Lenovo and Samsung eye HP's unit
Source: Bloomberg News |
August 24, 2011, Wednesday
|
Print Edition
Print Edition
HEWLETT-PACKARD Co's plans to unload its personal-computer business, the world's biggest, may attract China's Lenovo Group Ltd and South Korea's Samsung Electronics Co as suitors, analysts said.
Lenovo, the Chinese company that bought International Business Machines Corp's PC business in 2005, would be a leading candidate, analysts at technology research firms Ovum Ltd and IDC said. Samsung may also be interested because the purchase may complement its geographic and product mix, said Carter Lusher, a researcher at Ovum.
HP said last Thursday it may shed the unit as Chief Executive Officer Leo Apotheker plans to overhaul the 72-year-old company to focus more on software and enterprise customers. Credit Suisse Group AG estimates the division may be worth US$12 billion, which may make a sale the PC industry's biggest since HP bought Compaq Computer Corp in 2002, according to Bloomberg News data.
"The PC business is still going to be a huge business with great opportunities for a company that can manage it correctly," Lusher said. "The tablets are hot new flavors, but remember hundreds of millions of PCs are sold every year."
The Palo Alto, California-based company said yesterday it plans to separate its PC division within 18 months, discontinue making products that run WebOS software and purchase software maker Autonomy Corp for US$10.3 billion. Dell Inc, the second-largest PC maker, also is focusing more on services, though PCs still make up about half its sales.
Samsung and Lenovo may pursue a purchase "to establish themselves as worldwide leaders," IDC said in a report last Friday. "Both companies have aggressive growth plans and, if executed, would instantly reset the entire PC world."
For Lenovo, the world's third-largest PC vendor, buying the HP unit would help the company more than double its share of global sales and vault past Dell, the No. 2 producer. A purchase may also help the company benefit from the lower costs associated with economies of scale, said Steven Tseng, a Hong Kong-based analyst with Samsung Securities Co.
Share may surge
"In a mature business, volume is everything," Tseng said. "From Lenovo's perspective then, why not buy the brand and expand market share? If they were to acquire HP, the difference with other competitors would become huge."
Based on second-quarter shipments estimates by research firm Gartner Inc, Lenovo's market share would surge to 30 percent from 12 percent. That's more than double the 13 percent share held by No. 2 producer Dell and No. 4 Acer's 11 percent.
A purchase may also help the Chinese company in overseas markets, Tseng said. The maker of ThinkPad laptops, which gets 48 percent of its revenue at home, isn't even among the top five sellers in the United States, according to estimates at Gartner.
Acquiring the HP unit would help Samsung, the world's largest maker of memory chips, televisions and displays, extend its lead as the biggest electronics manufacturer by revenue. Suwon, South Korea-based Samsung aims to raise laptop computer sales by 80 percent this year as it rolls out new high-end models, the company said in February.
Not everyone expects Samsung to be in the mix. Mark Newman, a Hong Kong-based analyst at Sanford C. Bernstein & Co, said Samsung may rather be interested in HP's WebOS than the PC business as the Korean company competes against Apple Inc in smartphones and tablets.
"They're definitely interested in PC, but there's little to gain from buying a PC hardware business," Newman said. "WebOS would be a good asset for them to own if they could."
Google Inc, maker of the Android operating system, disclosed this week it agreed to buy Motorola Mobility Holdings Inc for US$12.5 billion as it seeks to forestall patent litigation and compete with Apple in the smartphone market.
Foxconn Technology Group, which makes PCs for HP, and Acer may be also interested in the HP unit, Ovum's Lusher said. Dell is unlikely to be keen because the company, like HP, aims to reduce its reliance in PCs and focus more on software, services and cloud computing, Tseng said.
Lenovo, the Chinese company that bought International Business Machines Corp's PC business in 2005, would be a leading candidate, analysts at technology research firms Ovum Ltd and IDC said. Samsung may also be interested because the purchase may complement its geographic and product mix, said Carter Lusher, a researcher at Ovum.
HP said last Thursday it may shed the unit as Chief Executive Officer Leo Apotheker plans to overhaul the 72-year-old company to focus more on software and enterprise customers. Credit Suisse Group AG estimates the division may be worth US$12 billion, which may make a sale the PC industry's biggest since HP bought Compaq Computer Corp in 2002, according to Bloomberg News data.
"The PC business is still going to be a huge business with great opportunities for a company that can manage it correctly," Lusher said. "The tablets are hot new flavors, but remember hundreds of millions of PCs are sold every year."
The Palo Alto, California-based company said yesterday it plans to separate its PC division within 18 months, discontinue making products that run WebOS software and purchase software maker Autonomy Corp for US$10.3 billion. Dell Inc, the second-largest PC maker, also is focusing more on services, though PCs still make up about half its sales.
Samsung and Lenovo may pursue a purchase "to establish themselves as worldwide leaders," IDC said in a report last Friday. "Both companies have aggressive growth plans and, if executed, would instantly reset the entire PC world."
For Lenovo, the world's third-largest PC vendor, buying the HP unit would help the company more than double its share of global sales and vault past Dell, the No. 2 producer. A purchase may also help the company benefit from the lower costs associated with economies of scale, said Steven Tseng, a Hong Kong-based analyst with Samsung Securities Co.
Share may surge
"In a mature business, volume is everything," Tseng said. "From Lenovo's perspective then, why not buy the brand and expand market share? If they were to acquire HP, the difference with other competitors would become huge."
Based on second-quarter shipments estimates by research firm Gartner Inc, Lenovo's market share would surge to 30 percent from 12 percent. That's more than double the 13 percent share held by No. 2 producer Dell and No. 4 Acer's 11 percent.
A purchase may also help the Chinese company in overseas markets, Tseng said. The maker of ThinkPad laptops, which gets 48 percent of its revenue at home, isn't even among the top five sellers in the United States, according to estimates at Gartner.
Acquiring the HP unit would help Samsung, the world's largest maker of memory chips, televisions and displays, extend its lead as the biggest electronics manufacturer by revenue. Suwon, South Korea-based Samsung aims to raise laptop computer sales by 80 percent this year as it rolls out new high-end models, the company said in February.
Not everyone expects Samsung to be in the mix. Mark Newman, a Hong Kong-based analyst at Sanford C. Bernstein & Co, said Samsung may rather be interested in HP's WebOS than the PC business as the Korean company competes against Apple Inc in smartphones and tablets.
"They're definitely interested in PC, but there's little to gain from buying a PC hardware business," Newman said. "WebOS would be a good asset for them to own if they could."
Google Inc, maker of the Android operating system, disclosed this week it agreed to buy Motorola Mobility Holdings Inc for US$12.5 billion as it seeks to forestall patent litigation and compete with Apple in the smartphone market.
Foxconn Technology Group, which makes PCs for HP, and Acer may be also interested in the HP unit, Ovum's Lusher said. Dell is unlikely to be keen because the company, like HP, aims to reduce its reliance in PCs and focus more on software, services and cloud computing, Tseng said.
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