1 Hewlett-Packard to split into two businesses (Wendy Lee in San Francisco Chronicle) Hewlett-Packard, one of the Bay Area’s oldest, most venerable tech firms, is splitting up. The Palo Alto company plans to separate into two businesses — one that sells PCs and printers and another that sells products such as data center hardware and services for corporations, a person familiar with the matter, onfirmed. HP is expected to make a formal announcement soon.
The move comes as legacy tech companies are being forced to spin off segments of their businesses to better compete with global rivals. HP is probably making a decision to simplify its operation and focus on the aspects it does best, analysts said. “For a corporation to survive, it has to constantly change, and if it doesn’t change, it becomes obsolete,” said Rob Enderle with advisory services firm Enderle Group. “These firms are restructuring in what is a new reality, a reality that didn’t exist a few years ago.”
HP sells a wide range of products, from PCs to servers. By being so broad in its focus, HP blocked itself from partnering with other companies because they have so many competitors, Enderle said. Rivals to HP include Cisco Systems and Lenovo. Other pressures facing the company include higher demand for smartphones and lower demand for PCs. HP’s printer business also has not been as profitable as in the past. The company declined to comment.
By splitting into two companies, HP is essentially moving half of its sales into a separate business. The company’s printing and personal systems group, which includes sales of products such as PCs and printers, generated roughly half of the company’s sales in fiscal 2013 at $55.9 billion. Last week, eBay said its electronics payments division PayPal would become an independent company. In 2013, PayPal made $6.6 billion in sales. IBM also has separated aspects of its business, selling its PC division and x86 server business to Lenovo.
2 German forecast cut to 1.5% (The Guardian) The IMF will cut its estimates for German economic growth in 2014 and 2015 to about 1.5 % for each year because of the crises in Ukraine and the Middle East, the weekly German magazine Der Spiegel has said. The IMF, which is due to publish the forecasts on Tuesday, predicted in July that Europe’s largest economy would expand by 1.9 % this year and by 1.7% next year.
Der Spiegel said the IMF would also call on the German government to do more to boost public and private investment because this would help to prop up growth in the short term and bring benefits for the country in the medium term.
Europe’s largest economy had a strong start to the year but shrank by 0.2 % in the second quarter and some economists have warned of the risk that it was in recession between July and September, especially as business and investor sentiment has weakened.
3 South Africans and life in kingdoms (Johannesburg Times) More than 20 million South Africans live in areas that have kings or traditional leaders, who are a link to their ancestors. But there is growing disenchantment over their taxpayer-funded lifestyles and alleged abuses of power. Traffic stops in Nongoma as South African Zulu King Goodwill Zwelithini passes through his bustling capital in a Mercedes-Benz. The 66-year-old is the most influential among South Africa’s 11 regional monarchs. Photographs of him, clad in leopard skins, adorn local tourism offices.
While kings and chiefs are revered by some, there is also growing discontent as they are seen as living well at taxpayers’ expense, and plans to reinforce their powers have been criticized. The country’s 10 kings and one queen get an annual salary of 1.3 million rand ($116,000) each from the state. In addition, Zwelithini gets more than 50 million rand from his province for the upkeep of his seven palaces, six wives and 28 children.
Other monarchs, who come from less powerful dynasties, get benefits such as vehicles or mobile phone allowances. Zwelithini, a figurehead leader for South Africa’s largest ethnic group of 11 million people, presides over the annual opening of the provincial parliament.
Those in favour of the kings say their spending is modest compared to that of European royalty. The state also pays the salaries of 829 senior traditional leaders -often called chiefs in English – wielding power over smaller groups, and, of 7,399 headmen or headwomen helping to run one or several villages. More than 20 million of South Africa’s population of 53 million live in areas that have kings or other traditional leaders.
Critics of traditional leaders also say some of them were given their posts for collaborating with the 1948-94 Apartheid regime, and that they stand for patriarchal values, allowing women to be represented by male relatives in court or when acquiring land. President Jacob Zuma, a Zulu traditionalist with four wives, has strongly backed traditional leadership.