Hewlett Packard shares dropped by nearly 21 per cent on Friday alone after the company announced that it was mulling plans to exit the PC market altogether; that alone might explain why HP's market capitalisation now stands at just under $49 billion.
That's just under four times less than Big Blue, a third of Oracle and around 15 per cent of Apple's value. The latter is sitting on cash reserve of more than $76 billion which should be enough to buy HP altogether, an option that doesn't sound as ludicrous as it seems.
There are a number of reasons why HP might become an acquisition target for Apple. First and foremost, HP is cheap but price is not an issue for Apple; It is also unlikely that the Federal Trade Commission would interfere given that both companies have very little in common.
HP could give Apple the necessary infrastructure and expertise to become a major force in the business and enterprise markets with the same ruthlessness that made Apple so feared in the consumer sector (ed : should this happens, Apple might even revive the Xserve brand).
The business ecosystem is where Apple has yet to make any significant inroads and one which will become even more critical for the iPhone and the iPad as the consumer mobile device market becomes saturated.
HP Printers are and still remain one significant revenue earner for HP and are one of the more popular accessories for Macs and iPad (Apple only sells HP printers on its website) and the Imaging and Printing group as a whole makes nearly three times the operating profit compared to the Personal System Group. Apple started selling its own brand printers nearly two decades ago but stopped in the late 1990's; should Jobs decide to acquire HP and revive Apple's printing division, that could be another nice money spinning venture.
Last but not least, there's the patent trove that HP owns. The company sits on more than 37,000 patents (with around 2000 patents from WebOS) and has the fourth most valuable patent portfolio worldwide according to Businessweek stretching from nanotechnology to printer related technologies and everything in between.