In a dramatic reshuffling, Hewlett-Packard Co. said Thursday that it will discontinue its tablet computer and smartphone products and may sell or spin off its PC division, bowing out of most of its consumer businesses.http://www.msnbc.msn.com/id/44193385/ns/business-us_business/It's one of the most dramatic makeovers in the company's 72-year history and signals new CEO Leo Apotheker's clearest effort to date to make HP look more like longtime rival IBM Corp.
A decade ago, HP acquired Compaq Computer for $24 billion after a bitter takeover battle, setting the stage for HP to become the world's No. 1 maker of personal computers. Now, three CEOs later, HP is changing course — hard.
The personal computer division is HP's biggest revenue generator but least profitable unit. The move to spin or sell off the division has long been rumored, but just six months ago HP dismissed stories on the possibility as "irresponsible reporting" and said that PCs are "core to HP's strategy for the connected world."
The low-margin, high-volume PC business is part of the Palo Alto, Calif.-based company's Personal Systems Group, which pulls in about $41 billion in annual revenue for the company.
The PC industry is under pressure from hot-selling smartphones and tablet computers, which have contributed to weak consumer demand for laptops and desktops in the U.S. and Europe.
Kim Forrest, an analyst with Pitt Capital Group, said industry insiders were expecting a major shift from HP.
"None of this should be surprising, in light of what's happening to the consumer with respect to the amount and the type of PCs they're buying and also the fact that even before Leo [Apotheker] took over, the company had been moving more into software and services, specifically targeted at businesses

