HP to keep PC business but will probably sell off WebOS

HP will not be selling its PC businessthe company announced at the end of last month.

Its new chief executive Meg Whitman, decided to overturn the decision to sell of the computer manufacturing division made earlier this year by her predecessor Leo Apotheker.

At the time he said he wanted the company to concentrate on software and cloud computing services. The company subsequently acquired UK software company Autonomy. However, with HP having around 17.7 per cent share of the global market for PCs, shareholders were not happy with Mr Apotheker's plans and the company's shares plummeted.

In a statement, Ms Whitman who took up her role in September said she had reviewed the earlier decision and came to the conclusion that "Keeping PSG within HP is right. HP objectively evaluated the strategic, financial and operational impact of spinning off PSG.HP is committed to PSG, and together we are stronger.

HP also announced that it would be bringing out a tablet using Microsoft's forthcoming Windows 8 operating system. It is not clear however if the company will continue with its WebOS division and it is  believed that HP will sell of this loss-making division.

However the announcement that the company is keeping its PC division has been applauded by analysts.

Mark Fabbi, Gartner analyst said: "The quick decisive response to the PSG issues was a good first move by Meg. Keeping PSG was the most pragmatic decision given the alternatives that would all cost HP money, not improve their balance sheet, which has to be a focus for Meg over the short term.

"The challenge will be to continue to drive cash flow as the PC market is pressured by the continued interest in mobile devices such as tables and smart phones.