HP to stop selling Apple's iPod

Reselling the iconic music player doesn't fit into digital-entertainment strategy, Hewlett-Packard says.

Ina Fried Former Staff writer, CNET News
During her years at CNET News, Ina Fried changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley.
Ina Fried
2 min read
Hewlett-Packard is ending a high-profile deal to resell Apple Computer's iPod.

The deal, unveiled with much fanfare at the January 2004 Consumer Electronics Show, took awhile to get going, with HP taking seven months to announce its first product.

"We do remain committed to our digital-entertainment strategy," HP spokesman Ross Camp said Friday. "We decided that reselling the iPod does not fit within that strategy."

Although HP plans to stop selling Apple's players, it will take some time for that to happen. The computer maker recently announced a new lineup of HP-branded iPods. Camp said HP plans to continue reselling the music players through the end of September, when it expects to have sold through its inventory of iPods, iPod Minis and iPod Shuffles.

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.

Camp said that HP plans to continue selling other digital entertainment products such as its lineup of televisions and Media Center PCs.

Apple also confirmed the unwinding of the deal, noting in a statement that "HP's iPod sales have accounted for an average of 5 percent of all iPods sold since the deal was originally struck between the companies in January 2004."

Last quarter, HP's iPod accounted for 8 percent of sales, Apple said on its recent earnings conference call. That was up from 2 percent or 3 percent in the prior quarter.

At times, HP had an iPod lineup that matched Apple's in terms of pricing and models. At other times, though, the HP models lagged those available from Apple. For example, there was a significant period of time during which Apple had color-screen models and HP did not. Also, until very recently, HP only sold the white iPod models and not the iPod Mini or flash-based iPod Shuffle. HP announced in June that it would start selling a Mini model and said earlier this month that it would begin offering the Shuffle.

Apple noted that HP is responsible for supporting the iPods that it sold. "As with all HP products, HP will support the Apple iPod from HP consistent with the terms of HP?s limited warranty and award-winning service," Apple said.

Word of HP's move was initially reported earlier Friday by the Wall Street Journal.