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Exclusive: HP halts orders for Apple's iPod music players

post #1 of 37
Thread Starter 
Exclusive: Hewlett-Packard, which recently entered into a strategic alliance with Apple to deliver HP-branded versions of the iPod under name 'iPod+ HP', has stopped placing orders for the digital music players with Apple Computer, AppleInsider has learned.

Hewlett-Packard is reportedly quarreling with Apple over a lack of price protection offered with the iPods it manufacturers through the Mac maker, possibly explaining why the two companies have yet to set a date for the rollout of the HP-branded iPod photo.

Without a set price protection policy from Apple, HP will be vulnerable to sudden iPod price cuts that would leave it biting the full cost of those reductions. Apple currently offers HP no price protection, whatsoever, on the two models it currently sells.

"I find it striking that even a company that is larger than Apple, and has better distribution channels, cant get anywhere with them in terms of protection of their business model in the event that price drops take place down the road," said one reseller.

As a result of the dispute, HP has reportedly refused to place any further orders for Apple's iPod. "HP wont re-order manufacturing until Apple is willing to sit down at the table and agree to something thats reasonable for both parties," a source close to the company said.

During Apple's Q1 2005 financial conference call on Wednesday, Apple CFO Peter Oppenheimer said that HP-branded iPods accounted for only 7% of the 4.58 million iPods sold during Apple's December quarter. Curiously, this figure rose just one percent from the previous quarter, even though both parties vouched that the December quarter would be marked by an increased presence of HP's iPod offerings.

HP's online store is currently out of stock of the 20GB iPod and retains only a limited supply of the 40GB iPod. Sales representatives for HPShopping.com confirmed that they ran out of 20GB iPods about a week ago and do not expect new shipments anytime soon.

Representatives from HP failed to return repeated phone calls for comment over the past 48 hours.

Apple Computer has a long standing policy of not communicating with AppleInsider, and hence declined to comment.
post #2 of 37
OOh

Let me be the first to start the Sony iPod rumor!!

wheee!

post #3 of 37
Quote:
Originally posted by TednDi
OOh

Let me be the first to start the Sony iPod rumor!!

wheee!


Shut up.
post #4 of 37
Quote:
Originally posted by TednDi
OOh

Let me be the first to start the Sony iPod rumor!!

wheee!


Well, Steve did say that 'maybe we can work on computers and music together' (I'm paraphrasing) during the Keynote at MWSF (it was at the very end of the speech given by the Sony President).

Makes you wonder....
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Never Doubt Apple.
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"Don't let the noise of other's opinions drown out your own inner voice." -Steve Jobs
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post #5 of 37
Quote:
Originally posted by TednDi
OOh

Let me be the first to start the Sony iPod rumor!!

wheee!


...Or maybe a 200$ mac, goddamnit, the mini is too expencive...
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You can't quantify how much I don't care -- Bob Kevoian of the Bob and Tom Show.
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post #6 of 37
They really should start playing nice with HP. If Apple pisses them off, they'll stop shipping itunes and go for media center. Eventually that will help contribute to the demise (or loss of market share) of apple.
post #7 of 37
HP signed an agreement to include iTunes. It can not quit installing iTunes. Deals can be broken, but we aren't at that point. You would have thought that whoever negotiated the original deal would have included a price protection clause.
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NOTICE: While every effort has been made to ensure the accuracy of the information supplied herein, fahlman cannot be held responsible for any errors or omissions. Unless otherwise indicated,...
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post #8 of 37
Oooh, Steve and Carly playing hardball.

Sit back, pop some popcorn, and watch the fireworks, kids. This'll be fun.
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The Mayflies - Black earth Americana. Now on iTMS!
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"...within intervention's distance of the embassy." - CvB

Original music:
The Mayflies - Black earth Americana. Now on iTMS!
Becca Sutlive - Iowa Fried Rock 'n Roll - now on iTMS!
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post #9 of 37
I just have to believe there is a lot of information we're not hearing. It makes no sense for Apple not to play nice with HP on some kind of price protection that would be amenable to both sides.
just waiting to be included in one of Apple's target markets.
Don't get me wrong, I like the flat panel iMac, actually own an iMac, and I like the Mac mini, but...........
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just waiting to be included in one of Apple's target markets.
Don't get me wrong, I like the flat panel iMac, actually own an iMac, and I like the Mac mini, but...........
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post #10 of 37
Great. Another high-profile pissing contest.

Without the iPod, HP is about as hip as Depends Undergarments.

Deal with it, Carly.
post #11 of 37
Quote:
Originally posted by converted2truth
They really should start playing nice with HP. If Apple pisses them off, they'll stop shipping itunes and go for media center. Eventually that will help contribute to the demise (or loss of market share) of apple.

Yea,really! No pc user could download itunes for themselves.
post #12 of 37
I'm surprised HP would sign the deal in the first place if they found its terms so distasteful. Or is it the fact that Apple is being a bit more aggressive (Mac mini, iPod shuffle) in the market now, and HP is afraid a price cut by Apple (or for that matter, release of new models) could come back and bite HP in the rear?

I wonder if HP wants or will be allowed to distribute the shuffle. It'd be a great impulse item to throw in with an HP desktop, or perhaps even package with an HP desktop for special sales or warehouse club packs. I bet shuffle will be Apple-exclusive at first, just like iPod photo, and eventually will filter down.

(Also, look for Target to be very aggressive with iPod shuffle - I think it's at a price point where they could move a ton of them quite easily.)
post #13 of 37
I'm wondering if this means there is a price drop coming up. If there wasn't, why would it even matter right now?
post #14 of 37
Well, if Hewlett Packard is going to be a real partner, I do think that Apple should give them some price protection. You can have friends, or 'partners' with whom you have good relations, or not. It will do Apple good to have HP also selling the iPod. It would be instructive to see what the price protection guarantee would be for the printers that Apple sells for HP. Will HP help out Apple if there are HP 8450s in the Apple Stores, and then HP drops the price, as they did with the predecessor to the 8450? Then Apple should give some protection to HP. If HP expects Apple to just absorb any price drops that they make, which they do at times, then they should not be asking for protection.

It is good for Apple to have healthy relations with other companies, whether it is HP, or Sony, or IBM, or Adobe, or whomever.
post #15 of 37
Quote:
Originally posted by a_greer
...Or maybe a 200$ mac, goddamnit, the mini is too expencive...

I hope that is sarcasm. Go build a PC with the exact form factor and comparable power and functionality.

Best of luck.
post #16 of 37
what would make anyone wanna buy the ipod from HP? lol why not just buy from apple if HP is out?
post #17 of 37
Quote:
Originally posted by zpapasmurf
what would make anyone wanna buy the ipod from HP? lol why not just buy from apple if HP is out?

That's our point of view.

Consider though, that there are still many people out there ignorant enough to outright refuse the purchase of anything made by MAC while dying to get their hands on one of those iPod thingies. Enter the hp iPod. It's a trojan horse to put Apple equipment into the hands of the stupid and easily influenced. Once hooked, their simple minds are easily turned to the ways of righteousness and they buy a Mac mini (or the upcoming hp mini, for those subjects who require one more dose of enlightenment before full conversion).
post #18 of 37
Rules of being an Apple reseller.

1. No Price protection (unless you are a Specialist store)

2. No Spiffs
post #19 of 37
Quote:
Originally posted by zpapasmurf
what would make anyone wanna buy the ipod from HP? lol why not just buy from apple if HP is out?

Believe it or not, HP has SALE prices for their iPods. Apple NEVER has a discount on ANY of their products unless they're EOL.
post #20 of 37
Quote:
Originally posted by JiveTurkey
Consider though, that there are still many people out there ignorant enough to outright refuse the purchase of anything made by MAC while dying to get their hands on one of those iPod thingies. Enter the hp iPod. It's a trojan horse to put Apple equipment into the hands of the stupid and easily influenced. Once hooked, their simple minds are easily turned to the ways of righteousness and they buy a Mac mini (or the upcoming hp mini, for those subjects who require one more dose of enlightenment before full conversion).

That was the original plan, but it really hasn't panned out that way and the HP iPod sales numbers prove it. This is just yet another demonstration of how pathetic HP's reputation has become and yet another example of how much of an idiot Carly is.

I remember when Carly first announced the deal saying proudly, "Apple came to us, because we have the ability to make the complex things simple" No Carly, Apple was after your 200 000 sales channels, plain and simple.

What is HP's slogan again? INVENT - they even type it in capitals. I guess "INVENTING" an MP3 player was just too daunting.

Another reason HP did this, was to decrease their dependency on MS technology. So what do they do? Just transfer that dependancy to someone else. Pretty slick Carly.

And now they want price protection. Price protection is for _resellers_ so if they stock up on supplies they don't have to lose money if there is a drop in price, I know Apple doesn't offer it to a lot of their resellers, but that's another debate. You can't have price protection if your acting as a distributor and simply re-branding a product. They expect _Apple_ to pay for the iPods that HP can't sell? Apple has no problem selling iPods, why should they pick up the slack for someone else?

And that;s another thing. With 200 000 channels, how can you sell less than 400 000 iPods a quarter? That is fucking disgraceful. What in the fuck are they doing? Apples doing all the marketing, their improving the product, the iTMS, and the experience. If they could actually move the product, price protection wouldn't even be necessary.

I'll tell 'ya why they don't sell though, and that's because HP is a peice of shit company, and everyone knows it, and people want an AppleĀ® logo on the back of their iPods, and not an HP logo.

Apple is not getting anything out of this deal at all, and frankly, giving HP price protection at this point would only encourage their slack ass attitude.
post #21 of 37
Harsh words, Mr. coolgut,

Well, I think you are right that HP has been having a lot of problems. I am not sure just what their plan is. They seem to like to try to do a lot of things. Mdme. Fiorina seems to be too much all over the place, now they are moving more strongly in to television/ media centres, good luck on that venture.


I do not remember seeing an advertisement on HPs part for their iPod. They need to market it. They really needed to market it before Christmas, during all the holiday season. They need to improve their marketing over all anyway.

Probably a lot of people don't even know that there is a HP iPod.

HP is a company that had a fine record and background, from William Hewlett. They do printing and servers well, and they have done original research. So I hope that they find their bearings and direction.
post #22 of 37
Quote:
Originally posted by NordicMan

HP is a company that had a fine record and background, from William Hewlett. They do printing and servers well, and they have done original research. So I hope that they find their bearings and direction.

Don't forget Dave Packard! They have a wonderful history as a scientific equipment company. Their calculators were awesome (I have a 20 year old HP 41CX calculator that still works fine to this day) and I don't understand why they threw in the towel in that market.

Nevertheless, anyone familiar with the legendary Hewlett-Packard company of old is weeping. It has been reduced from being a giant of technical leadership to having a few niches of excellence and the rest of it is just markets mediocre crap.
post #23 of 37
because they are 2 cents more...
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The bored one.
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post #24 of 37
Apple can make more money selling them then selling to Hp for Hp to sell. Apple should be looking for any reason to get out of this deal. What does HP offer apple? not anything in my view. Apple doesnt play well with other companies anyways.
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post #25 of 37
Quote:
Originally posted by macFanDave
Don't forget Dave Packard! They have a wonderful history as a scientific equipment company. Their calculators were awesome (I have a 20 year old HP 41CX calculator that still works fine to this day) and I don't understand why they threw in the towel in that market.

Nevertheless, anyone familiar with the legendary Hewlett-Packard company of old is weeping. It has been reduced from being a giant of technical leadership to having a few niches of excellence and the rest of it is just markets mediocre crap.

They USE to make great calculators!! I have had 48 S, 48 SX, 48 GX, 33s which are all great calculators to this day (GX being my favorite I have two of them). Not to mention all the mail order stuff I bought from CalcWare before they went out of business.

I have the new 49 G+, I think. It is a piece of C-R-A-P! The buttons kill the calculator. A nice calculator but I cannot be sure what button presses go through and which do not. HP killed the 48 GX instead of just improving on it. Stupid morons...

Pissed off HP customer here. I currently have a iPaq 5555 pocket pc, no more when this one dies unless they bring back a great calculator.

Apple is better off without them!

Eric
Hard-Core.
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Hard-Core.
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post #26 of 37
These things are really sad to hear. The HP I think of has good printers, still does, a value for the servers, and did remarkable research, thinking computing down to the atomic level.

I know some folks who got a HP pc, and it got struck by lightning, ball form. Well, it wasn't too good then. But the next two replacement computers from the dealer were not good, broke down, and then the year warranty was up, so they had nothing.


Sad.
post #27 of 37
yes, HP does make good hardware....

...too bad their drivers suck so much you wish you had bad hardware, and halfassed drivers, since that would be better. good riddance to bad rubbish!
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post #28 of 37
I guess nobody (including Jobs) expected HP would suck so much as to fail to sell a bestseller like iPods. In these circumstances it's silly to hope Apple will still clutch at the deal.
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Technology is dominated by two types of people: those who understand what they do not manage, and those who manage what they do not understand. Putts Law
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post #29 of 37
Whatever happened with this story? I presume things were ironed since HP is still selling several models here.
PPC4EVER
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post #30 of 37
Quote:
Originally posted by Aurora
Apple should be looking for any reason to get out of this deal. What does HP offer apple? not anything in my view.

Oh yes they do - every HP computer ships with iTunes on the desktop. That is HUGE in keeping the WMA monster at bay. If Apple doesn't kill WMA, we are all screwed. WMA must die.
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post #31 of 37
Quote:
Originally posted by lundy
Oh yes they do - every HP computer ships with iTunes on the desktop. That is HUGE in keeping the WMA monster at bay. If Apple doesn't kill WMA, we are all screwed. WMA must die.

Those are some pretty 'heady' words there, moderator. Can you please elaborate on why we are all 'screwed' if WMA survives?

post #32 of 37
Quote:
Originally posted by cj3209
Those are some pretty 'heady' words there, moderator. Can you please elaborate on why we are all 'screwed' if WMA survives?


Because Gates will use his monopoly in the OS to make a monopoly in the music player market. Then you can use any download service you want - as long as it's WMA. Shudder.
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post #33 of 37
They won't risk that. They just got fined about 500 million, and can't risk to continue doing that.
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post #34 of 37
Quote:
Originally posted by lundy
Because Gates will use his monopoly in the OS to make a monopoly in the music player market. Then you can use any download service you want - as long as it's WMA. Shudder.

Yep. You can use any player you want, as long as Microsoft gets a cut up fronts, and 2 cents out of every track you download. Microsoft, getting money for nothing.
post #35 of 37
Quote:
Originally posted by Gene Clean
They won't risk that. They just got fined about 500 million, and can't risk to continue doing that.

That is approximately $650M. Do you have any idea how much cash MS has? Approximately $34 BILLION.

The fine was a slap on the hand. No court or government has done anything of any consquence to abate Microsoft's actions. Slow slightly? Maybe. But nothing to stop it. After all...Microsoft is only a convicted felon...what should we expect?
post #36 of 37
Quote:
Originally posted by zpapasmurf
what would make anyone wanna buy the ipod from HP? lol why not just buy from apple if HP is out?


Simple WAL-MART
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windows... nice gaming machines but I
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post #37 of 37
Actually, some retail stores only carry the hp version of the ipod, so if you're looking to buy in-store and don't know the difference, then buying the hp makes sense...almost.
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