HP merges PC and printer groups

HP is combining its imaging and printing group (IPG) and the personal systems group (PSG). According to a memo sent to all employees, the company´s IPG Executive VP, Vyomesh Joshi will lead this new group. The memo further says that, "Under his leadership, this new organization will drive profitable growth, leverage the power of the combined portfolio, and strengthen and unify our capabilities to beat our competition."

The move has been triggered by the need for better profitable conditions for its personal computer unit, following patchy results during the past few quarters. It was further disclosed that the profit margins in the PC business came down to less than 1% of total sales. 

On the financial front, while IPG and PSG businesses had about $24 billion in revenue in fiscal 2004, the printer unit made just $3.85 billion in profit as compared to $210 million profit booked by the PC business. Experts suggest that HP´s printer group is undoubtedly its most-profitable unit, with a margin of 16% in fiscal 2004 ended October 31. 

Coming to the rankings, the company, which lost its number one position in the PC business in 2003 today stands at second position behind Dell. Vyomesh has a tough task at hand to steer growth of PCs. He has been instrumental in hiking the earnings at the company´s printer unit in the past three years and is likely to continue operating from his existing base in the US. 

Hailing from Ahmedabad, Vyomesh has been on the upswing at HP since the late 1990s. He last visited India in December 2002 and held talks with major customers and the channel community as well. "Vyomesh is one of the most highly regarded managers I have come across with. His clear understanding of complex things has taken him to this position and we are proud of him. I am sure that under his leadership, our PC business will touch greater heights," informed a senior HP India official on conditions of anonymity. 

With IBM selling its PC business to Chinese PC maker Lenovo, it is time for many a global re-arrangement in the PC business sector. For HP, combining the PC and printer businesses is likely to yield considerable cost savings from the shared overhead, as well as drive Vyomesh to offer PCs and printers as he sells to consumers and business customers as well. Interestingly, the company´s PC unit head, 57-year old Duane Zitzner has also retired from the company after serving for nearly 15 years. 

ZIA ASKARI

NEW DELHI