The benefits and pitfalls of breakup at HP
Hewlett-Packard (HPQ) announced it will split its computer and printing business from its enterprise business, which includes software and data storage.
Two separate publicly traded companies will be created.
The PC and printer business will use the name HP Inc., with Dion Weisler as chief executive officer and the services business will be called Hewlett-Packard Enterprise with Meg Whitman as president and CEO.
The announcement comes as HP approaches the fourth year of its five-year turnaround plan. The company aims to be in a better position to compete in the market and deliver maximum value to shareholders.
Read More Split shows turnaround a success: HP CEO Whitman
"Splitting its consumer and corporate businesses, like IBM (IBM) did, could make both divisions more nimble. Both have been struggling, and this could make them better able to operate independently of each other," said Mike Prospero, reviews editor at Laptop Mag.
But there are some downsides. The separate divisions will lose the purchasing clout of a unified HP, Prospero said. It will be harder to get better deals on, say, chips from Samsung (Korea Stock Exchange: 593-KR) for the server division if you can't also agree to purchase displays for its tablet group, he said.
The move is expected to be completed by the end of fiscal 2015.
