HP PC DivisionIn her first major announcement since taking over the role as CEO for Hewlett-Packard, Meg Whitman announced that Hewlett-Packard (HPQ) has indeed decided to continue its PC business, following months of speculation that it would decide to spin-off the business.

The idea to spinoff the PC division was first proposed in August by former CEO Leo Apotheker as part of a sweeping overhaul he was trying to do to the company. This was one of the last proposals he made before being ousted from his position.

The decision to review the company’s PC business came as a result of a massive shift by consumers towards smartphones and tablet computers. HP launched its own high-profile tablet, th TouchPad, but it decided to discontinue the tablet just two months after its launch, doing a $99 fire sale on the tablets that techies gobbled up as fast as they could. HP said it would make one more round of TouchPads, some have estimated around 200,000 tablets, to try to make up for some of the high demand it saw during the $99 sale, but even the 200,000 additional units will not be able to keep up with the demand, and they too will probably sell out in a day or two.

HP is still the world’s largest PC seller, but revenues have been trending lower. During the quarter that ended in July, the company had PC sales of $9.59 billion, down from $9.92 billion during the same period last year. Despite this, HP feels as though it is still a very important part of the company and worth trying to save.

The decision to keep the company’s PC business is probably the best decision for the company. The PC business may be shrinking, but that does not mean that HP should abandon it. As Whitman stated, the goal is not to transform HP, but instead to take its incredible assets, and make them greater.

Whitman assured investors that HP was going to get back into the tablet business, but it is not going to backtrack on its decision to eliminate its WebOS operating system, but instead will focus on tablets running Microsoft’s (MSFT) Windows 8.

Time will tell if HP is able to turn its PC business around, but for now its probably the right decision to at least allow Whitman the opportunity to try.

 

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