HP Investors Regain Faith as CTO Retires

After some flip-flopping back and forth, it turns out Hewlett-Packard will keep its PC division and resume production of the tablets after all, reversing the surprise decision to refocus its business that was announced two months ago. It’s been a good move so far for HP as investor support slowly returns.

The plans from new executive chairman Meg Whitman, just five weeks in office, was a dramatic rejection of the strategic decisions that led to the ousting of her predecessor, Leo Apotheker, after less than a year at the helm of the company.

HP President and CEO Meg Whitman said, “HP has been selling an objective assessment of all the company’s Personal Systems Group, the development of strategy, finance and operations may impact the analysis after the Personal Systems Group, reserves the obvious not only to customers and partners is the right choice, even more beneficial for shareholders and employees. HP will continue together with the Personal Systems Group, grow strong.”

The PC market has stagnated with the astronomical increase in powerful smartphones and the arrival of the tablets such as the iPad, but that doesn’t mean HP’s core business is dead in the water.  However, there’s still some looming questions over its device goals, namely around webOS.  HP declined to reveal what are their plans for webOS, but the company could make their next tablet one that will use the Microsoft operating system instead.

This assessment was confirmed a significant extent, which contributes to the PSG HP portfolio as well as the total value of the brand. It also showed that the cost of any re-creation of separate companies would outweigh any benefits of its division.  The result of this process confirms the business model of HP and its value for customers and shareholders. PSG is a key component of HP’s strategy to provide higher value long term relationships with customers, SMEs and large companies.

Wall Street analysts and some big investors have welcomed this decision, and expect HP to regain momentum over the long term.  HP’s stock, which was trading at $21 by late September, has edged up slightly closing at $26 on October 31.

HP Loses Longtime Technical Officer

But not everyone sits well with the current HP setup.  Phil McKinney, vice president and chief technology officer of HP’s Personal Systems Group, is leaving the company after nine years of service. The decision came just days after HP’s development on retaining the PC and tablet businesses. McKinney was instrumental in the acquisition of Palm by HP.

In this blog entry, McKinney wrote,

“My definition of retirement is the freedom to write, speak, mentor, advise and teach without the restrictions of the traditional employee/corporate structure.”