HP: Hurd takes the axe to groups merger

Five months after merging its PC business with its imaging and printing group, HP has split them up again and appointed R Todd Bradley, former chief executive of PalmOne, as the new leader of its personal systems group.

Bradley, 46, had been CEO of handheld-computer maker PalmOne until February and was widely credited for turning around the company's supply-chain woes earlier this decade. Before that, he was a top operations executive for PC maker Gateway.

The move is the most dramatic change initiated so far by HP's new CEO, Mark Hurd, who took the reins in March. His predecessor, Carly Fiorina, merged the PC and printer groups in January but was ousted in February.

Vyomesh Joshi will resume his previous role as executive vice president of the imaging and printing group, HP said. Bradley is also an executive vice president.

The split makes sense for an operations-focused executive such as Hurd, said Forrester analyst Ted Schadler.

"If you look at the printing business and the PC business, they could hardly be more different," he said. "If you're going to execute [a business plan], you have to have business groups that have an identified customer with a single product and a consistent go-to-market strategy."

HP itself didn't detail its rationale. A company spokesman said: "It's all about streamlining the business from a management and organisational standpoint, and allowing VJ and Todd to double down their focus." The two groups "share a lot of commonalities" but HP wants to "remove as much complexity out of the organisations as we can".

HP's personal systems group, which sells PCs and handhelds, reported a revenue increase from $6bn to $6.4bn for its most recent quarter, with operating profit increasing from $44m to $147m. However, in recent years the group has lost share to Dell, now the top PC seller.

Wall Street analysts have called for HP to spin off parts of its business - perhaps computers or printers - and that's an area where Bradley has experience. Bradley ran Palm's hardware division as the company was split into PalmOne to sell hardware and PalmSource to sell software.

But Forrester's Schadler doesn't see Bradley's appointment as an indication Hurd plans to split off the PC business, as IBM did by selling its PC group to Lenovo.

"Having them as an autonomous business unit makes it easier to spin off but I would not expect Hurd is making that decision through this appointment," Schadler said. "This is purely, 'how do you operate the business more efficiently?'"

Despite the upper-management changes, the company's product lines are expected to stay the same, at least for the remainder of the year, according to IDC analyst Roger Kay.

Stephen Shankland writes for CNET News.com