Samsung doesn't want HP's PCs, raising a red flag

The second-strongest mobile company passes on HP's PC business and makes you wonder if any innovator would want it

A week after Hewlett-Packard shocked everyone by declaring HP was looking to sell or spin off its PC business, speculation has mounted as to who might want it. Samsung has come out and bluntly said it has zero interest in HP's PC business.

In a remarkable "we're serious" move, Samsung took the initiative to email the following statement from CEO Geosung Choi to reporters so there'd be no misunderstanding:

To put to rest any speculation on this issue, I would like to definitively state that Samsung Electronics will not acquire Hewlett-Packard's PC business. Hewlett-Packard is the global leader in the PC business, with sales of 40 million units last year, while Samsung is an emerging player in the category and sold about 10 million units in 2010. Based on the significant disparity in scale with Samsung's own PC business and the complete lack of synergies, it would be both infeasible and imprudent to even consider such an acquisition.

What made Samsung an intriguing possibility is the very fact that it is not a usual suspect in the PC business. In its forays into mobile, it's shown some daring and fresh thinking with its Galaxy S line of Android smartphones, its Bada mobile OS, its Android-based Galaxy Tab 10.1, and its experimentation with Chromebooks. Samsung has been in the cellphone market for some time, so selling smartphones running Android (and Windows Phone) were not big stretches, but its ability to expand beyond those successfully gives hope it could do something with the boring PC business, too.

I don't want to overstate Samsung's prowess. It leaves the heavy lifting mainly to Google and Microsoft, like most consumer electronics manufacturers -- what the industry calls OEMs, or original equipment manufacturers: Acer, HTC, ZTE, and so on. And there's that pesky fight with Apple over Apple's claims that Samsung has copied its product designs. But in that sea of sameness, Samsung has managed to get a strong, emotional following while pushing a little at the edge of the envelope. That's enough for PCs.

Samsung could have tried its hand at reinvigorating the PC business by buying it from HP. And I don't quite believe all of Samsung's "it's too big" rationale. After all, the same people who make HP's PCs could make them for Samsung. Plus, outsourcing the manufacturing doesn't mean the quality need be mediocre -- Apple outsources the manufacturing of its premium Macs, iPhones, iPods, and iPads. Still, it would be a big bet for Samsung, which may have simply concluded that the future is mobile, and that's where it's going to remain focused.

That leaves the usual suspects, Lenovo and Acer, as possible acquirers of HP's PC business. They rank third and fourth globally in PC sales, and their products are on par with HP's. It would not be a stretch for one or both of them to absorb HP's outsourcers into the fold while tapping into HP's North American distribution channels -- where both are largely absent. Dell has made some noise about how it would clean up if HP faded, but Dell itself has been shifting quietly away from consumer PCs and has hurt its reputation among business customers. I doubt that gloating will amount to anything.

Or maybe no one will want HP's PC arm, seeing it as a legacy business not worth investing in. After all, HP CEO Léo Apotheker and his board of directors loudly came to that conclusion. It was quite telling that once HP dropped that bomb, Wall Street financial analysts thought HP could get just $10 billion for its PC business, which is less than it has offered to buy search vendor Autonomy, whose current market is smaller.

Samsung could just be saying publicly what the industry as a whole believes: HP's PC business should die along with the established PC market, either through a spinoff that fades away or by staying within HP where it can fade away just as easily.

Oh well. The Samsung speculation was an interesting possibility.

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