Is It Time for Hewlett-Packard to Go Back to the Garage?

Hewlett-Packard came to life in a garage in 1939, about 20 years before the arrival of silicon-based semiconductors and long before beginning a company in a garage was a cliché. While plenty of electronics startups already existed in what would become Silicon Valley, HP hit it big first. William Hewlett and David Packard’s garage stands as the Valley’s symbolic birthplace, and for decades their company was an icon of stability in an industry ruled by booms and busts.

Under Léo Apotheker, who arrived as the new CEO late last year, it’s been quite the opposite: While much of the tech sector thrives, HP has appeared chaotic and confused. Apotheker has lowered sales forecasts for three consecutive quarters. Dozens of top executives have departed. And in March he vowed to double down on webOS, the mobile operating system HP acquired when it bought Palm in early 2010, only to soon reverse his decision. On Aug. 18, Apotheker announced that HP will explore the sale of its $41 billion PC business and pull its Palm smartphones and tablets from stores. HP will essentially quit the consumer market to focus on business software. Its stock plummeted more than 20 percent on the news. Analysts are wondering aloud how much time the CEO has left, and the measured Toni Sacconaghi of Sanford C. Bernstein recently wrote that a leadership shakeup “would likely serve as a catalyst for the stock.” Apotheker declined to comment.