Quote:
Originally Posted by =X=
Software is expensive to write and maintain, the cost might not be in the final product but the cost of maintaining quality developers is not cheap. A PC chip cost a penny to make yet they sell for several hundred, a pbook cost $1-$2 to make yet sells for $20-$25. Because the cost is not so much in the material but the overhead. Software is no different.
You give HP's too much credit. If there was any truth to what you said about HP's PC business he would still be HPs CEO. Instead what he was proposing was to sell one of HPs most lucrative businesses, sure it's not as profitable as the printer business, but it's still a $100B business. Not as profitable as it once was but still very profitable.
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Not correct. PSG does not generate big profit. Big volumes and sales are different. Biggest profit business ot one of those is IPG, which ironically, is not a strong area now .
Leo is gone because that was horrible decision plus was doing a bad job anyway, even before. Can't give you details, but basically the supply change PSG provides surpasses any low profit margin or even loss. Think about it as a commodity, the Ace to win the hand when ordering parts, like screens or chips.
And you are not correct about software business. The initial R&N could be high, but the ROI is bigger. It is more expensive to maintain a production manufacturing line than a pool of developers.
You need to revise your numbers ot adjust that to a big company.
Careful. I'm not saying the TouchPad was an awesome tablet, but WebOs is not a bad Os like many think. The acquisition made sense but was not properly guided.