Dell鈥檚 hopes of regaining the throne of the world鈥檚 largest maker of personal computers have been dashed, at least temporarily. Hewlett-Packard says it will no longer spin off its $40 billion PC division.
"The decision was actually very straightforward," HP CEO Meg Whitman said, The newspaper says HP realized separating its PC division would have cost about $1.5 billion, much more than initial estimates of $300 million to $400 million.
The news sent HP shares , but the stock is still down over the past year. Dell shares were trading this afternoon.
Round Rock-based Dell, which employs about 16,000 people in Central Texas, had been hoping to capitalize on HP鈥檚 indecision about whether to remain the world鈥檚 largest maker of personal computers.
"Any uncertainty or confusion that exists is an opportunity," Dell CEO Michael Dell said earlier this month in San Fransisco, . 鈥淣o question we've seen significant opportunities from what is going on over there (at HP). Customers think about what is going to happen in a year or two and that erodes their confidence."
Informed observers were also optimistic about the prospects for Dell.
鈥淚f HP sells, this is the best thing that could happen to Dell in the next year, year-and-a-half,鈥� a senior lecturer at the University of Texas McCombs School of Business
But HP still faces significant challenges. says those include a shortage of hard drives caused by flooding in Thailand, and uncertainty over what HP will do with webOS, the mobile operating system it purchased from Palm last year for $1.2 billion.
