Hewlett-Packard has reorganized its handheld business unit to better take advantage of the growth of smartphones. iPAQs get their own division, away from laptops for the first time.

As a result of the shakeup, handhelds becomes one of four units in HP's Personal Systems Group. The others include notebooks, desktops and workstations

Mobility Business senior vp Ted Clark will continue to lead HP's notebook division, but will cede control of handhelds to Dave Rothschild (once of Sun Microsystems, Pixo and Netscape). Rothschild will report to Personal Systems Group head honcho Todd Bradely, whom many of you will remember from his days as the CEO of Palm/palmOne—a post he resigned a little over a year ago.

“The converged device market is growing at more than 60 percent a year,” said Bradley. “This realignment positions the handheld team to more clearly focus on navigating this fast-paced market while (the) Personal Systems Group continues to accelerate its trend of profitable growth.”

While HP continues to do well in the standalone PDA space with the iPAQ line it inherited when it took over Compaq a few years back—ditching its own loyally-followed Jornada Pocket PCs in the process—that category of device hasn't lit up the charts in a while. Consumers and enterprises are more and more turning to smart devices, including handhelds, with cellular-wireless capabilities.

Hence, the advent of the iPAQ Mobile Messenger line in 2005.

HP's smartphones haven't performed as well in the marketplace as similar products from RIM or Palm, for example. Competition is heating up even more with a plethora of additional compact smartphones with QWERTY keyboards - Motorola's Q, Cingular’s 8100 series, T-Mobile's SDA & MDA, Fujitsu-Siemens Pocket Loox T800 series, Samsung's SGH-I320, to name just a few - either on the way or already shipping.

By pulling iPAQs out of a larger business unit, HP may be giving the division room to breathe and finds its bearings. The iPAQ hw6900 series will most likely be the first iPAQs released under the new regime. It'll ship with support for both Microsoft and Good Technologies' mob-e-mail solutions.