Hewlett-Packard Company (NYSE:HPQ)‘s search for accelerated growth in its core businesses will in the coming weeks see the splitting of the company into two. During an interview on CNBC, Enderle Group President, Robert Enderle, pointed out that the split will involve the separation of the printer and hardware division from the business services that involves software’s and servers.
Enderle believes that the split will allow the two divisions to form alliances with HP’s current competitors, which are client oriented in the cloud as one of the ways of pursuing accelerated growth
“Both sides are generating a lot of cash the printer side actually turns in a substantial amount of cash but it has been going down over time, which has created a problem with regard to trend. The thing that will probably turn the printer division around is that they are coming up with a new 3D printing capabilities over the next year or so, “said Mr. Enderle.
The introduction of 3D printers is expected to revolutionize Hewlett-Packard Company (NYSE:HPQ)’s printing business and should give it a good foothold of the market. The biggest challenge going forward will likely come from the software and server business which has underperformed in the recent past. Increased competition from Google Inc. (NASDAQ:GOOG) and Amazon.com, Inc. (NASDAQ:AMZN) has consistently suppressed profit margins for the software and server business.
Hewlett-Packard Company (NYSE:HPQ) has already made its intention known of changing the way printing is done in the industry with high resolute printers. The printers are believed to be equipped with some of the finest capabilities for advanced printing, according to Mr. Enderle.
“[..] They want a printer that works very much like their paper printer. In other words, they can print high-quality low-cost items so that you can put them at home or in the office, and you wouldn’t have to wait hours for everything to print out. That supposedly what they are bringing out suggest a very advanced printing mechanism something we haven’t seen in the market before, “said Mr. Enderle.
Enderle believes a split will allow the printing and PC business cut deals with International Business Machines Corp. (NYSE:IBM) and Apple Inc. (NASDAQ:AAPL) to achieve further growth.
Ralph V. Whitworth‘s Relational Investors held 27.8 million shares wroth $936.18 million at the end of the second quarter of 2014.
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