HP may resurrect TouchPad, weighs PC spinoff

Tue Aug 30, 2011 2:41pm EDT
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By Terril Yue Jones

BEIJING (Reuters) - Hewlett-Packard Co may resurrect its TouchPad as it weighs a spinoff of its personal computer arm, the head of its PC division said, suggesting HP might revive a tablet that lasted just six weeks in the face of stiff competition from Apple Inc.

HP stunned markets two weeks ago, when it announced it may shed its PC business -- the world's largest after the $25 billion acquisition of Compaq in 2002 -- as part of a wrenching series of moves away from the consumer market. Those included killing off the TouchPad tablet computer.

Now, the board of the largest U.S. technology company by revenue is expected to decide before the end of the year whether to hive off its PC arm -- which began selling the TouchPad in July -- into a separate company, considered the best option for shareholders.

Personal Systems Group head Todd Bradley told Reuters in an interview he intends to lead any standalone company created, and expects it to be a full-fledged computer maker spanning tablets, ultra-thin and all-in-one PCs.

"Tablet computing is a segment of the market that's relevant, absolutely," he said, without elaborating. He said a spinoff of the Personal Systems Group will bring the "best value" to HP shareholders for taxation and other reasons.

"My intention would be to lead it through this transaction ... and if it's a standalone public company, to lead that."

Selling the PC division to a rival such as Taiwan's Acer Inc, which acquired computer maker Gateway in 2007, or to China's Lenovo Group Ltd, which bought IBM's PC division in 2004, is not a desirable alternative, Bradley said.

"I would just say that the numbers don't support that that strategy works," he said, citing Acer reporting its first-ever quarterly loss last week.   Continued...