NEW DELHI: Hewlett-Packard has announced that it would combine its imaging and printing group (IPG) and the personal systems group (PSG). According to a memo sent to all HP employees, the company's IPG executive vice president Vyomesh Joshi would lead this new group.
The memo further says that, "Under his leadership, this new organization will drive profitable growth, leverage the power of the combined portfolio, and strengthen and unify our capabilities to beat our competition."
According to sources, the move has been triggered by the need for better profitable conditions for its personal computer unit and the patchy results during the past few quarters. Interestingly, the company's PC unit head, the 57-year old Duane Zitzner has also retired from the company after serving for nearly 15 years.
Sources further disclosed that with the profit margins in the PC business coming down to less than one percent of sales, Joshi has at hand a tough task to steer growth. Joshi has been the driving force behind HP's accelerated earnings at the company's printer unit in the past three years. Joshi is likely to continue operating from his existing base in the US.
The company which lost its #1 position in the PC business in 2003 today stands at #2 behind Dell. On the financials front, while IPG and PSG businesses had about $24 billion in revenue in fiscal 2004, the printer unit made $3.85 billion in profit as compared to $210 million profit booked by the PC business. Experts suggest that HP's printer group is undoubtedly its most-profitable unit, with a margin of 16 percent in fiscal 2004 ended October 31.
Joshi, a native of Ahmedabad, has been on the upswing at HP since the late 1990s. It may be recalled that Joshi last visited India in the month of December 2002 and had held talks with major customers and the channel community as well.
"Vyomesh Joshi is one of the most highly regarded managers that I have come across with. He is a visionary and an outstanding professional. His clear understanding of complex things has taken him up to this position and we are proud of him. I am sure that under his leadership, our PC business will touch greater heights," informed a senior HP India official on conditions of anonymity.
With IBM selling its PC business to Chinese PC maker Lenovo, it is time for many a global re-arrangement in the PC business sector. For HP, combining the PC and printer businesses is likely to yield considerable cost savings from shared overhead, as well as drive Joshi to offer PCs and printers as he sells to consumers and business customers as well.