HP to keep PC business after all

Will they, won't they? Hewlett-Packard has said it now plans to keep its PC division after announcing the possibility of spinning it off earlier in the year.

In August, HP said it was considering spinning off its PC division, to be completed within 12 to 18 months, signalling a greater investment in cloud computing

This announcement was closely followed by HP's decision to discontinue operations for its web OS devices, which left the TouchPad, at the time recently released in New Zealand, high and dry (and a juicy offering for Trade Me bidders).

At the time the company said the devices had not met “internal milestones” and financial targets.

And in September HP named former eBay chief Meg Whitman as new chief executive, replacing Leo Apotheker after only 11 months.

Ms Whitman told CNBC at the time that she supported spinning off the PC business.

But it looks like the analysis is over, the chips are down and HP has decided not to spin off its PC business which had annual revenues of about $US41 billion in the 2010 fiscal year.

The company's strategic review revealed the "depth of integration" which had occurred across key operations such as supply chain, IT and procurement, the company said.  It also detailed the extent the PC business contribued to HP's overall brand value, it said.

"Finally, it also showed that the cost to recreate these in a standalone company outweighed any benefits of separation."

Ms Whitman said HP was committed to the PC arm of HP.

"It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees,” she said. 

"Together we are stronger.”

The HP board was confident the PC arm could drive profitable growth as part of the larger entity, the company said.