Hewlett-Packard to ditch tablets, smartphones, possibly sell PC division, in massive overhaul

Hewlett-Packard’s decision to surrender in smartphones and tablet computers and possibly get rid of its personal computer business underscores how Apple has transformed consumer electronics in just four years.

HP’s new CEO Leo Apotheker is now trying to turn the Silicon Valley stalwart into a twin of East Coast archrival IBM. In doing so, he is acknowledging that his company has failed to balance the demands of both the consumer and corporate markets. As a result, it needs to exit most of its consumer businesses, just as IBM did six years ago. Apple is the hottest consumer electronics company on the planet. The iPhone’s debut in 2007 brought ease of use and an intuitive design unmatched by predecessors, including smartphone pioneer Palm, which HP bought last year in hopes of getting a foothold in mobile devices. Apple followed in 2010 with the iPad tablet computer and managed to persuade people to buy a product they never knew they needed. Rather than remain locked in a futile fight with a company that seems to have found the magic touch on making hit consumer products, HP is whittling its competition to the other business technology specialists — namely, IBM, Oracle Corp. and Cisco.

HP’s overhaul has three parts:

1. HP will stop making tablet computers and smartphones by October.
2. It will try to spin off or sell its PC business, the world’s largest. By the end of next year, HP computers could be sold under another company’s name.
3. The company plans to buy business software maker Autonomy Corp. for about $10 billion in one of the biggest takeovers in HP’s 72-year history. That would expand HP’s software and services offerings, where IBM is strong.

(Aug 18)