Hewlett-Packard – best known for the general population for its quality printers and portable computers – seems to find it hard to adapt to the new generation of mobile devices and online computing. The company will now try to remedy this unpleasant situation by splitting in two, and focusing more on the fast-growing corporate services market, according to a Sunday report by the Wall Street Journal.
The move, set to be announced on Monday, will completely re-shape the technology veteran. Hewlett-Packard plans to separate its hardware – computer and printer – business from its corporate services division, offering its customers high-profile hardware solutions and services. The unit will be spun-off in a tax-free distribution of shares to shareholders sometime next year.
Hewlett-Packard is a veritable pioneer in computing. Founded by Bill Hewlett and David Packard in 1939, in Palo Alto, it was one of the companies shaping the Silicon Valley and the revolution of personal computing. It has become one of the best known IT brands of the world, but it has seemingly failed to adapt to the shifts of our times toward mobile computing and to the emergence of a series of younger and more forceful rivals on the market. Today the company has over 300,000 employees, and has reported a revenue of over $112 billion in the last fiscal year. About half of its revenues and profits are generated by its personal computing and printers division.
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It is not yet clear how the split will affect Hewlett-Packard’s employees – how many of them will work in each of the two planned companies. When asked about the matter, Hewlett-Packard’s spokesperson has declined to comment. One thing is for sure – the once gigantic company has a market value overshadowed by Apple and Microsoft, and has even been taken over by Lenovo, an emerging Chinese company that is the world’s number one in PC sales.