What’s the point of continuing the ‘Apple iPod by HP’ deal?

“Hewlett-Packard’s new chief executive, Mark Hurd, has been described as an execution whiz with a track record of growing and turning around lackluster businesses. Perhaps one of the things he will help HP better execute is its partnership with Apple Computer over the iPod music player,” Lisa DiCarlo writes for Forbes.

“When HP and Apple announced in January 2004 that HP would resell a branded version of Apple’s smash hit product, the iPod, both companies had high hopes. HP’s then-chief executive, Carly Fiorina, said partnering with Apple would provide an opportunity to add value to HP’s ambitious digital entertainment strategy. Apple CEO Steve Jobs said HP would help Apple ‘get iPods and iTunes into the hands of every music lover around the world.’ It hasn’t exactly worked out as planned,” DiCarlo writes. “HP declined to comment for this article, saying that iPod-related news may be forthcoming in the next few months.”

“HP sold about 321,000 iPods in the fourth quarter, while Apple sold 4.58 million; it has sold more than 10 million to date. On the surface, Apple doesn’t seem to need HP to move more iPods,” DiCarlo writes. “HP’s iPod (which is identical to Apple’s) seems to fly in the face of HP’s tagline ‘invent,’ as does the branding of the product ‘Apple iPod from HP.’ Unless it can create the same kind of halo effect for other HP products that Apple has been able to with its products, it’s unclear what the advantages are for HP.”

“For that matter, what are the advantages for Apple? The company was likely attracted to HP because of its broad distribution reach with retailers and its status as a top PC supplier,” DiCarlo writes. “But if it’s not moving as many iPods as Apple hoped, and Apple is selling several million of them each quarter on its own, what’s the point?”

Full article here.

MacDailyNews Take: Exactly. What is the point? As we wrote in our take back on February 9th, “Fiorina got jobbed by Apple CEO Steve Jobs with the ‘Apple iPod by HP’ deal. We actually felt bad for her, seeing her onstage holding up that blueish-grey iPod mockup. Steve must have had a really good laugh after he got the ink on that deal. How could Fiorina justify that deal with HP’s slogan ‘Invent’ plastered everywhere? It was totally ridiculous. Why not just come right out and say, ‘Oh, ‘Invent’ is only a marketing slogan, we don’t really invent anything anymore, silly!'”

Related MacDailyNews articles:
Hewlett-Packard ousts CEO Carly Fiorina, and what was with that ‘Apple iPod by HP’ deal anyway? – February 09, 2005

25 Comments

  1. How many DJs did Dell ship? I’m betting not over 100,000.

    I think Apple needs the HP deal to keep going as long as it can… it keeps iTunes on all those HP desktops, and keeps a major competitor from crowding the market with another Microsoft-based PlaysForShit.

  2. How about the “point” being that they could stay number two in the HD based player market as long as they continue the deal. Otherwise, they can create another Dell DJ…

    Regardless of whether or not the deal was a “good idea” the point still remains that the iPod is the number one portable digital music player in the world and HP sold more of them than Dell sold of the DJ or than ANYONE had sold of ANYTHING else… and we’re talking about companies that have been in the business for YEARS before HP decided to ship the iPod.

  3. Anybody ever seen an HPiPod?
    Are they getting their share or is Apple taking up all the production?
    Or maybe the last CEO put it on the backburner knowing that 80% of HP profits come from selling overpriced ink cartridges????

    Lots of questions to answer before flaming to conclusions.

  4. “For that matter, what are the advantages for Apple? The company was likely attracted to HP because of its broad distribution reach with retailers and its status as a top PC supplier,” DiCarlo writes. “But if it’s not moving as many iPods as Apple hoped, and Apple is selling several million of them each quarter on its own, what’s the point?”

    ——————-

    Many people got iTunes on their HP and then bought an Apple iPod..

    awesome for Apple..shit for HP..

  5. I saw an iPod+HP once.

    I do agree, this is a good deal for both companies (in a way). HP is the #2 HDD-based music player in the US (in less than six months, no less).

    It, like others have said, prevents HP from becoming a competitor something that Apple doesn’t want and MS would love. Remember for every computer HP ships, the user gets iTunes and the iTMS. The only thing the user would have to fill in is the iPod (if they don’t have one already).

  6. “it’s unclear what the advantages are for HP.”

    Hmmm… let me think… hmmmmm, thinking hard Lisa… how about the profit from 321,000 “Apple iPods from HP” in a single quarter? I’m certain that they weren’t selling them at a loss.

    That number is a magnitude higher than the number of iPods which were sold by Apple during the first quarters after product release, and look where Apple’s numbers are today.

    (Magic word… years) Be patient Lisa.

  7. I just love my 60G iPod Photo ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />
    Changed the speakers though ” width=”19″ height=”19″ alt=”smile” style=”border:0;” /> Those that Apple supply sucks not well..

    We have now 10 Mac minis, 3 iMacs and 2 Dual G5´s and xServe will be served next week and there is much more to come.

    Some times it is fun to do shopping with 100 000€ ;P

  8. Say what you want. At least one of HP’s new Media Center systems (the M7070) seems to ship with an iPod dock built into the top of it.

    And let’s not get all sniffy about HP’s Invent thing. The truly clever thing about the iPod is actually the way iTunes glues everything together. The iPod is a collection of off-the-shelf components (HD by Toshiba and IBM/Hitachi, screen by someone, Parts of the original OS by Pixo. Current controller made by another third-party) wrapped up in a cute case, where the only “real” Apple innovation is the Clickwheel – and that took three years and four product iterations.

    How you behave when you’re winning says as much about you as how you behave when you’re losing: I hate to say it, but MDN needs to take stock of the crowing level cause it’s getting a little bit tired.

  9. The point is that HP ships all their PCs with iTunes.

    The point is that instead of Windows Media Player, on HP Media Center PCs, iTunes is the audio interface.

    The point is that HP can ship a desktop PC with a built-in iPod dock.

    Would HP do any of these things without the iPod deal?

    Like, duh! MDN is spot on most things, but really, your distate for Carly makes you miss the obvious.

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