HP merges computer and printer units

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HP merges computer and printer units

Hewlett-Packard on Wednesday said it is combining its computer and printer units to free up more cash for innovation in the rapidly evolving technology market.

Hewlett-Packard on Tuesday said that it is combining its computer and printer units to free up more cash for innovation in the rapidly evolving technology market. (AFP Photo/Dirk Waem)

HP will combine its Imaging and Printing Group and its Personal Systems Group (PSG) into an entity headed by Tom Bradley, who has been PSG executive vice president since 2005.

HP declined to comment when asked whether the corporate reorganization would result in a cut in its work force.

"We have no specific announcements about changes to headcount at this time," an HP spokesman told AFP.

The merging of the units comes as growth in the printer market, once a gold mine for the company, slows to a trickle and people increasingly turn to smartphones and tablets for their Internet needs.

HP last month reported lower quarterly net profit and revenue as slumping personal computer sales dragged down earnings at the world's largest computer maker.

Palo Alto, California-based HP said net profit fell 44 percent during the first quarter of its fiscal year to $1.5 billion compared to the same quarter a year ago, while revenue was down seven percent to $30.0 billion.

HP chief executive Meg Whitman said in an earnings conference call that the company was "taking the necessary steps to improve execution, increase effectiveness and capitalize on emerging opportunities."

Whitman last month told a gathering of entrepreneurs and executives that HP will take another shot at Apple's iPad with the release late this year of a tablet computer geared for work instead of play.

The tablet will run on Microsoft Windows 8 software and take on iPad in the workplace, where HP will bank on its reputation and its strengths in providing gear and services to businesses, according to Whitman.

"It is not really a tablet market, it is an iPad market," Whitman said at a Wall Street Journal Viewpoints West event in Silicon Valley.

HP will release by Christmas a new tablet tailored for security, productivity and business network compatibility, said Whitman.

"There is a big trend to BYOD to work; which is all well and good until there is a security breach," she said, referring to people increasing bringing their own devices such as iPhones or iPads to use on the job.

"We are going to provide an alternative."

A blockbuster hit with people in their personal lives, iPads have been gaining traction in workplaces. Apple sold three million iPads during the weekend following the release of a third-generation model on Friday.

HP made a dismal initial foray into the tablet market last year with a TouchPad powered by webOS mobile operating system software it acquired as part of its $1.2 billion purchase of Palm in 2010.

Citing disappointing sales, HP decided to discontinue the TouchPad just seven weeks after it hit the market.

HP's first tablet to take on iPad "was not a happy ending," admitted Whitman.

Whitman, a former chief executive of eBay and unsuccessful candidate for governor of California, took the reins at HP in September after her predecessor, Leo Apotheker, was ousted after just 11 months on the job.

HP said revenue declined 15 percent at its PC unit during the quarter, with commercial sales down seven percent and consumer sales falling by 25 percent.

The low-margin PC market has been flat amid an astronomical increase in powerful smartphones and the arrival of hot-selling tablet computers such as the iPad.

HP printer revenue was down seven percent in the quarter.

HP on Wednesday also said it was reorganizing its sales, marketing, real estate, and communications units.

"Ensuring we have the right organizational structure in place is a critical first step in driving improved execution," said Whitman.

HP's stock price slid more than a percent to $23.60 a share as the close of the trading day neared Wednesday in New York City.

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