Samsung May Buy HP's PC Division, More Awkwardness With Frienemy Apple
According to Digitimes' sources Samsung is looking to purchase Hewlett-Packard's PC Business.
The source claims that Samsung met with HP's top notebook contractor, Quanta Computer, as well Compal Electronics, and Pegatron Technology. The discussion topic? Outsourcing notebook orders.
To most this would signal that Samsung simply wants to enter the notebook business and is looking for manufacturers. However, Digitimes' sources believe this is evidence Samsung wants to purchase HP's PC business which shipped a combined 100 million+ PC's and Laptops last year.
Samsung is already projected to ship about 16 million laptops this year, but as one of the largest producers of PC components including hard drives, LCDS, batteries and memory, could cut costs immensely with vertical integration. Plus Samsung would inherit any patents HP's PC division owns.
Samsung would of course then be a direct competitor to Apple in yet another market. Apple would most likely drop Samsung completely as a component supplier, not just because they're a competitor, but because Samsung would likely horde their produced components for their now massive PC division. This would then of course create problems for Samsung as they would lose a substantial bit of income from Apple and other companies purchasing their components as their factories dedicate to producing for themselves. This in itself presents a problem. If the new PC division of Samsung doesn't sell the products they produce, then Samsung wont see a return on their investment in terms of vertical integration. Samsung will need to take whatever they purchase, chop it off at the knees, and reinvent the currently bloated HP brand.
While Samsung has the money, market share, and perhaps know-how to pull off this deal, it may be in their best interest to stay far far away from HP's barely profitable PC division. On the other hand, if they reinvent the HP PC division and can effectively produce products that compete with Apple, and other manufacturers, they could gain market share and become an even larger player in the mobile computing world. But, they might in the process sacrifice their stance as one of the largest component suppliers, not because there isn't the demand or they lack the capacity, but because of a perceived conflict of interest.