Hewlett-Packard (HP) said yesterday it would stop reselling Apple Computer's popular iPod digital music players, ending a partnership introduced...
SAN JOSE, Calif. — Hewlett-Packard (HP) said yesterday it would stop reselling Apple Computer’s popular iPod digital music players, ending a partnership introduced with much fanfare by HP’s former 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,” said Apple spokeswoman Natalie Kerris. She said sales would stop by the end of September. 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 yesterday. HP shares gained 13 cents, to $24.62.
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Ross Camp, a spokesman for HP, said the company will continue to offer other digital entertainment devices, including televisions and computers running Microsoft’s Windows Media Center operating system. He declined to comment on whether HP will launch its own portable digital music player.
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.
“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 … remains to be seen.”
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 combining the 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.”