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9/30/2009
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HP Considers Merging Printer, PC Units

The company is planning to combine the once-joined units to minimize slippage in its printer business.

Pressed to turn around the sagging momentum of its printer unit, Hewlett Packard is planning to merge the unit with its PC operation, according to a report in Wednesday's Wall Street Journal.

Long the profits star of HP, the printer unit has been shifted around in recent years as the company seeks to squeeze more revenue and profit from its printers. The printer and PC operations had been combined early in the decade, but HP CEO Mark Hurd separated the units soon after he took over the helm of the firm four years ago.

Now, after the PC operation has gained traction and the printer operation is slipping, he is said to be considering putting the two units together again.

The newspaper said the plan under consideration would place PC unit head Todd Bradley in charge of a new combined PC-printer unit. The status of Vyomesh Joshi, currently the head of the printer unit, is unclear. Joshi has perennially been sought by headhunters as a CEO because of his successful leadership of the printer unit over the years. In some years, the printer unit delivered 70% of HP's profits.

Under Bradley, HP's PC unit has moved into first place in the shipments category and the company is forecasting a 3-5% growth for the unit in fiscal 2010. The company is predicting growth of zero to 2% in its printer operation for the same period. The printer unit remains HP's more profitable operation.

A merger of the two operations makes some sense because HP PCs are often sold with HP printers. And, along with HP's more aggressive move into enterprise IT-oriented services, the company has been attempting to encourage users to print more. For instance, the HP Photosmart Premium, announced in June, connects wirelessly to the Web and can print maps and other documents directly from the Internet.

In addition, a HP-Canon printing alliance formed earlier this month enables HP to use Canon's imageWare Enterprise Management Console and Canon Multifunctional Platform. With HP's EDS subsidiary supplying key workflow software and services, the collaboration helps enterprise IT users print more documents directly from the Web.


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