14 June 2005 Technology giant Hewlett-Packard has unveiled astonishing plans to separate its PC unit from its image and printer division a mere five months after deciding to merge the two.

The decision marks a stunning volte-face , reversing one of the final decisions made by HP’s previous CEO Carly Fiorina.

HP has appointed former PalmOne CEO Todd Bradley to head up a newly formed personal services group (PSG) which will include PCs, handhelds and monitors, as well as associated support services.

“By managing PSG and IPG (image and printing group) as separate, highly focused organisations, we can further sharpen our competitiveness and improve our cost structures,” said Mark Hurd, who is now CEO of HP.

HP has struggled in the fiercely competitive PC business in recent years, losing market share to rivals such as Dell.

But its overall financial performance has been ballasted by its printer division, which is responsible for much of its profits.

This disparity in performance has led to some market watchers suggesting that one or other of the divisions should be sold off. By merging the two divisions Fiorina had hoped to reinvigorate HP’s business, while dampening talk of spin offs.

The decision by new CEO Hurd to reverse that decision may reignite speculation of a sell off, however the hiring of Bradley suggests that HP is not looking to offload its PC business.

Bradley will join HP’s executive council as its 10th member.

Story by Kaia Hødnebø