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Who Should Buy HP’s PC Group?

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Who Should Buy HP’s PC Group?

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HP’s double bombshell at its third-quarter earnings call yesterday included the news that the company was spinning off its Personal Systems Group (PSG) and considering putting the division up for sale. The PSG produces and sells consumer and business PCs, PC accessories (like external hard drives, keyboards, and mice), handheld computing (Palm, WebOS, phones, and tablets), as well as the rest of HP’s entertainment-based consumer electronics. The division is purportedly worth $12 billion.

PCMag’s desktop analyst, Joel Santo Domingo, does not believe HP is making the right decision. HP is an innovator, he wrote earlier today, and is “several years ahead of all the PC makers when it comes to touch screen PCs.” HP and Dell are also the last remaining major (top-six) PC manufacturers based in America. “It would suck if the number one worldwide PC manufacturer was sold to an overseas conglomerate, leaving Dell as the sole American (Windows) PC manufacturer,” he wrote.

Despite Joel’s protests, however, it appears that a deal might be in the cards. So forget for a minute the magnitude of the number one computer manufacturer in the world thinking of selling off its PCs division. If it does decide to sell off, which company should buy it? There are very few companies in the world that could afford to buy HP and have the wherewithal to build upon such a monumental acquisition. But we have five that we think might have a shot at both.

1. Lenovo

Lenovo

Lenovo is the most likely suitor. After all, it did acquire IBM’s PC division back in 2005, showing that it has the know-how and isn’t afraid to acquire a big PC company like HP. It already has access to worldwide markets, though not enough of them to overtake Dell and Acer. Lenovo is partly owned by the Chinese government, so not only is it the PC distribution leader in China and much of Asia, but it also has an entire country backing it, should it decide to make a play for HP.

2. Samsung

Samsung

Samsung is the largest electronics maker in South Korea, and essentially the equivalent of what Lenovo is to China. It has enough capital to swallow up HP PSG’s $12 billion asking price, and unlike Lenovo, Samsung’s PC division doesn’t have any kind of a foothold in worldwide markets. It doesn’t make desktops, and its laptops are barely making a dent in U.S. markets. By acquiring HP’s PSG, it can transform from being a no-impact player to the number one PC retailer worldwide.

3. Asus

Asus

Having conquered the PC component space, Asus was intent on becoming the third largest laptop maker in the global market by this year. Well, it hasn’t exactly worked out that way, given the state of PC sales and the tablet boom. At one point, the company was in talks with Toshiba about acquiring its PC division, but nothing ever became of it. Asus can’t afford HP’s asking price for PSG, but if HP were to break it off even further, this idea might be plausible.

4. Acer

Acer

Acer’s PC business is very much in line with HP’s, except that it lacks a direct channel (all of its PCs are sold through resellers) to its customers. It seems like a longshot, given that it had recently acquired the Gateway and eMachines brands. Right now, Acer is fighting Dell for the number two spot as world’s top PC manufacturer. And with PC sales slumping, a play at HP would strike fear among its rivals.

5. Dell, Inc.

Dell, Inc.

Dell has been ceding its leadership position in the PC space for quite some time now, and is making similar attempts to bolster itself as a cloud player in the enterprise space. A couple of months ago, we would’ve said emphatically that HP would never buy Dell or vice versa. With HP throwing up the white flag first, though, Dell might see it as an opportunity to retake the number one spot that it once held. A move like this would also cause a seismic shift in the PC industry, causing other PC manufacturers to look at potential mergers. It’s very unlikely, but it’s food for thought.

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Source link : https://www.pcmag.com/news/who-should-buy-hps-pc-group

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