PC move by HP’S EX-CEO was ‘suicidal’

Share of U.S. market declined 26% last quarter

Hand-wringing at Hewlett-packard over possibly shedding its PC unit, combined with growing consumer preferences for tablet computers, served up a double-whammy of damage to HP’S computer business.

The company’s share of the U.S. personal computer market was down 26% last quarter compared with a year ago, according to Gartner.

PC shipments nationwide were down 5.9% in the quarter and 1.4% worldwide, according to technology research firm Gartner. But HP’S steep decline came mostly at its own hand.

The uncertainty spawned by former CEO Leo Apotheker’s decision last year to consider a spinoff or sale of its $41 billion computer business prompted some potential PC buyers to steer clear of the brand or delay major HP equipment purchases.

Apotheker’s decision was a “suicidal” move for HP, says Gartner analyst Mikako Kitagawa.

Dell and Lenovo raided some customers, Kitagawa said. Dell, in particular, edged into HP’S turf in the professional market yet still ended up with a 4.5% drop in its own PC shipments in the U.S. HP did not respond to requests for comment. Under Apotheker, HP announced in August its decision to buy software maker Autonomy for $10.3 billion and plans to separate from its profitable PC business. Questions about the logic behind both moves pummeled HP’S stock.

Then in September, the company booted Apotheker and installed former ebay chief Meg Whitman as CEO. The following month, Whitman did an about-face and kept the PC unit.

For all of 2011, PC shipments climbed just 0.5% for all manufacturers worldwide, following a 14% rise in 2010. But the fourth quarter of 2011 “was pretty bad,” says Kitagawa.

PC makers certainly tried to entice buyers. But even the super-thin ultrabooks, quietly launched over the holidays, did little to juice up the ailing computing market.

Those battery-sipping laptops that ape Apple’s Macbook Air made a big splash at the International Consumer Electronics Show this week. “Apple is on a tear and others are out to copy them, from what CES shows us,” Kitagawa says.

Apple shipments in the fourth quarter grew 20% in the U.S., the top gainer of those tracked by Gartner. HP remained No. 1 in the U.S., followed by Dell, Apple, Toshiba and Acer.