Hewlett-Packard Turns Up Handheld Heat

The company breaks the hot gadgets into their own division.
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Handheld computers have been elevated to a more prominent position at tech giant Hewlett-Packard (HPQ) - Get Report, with the company announcing Monday that it is breaking its handheld business into its own division.

The change signals the growing importance of mobile electronic gadgets in the tech industry, as well as H-P's plan to find new ways to grow under a turnaround strategy engineered by CEO Mark Hurd.

Until now, handhelds, along with notebook PCs, were part of the mobility business unit within H-P's Personal Systems Group. Handhelds will remain within the PSG group but will now be one of four main product units in the division. The other three are notebook computing, desktops and workstations.

By making handhelds a separate unit, the division will have greater financial and operational control of the business. H-P believes this will improve its ability to capitalize on its growth strategy in both the handheld and notebook computing markets.

"The converged device market is growing at more than 60% a year," Todd Bradley, executive vice president of H-P's PSG group, said in a statement. "This realignment positions the handheld team to more clearly focus on navigating this fast-paced market while PSG continues to accelerate its trend of profitable growth."

H-P has tapped Dave Rothschild, a former

Sun Microsystems

(SUNW) - Get Report

executive, to lead the handheld division. Ted Clark will continue to lead the notebook PC division.

The move comes as H-P is seeking to offset a maturing PC market. The company has spoken about layering software applications onto its installed base of PCs to generate new revenue. Mobile platforms are at the heart of this strategy, with consumers using their notebooks and smart-phones to access new online entertainment services.

H-P reports its fiscal first quarter financial results on Wednesday. Analysts polled by Thomson First Call expect the company to earn 44 cents a share on revenue of $22.5 billion.

Shares of H-P were off 23 cents, or 0.7%, to $31.28 in Monday trading.