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Apotheker can't save HP

Posted: 22 Aug 2011 ?? ?Print Version ?Bookmark and Share

Keywords:WebOS? PC business? business applications?

I understand Leo Apotheker's vision for Hewlett-Packard Co. (HP), but I don't believe he can execute on it. HP's woes are broad and deep, and the new CEO's methods are at best clumsy and arguably incompetent.

By announcing HP will take the next year or so to discuss what to do with its PC business, Apotheker will drive customers to Acer, Dell and Lenovoand drive down the price anyone would pay for HP's $41 billion PC group.

It's hard to think of anyone who might want to buy the world's leading PC business given its razor thin margins. What's worse, that client business has zero position in the hot mobile markets of tablets and smartphones now that Apotheker axed HP's WebOS products.

It's even harder to think of who would want to buy the remaining WebOS software group, given Apotheker is admitting he sees no viable product business based on it. If WebOS was not already in last place as a mobile platform, it is now.

I fail to understand why HP did not opt to explore possible PC and WebOS deals quietly before announcing to the market it believes both are of questionable value. I am no fan of the new HP tablets and smartphones, but axing the WebOS products after two months on the market may set a new record for corporate impatience.

In a conference call, Apotheker talked about managing the PC and WebOS businesses "in a very normal way" while HP explores its options. "I am sure we can manage through whatever distraction there is and continue to deliver great products," he said.


HP is victim of too many CEOs. Carly Fiorina bought Compaq to get PC volumes up. Mark Hurd bought Palm for $1.2 billion just 18 months ago to create a mobile client strategy.

Now Apotheker, the former SAP CEO, decides client computing is a hot potato, and drives the company to a server software strategy. HP employees should sue for whiplash.

Unfortunately HP's woes are not limited to PCs and WebOS. It's services business has failed to live up to the promise of its massive acquisition of EDS, so today Apotheker also appointed a new and largely unknown head of that unit, which he says now faces an 18-month transition period.

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