Skip to main content

Why would Samsung want HP's PC business?

IBM was the first major US corporation to dump its PC business.

Big Blue, used to looking deep into the future, had no trouble handing its hard-established brand names on to the Chinese. Now Lenovo is the third-biggest maker of PCs in the world, but in a market IBM reckoned only had a few more years' life left in it.

Now HP wants out too. The company's crystal-ball readers and soothsayers gathered in smoky back rooms. They looked at what became of the Compaq brand - the fruit of the mega-merger forced through by winsome, lose-some Carleton Fiorinna, leaving casualities left, right and centre. And they decided. Enough's enough.

Having bought its way to the top of the PC tree, HP found that it was itself rotton at the core. Compaq was borged, infected with the rot and will now be cast off, devoid even of its name. The move has sent bystanders clucking headlessly in circles.

Much of that clucking was tossed in the direction of Seoul. Might mighty Samsung pick up the cast-off?

Samsung is possibly the one non-American company the established corporations are really scared of. Whole cities in Korea are dedicated to churning out Samsung electronics like there's no North.

Through televisons, cars and gadgets, Samsung is a far-eastern brand the western consumer trusts. While Acer's conversion to the branding game is relatively recent, Samsung has been building for years. It may be likened to Sony.

And now Samsung is a leading manufacturer of microprocessors. While manufacturing memory for PCs was a lucrative business - especially if your competitors were your chums - it was a side-line compared to Intel's dominance of the CPU.

But now Samsung - thanks to ARM - is building chips that form the heart of the device that is killing the PC - the smartphone. It even builds the chips powering Apple's over-sized smartphone, the iPad.

There are few manufacturers that build a device from start to finish. HP's claim to be the 'world's largest manufacturer of PCs' is more accurate when expressed as: 'the world's biggest badger of PCs'.

So Samsung can build the complete device, all it has to do is make sure its licensing is in order. This opens up the new battle front, the initial salvos of which have been fired by none other than customer number one, king of the brand game, Apple itself.

In relation to the HP business, Samsung chief executive Choi Gee-sung said: "I would like to definitively state that Samsung Electronics will not acquire Hewlett-Packard's PC Business."

"Based on the significant disparity in scale with Samsung's own PC business and lack of synergies, Samsung is not interested in the acquisition." he said, shooting down persistent market talk the South Korean firm may snap up the unit to become the world's top PC maker.

No, Samsung has bigger fish to fry than to corner a small-margin contracting market.

Acer, mind you, has always wanted to be the world's 'number one PC company". Shame its bank balance could do with a top-up, if it wants to stump up $10-$12 billion or so.