HP: Former CEO Fiorina Ponders Tie-Up with Dell on CNBC

Carly Fiorina, formerly CEO of Hewlett-Packard (HPQ) was a guest on CNBC‘s “Closing Bell” this afternoon, where she was interviewed about the computer maker by Mario Bartiromo.

Asked about�rumors yesterday�that the company might be considering a break up, or spinning-off its PC unit, Fiorina observed that Dell‘s (DELL) decision yesterday to take itself private presents the possibility of HP combining its PC business with Dell’s:

I have always come down on the side of saying HP is more powerful, more valuable together. But certainly I have said that HP is a point now where they should be considering every alternative. We got so much synergy out of our supply chain, out of our customer relationships. However, the times have changed. One thing that has changed is that HP has had two failed acquisitions, Hp has milked its product line for too long. The market that HP serves has changed dramatically because the PC business is now a shrinking business not a growing business. Potentially you could combine and HP and a Dell PC business. Lenovo is now the big competitor. And because of the milking of these product lines in the past, they don’t have an iPad, they don’t have a product for where the market is going, which is mobile.

Asked whether the “PC is dead,” Fiorina said,

This is the big question. I don’t think the PC is dead, but I think the PC business is ripe for consolidation. Dell’s move to go private opens up some new possibilities. In general the PC business is one that has to consolidate. Dell bought itself some time, and I think they will be more aggressive in the market [as a private company]. But never forget that HPs’ supply chain is a huge advantage to them. Once you rip that apart, HP loses that advantage.

Fiorina, you’ll recall, spearheaded HP’s purchase of Compaq�back in the day.

Asked whether she would rather have had a private company to run, Fiorina said,

I actually think it was a very smart move on Michael Dell’s part. I think what going private gives them the opportunity to do is to invest more deeply in R&D without the public market scrutiny. It Also allows them to be more aggressive without worrying about whether they hang on to customers or lose them. Microsoft‘s (MSFT) move is very interesting. Microsoft’s business is based on volume, and so looking at a combo of a public HP and a private Dell could be very interesting.

Asked what the calculus would be today for a spin of the PC operations, Fiorina elaborated:

We’ll probably look different today that it would have two years ago, certainltyt five years ago.PC business is at a stage of lower growth, consolidating, lack of innovation puts them at a competitive disadvantage. Numbers could look very different today than vive days ago.

Fiorina was also asked about rumors that activist investor Carl Icahn may be buying up shares of HP, allowing her a chance to take a swipe at HP’s board:

I’ve been very candid in saying the HP board needs a lot of self-examination. A shareholder who will get in there and demand discipline and accountability on the board’s part is not a bad thing. �I Hadn’t heard the rumor about Icahn, that’s interesting. But, bottom line, this is a company, this is a board, that must have the courage to examine every strategic alternative in front of them.

HP shares today are up 11 cents, or 0.7%, at $16.72.