Report: Hewlett-Packard to stop reselling Apple iPods by September [UPDATED]

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

31 Comments

  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. Does this mean that Radio Shack will become #2 in the digital music player market? ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

  6. 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?

  7. Write first, and ask questions later. That’s what I say. ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

    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.”

  8. 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

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