Jobs respected HP. HP respects its PCs.
October 27, 2011
Walter Isaacson's biography of Steve Jobs remains atop the bestseller lists this week. It's a remarkable thing to have more than 600 pages of a bio, written by a man who chronicled the lives of Einstein, Ben Franklin and Henry Kissinger, on the streets within three weeks of a tech titan's death.
In an interview with Issacson, he reveals that although Jobs never wanted to work at HP, he admired the company's intentions right up to the end. By the time Jobs stepped down as CEO in August, Hewlett-Packard had already told the world it was thinking about getting rid of its $40 billion PC business. Isaacson said in an interview with CNET that Hewlett-Packard was no joke to Jobs.
When he resigned as CEO, he's in the board room talking to some of its members, and someone mentions that Hewlett-Packard is getting out of the PC market, and people sort of start laughing about it. And he got very serious, and later said it's a real shame, because "Bill Hewlett and David Packard left a really great company that should be destined to survive generations, and that's what I'm trying to do at Apple."
Today brings news that the newest leadership values the biggest part of its survival system. There have been rumors afloat that the spinoff of HP's PCs could turn out to be nothing more than an idea floated for effect. HP announced today that "it has completed its evaluation of strategic alternatives for its Personal Systems Group (PSG) and has decided the unit will remain part of the company."
HP objectively evaluated the strategic, financial and operational impact of spinning off PSG. It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees,” said Meg Whitman, HP president and chief executive officer. “HP is committed to PSG, and together we are stronger."
Whitman said at a quickly-called briefing that she doesn't want HP to spread itself too thin. "HP tries to do a lot of things. And I’m a big believer in doing a small set of things really, really well." At the same time, Apple reported that it will double its capital investments to $8 billion in 2012, according to SEC documents filed today. Of that, almost 15 percent will be aimed at Apple's retail stores. Apple is creating its own retail PC space, since HP inhabits so many shelves elsewhere.
HP's employees, especially engineers, are said to be weary of all of the jibes and lashing their company has sparked over the past three months. "We're just trying to finish out the quarter," one said, noting that Apothker hadn't left Hewlett-Packard with a rosy outlook for 2012 business. The fiscal year ends on Monday, with a lot of deal-making going on today and tomorrow to lift up the final quarter.
HP's stock ticked up beyond $27 today, the first time it's cracked that mark since those that PC spinoff and Apothker ouster were announced. And that gain took place before HP announced PCs were staying in the fold. Over the fiscal year while Apotheker worked, the stock has lost 15 percent of its value, even considering its nose-dive in August. HP continues to pay 12-cent dividends per share. This may be a break in HP's stormy weather.
This Silicon Valley icon was not noted for products that touched the masses until its printers broke through in the 1980s, then crowded retailer shelves in the late 1990s. Jobs respected these ancestors of the ideal that was his Apple, by Isaacson's account. His book asserts that Jobs will join Edison and Ford in the pantheon of modern inventor-princes. Hewlett and Packard are just as revered across HP and its oldest customer groups. They simply didn't invent in an era of social networking and broadband media that promoted their work -- or live to have it celebrated at a bestseller rate.