Hewlett-Packard confirmed that the company will split into two independent companies: Hewlett-Packard Enterprise which will focus on providing various services, and HP Inc. which will mainly continue the current PC manufacturing business. In a nutshell, the company splits into a software-based (or service-based) company and a hardware-based company, and I am not surprised by the split. The hardware-based business or the PC manufacturing business around the world has been losing market because of the impact from smart phones and tablets, and the profit of the PC business is very marginal, therefore, Hewlett-Packard has been considering to sell their PC business as IBM did many years ago. The split will enable Hewlett-Packard to focus more on enterprise level, more prolific, SaaS (Software as a Service) businesses, while keeping the door open to sell the PC manufacturing business in the future if they can find a buyer. The stock market’s positive response to the HP split shows that their decision is welcome by investors.
Another big news in this week is that RedBox decided to shut down their newly launched video streaming service. The RedBox DVD rental service is an unique business model, but with more people turning to video streaming, it is understandable that RedBox tried to get a hold of the streaming business. Unfortunately, the competition is too high and the result since its launch didn’t meet the expectation, and now it is forced to shut down. It appears to me that the streaming service market is already full, and with companies such as Netflix, Amazon, Google Play, Hulu, and Vudu dominating the market, it is extremely difficult to enter this market at this point unless you can provide unique service.