Hewlett-Packard Continues to Morph with New Strategy

Hewlett-Packard (NYSE:HPQ) has announced that it will be spinning off its existing Personal Systems Group (PSG) segment, which has the lowest operating margin among all of the company’s divisions. Research firms like Gartner Inc. (NYSE:IT) have predicted a bleak future for the PC Industry in light of increasing demand for tablets and smart phones.

Moreover, to reduce its dependence on PCs, HP has made several acquisitions, namely: 3Par Inc, a data storage company; Arc Sight Inc and Fortify Software Inc., security companies; and now Autonomy Corp, a UK-based search software company. The expensive acquisition bid has caused the company’s share to move 20.3 percentage points south, the worst ever since Black Monday in October 1987. The stock is currently trading at $22.72 near its 52 week low at $22.13.

Other companies heavily affected by HP’s new strategy include: Dell (NASDAQ:DELL), Apple (NASDAQ:AAPL), EMC (NYSE:EMC), Cisco (NASDAQ:CSCO), Oracle (NASDAQ:ORCL), Microsoft (NASDAQ:MSFT) and IBM (NYSE:IBM).

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