HP announces PC, printing units merge

SAN FRANCISCO - Hewlett-Packard (HP) on Wednesday announced that it will merge its Imaging and Printing Group (IPG) with Personal Systems Group (PSG), in a move to improve performance and drive profitable growth for the company.

HP said the combined Printing and Personal Systems Group will rationalize the company's go-to-market strategy, branding, supply chain and customer support worldwide.

"This combination will bring together two businesses where HP has established global leadership," HP's chief executive officer Meg Whitman said in a statement.

"By providing the best in customer-focused innovation and operational efficiency, we believe we will create a winning scenario for customers, partners and shareholders," she added.

According to US media reported on Tuesday, Vyomesh Joshi, executive vice president of IPG, is retiring from HP and the new unit will be led by Todd Bradley, who has served as the executive vice president of PSG since 2005.

However, some analysts have been skeptical about HP's decision.

Sterne Agee analyst Shaw Wu said the combination may not bring much cost savings and other strategic benefits as each unit has unique business model.

"We believe there is room to cut costs, particularly with general and administrative and potentially with sales & marketing. However, we believe there could be a limit as it is debatable whether customers want to buy PCs and printers at the same time. More often than not, customers buy them separately," he said in a research note quoted by ZDNet.

"In addition, both follow different product cycles with PCs much quicker at 1-3 years vs. printers at 3-5 years and possibly longer," Wu noted.