Posted by & filed under App Economy, Change Management.

HP CEO Leo Apotheker wants to get HP out of the PC business.

Discussion:  Last week HP announced that it would no longer support its TouchPad, among other things, which had only been on the market for three weeks.  It also announced that it was going to buy British software developer Autonomy.  HP states that it is trying to transition into faster-growing, more profitable businesses like software, servers and corporate technology services.  Currently, software makes up 2% of HP’s sales, while its Personal Systems unit accounts for roughly 1/3 of the company’s annual revenue.  The future of a large portion of HP’s employees is still uncertain, and it will remain to be seen if these decisions will ultimately be beneficial or harmful to HP’s value.

Source:  CNN

Date:  August 18, 2011

Link:  http://money.cnn.com/2011/08/18/technology/hp_pc_spinoff/index.htm?hpt=hp_t2

Discussion Questions:

  • HP purchased Palm a little over a year ago (June 2010).  What has changed in the last year to shift HP’s strategy from acquiring Palm to quitting TouchPad and webOS altogether?
  • How is HP’s decision to exit the PC business an example of the sunk cost fallacy?
  • HP’s TouchPad went from selling at a retail price of $399 to $99 after this announcement.  How could this aggressive pricing affect the tablet market as a whole?

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