HP chief resurrects Personal Systems Group

But customers still kept in the dark about future plans

Tom Sanders in California, vnunet.com 14 Jun 2005

HP has once again appointed a new executive to head up its revived Personal Systems Group, hiring former PalmOne chief executive Todd Bradley to run the unit that it merged with the imaging business earlier this year.

The desktop and notebook unit was previously led by Vyomesh Joshi, who supervised the succesful imaging group. He will go back to managing HP's printer and digital camera business.

Bradley's appointment is the most dramatic move by Mark Hurd since he took on the position as chief executive in March. It also reversed one of the last major decisions by his predecessor, Carly Fiorina, who was fired in February.

HP did not comment on the strategic reasoning behind the split up of the group. In a statement Hurd applauded Bradley's skills and ability to grow businesses.

"His experience driving growth and profitability in highly competitive hardware fields makes him well-suited for this position," he said.

The Personal Systems Group is a major trouble spot for HP. Although the unit is profitable and reported an increase in revenues in the most recent quarter, it has lost market share in recent years and conceded the number one spot to Dell.

The imaging business, on the other hand, has been HP's main profit centre. By merging the two units HP could have increased cross sales and the systems group could learn from the imaging group how to make money in highly competitive markets.

Financial analysts in the past have called on HP to spin off its printer or desktop computer business, believing that they would show better financial performance outside the company. Bradley has experience in splitting organisations with the division of Palm into PalmSource and PalmOne.

Bradley's appointment and internal split-up do not offer many clues about the future course of the vendor, according to Michael Dortch, a principal analyst with the Robert Frances Group.

"Hurd is going to make some pretty deft moves in a short period of time that stakeholders will see as positive. Otherwise this looks like it could be the beginning to sell off parts of HP," he told vnunet.com.

But the real market for HP is with enterprise users who spend most of their money on servers and tools, according to Dortch. Ever since Hurd's appointment they have been waiting for signals about his new strategy.

"Those people need reassurance. Today's announcement does little if anything to help them," said Dortch, adding the the "clock is ticking".

"The longer that takes, the more opportunity it creates for competitors," he warned.