HP to Stop Reselling IPod Music Player
mmoore321
By MATTHEW FORDAHL
SAN JOSE, Calif. (AP) - Hewlett-Packard Co. said Friday it would stop
reselling Apple Computer Inc. (AAPL)'s popular iPod digital music
players, ending a partnership introduced with much fanfare by HP's
now-ousted CEO Carly Fiorina.
Both companies confirmed the end of a deal that has contributed to
about 5 percent of the iPod's total shipments.
"HP 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 the end
of this September."
Kerris declined to comment on how HP's decision will affect Apple's
financial results. The company's profits have been driven largely by
iPod sales - with 6.2 million shipped in the most recently reported
quarter. Of those, HP-branded iPods accounted for about 500,000 units.
Shares of Apple fell $1.15, or 2.6 percent, to close at $42.65 in
Friday trading on the Nasdaq Stock Market. HP shares gained 13 cents,
$24.62, on the New York Stock Exchange.
Ross Camp, a spokesman for HP, said the Palo Alto company will continue
to offer other digital entertainment devices, including televisions and
computers running Microsoft Corp. (MSFT)'s Windows Media Center
operating system. He declined to comment on whether HP will launch its
own portable digital music player.
"HP is constantly evaluating how we can make the most of our digital
entertainment experience for consumers," he said.
However, according to HP's original agreement with Apple, it cannot
sell another player that competes with the iPod until August 2006.
Shaw Wu, an analyst at American Technology Research, said the breakup
was logical for HP.
"For a company like HP, it does not make sense for them to resell
someone else's product," he said. "They are a technology company.
They're an innovator. ... It makes a lot of sense for HP to do their
own. Whether it actually sells or not, that remains to be seen."
HP said it will continue to honor all warranties and service contracts.
The HP devices will remain on sale until supplies run out sometime in
September, Camp said.
The announcement ends one of Fiorina's biggest announcements before her
ouster earlier this year. Since then, new CEO Mark Hurd has embarked on
a major reorganization that includes 14,500 job cuts and the undoing of
some of Fiorina's initiatives, including her combination of the
company's printer and personal computer businesses.
"This was Carly's deal and it's being unwound," Wu said. Hurd "is
putting his own stamp on the company."
Camp said the decision was made by senior leaders in HP's digital
entertainment team.
"As CEO, Mark Hurd obviously sets the tone and visions for the
company," he said. "His management team executes against that vision as
accountable business managers."
Still, HP's move is a surprise, particularly after it recently started
offering other models of the music player, such as the iPod Shuffle and
iPod Mini, besides regular iPods.
As part of the original agreement, HP also installed Apple's iTunes
music jukebox program in its desktop and notebook computers. Apple said
the software bundling would continue.
Apple has sold more than 20 million iPods since launching it in 2001.
__
I never understood this arrangment anyway. What benefit would you have
getting an iPod from HP? I wonder if HP will try to make one of their
own like Dell and Gateway?
Cuss and Discuss (tm).
Nasht0n
> Cuss and Discuss (tm).
>
I wonder what Jobs did to piss them off.
Nicolas
Alan Baker
Nasht0n <n...@nada.ca> wrote:
You really need to get over the cancellation of the Newton, Nicolas.
--
Alan Baker
Vancouver, British Columbia
"If you raise the ceiling 4 feet, move the fireplace from that wall
to that wall, you'll still only get the full stereophonic effect
if you sit in the bottom of that cupboard."
George Graves
"mmoore321" <mmoo...@gmail.com> wrote:
Sounds more like "not invented on my watch" than it does an actual
business decision. It's the same scenario as when a castle fell to a new
king. Often, everybody connected to the old regime, including stable
boys and kitchen knaves were put to death simply because they were put
in place by the old master. Carly brought Apple in, the new regime kicks
them out.
I wonder how many more times HP can re-invent themselves before the name
becomes a meaningless property sold again and again to the highest
bidder like so many other US brands: Fisher, Emerson, RCA, etc. HP used
to stand for something - the best electronic and medical test equipment
in the world. Now it's a company that makes Winboxes and Winbox
peripherals. How the mighty have fallen. David Sr. and Bill must be
spinning in their graves.
--
George Graves
------------------
A sports car makes the journey more fun than the destination.
Super Spinner
How so? Obviously HP wasn't selling enough HP branded iPods to cover
what they payed Apple for the rights to resell said iPods. This deal
never made sense to me anyway, for either HP or Apple.
"However, according to HP's original agreement with Apple, it cannot
sell another player that competes with the iPod until August 2006. "
Looks like a contract that Microsoft would've come up with. This is an
example of Apple abusing its dominance in the portable digital music
player market by engaging in exclusive contracts. For shame. :p
Lefty Bigfoot
(in article <YODGe.67089$Ph4.2...@ursa-nb00s0.nbnet.nb.ca>):
> mmoore321 wrote:
>
>
>> Cuss and Discuss (tm).
>>
>
> I wonder what Jobs did to piss them off.
Ask IBM. :-)
ZnU
"Super Spinner" <Pepe....@gmail.com> wrote:
> George Graves wrote:
[snip]
> > Sounds more like "not invented on my watch" than it does an actual
> > business decision.
>
> How so? Obviously HP wasn't selling enough HP branded iPods to cover
> what they payed Apple for the rights to resell said iPods. This deal
> never made sense to me anyway, for either HP or Apple.
Right, the idea of selling such a heavily branded product under a
different brand was always a little screwy. This move isn't going to
reduce iPod sales; there are lots of places to get an iPod these days.
RadioShack is the latest major addition.
HP is going to keep bundling iTunes, which was the really valuable part
of the deal for Apple, I think.
> "However, according to HP's original agreement with Apple, it cannot
> sell another player that competes with the iPod until August 2006. "
>
> Looks like a contract that Microsoft would've come up with. This is an
> example of Apple abusing its dominance in the portable digital music
> player market by engaging in exclusive contracts. For shame. :p
I would assume Apple also has to stick to its side of the exclusivity
agreement, and not sign a similar deal with another OEM until that same
date. (Although, I'm not sure there would be any interest on the part of
Apple or other OEMs in another such deal anyway.)
It'll be interesting to see what HP does eventually do in this market
space. Attempting to make an 'iPod Killer' doesn't look like such a
profitable business. (I wonder if anyone is making a list of all the
devices that have been hyped as 'iPod Killers' that nobody ever heard
about again? There must be several dozen by now.)
--
"This notion that the United States is getting ready to attack Iran is simply
ridiculous. And having said that, all options are on the table."
-- George W. Bush in Brussels, Belgium, Feb. 22, 2005
Nasht0n
> In article <YODGe.67089$Ph4.2...@ursa-nb00s0.nbnet.nb.ca>,
> Nasht0n <n...@nada.ca> wrote:
>
>
>>mmoore321 wrote:
>>
>>
>>
>>>Cuss and Discuss (tm).
>>>
>>
>>I wonder what Jobs did to piss them off.
>>
>>
>>Nicolas
>
>
> You really need to get over the cancellation of the Newton, Nicolas.
>
What makes you think I'm not?
What so you think Job's did to make them cancel the deal? After all,
they were making money from it (HP) and it's not as if they have another
product in the works or ready for an imminent release of something
similar to have made them stop selling iPods.
Nicolas
Tim Adams
Nasht0n <n...@nada.ca> wrote:
According to the article, they couldn't start selling a similar product till
late 2006. Do you think they might have something ready by then so wanted to get
out from under now, to keep that date from moving even further out?
>
> Nicolas
--
Tim
Lloyd Parsons
<gmgravesnos-B8E0...@newssvr13-ext.news.prodigy.com>,
George Graves <gmgra...@pacbell.net> wrote:
HP is also changing (reducing) the commissions that resellers get on
server sales that are done direct.
For me and lots of other VARS, that means we will look at alternative
ways and product to resell that is more profitable. Same thing we did
last time they twinked with the commissions. HP and Compaq before them
always keep forgetting that VARS are the channel that built them.
Lloyd Parsons
"Super Spinner" <Pepe....@gmail.com> wrote:
For shame my ass! That is good business.
John
Probably due to the low profit margin for HP.
Elijah Baley
It's more like what did Gates threaten them with if they didn't stop
dancing with Apple and start using WMA.
--
"There are no significant bugs in our released software that any significant
number of users want fixed." Bill Gates
Source: Focus Magazine, nr.43, pages 206-212, (October 23, 1995)
Alan Baker
> Alan Baker wrote:
>
> > In article <YODGe.67089$Ph4.2...@ursa-nb00s0.nbnet.nb.ca>,
> > Nasht0n <n...@nada.ca> wrote:
> >
> >
> >>mmoore321 wrote:
> >>
> >>
> >>
> >>>Cuss and Discuss (tm).
> >>>
> >>
> >>I wonder what Jobs did to piss them off.
> >>
> >>
> >>Nicolas
> >
> >
> > You really need to get over the cancellation of the Newton, Nicolas.
> >
>
> What makes you think I'm not?
Your very next sentence.
> What so you think Job's did to make them cancel the deal? After all,
> they were making money from it (HP) and it's not as if they have another
> product in the works or ready for an imminent release of something
> similar to have made them stop selling iPods.
>
> Nicolas
--
George Graves
Lloyd Parsons <lloydp...@mac.com> wrote:
One thing about successful tech companies that never seems to change:
Often they succeed in SPITE of their management.
Ross Winn
<gmgravesnos-B8E0...@newssvr13-ext.news.prodigy.com>,
George Graves <gmgra...@pacbell.net> wrote:
> I wonder how many more times HP can re-invent themselves before the name
> becomes a meaningless property sold again and again to the highest
> bidder like so many other US brands: Fisher, Emerson, RCA, etc. HP used
> to stand for something - the best electronic and medical test equipment
> in the world. Now it's a company that makes Winboxes and Winbox
> peripherals. How the mighty have fallen. David Sr. and Bill must be
> spinning in their graves.
HP still makes a lot of things better than anyone else in the world. The
stupidity, that PCs would save a company, didn't start with Carly. The
engineers at HP were smart enough to see that the patents wouldn't keep
them alive forever. They were looking for something new. The PC fit the
bill and things were wonderful. Then printers came along and things were
wonderful. Now the industry is disintegrating, and HP is trying to
integrate. Everyone else is commodotizing PCs, and HP (and Dell and
Gateway) are still making custom motherboards?
HP makes pennies on iPods, and they think that this isn't enough.
Meanwhile they hemorrhage millions every quarter on shit that makes them
nothing.
HP is dead, they just don't realize it.
--
Ross Winn
Freelance Geek & RPG.net Columnist
ELVIS2000
wrote:
>
>"HP 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 the end
>of this September
Never made a goddamn bit of sense, and only proved Carly was a total
loon.
JW
ELVIS2000
>
>Probably due to the low profit margin for HP.
Probably due to it reeking of desperation.
ZnU
ELVIS2000 <elvi...@ElvisLives.com> wrote:
HP was clever enough to see the iPod was going places, and they wanted
to jump on board. The deal they worked out, however, didn't really let
them turn the iPod's success to their own benefit. In fact, as the iPod
because more successful, it started to contribute more value to Apple's
brand, and this actually *reduced* the effective value of HP-branded
iPods.
If WalMart took designer clothing and re-branded it (but left the price
the same), how many people would buy the WalMart-branded versions, even
if it was known it was the same stuff? Not many. Same deal with the HP
iPod.