Samsung emerges as contender to buy HP’s PC division

23 Aug 2011

Samsung has emerged as a potential buyer of HP’s Personal Systems Group which the company revealed last week it is interested in spinning off. While HP may be content to focus on ‘big iron’ data services, the move could fit nicely with Samsung’s focus on consumer electronics.

It would also make Samsung in one fell swoop one of the largest computer manufacturers in the world and add fuel to the fire in terms of its ongoing battle with Apple.

Taiwan industry news site DigiTimes said Samsung Electronics contacted Taiwan-based notebook makers Quanta Computer, Compal Electronics and Pegatron Technology in August to evaluate the possibility of outsourcing notebook orders.

“The sources added that Samsung’s actions seem like it is already in preparation to take up Hewlett-Packard’s (HP’s) PC business,” DigiTimes said.

It said Taiwan’s notebook OEM industry’s production efficiency and cost control is currently unmatched worldwide; therefore, if Samsung takes over HP’s PC department, HP’s over 40 million PC shipment volume will still need to depend on Taiwan OEMs.

Samsung purchase of HP PC division would catapult it top of global PC maker league

Last week HP’s new CEO Leo Apotheker said the company plans to spin off its Personal Systems Group (PSG) which makes HP PCs as well as abandon its webOS tablet and smartphone business which it acquired only last year from Palm. The move resulted in a fire sale kicking off with TouchPad tablets selling for as little as US$100.

According to IDC HP is the largest PC maker in the world with 26pc of the global market, shipping 4.6m personal computer in the second quarter. However, recent figures from IDC also revealed that across the board PC manufacturers are struggling in the face of declining sales caused by the commoditisation of technology and new form factors like tablet computers.

Apple was the only personal computer manufacturer that showed any sign of growth in Europe in the last quarter.

Currently locked in a bitter patents battle with Apple over its Galaxy range of smartphones and tablet computers, Samsung is nevertheless quite successful in the PC business but currently lower down the league table than manufacturers like HP, Dell, Apple, Toshiba and Acer.

Buying HP would catapult Samsung to the top of the list. However, this would result in Samsung being obliged to manufacture some 50m additional computers a year. Hence it makes sense the Korean technology giant is courting contract manufacturers in Taiwan – a sure sign as any Samsung is very interested in HP’s computer business.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years