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. I agree with NewType and MCCFR and others. In the short term it doesn’t look like either company has much to gain from this deal. But the significance is in the long term. Apple has found a way to increase market share of its iTunes program without compromising its standards. Cooperating with HP also shows the PC-centric world that Apple products can work very well with the PCs.

    Regarding HP, since their slogan is “Invent”, this deal shows that HP recognizes the fact that the iPod is the BEST mp3 player out there. They are basically telling people that the iPod is better than anything they could possibly come up with. It’s actually a compliment to Apple. And for the millions of iPod owners that don’t want to buy a Mac, an HP suddenly looks better than a Dell because it offers good support for their iPod. It’s like HP is trying to tell people that they are the “Apple” of the pc world. It’s very good advertising for HP.

  2. I think MDN is missing a few points. Most of them have already been addressed here but my favorite has only been glossed over.

    How many iPods did Apple sell due to the fact that HP was selling them too? HP is a popular brand and highly visible so to have them also selling the iPod I think help legitimize it as far as the PC crowd is concerned. Without HP is to much easier to say that it’s just an Apple thing. Don’t forget that Dell sold them too but they didn’t really push them, HP has.

    As an Apple user the number one brand I buy other then Apple is HP. If they are going to support me then I’m supporting them.

  3. I had a HP printer and the band that moves the printing head wore out. HP doesn’t sell the part (tho some 3rd party people have started providing the 10 dollar part for 50 dollars). So I said screw it and bought a Canon.

  4. MDN seems to think that Steve Jobs conned HP into this deal….and that it was a stupid deal for HP but they were suckers and Steve pulled a fast one over on them.

    Since when is more companies selling Apple products a bad idea????

    Heck let Sony sell a Sony brand iPod, too. Get more people to get the Apple experience. Windows computer companies endorsing by selling Apple products is only good news for APPLE.

    But MDN thinks Steve pulled a fast one on HP.
    HP is doing Apple a favor. Plus making a nice profit on all the iPods they sell. MDN would be happy if tomorrow HP would announce they would stop selling ipods and take iTunes off their computers. MDN is a bit confused on this issue.

  5. MDN: “Why not just come right out and say, ‘Oh, ‘Invent’ is only a marketing slogan, we don’t really invent anything anymore, silly!'”

    Why doesn´t Apple just come out and say, “Oh, we have our computers made in China by the same company that makes computers for Dell, HP, etc. etc.”

    Answer for both: Because it is stupid and it shows MDN has no experience in the computer (or any business) industry, just a hobby collector of Apple news links for their fansite.

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