Industry watchers and analysts strongly believe HP's decision to split into two companies as is good for the growing consumer-tech market, Tech Times reported.
Earlier this month, the company announced that HP and Hewlett-Packard will become two separate entities. The former will handle the consumer-based computer and printer products while the latter will oversee the corporate hardware and service operations, according to Fox Business.
The business deal is expected to be finalized in October of next year. For CEO Meg Whitman, the decision to form two separate companies will allow both HP and Hewlett-Packard to cater to the needs of the industry from different directions.
"In short, by transitioning now from one HP to two new companies, created out of our successful turnaround efforts, we will be in an even better position to compete in the market, support our customers and partners, and deliver maximum value to our shareholders," she said.
Like Whitman, Ralph Whitworth, the founder of Relational Investors, believes the decision will enable both companies to adapt to the fast-paced market.
"HP's board and management have made a brilliant, value-enhancing move at the perfect time in the turnaround," he said.
"The new companies will be better-positioned to address today's light-speed market dynamics and customer needs, and with distinct and compelling financial profiles and strong leadership teams, accelerate growth and shareholder value creation," Whitworth added.
Aside from its operational advantages, the break-up of the company will also benefit shareholders, according to Whitworth.
"Shareholders will now be able to invest in the respective asset groups without the fear of cross-subsidies and inefficiencies that invariably plague large business conglomerates," he said.
For Steven Milunovich, an analyst for UBS, streamlining the business operations of the two companies will help maintain the focus of HP and Hewlett-Packard, Reuters reported.
"We like the spin and believe it could create additional value over time," he explained. "In our view, focus is more important than synergies, and it is hard to be good at both consumer and enterprise computing."
