Hewlett-Packard (HP) will stop reselling all models Apple iPods portable music player, the Wall Street Journal (WSJ) is reporting. According to the report, both HP and Apple have confirmed that HP will begin phasing out sales of the iPod immediately through all of its retail partners. According to the WSJ, HP notified its retail distributors of the “Apple iPod by HP” phase-out on Thursday. The journal story quoted HP spokesman Ross Camp who said that iPod sales had been successful, but that company determined “the iPod doesn’t fit in with our digital entertainment strategy.”
“They’ve decided that reselling iPods doesn’t fit with their company’s current digital media strategy,” Apple spokeswoman Katie Cotton said, according to the Journal’s report. Full article (paid subscription required) here.
“Probably more astonishing to the casual gadget fan would be the notion that HP has a digital entertainment strategy. Much as we appreciate the super-talented HP support people who can resurrect a 3Si printer from the hardware graveyard, we just can’t see them dropping deep trance mixes on a crowd of ravers at 3 am,” David Utter writes for WebProNews. Full article here.
In a conflicting report from The Associated Press, which could possibly be a misquote, Apple says that it pulled the plug, “Apple has decided that reselling iPods does not fit within the company’s current digital entertainment strategy,” Apple spokeswoman Natalie Kerris said. “As a result, HP plans to stop reselling iPods by end of this September.” Full article here.
“‘I can confirm we have exited the relationship,’ Hewlett-Packard spokesman Ryan Donovan said. He could not immediately provide further details,” Reuters reports. Full article here.
Ina Fried reports for CNET, “HP spokesman Ross 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.” Full article here.
MacDailyNews Note: This story is developing, we’ll keep you up-to-date. In the most recent quarter, according to Apple CFO Peter Oppenheimer’s comments in the most-recent Apple financial results conference call on July 13, the “Apple iPod by HP,” held nearly 8% of the US market for MP3 players — making HP #2 in the digital music player market. Apple holds around 75% of the US market currently. As recently as the first of July, we reported that HP had planned to add the “Apple iPod shuffle by HP” to its lineup. HP has a new CEO, Mark Hurd, and the “Apple iPod by HP” was former HP CEO Carly Fiorina’s deal.
[Updated, 3:55pm EDT: Added Reuters and AP quotes and links to articles.]
[Updated, 4:20pm EDT: Added CNET quotes and links to article.]
Related MacDailyNews articles:
Analyst: Hewlett-Packard may want to make their own MP3 music players – July 29, 2005
HP adds ‘Apple iPod shuffle from HP’ to digital music player line – July 01, 2005
Hewlett-Packard adds ‘Apple iPod mini from HP’ to iPod digital music player lineup – June 02, 2005
Hewlett-Packard expands branded iPod lineup, announces ‘Apple iPod photo from HP’ models – April 12, 2005
Hewlett-Packard adds ‘iPod dock holder’ to latest Media Center desktop – March 31, 2005
What’s the point of continuing the ‘Apple iPod by HP’ deal? – March 30, 2005
Hewlett-Packard ousts CEO Carly Fiorina, and what was with that ‘Apple iPod by HP’ deal anyway? – February 09, 2005
Apple, Hewlett-Packard debut new iPod television commericals – August 30, 2004
Hewlett-Packard-branded Apple iPod to debut Friday – August 26, 2004
Why Hewlett-Packard took Apple’s iPod shortcut – February 02, 2004
Well, now that they’re selling over 6 Million iPods per quarter, Apple doesn’t really need HP anymore anyway. Now they’ll get that 8% market share back all under the Apple umbrella.
Looks like HP wanted some slack on the recent price reductions; but then they are not getting it from Apple. Once the iPods are sold to HP, it is up to HP to sell them to the public. So, if Apple makes any price change on the iPods, the margin of profit of the HP iPods reduce. Bad deal for HP.
How long did we really think this would keep up. It surprised me from day one. On the other hand, good luck selling a different MP3 player. Of course perhaps we are about to see the first non-Apple MP3 player that can play music purchased from iTunes. HP gets to sell their own product, Apple gets a tidy licensing fee, and maintains HP’s customers.
Apple is now in Wal-Mart, Radio Shack and the other places that the HP iPod was supposed to be selling at anyway, so it just eliminates the duplication and “competition” if you even want to call them that. It served it’s limited purpose, but now it’s no longer necessary for Apple.
Does this mean that Radio Shack will become #2 in the digital music player market?
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The Apple iPod is now dead. Apple Computer, Inc. soon to follow.
Possibly a bigger impact than losing HP sales outlets is that HP now has no need to ship Quicktime with its PCs. Don’t know how many QT installations on PCs that accounts for, but every little bit would help.
I wonder just what HP’s digital media strategy is gonna be… selling one of the many also-rans?
“Of course perhaps we are about to see the first non-Apple MP3 player that can play music purchased from iTunes.”
Or not.
Write first, and ask questions later. That’s what I say.
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Finding another article on this, I got my question answered. quote…
“they did note that the PC maker plans to continue including copies of iTunes on its computers, and the writers referred to unnamed sources who said that HP “cannot sell a competitive digital music player from another company or begin development of its own player until August of next year,” according to the terms of its deal with Apple.”
We will continue including copies of iTunes on our computers
we also cannot sell a competitive digital music player from another company or begin development of our own player until August of next year because of our terms of the deal with Apple
“Possibly a bigger impact than losing HP sales outlets is that HP now has no need to ship Quicktime with its PCs. Don’t know how many QT installations on PCs that accounts for, but every little bit would help.”
this is true, but HP could continue to sell their computers with QT, but not iTunes. Sony already does this on their computers, as well as Gateway.
“‘I can confirm we have exited the relationship,’ Hewlett-Packard spokesman Ryan Donovan said. He could not immediately provide further details.” (REUTERS)
Exited the relationship? Or is Apple formulating other, more interesting alliances? Something is shaking. You’ll see very soon.
I smell money from Micro$oftopoly. Lends a whole new meaning to Microsoft Money.
It’s none of the above. Mark Hurd wants to put his own scent on HPs dealings and like a new male lion taking over the pride, he kills off the previous lion’s children. Hurd wants to be seen as HPs CEO, not an Apple patsy. I knew this was going to happen when Hurd took over. There must have been some wrangling, but in the end I just knew there’d be no give on Hurd’s side. He’s the new HP Big Kahoona now and he wants everyone to know it.
MDN Magic Word: zipper
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“Camp (HP spokesman) 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.”
http://news.com.com/HP+to+stop+selling+Apples+iPod/2100-1047_3-5810643.html?part=rss&tag=5810643&subj=news
I wouldn’t read too much into this. Mark Hurd has his hands full right now, and I don’t think that ANY digital music player is of interest to HP anymore. If Sony couldn’t make it in this market, why would HP even want to try? They have enough problems right now without having iPod marketing as a distraction.
I wouldn’t be suprised if HP becomes an iPod reseller, putting the support requirements back on Apple.
(I haven’t read the entire article, so I apologize if that last bit was discussed)
The current Sharper-Image catalog shows they’re selling iPods.
I wonder if the HP iPod will become a collector’s item now.
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maybe partnership with DELL
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“maybe partnership with DELL”
I’m feelin a bit peckish today. I think I will pick a person completely at random and insult them Let’s go wwiiiittthh….. Tango! Tango, you’re an ugly ass sumbitch. Thank you all for reading my insult to Tango.
And the comment from Rob Enderle….you never give up….just give it up…Did you get fired from Apple or r u getting $$$ from the Raptor from Redmond???? I am really starting to think there should be an investigation as to where your income comes from….just 1 % increase in market share at a time….
Perhaps you just don’t understand that Sir Steve believes that the war isn’t over yet.
Couple of notes for the previous posts:
Radio Shack cannot become the #2 portable music player because Radio Shack is not rebranding an iPod, just selling them.
HP will continue to include QuickTime with its PCs because, as the story mentioned, HP is required to buncle iTunes (which makes heavy use of QT now) on its PCs until August 2006.
My guess is that most of HP’s iPod sales came from Radio Shack anyway, since Radio Shack features HP digital cameras, PCs, printers, and other products. Likely this is a result of the new Radio Shack deal, and if HP sold most of their HP iPods through Radio Shack, that was about to end anyway.
My guess is that HP just saw the Motorola iTunes phone. Apple has a new girlfriend now.
And in all the time HP were selling the iPod, somehow it never landed up having its WMA capability enabled.
So let’s strike another one of Paul Thurrott’s predictions.
Also, if HP were selling 5% of Apple’s iPods, they were actually selling some 300,000 units/quarter which – given the fact that they didn’t have access to either the shuffle or the mini – were probably generating around $72 million in sales and anywhere between $3.6 and $4.8 million in profits.
It must be nice to know, if you’re one of the 14,000+ employees getting laid off, that your former employer feels it has the luxury of dispensing with a product that actually brings some cachet of hipness as well as sales revenue.
Still, I guess Mark Hurd’s bonus will get paid from inkjet cartridges…