July 29, 2005 12:14 PM PDT

HP to stop selling Apple's iPod

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Hewlett-Packard is ending a high-profile deal to resell Apple Computer's iPod.

The deal, unveiled with much fanfare at the January 2004 Consumer Electronics Show, took awhile to get going, with HP taking seven months to announce its first product.

"We do remain committed to our digital-entertainment strategy," HP spokesman Ross Camp said Friday. "We decided that reselling the iPod does not fit within that strategy."

Although HP plans to stop selling Apple's players, it will take some time for that to happen. The computer maker recently announced a new lineup of HP-branded iPods. Camp said HP plans to continue reselling the music players through the end of September, when it expects to have sold through its inventory of iPods, iPod Minis and iPod Shuffles.

Camp said that HP's "current plan" is to continue including Apple's iTunes software on its desktop and notebook PCs, as it has done since last year.

Under the terms of HP's deal with Apple, the computer maker cannot develop or market a rival digital music player to the iPod until August 2006.

Camp said that HP plans to continue selling other digital entertainment products such as its lineup of televisions and Media Center PCs.

Apple also confirmed the unwinding of the deal, noting in a statement that "HP's iPod sales have accounted for an average of 5 percent of all iPods sold since the deal was originally struck between the companies in January 2004."

Last quarter, HP's iPod accounted for 8 percent of sales, Apple said on its recent earnings conference call. That was up from 2 percent or 3 percent in the prior quarter.

At times, HP had an iPod lineup that matched Apple's in terms of pricing and models. At other times, though, the HP models lagged those available from Apple. For example, there was a significant period of time during which Apple had color-screen models and HP did not. Also, until very recently, HP only sold the white iPod models and not the iPod Mini or flash-based iPod Shuffle. HP announced in June that it would start selling a Mini model and said earlier this month that it would begin offering the Shuffle.

Apple noted that HP is responsible for supporting the iPods that it sold. "As with all HP products, HP will support the Apple iPod from HP consistent with the terms of HP?s limited warranty and award-winning service," Apple said.

Word of HP's move was initially reported earlier Friday by the Wall Street Journal.

14 comments

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interesting
I do have an iPod, but I'd never have any desire to buy an iPod by
HP... doesn't seem to make any sense. Glad to hear, though, that
they are continuing to put iTunes preloaded on their machines,
though.
Posted by NeverFade (402 comments )
Reply Link Flag
The iPod is from Apple, .....
... HP is just reselling it with an HP logo.BUt it sounds like HP has
another idea in the winds- perhaps an HP-designed MP3 player?????
Posted by Earl Benser (4310 comments )
Reply Link Flag
Did anyone really buy the HP iPods?
I mean, honestly, if you're going to get an iPod, just get it from Apple for Pete's sake.
Posted by Christopher Hall (1205 comments )
Link Flag
Maybe something else at work...
Could HP have received a nasty threat from Gates and Co.? Stop
dancing with Apple or ELSE!
Posted by lkrupp (1608 comments )
Link Flag
Not surprised
As Apple makes deals with the likes of Walmart and Radio Shack to
carry Apple iPods, the space for HP branded iPods looks smaller
and smaller, so it seems this odd arrangement was doomed
anyways.
Posted by tomtwigg (4 comments )
Reply Link Flag
Is there a Microsoft Conflict Going On Here?
It seems as though there may be more to this story than what is
being told. I would think that HP, being a PC retailer and not a
native Mac retailer, would get a little bullying from Microsoft for
even striking a partnership with Apple.

For a company that has been know to dislike it's competition in
more ways than one, this seems like a standard practice that
would have Microsoft written all over it.

Although sometimes it's hard to read between the lines in
situations like this; let alone in technology. My line reading say's
somebody's being a bully. Why would you get rid of a profitable
entity like the Apple iPod?

It's a valid question, who's answer will come out in the long run.

Justin
Posted by OneWithTech (196 comments )
Reply Link Flag
Are You Sure HP is Making $$ Out of iPod?
I see no reason to buy an iPod from HP, so why not buy from Apple instead? :)
Posted by 201293546946733175101343322673 (722 comments )
Link Flag
I Am Always Wondering
Why would people buy a HP iPod? It's not cheaper and it has no added value :)
Posted by 201293546946733175101343322673 (722 comments )
Reply Link Flag
ipod can be improved upon
or.. ipod isn't what it's cracked up to be. It's enormously popular but it's not really a value for the price. You pay a lot for the hip industrial design but it takes a lot of 3rd party products to make it do a lot of things that it should already be able to do. Voice recording and FM tuning/recording, in particular. Built-in FM transmitter anyone? If you're marketing it to college students, why not build in voice recording so you can record lecture notes. Gee, Ma and Pop might even buy it for young Susie.

HP probably now realizes they can easily make the iPod better, get better margins from someone like iRiver and have a better product.
Posted by (2 comments )
Reply Link Flag
disappointed
Both my brother-in-law and myself have owned HP iPods for the last year. They have been very disappointing to say the least. My HP iPod has had a terminal crash twice, requiring a replacement from HP. My brother-in-law's iPod has crashed no less than 3 times, and after his third REPLACEMENT iPod crashed, he opted for an HP gift certificate instead of yet another crappy iPod. Stay away from these iPods if you want to continue living a happy life!
Neil Lawrence
Posted by felixferdinand (1 comment )
Reply Link Flag
 

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