Report: Dell, HP held merger talks with EMC as PC hardware makers scramble to get out

Hewlett-Packard's $89.99 Mesquite Android tablet with Intel chip
Credit: Hewlett-Packard

With more and more computing hardware moving into the tablet and smartphone spaces, old giants like Dell, EMC, and Hewlett-Packard are exploring merger talks, according to a report.

The Wall Street Journal reported Sunday night that EMC had called off a year-long round of talk that would have merged the company with Hewlett-Packard, according to the report. Dell also reportedly held limited talks with EMC, possibly about taking over a portion of the business.

Since the talks broke off, there's no indication that the established PC landscape is going to be rewritten anytime soon. Combining EMC and HP would have created a company with a market value of about $130 billion, the Journal reported, combining enterprise storage with HP's PC and printer business.

But with companies like IBM long abandoning their PC hardware businesses in favor of software and services, old-guard enterprise hardware companies are apparently looking to escape the business. IBM, for example, recently signed a deal with Apple for custom iPads, combined with IBM's enterprise services. Joe Tucci, EMC's chief executive, has said that he will step down next year.

In the second quarter of 2014, Hewlett-Packard topped the list of U.S. PC vendors, with 27.3 percent of the market. Dell was next, with 25.7 percent, according to IDC. But in the worldwide market, both of them trail Lenovo, with 19.6 percent of the market. (HP is second, with 18.3 percent share, and Dell is third with 14.0 percent.) Dell went private in 2013, and HP tried, then aborted, a PC business spinoff in 2011.

It's a lousy time to make PCs. Expect more of the same in the future.

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