

    Apple has $0 debt and pays its fair share of taxes.

    By the First Law of Capitalism, the market values of public companies are not supposed to be less than their revenues. If revenue is greater than market value then the public company is underwater. https://equityscore.com/about-us/pc-academy/untax-usa/katchings-laws-of-capitalism/first-law/

    Since HP is not aware of this underwater fact HP is paying too much tax and has taken on too much debt based on incompetent academic assumptions.

    A simple change to HP taxing philosophy and the wiping out of its debt in a single day would may HP at least a $485 billion company.

    The question for HP is how to make this two changes simply.

  • Thiruththanikainatha S.

    Thiruththanikainatha

    Thiruththanikainatha S.

    Business Relations & Business Development and Business Consultant Seeking Challenging Role!

    Thank you guys iam learning good information based on your comments

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