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HP’s PSG to be a Spin-Off

By: , 8/31/2011 5:31 pm | 56 comments

The days of ambiguity regarding HP’s PSG are now more clear with the above image. The $40 billion dollar a year sector is being shed and sources are indicating PSG’s Executive Vice President Todd Bradley will be continuing to head up the company in its transition. Mr. Bradley was  interviewed by Reuters this week and noted he had no intentions of leaving and intended to spearhead this spin off.

HP also stated the idea behind the image is to make the spin-off a $40 billion dollar company which would be able to react like a startup (i.e. agile, quick, freedom). Being able to react quickly could result in faster “to market” times with less corporate bureaucracy. So if webOS hardware were produced by this new organization it may be able to release products in a timely matter, instead of 6 months or longer.

This, of course, is not set in stone. HP has officially stated their preference is for spinning off the company. It seems being ambiguous is a hard habit for HP to break.

[Sources: PC Mag, TheNextBench]

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About Levi Pelikan

webOS fanatic and general tech geek. I have been an avid palm/HP fan since October 4th, 2007 when I purchased my Treo 680. I'm available on twitter (@LeviTheGiant) when I'm not scanning the internet for the newest information or contributing to webOSroundup.
  • Anonymous

    Oh man, LEVI, this is big news.

    There’s two things I hope happen from this. First and foremost, I hope this means we eventually get to see new webOS devices. Bradley has hinted we might see a return of the Touchpad or of new tablets. I hope we get that AND new phones.

    Second, I hope it really will be the spirit of a startup. Having the agility and freedom of a startup might, just might, give us hardware to rival everyone else.

    The bad thing either way is that it will still be a while before we get new webOS devices.

    • Adaisguy

      On the earnings conference call HP stated that they would keep webOS as part of HP and not include it in any spinoff, I believe. HP has also said many times before that a spin off is their preference, so this really is not big news and certainly does not guarantee new webOS hardware.

      • Anonymous

        They say a lot of stuff though, so they might change their mind, right?

        RIGHT?!?!

        • Adaisguy

          Anything is possible, including a spinoff licensing webOS. Although webOS has been a money loser. Your asking a new company with extremely low margins (without the profitable ink sales) to invest substantial funds without any chance of profit for many years. If HP wouldn’t do it, why would a spinoff. HP would still lose money as well, spending a lot of resources for a very small licensing fee.

          • Anonymous

            Actually it looks as if webOS wouldn’t be part of that PSG-spinoff and they would just have the possibility to use it as a licensee, while HP keeps the development-team and tries to attract some more licensees of webOS.

          • Adaisguy

            That does not change my last post. It takes a lot of money to develop hardware, support it and satisfy the carriers.

      • Anonymous

        They say a lot of stuff though, so they might change their mind, right?

        RIGHT?!?!

    • Adaisguy

      On the earnings conference call HP stated that they would keep webOS as part of HP and not include it in any spinoff, I believe. HP has also said many times before that a spin off is their preference, so this really is not big news and certainly does not guarantee new webOS hardware.

    • Rich

      Nice comment sir! Well said!

      Right now anything is possible with this.

  • Snow

    Dear HP. **** you.

  • Anonymous

    Can this be like what Motorola did with Motorola Mobility?   I made a new thread at Precentral.net about how I can see Todd Bradley in charge of a new spin off company that makes hardware with webOS software.   That means the company will focus strictly on webOS development.  

  • http://twitter.com/Andolamin Alan Stice

    HP could still make webOS hardware by licensing webOS to the PSG spinoff while HP kept webOS software in house. They wouldn’t be breaking any promises that way and the new PSG would be able to go through product cycles faster. Of course then Palm would have split their hardware and software business again… Crazy how cyclical Palm is.

    • William Price

       … almost like the Left Palm doesn’t know what the Right Palm is doing.

    • William Price

       … almost like the Left Palm doesn’t know what the Right Palm is doing.

    • William Price

       … almost like the Left Palm doesn’t know what the Right Palm is doing.

    • William Price

       … almost like the Left Palm doesn’t know what the Right Palm is doing.

  • Scotland

    Well, would webOS (the software) go with the spinoff (PSG) or stay with HP?  Bradley is behind webOS and it would make sense for the newly independent company to make webOS devices but how exactly would PSG do that after they lay off all the former Palm GBU HW folks?  Unless, this is what Bradley is talking about with the Touchpad resurrection comment.  There was speculation early this year that PSG might make tablets with webOS instead of doing them in-house at the Palm GBU.

    As far as PSG webOS devices go, PSG still has the same problem (if not more so) than HP currently does in regards to a viable business model for webOS devices.  Significant demand for webOS devices has not existed for webOS devices when priced above their cost.  Unless PSG can come up with much more competitive HW, WebOS devices either need to be sold at a slight loss to seed the market or webOS needs to be modified significantly to make it an easier sell (for example, adding the ability to run Android applications would make it instantly more competitive).

    If HP (parent) keeps the OS and PSG (the spun off company) makes the HW, this isn’t a recipe for success – we saw how well that worked with Palm (PalmSoft and PalmOne).  Mileage may vary but HP hasn’t inspired a lot of confidence recently.

    • Scotland

      Oh, and I should add in regards to business model – PSG will be cut off from the very profitable printer business side of HP (they are run as separate divisions now) but this further limits PSG’s ability to subsidize any non-performing (loss-leading) products.  I’d would love to be proved wrong, but I don’t see a spun-off PSG doing a lot of R&D or risky products given how tight their margins currently are.

      • dmm

        Will they?  Given that printers are hardware, it might make sense to roll that in to the spinoff if it’s a better fit.  Otherwise the printers would be a very profitable orphan.

      • Haze

        I agree. PSG will lose the massive R&D budget (probably the Touchpad/Pre guys didn’t get any thing from this money) and with the low margins in the pc market they will have trouble to keep up. HP talks well how good PSG is as #1 etc but this is the regular bull.. They don’t won’t this business, simple as that.

    • Scotland

      Oh, and I should add in regards to business model – PSG will be cut off from the very profitable printer business side of HP (they are run as separate divisions now) but this further limits PSG’s ability to subsidize any non-performing (loss-leading) products.  I’d would love to be proved wrong, but I don’t see a spun-off PSG doing a lot of R&D or risky products given how tight their margins currently are.

    • Scotland

      Oh, and I should add in regards to business model – PSG will be cut off from the very profitable printer business side of HP (they are run as separate divisions now) but this further limits PSG’s ability to subsidize any non-performing (loss-leading) products.  I’d would love to be proved wrong, but I don’t see a spun-off PSG doing a lot of R&D or risky products given how tight their margins currently are.

    • dmm

      While the nature of the demand (how much for webOS and how is for a good deal) hasn’t been demonstrated, I think some of it would have been there.  Part of it is what Palm missed when they did a 6-month exclusive (vs 3) on the original Pre–the “alternative to Apple” demand that Verizon tapped into with the original Droid.  Remember Ruby’s comments on that–that Palm would have sold more had they launched before the Droid?

      Well, when it comes to tablets, there hasn’t been that one device (like the Droid) until now.  Apart from the iPad… just an overload of nearly-identical Android tablets, the half-baked PlayBook, and then the TouchPad, which was under-marketed and misrepresented (the issues in reviews that were fixed with an update–except that the reviews’ readers didn’t know that, etc.).

      And what we saw before (PalmSource & PalmOne) was a somewhat different different situation.  PalmSource was created to do essentially what Google has done with Android, until this purchase of Motorola.  If HP keeps webOS and licenses it to the new PSG spinoff, that might be an exclusive arrangement.  Since Todd Bradley went through all of this once–he was in charge of PalmOne, remember–he knows what many of the pitfalls are.

  • Scotland

    Well, would webOS (the software) go with the spinoff (PSG) or stay with HP?  Bradley is behind webOS and it would make sense for the newly independent company to make webOS devices but how exactly would PSG do that after they lay off all the former Palm GBU HW folks?  Unless, this is what Bradley is talking about with the Touchpad resurrection comment.  There was speculation early this year that PSG might make tablets with webOS instead of doing them in-house at the Palm GBU.

    As far as PSG webOS devices go, PSG still has the same problem (if not more so) than HP currently does in regards to a viable business model for webOS devices.  Significant demand for webOS devices has not existed for webOS devices when priced above their cost.  Unless PSG can come up with much more competitive HW, WebOS devices either need to be sold at a slight loss to seed the market or webOS needs to be modified significantly to make it an easier sell (for example, adding the ability to run Android applications would make it instantly more competitive).

    If HP (parent) keeps the OS and PSG (the spun off company) makes the HW, this isn’t a recipe for success – we saw how well that worked with Palm (PalmSoft and PalmOne).  Mileage may vary but HP hasn’t inspired a lot of confidence recently.

  • TimmyB

    Are you guys SERIOUSLY excited by all of this?  Gee, let’s do the math… it will take months (six to twelve) for this spin-off to happen.  How many new devices will be created in that time, while the company is still under the rule of leo, the d-bag?  ZEROOOOOOOOOOOOOOOOOOOOOO.  Then, after all of this dead-time, Scott Bradley, or whomever IS in charge of the PSG, will be able to make “nimble” decisions, getting new hardware out in a shorter span of time.  Wow, by Christmas of 2012, we might have the Pre4!!!  I think I’m drooling with the excitement of this. 

    Please, Samsung, take over ALL of HP, while their price is seriously deflated, fire the morons, and put webOS into your cool hardware.  Now THAT would be excitement.  This is just more sales-speak for “please don’t give up on us…we have new stuff, in the coming months!”

  • http://twitter.com/Chooi Chooi Oh

    this news does not really make me happy as I have lost all faith in HP to develop webOS in any way or form. I suspect like Motorola mobility, this spin off is created with hope of it being bought. I suspect HP would rather sell webOS separately and webOS future depends more on its new potential owners

  • http://twitter.com/Chooi Chooi Oh

    this news does not really make me happy as I have lost all faith in HP to develop webOS in any way or form. I suspect like Motorola mobility, this spin off is created with hope of it being bought. I suspect HP would rather sell webOS separately and webOS future depends more on its new potential owners

  • Peter

    I don’t trust in HP until they get ride of the current CEO

  • Peter

    I don’t trust in HP until they get ride of the current CEO

    • Addel

      I agree
      with you. Current CEO is a German dog, he must be fired immediately.

  • Denise

    This “ambiguity” is the reason I’m leaving webos to a new nexus s 4g. I’m not trying to troll or be negative. I was a big advocate for webos and convince 8 people to get these phones AND I have the pre- from Sprint. I’m just done guys. HP phucked it up royally for us….truly.

  • Denise

    This “ambiguity” is the reason I’m leaving webos to a new nexus s 4g. I’m not trying to troll or be negative. I was a big advocate for webos and convince 8 people to get these phones AND I have the pre- from Sprint. I’m just done guys. HP phucked it up royally for us….truly.

    • Micah R

      I don’t think they can call it anything but HP. If they don’t include the name “HP” then they can go from a pc sold every second to one sold every other day. HP is a brand more than a corporation. HP would be better off spinning off its software branch rather than hardware. Crap hardware or not they are priced to compete and are in the”homes” of more customers than any other brand. Long live HP, rename enterprise.

    • Micah R

      I don’t think they can call it anything but HP. If they don’t include the name “HP” then they can go from a pc sold every second to one sold every other day. HP is a brand more than a corporation. HP would be better off spinning off its software branch rather than hardware. Crap hardware or not they are priced to compete and are in the”homes” of more customers than any other brand. Long live HP, rename enterprise.

  • Raun

    If they spin-off the company, what should they call it? Compaq? Palm? Palmpaq? Funny, but AT&T was all but dead, now Pacbell is. They should definitely scrap any hp reference in the new name after this fiasco.

  • Carldc

    zombie-Palm!

  • bob’s burgers

    I want 2b happy… I really do.. You can’t spell HoPe wout HP… We shall see

    • Frett

      And u can’t spell phiasco without HP either :P

  • http://profiles.google.com/d.dennis.liang dennis liang

    This is sooooo Palm 3.0

    Ruby must be the one behind this Evil Plan to resurrect Palm again. Go Ruby GO!!~~

    • Anonymous

      Can’t say I’m a big fan of Ruby either at this point. while certain matters MAY have been beyond his control (i.e. no update for legacy devices, resources devoted to TouchPad development, releasing the TouchPad before it was ready), I never got the sense that the webOS division was being properly led under his stewardship. His repeatedly vague comments regarding Pre3 and Touchpad release dates after the Feb 9th announcement were very damaging to the brand and caused erosion of the webOS base. He and Leo Apocalypse both belong in the webOS Hall of Shame.

  • Jim

    HP fire Leo and his cronies

  • Michael

    Didn’t Palm do this once upon a time? What happened to them?

    • Druonysus

      I don’t think it went well.

    • Druonysus

      I don’t think it went well.

  • Addel

    Current CEO is a German dog, he must be fired immediately.

  • Addel

    CEO Leo Apotheker is a German Dog, He must be fired immediately…..

    • Frett

      Dude what is it with you and German dogs?  I mean, is he a German Shepherd? Cuz, like, they’re pretty smart and Leo is not.  ;)

  • Mtv757

    well the biggest problem with hp and other computer manufacturers is that they are slowly losing marketshare to smaller mobile computers like ipads and other more functional tablets. If they intend to have any longtern revenues in this kind of market, they need to start producing hardware for this new ever growing tablet and mobile smartphone market. Pretty soon desktops will be a thing of the past. Even in the enterprise sector. They need to start gaining marketshare now if they plan on being viable 10 years from now. It will only make sense to focus alot on tablets and smartphones. Preferably with the webos platform.

  • Wcrispin

    Just heard the Chairman of the Board for HP, Lane, discuss the spin off of the Computer Group, the tablet and the future of WEBOS.  This is what he said on the  2pm segment of CNBC.  He said there is no customer for the computer group, that it will be spun off to the shareholders of HP and be a separate company.  He said that company will decide whether to make tablets, including the Touchpad, and other devices.  He further said that HP will keep WEBOS software and license it to companies including the spun off computer group if it decides to make WEBOS devices.  He said HP can make money on WEBOS and that HP’s vision was to use the software on mulitple devices across the board of products.  2:45 PM Sept 1

    • Michael Gill

      Too bad. I have no it confidence in HP when it comes to our beloved OS.

  • Michael Gill

    I guess this is what they meant by ‘Think Beyond.’ The last part of the statement with their emphasis on PCs doing “things that simply can’t be done on other devices ” sounds like we didn’t acquire webOS to get into the phone business kind of thing. I don’t know what to think with these darn people anymore. Idiots!

  • Mark

    At least this spinoff gives me some hope. I will go to ios if I do not hear some clear plans soon. I like webos. It easy to use and they had a vision. I like the hard wear. I was looking forward to the pre3 (along with the rest of the community) I think the pre3 needs an LTE signal to be relevant. If Leo is out of the way PSG could continue the vision. So Ruby, bradly I need to know if the vision will continue (pre3) or I need to stop holding on and move on?

  • Mark

    Even if hp needed to scrap the Pre3 and do a slab phone. I’m still ok with that. Want the tts and the ecosystem. Please give me something.

    • Micah R

      Pick up another touchpad and you get touch to share. I did it last night and it’s as cool as you would think it would be. Super easy too.

  • Brother Al

    IN REFLECTION:

    HP’s senior management, (Apothecracker & Co), has been acting like spoiled kids in a toy store… They see something they want, get Mommy & Daddy, (the cherry-picked board), to buy it… then they abuse it, break it, toss it aside, & run over to the next great thing they see. Meanwhile, the parents not only smile & nod approvingly at the bad behavior, but they reward the brats for it… Uhg.

    This spinoff might sound great but IMHO “PSG”, it’s few remaining employees, & those “shareholders” are seemingly going to see a disaster unfold.

    This is a very old corporate trick to excuse pending losses, while keeping shareholders stupid & happy with bottom-line profit.
    A notably huge failure was when GM tried this in the early 2000′s with AC Delco. They announced that they were …”going to focus on their core business and allow the division freedom to stay competitive in a fast-moving economy (to China)…”.
    They “spun it off”, (see ditched), as “Delphi”… Buried in the details was a lot of old GM debt, pension-legacy costs, & left them with little cash to maintain themselves… It backfired on GM because Delphi made most of GM’s electronics & many other components. They had to buy it back to save production & prevent all kinds of lawsuits. It resulted in a massively-expensive blunder, ultimately leading to GM’s bankruptcy in the end.

  • Brother Al

    Without webOS and at least the printer segment, they will have a huge mountain to climb for success. I am hopeful that PSG gets webOS tho.