HP to Split Handhelds, Notebooks

With an eye toward potential explosive growth in the smartphone market, Hewlett-Packard today created a separate unit for its iPaq handheld.

The move splits handhelds from the computer maker’s laptop operations so that HP can focus on the converged device market experts say is growing at more than 60 percent a year.

The new handheld unit will be led by Dave Rothschild, formerly of Sun Microsystems’ consumer and mobile systems unit.

The announcement increases the focus on the iPaq, according to spokesperson Elizabeth Gillian.

“By separating handhelds, HP will improve its ability to capitalize on its strategy for growth in both the notebook computing and handheld markets,” Gillian said in a statement.

The move will result in four units under HP’s personal systems group: handhelds, laptops, desktop computers and workstations.

The action provides each unit with greater control while also continuing efforts at streamlining the company, “including splitting certain functions that had previously been combined,” according to the press release.

HP CEO Mark Hurd triggered a similar unit split last year, separating the company’s PC and printer business.

Researchers reported the smartphone market grew 70 percent in 2005, with “robust” increases expected for the next several years.

Compared to the RIM Blackberry and Palm Treo, the iPaq is known more as a PDA and “is barely on the radar” as a smartphone, according to In-Stat researcher Bill Hughes.

Windows Mobile, which powers the iPaq, has gained smartphone market share over previous leaders.

Promoting the iPaq to its own business unit may combat consumers who lump smartphones in with HP’s other products. This will prevent handhelds being viewed as simply “little computers,” according to Michael Gartenberg of JupiterResearch*.

In a nod to the importance of its iPaq and a growing push to unseat beleaguered RIM, HP unveiled its hw6900 series iPAQ Mobile Messenger. Along with a keyboard for thumb-typing, the hw6900 sports Microsoft Mobile 5.0, featuring push e-mail.

The handheld does an end-run around RIM by offering users messages routed through the Microsoft Exchange Server.

The hw6900 series supports Skype Mobile software, as well as Wi-Fi and Bluetooth. The handset will be available in Europe, Asia and Africa this spring and then North America this summer.