HP announced that the world number one PC maker HP will stay in the business.
"HP objectively evaluated the strategic, financial and operational impact of spinning off PSG," said HP president Meg Witman the firm’s former plans to dispose of the low-margin hardware division.
"It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees," said Witman, adding that the firm is "committed" to the PSG division.
Combined with moves to kill off the newly launched WebOS, the decision to spin off the PSG division resulted an avalanche of criticism from analysts and investor concern that wiped $40 billion off HP’s market value.
The HP board moved to replace Leo Apotheker, in the job just 11 months, with ex-Ebay executive Meg Witman whose first job would be to decide upon the fate of HP’s hardware business.
As rivals such as new world number two Lenovo made hay of HP’s lack of commitment to the PC market, Witman showed understanding that uncertainty would do little but weaken then brand and promised a decision would be made quickly.
Announcing the U-turn, HP said in a release that the strategic review had "revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement."
The company also appeared to notice for the first time that the company’s massive hardware business contributed to the firm’s "brand value"
PSG group boss Todd Bradley said: "We intend to make the leading PC business in the world even better."