HP confirms desire to sell PC business, makes another batch of TouchPads

By Liam Tung, Stewart Mitchell on Aug 31, 2011 7:53 AM
Filed under Hardware

"We prefer a spin-off as a separate company," HP says.

HP appears to have confirmed its desire to sell off the world's biggest PC business after backpeddling since first raising the idea earlier this month.

The company shocked the industry when it announced plans to sell or spin-off its Personal Systems Group, but the company appeared to back track last week, with one British executive claiming HP was "committed to creating and supporting great products".

Now, the company says it's working out the implications of separating PCs from the rest of its business and still expects a separation within 18 months.

"We prefer a spin-off as a separate company and the working hypotheses is that a spin-off will be in the best interests of HP's shareholders, customers and employees," a HP spokeswoman told the Reuters news agency.

"However, we have to complete the diligence process and validate this assumption, including fully understanding the dis-synergies in separating the PSG business from HP."

Hewlett Packard Australia did not respond to requests for comment by the time of publication. 

Meanwhile HP’s discontinued TouchPad will get one last burst of production before the plug is pulled, the company announced via its blog. 

“Despite announcing an end to manufacturing webOS hardware, we have decided to produce one last run of TouchPads to meet unfulfilled demand,” said Mark Budgell, announcing the decision on HP’s The Next Bench blog

HP explained that it would manufacture a “limited quantity” of TouchPads with webOS during its fourth fiscal quarter 2011, ending October 31. 

The PC giant did not divulge how many it would produce and insisted that despite the decision to produce more it would still be “winding down device operations within our fourth fiscal quarter 2011.”   

Those who wanted a TouchPad were advised to follow HP's @BrynaatHP and @MarkatHP Twitter accounts.

The new batch would be manufactured and sold before 31 October. It was unclear how many - if any - would make it to Australia and at what price.

It appeared that customers who had requested email notification through HP directly of future availability of the device would receive an email today with a “one-time exclusive offer”.

Customer excitement about the new batch announcement overwhelmed the blog site, which went offline for up to an hour.

Budgell said HP was “pleasantly surprised” by the “stunning” speed at which the TouchPad cleared out after it slashed prices across the globe to $99 and $149 for its 16GB and 32GB devices.

Stocks quickly sold out in Australia, the United States and Britain.

Cheap tablets sell

The big lesson observers took from HP’s firesale was that consumers would buy a rival to the iPad if the price was right, which is driving speculation that Amazon’s low-cost tablets --rumoured to hit the market at sub-$300 prices as early as October -- would hit the mark. 

Asking prices on eBay support this view, with HP’s 16GB and 32GB WiFi devices are currently on sale there for just under $300.

Analyst firm Forrester this week bet the sub-$300 range would land Amazon up to five million tablet sales within three months.

“If Amazon launches a tablet at a sub-$300 price point — assuming it has enough supply to meet demand — we see Amazon selling 3-5 million tablets in Q4 alone,” wrote Forrester analyst, Sarah Epps. 

 
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HP confirms desire to sell PC business, makes another batch of TouchPads
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