5 Chinese Hardware Makers That Would Love to Buy HP’s PC Business

There have been some shock announcements coming out of HP headquarters after its Q2 2011 earnings call. Aside from the supposed abandonment of its newly-acquired mobile and tablet software platform, WebOS, it seems that HP might also exit the not-exactly-thriving consumer PC business. And that’d be great news for some Chinese and Taiwanese PC makers.

With word that HP is likely looking to spin-off and sell-off its PC division, it’s inevitable we think of who might profit from HP’s apparent shift in strategy, away from the reported seven percent profit margins of the PC industry to the healthier cuts to be made from enterprise solutions.

Chinese and Taiwanese companies will be key among them, eyeing a buy-out of the world’s biggest PC maker, which last quarter shipped 9.7 million computers to take a 15 percent global share.

We’ve been here before, of course. In late 2004 the Chinese firm Lenovo, then little-known in the wider world, bought IBM’s PC group for US$1.75 billion. At the time, IBM was the world’s third-largest PC vendor, with a 5.3 percent market share. Since then it has slipped down to be the fifth-biggest, but with a 7.5 percent cut. So it has become more dominant despite selling fewer units. It’s a telling tale of how new hardware makers have cropped up, selling budget machines such as netbooks, undercutting some more ‘premium’ brands such as HP, Dell, and Lenovo. That’s why Acer has vaulted over Lenovo in the past two years.

The buy-out, nonetheless, helped Lenovo to rebrand – it anglicised its moniker from ‘Lian Xiang,’ which remains as its Chinese name – and gave it an immediate space on global retailer’s shelves. Lenovo still makes IBM’s signature ThinkPad brand, and did not perceptibly disturb consumers in the way the American brand suddenly turned Chinese.

So, with IBM-Lenovo as a working model, who might be up for grabbing HP’s PC division? Here are five feisty candidates:

Foxconn

If Foxconn fancied taking its integration vertical, then HP would be a great buy. The Taiwanese OEM manufactures parts for numerous major brands, such as Apple, Dell, Nintendo, and HP itself.

Foxconn has in recent years even been experimenting with retailing, as a literal store-front for the many brands it manufactures for. All that’s missing is a brand of its own.

Lenovo

Are we really in the post-PC era, where desktop and laptop computers are encumbrances, not desirable gadgets? Could some households forego a PC completely, and instead enjoy his’n’hers tablets? If that’s not the case – as Mashable recently affirmed – then Lenovo might like to make itself into the world’s largest PC producer by acquiring HP’s segment. Looking at the most recent Q2 figures, it’s clear to see that Lenovo’s 4.8 million units plus HP’s 9.7m equates to 14.5m computers as a HP-Lenovo mega corp – outselling Dell (7.5m) and even all of Apple’s Macs and iPads to be the planet’s biggest.

True, Lenovo doesn’t really need HP’s brand or know-how, unlike the four other Chinese/Taiwanese contenders, but being the biggest computer hardware maker in the world is suddenly quite easily within its grasp.

Great Wall