H-P Unites Units

Updated from 1:33 p.m. EST Hewlett-Packard(HPQ Quote) shook up its internal structure Friday by placing its personal computer systems group under the management and oversight of its dominant imaging and printing unit.

Duane Zitzner, 57, head of the personal systems group, announced his retirment, and Vyomesh Joshi, 50, executive vice president of the imaging and printing unit, will lead the combined division.

H-P said the combination of its two consumer units will help it "accelerate profitable growth, leverage the power of its portfolio and strengthen its market position."

H-P shares were essentially unchanged on the announcement, down 6 cents to $19.89.

"I think it makes sense given that companies in the consumer space are defined by how lean and mean they are," said tech consultant and analyst Rob Enderle, principal of the Enderle Group. "By taking executive leadership that has shown they can compete and by putting them in charge of the PC division, there's a belief that they can apply their magic there."

The imaging and printing unit accounted for $24.2 billion of H-P's sales in 2004, or 30% of its total revenue. In profit, however, the unit earned $3.85 billion, or 73% of H-P's total earnings. The group sells printers, imaging, projectors and digital cameras.

The personal systems group logged similar sales of $24.6 billion but it only posted a profit of $210 million, 3.9% of the company's overall earnings. The group sells desktop and notebook PCs, handheld products, personal storage appliances and workstations.

The combined unit will account for around 60% of its total sales base. H-P's other main unit is the technology products group, which holds the software, services, and enterprise storage and server segments. It posted earnings of $1.29 billion on sales of $29.9 billion in 2004.