HP will stop selling its branded Apple iPods in September. HP will continue to install iTunes on its PCs and laptops, however.
In a statement provided to
, Apple said that “HP has decided that reselling iPods does not fit within the company’s current digital entertainment strategy,” and that September will mark the official end of the Apple iPod from HP.
In January, 2004 Apple and HP first announced partnership plans for the iPod, which appeared as part of HP’s line after Apple debuted its fourth-generation “Click Wheel” equipped iPod in the summer of 2004.HP has expanded its line to include the iPod mini and, most recently, iPod shuffle. In September HP will cease selling all Apple iPods all together.
The manufacturing partnership was announced by Apple CEO Steve Jobs and HP CEO Carly Fiorina at the January, 2004 Consumer Electronics Show (CES) in Las Vegas, Nevada. Fiorina was ousted from HP in February, 2005. Soon afterwards, the iPod deal was reviewed by senior executives at the company, who concluded that the business wasn’t significant enough to continue, according to the
Wall Street Journal
also reports that HP is bound by a non-competition agreement with Apple that will prevent HP from partnering with another digital music player maker or begin development of its own digital music player until August of 2006.
As part of the original arrangement, HP agreed to install Apple’s iTunes software on its personal computers. That part of the deal won’t change, according to Apple. “HP’s current plan is to continue bundling iTunes on its desktop and notebook PCs,” an Apple spokesperson told
Although Apple sells iPods that work with Macs and PCs and includes both Mac OS X and Windows iTunes software with the iPod. Apple’s status as maker of the Macintosh gave HP one perceived advantage: a Windows-friendly company to provide after-sales support and service to Windows PC users — ostensibly HP PC buyers — who bought the iPod.
HP sold the iPod for the same price as Apple, so there wasn’t a big benefit for cost-conscious consumers to buy an iPod. But HP did provide Apple with channel distribution Apple didn’t have prior to the deal — Apple iPods from HP began appearing on the store shelves of electronics retailer Radio Shack, warehouse stores and elsewhere — HP counts more than 100,000 retail outlets worldwide.
That distribution didn’t translate into huge market gains for either company, however. Apple’s said that HP’s iPod sales have contributed an average of only about five percent to all iPods sold since the deal was first announced. Last quarter Apple shipped more than 6.2 million iPods, which added more than $1.1 billion to their revenue for the quarter.