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HP to stop selling Apple's iPods

post #1 of 48
Thread Starter 
Hewlett-Packard Inc. has decided to stop reselling Apple's popular iPod portable music player, the Wall Street Journal reported on its Web site Friday.

The two companies confirmed that HP will immediately phase out sales of the iPod through its retail distribution partners, whom HP notified of the changes on Thursday.

"They've decided that reselling iPods doesn't fit with their company's current digital media strategy," Apple spokeswoman Katie Cotton told the Journal.

HP, which began selling iPods last September, has been met with frustration overs Apple's marketing tactics, sources familiar with the partnership have told AppleInsider.

In January, HP stopped ordering iPods from Apple's factory, protesting a lack of price protection offered with each player Apple sold to HP. Shortly thereafter HP resumed orders, but the issue was left unresolved.

Reliable sources told AppleInsider last week that the same price protection issues played a major roll in Apple's ability to secure a deal with RadioShack to place iPods in nearly 7000 of its electronics stores this holiday shopping season.

HP had previously formed an exclusive partnership with RadioShack to sell iPods, but was unable to offer the retailer proper price protection. When Apple recently came knocking on RadioShack's door with more amicable terms, the electronics retailer was eager to form a deal and did so.

HP accounted for 8 percent of total iPod sales last quarter, which was up from 3 percent during the previous quarter.
post #2 of 48
not a huge loss here...
post #3 of 48
eh, don't let the door hit you in the ass on the way out . . .
post #4 of 48
Quote:
"They've decided that reselling iPods doesn't fit with their company's current digital media strategy," Apple spokeswoman Katie Cotton told the Journal.

HP strategy = going out of business.
post #5 of 48
Well I think this is a bigger problem than y'all think. Maybe Radio Shack will be that lower level outlet, but I think Apple needs more bridges, not fewer!

HP is going out of business like Apple was 5 years ago.
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post #6 of 48
Quote:
Originally posted by MacGregor

HP is going out of business like Apple was 5 years ago.

One major differance, HP has no new tech on the horison...If OS 10 had just been a continuation of OS 9 and the iPod hadn't happened, I think Apple would have gone under by now. The fact is that the iPod saved Apple and NeXt step saved the Macintosh platform. Apple made 1 wise decision in the 1990s, to buy NeXt (and thus aquier the base of OSX and of course, Steve).

What is coming down HPs pipeline? the death of their unix stuff - HPUX is no more.
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post #7 of 48
With IBM selling its PC division to China, and the HP/Compaq merger not showing itself to be what it should, what do PC makers have to offer that you cannot get from Dell?

At least HP still makes printers...
post #8 of 48
Quote:
Originally posted by OriginalMacRat
HP strategy = going out of business.

You replied to an incorrect quote.. being this is appleinsider, a rumor site, i am not surprised they got the quote wrong. It was apple that decided that HP reselling ipods did not fit in their strategy, not HP as appleinsider claims.

That being said, i am not surprised. I'm shocked HP even entered the deal without price protection. I'm even shocked Radio Shack did a deal with apple. They will soon come to realize that Apple dictating terms to them is not palatable. Imagine going into every supermarket and finding out that Kellogs cereal cost the same everywhere because Kellog said so. Actually, imagine a country where the price of any product is the same everywhere. (one benefit is that my girlfriend would no longer like shopping and we can then use the extra time to do other important stuff.. like watching sports or participating in fantasy leagues). Anyway, Anyone wants to place bets when Radio Shack will break of the partnership. I say 1 year, maybe 2 (since it seems they are being given better terms than HP was given).
post #9 of 48
Quote:
Originally posted by a_greer
One major differance, HP has no new tech on the horison...If OS 10 had just been a continuation of OS 9 and the iPod hadn't happened, I think Apple would have gone under by now. The fact is that the iPod saved Apple and NeXt step saved the Macintosh platform. Apple made 1 wise decision in the 1990s, to buy NeXt (and thus aquier the base of OSX and of course, Steve).

What is coming down HPs pipeline? the death of their unix stuff - HPUX is no more.

Don't want to defend HP but you don't work there. You have no idea what they are coming up with and one does not have to have a hot consumer item to survive. Microsoft is doing all right without an ipod, aren't they. HP will survive without an Ipod. I'm sure HP forgot to keep you in the loop about their future product plans. I'll send them an email to remind them to CC you on internal communications.
post #10 of 48
Quote:
Originally posted by JimDreamworx
With IBM selling its PC division to China, and the HP/Compaq merger not showing itself to be what it should, what do PC makers have to offer that you cannot get from Dell?

Variety.

HP is too big. If HP said, "Okay, we're selling off the PC side of the business and we're going to concentrate on printers, that's where the money is, the PC business isn't profitable enough anymore." Who would, or could, buy them?
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post #11 of 48
Quote:
Originally posted by wnurse
You replied to an incorrect quote.. being this is appleinsider, a rumor site, i am not surprised they got the quote wrong. It was apple that decided that HP reselling ipods did not fit in their strategy, not HP as appleinsider claims.

Um, I think You are wrong.

Read for yourself:

http://www.marketwatch.com/news/news...27A99E47E3E%7D

www.wsj.com

http://www.macnn.com/articles/05/07/...eselling.ipod/

But thanks for the vote of confidence,

-K
EIC- AppleInsider.com
Questions and comments to : kasper@appleinsider.com
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post #12 of 48
Quote:
Originally posted by Kasper
Um, I think You are wrong.

Read for yourself:

http://www.marketwatch.com/news/news...27A99E47E3E%7D

www.wsj.com

http://www.macnn.com/articles/05/07/...eselling.ipod/

But thanks for the vote of confidence,

-K

He is wrong (so I've been told).

Apple is not doing right here. If you get the reputation as being an unreliable business partner, or even worse. one that directly competes with its partners, you will have problems making deals in the future.

This is probably why the WalMart deal came about as well.

It was unheard of that Apple didn't offer Hp price protection. And then to compete with them using that as a wedge...
post #13 of 48
Quote:
Originally posted by Kasper
Um, I think You are wrong.

Read for yourself:

http://www.marketwatch.com/news/news...27A99E47E3E%7D

www.wsj.com

http://www.macnn.com/articles/05/07/...eselling.ipod/

But thanks for the vote of confidence,

-K

Then other sites that reported differently, USAToday for example got it wrong. Someone is wrong. I wonder who wrote the original article.

relevant links
http://www.sfgate.com/cgi-bin/articl...f124205D77.DTL
http://www.usatoday.com/money/indust...-29-ipod_x.htm
post #14 of 48
This is simple, evil but simple. HP uses it distribution channel to get iPods in to retailers that Apple might not have been able to get in to easily or as quickly. The iPod takes off, becomes the number one digital music player. Retailers start to see dollar signs. HP withdraws from the agreement presumably because Apple is difficult to work with. Apple steps in and supplies all retailers who are left empty handed with iPods directly, increasing their profit.
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post #15 of 48
Quote:
Originally posted by fahlman
This is simple, evil but simple. HP uses it distribution channel to get iPods in to retailers that Apple might not have been able to get in to easily or as quickly. The iPod takes off, becomes the number one digital music player. Retailers start to see dollar signs. HP withdraws from the agreement presumably because Apple is difficult to work with. Apple steps in and supplies all retailers who are left empty handed with iPods directly, increasing their profit.

Hp never got a big marketshare though. Without price protection they were at a disadvantege as well.

Apple has been behaving badly the past few of years.

Competing with their dealers by not supplying them with product. Raising the requirements to remain a dealer. Now opening a store a block away from the biggest Mac dealer here in NYC.

None of this is good.
post #16 of 48
Quote:
Originally posted by fahlman
HP withdraws from the agreement presumably because Apple is difficult to work with.

According to the USA today article Apple spokeswoman Natalie Kerris said, "Apple has decided that reselling iPods does not fit within the company's current digital entertainment strategy. As a result, HP plans to stop reselling iPods by end of this September."

Apple is evil
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post #17 of 48
It was Apple's decision. The agreement was always a little awkward and was put together under the Carly Fiorina regime. It makes no sense anymore (if it ever did)
post #18 of 48
Quote:
Originally posted by fahlman
According to the USA today article Apple spokeswoman Natalie Kerris said, "Apple has decided that reselling iPods does not fit within the company's current digital entertainment strategy. As a result, HP plans to stop reselling iPods by end of this September."

Apple is evil

I wouldn't say Apple is evil, I'd say they are a very difficult company to work with. It seems the loyal apple fans refuse to see this. In a sense, one cannot blame apple though. In the 90's they played nice and look what happened..the saying "nice guys finish last" was very true. Now they are cutthroat. I'm just amazed that any other technology company would play along with them. They are not microsoft. They cannot punish you for not dealing with them. But Apple has learned it's lesson and is backstabbing as well as microsoft does. Have you read the latest microsoft backstabbing?. They are now competing with their partners for Small businesses (after promising not to, if the partners sell microsoft products).. Apple has surely learned from the best. Make a deal and then undermine your partner all the while growing marketshare and then discard the partner when it suits you.
I guess Steve Jobs is tired of finishing last. However, i think the apple diehards should get down on that high moral horse, don't you?. Apple is no longer the nice guy. They are not evil, they just got a little roughneck in them now.
post #19 of 48
Quote:
Originally posted by fahlman


Apple is evil

That's a joke, right?
post #20 of 48
Quote:
Originally posted by vinney57
It was Apple's decision. The agreement was always a little awkward and was put together under the Carly Fiorina regime. It makes no sense anymore (if it ever did)

Well, got a few votes of confidence.. maybe the administrator who admonised me would post an update?. Do you still stand by appleinsider reporting?
post #21 of 48
Quote:
Originally posted by vinney57
It was Apple's decision. The agreement was always a little awkward and was put together under the Carly Fiorina regime. It makes no sense anymore (if it ever did)

I agree with you.. i never understood how HP was benefitting from the deal. I understood why Apple did it. Now i read that HP signed a non-compete agreement with Apple.. wow!!.. Apple raped HP. No wonder Carly was fired. Imagine, agreeing not to innovate to sell a potential competitor product where you are not offered price protection and you are told you have no price flexibility. Man.. gotta give Apple props. Their lawyers made their yearly bonuses on that one deal. HP management must be silently fuming right now.
post #22 of 48
the whole OS thing is starting to unravel as devices begin to take on more of the original core abilities of the OS. How do I know? Look at all of the "who cares" for Longhorn/Vista and yeah, Tiger is great, but it is iPod not Tiger bringing folks to Apple. Tiger helps keep them, but it is more lack of viruses, not positives like Dashboard that is increasing market share.

So both MS and Apple are having to do other things and I think MS is starting to get desparate by competing against game consoles and now small business. So it isn't being evil, it is the start of a paradigm shift.

Back to HP, yes, they need to do what Xerox did when it became the "document" company. There is no reason why they can't imitate some of Dell's model and so they are not going anywhere. IBM could sell off ThinkPads because they still make chips and big iron. HP I think needs more of the PC presence as they move to being the "printer" company.
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post #23 of 48
Hp will have to offer value in their towers with things that Dell hasn't got like the media bay drive the memory stick device built-in and lightscribe DVDs, as well as competitive prices-and great printers-all of which they have done and effectively. Apple however coming to bat in the Intel arena is going to take a beating in ways it never imagined thanks to revenge for hornswaggling HP over the iPod. THAT is going to bite Apple back in the ass HARD, as Apple has enjoyed a significantly higher price point than competing PC Iron. Apple is in for a few rude shocks, the main one being people are going to see Apple as an overpriced stylish clone finally, which is what it will become after all in order to survive Steve Jobs death, go mainstream and all. HP will viciously compete against Apple with all the aggression it can muster-thanks to Job's latest "brilliant iPod maneuver". The days of high profits from Apple hardware are gone forever with the Intel transition. It's going to be painful for Apple in many ways......but as I said there, Apple is in for a rude set of jolts. Steve Jobs will cash in with interest the adage of he who seeds the wind...reaps the whirlwind........but theres ol' hypomaniac Jobs at work, snatching defeat from the jaws of victory, as usual.....except that his "reality distortion field" only puts off the inevitable. There was some advantage to a PowerPC Mac. Now that Jobs effectively killed off innovation due to methodical insanity....well don't be surprised if fewer than hoped will buy tickets for Job's "Titanic" attempt at another run at Microsoft.
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post #24 of 48
Quote:
Originally posted by melgross
Apple has been behaving badly the past few of years.

Competing with their dealers by not supplying them with product. Raising the requirements to remain a dealer. Now opening a store a block away from the biggest Mac dealer here in NYC.

From an idealistic point of view, you're right. But put yourself in the shoes of Apple. Image is EVERYTHING! If a reseller is not showcasing Apple products and portraying them the way Apple wants, they have every right to come along and do it themselves.

This is an OPPORTUNITY for retailers to compete against Apple at the SERVICE level. Price is hardly a differentiating factor with Mac products. If the resellers are just going to whine and complain, then they deserve what they get.

Now, to bring it back on topic... I think HP is pissed that Apple has agreed to deal directly with RadioShack. However, time will tell if the "strategy" that HP is working on is what we think it is. Afterall, they began building computers with build-in iPod docks, so it hardly strays from their strategy as we thought it to be.
post #25 of 48
Quote:
Originally posted by fahlman
According to the USA today article Apple spokeswoman Natalie Kerris said, "Apple has decided that reselling iPods does not fit within the company's current digital entertainment strategy. As a result, HP plans to stop reselling iPods by end of this September."

Apple is evil

Strange, in the article I read, Natalie Kerris says "HP has decided that reselling iPods does not fit within the company's current digital entertainment strategy."

Both papers pulled the same AP story, but only one is misquoting Kerris. Considering the rest of the story goes on to talk about a reorganization within HP with Fiorina's departure, it makes more sense to me that HP was the one to pull the plug.
post #26 of 48
I hope Wal-Mart is or will be selling the Apple iPods. I know they have HP ones, but last I knew that was it. The difference from my mother's 10% employee discount would have been a great encouragement for me to buy an iPod if I happened to come in to enough spare money to buy an mp3 player. If I can't get it there, I don't think I'd even bother.
post #27 of 48
Quote:
Originally posted by coolfactor
From an idealistic point of view, you're right. But put yourself in the shoes of Apple. Image is EVERYTHING! If a reseller is not showcasing Apple products and portraying them the way Apple wants, they have every right to come along and do it themselves.

This is an OPPORTUNITY for retailers to compete against Apple at the SERVICE level. Price is hardly a differentiating factor with Mac products. If the resellers are just going to whine and complain, then they deserve what they get.

Now, to bring it back on topic... I think HP is pissed that Apple has agreed to deal directly with RadioShack. However, time will tell if the "strategy" that HP is working on is what we think it is. Afterall, they began building computers with build-in iPod docks, so it hardly strays from their strategy as we thought it to be.

You haven't run a business, have you? I've had two over the last 30 years, and you don't behave that way, or you will be out of business. Apple isn't the only company that needs an image.

Dealers can't compete with Apple on service because Apple determines what services they will be allowed to offer. They can't stock parts, can't do many repairs, can't offer large discounts. Small retailers don't have the money to offer nice roomy stores like Apple can. It's not easy.

In parts of Europe, Apple pays for stores to get refurbished to look like Apple's stores. Do they do that here?

Why would they move a block away from one of their most loyal, largest dealers in the country. One who has offered many services. Even Apple here sends some repair work to them.

Apple is trying to cut out its dealers. What they really want is to be a Dell, but with stores.
post #28 of 48
Quote:
Originally posted by rasnet
I hope Wal-Mart is or will be selling the Apple iPods. I know they have HP ones, but last I knew that was it. The difference from my mother's 10% employee discount would have been a great encouragement for me to buy an iPod if I happened to come in to enough spare money to buy an mp3 player. If I can't get it there, I don't think I'd even bother.

Do you read the newspapers? Apple has been selling some iPods through WalMart for some time. Thet just made a deal to sell the line.
post #29 of 48
By the way, what I've been reading (and been told) is that Hp was the one who decided to stop the sales. Apple is throwing a bit of spin on it.
post #30 of 48
Quote:
Originally posted by melgross
By the way, what I've been reading (and been told) is that Hp was the one who decided to stop the sales. Apple is throwing a bit of spin on it.

What spin? It seems both parties are in agreement that HP's quitting the iPod business. The New York Times, Wall Street Journal, and the Associated Press (with the exception of SFgate's version) all agree on that view.
post #31 of 48
Quote:
Originally posted by frawgz
What spin? It seems both parties are in agreement that HP's quitting the iPod business. The New York Times, Wall Street Journal, and the Associated Press (with the exception of SFgate's version) all agree on that view.

Read the post by wnurse.
post #32 of 48
Quote:
Originally posted by melgross
Read the post by wnurse.

I did

Only the first link he provides corroborates what he says, and it's an older version of the AP story that appears in the latter link. All up-to-date versions of the same AP story, including the one appearing on USA Today, say that it was HP that decided to quit -- from the mouth of an Apple spokeswoman, no less.

AI got it right, according to all the major news sources out there. The only spin, it seems, is coming out of this thread.
post #33 of 48
Quote:
Originally posted by fahlman
According to the USA today article Apple spokeswoman Natalie Kerris said, "Apple has decided that reselling iPods does not fit within the company's current digital entertainment strategy. As a result, HP plans to stop reselling iPods by end of this September."

The USA Today article has been changed. It now says: "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 end of this September."
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post #34 of 48
Quote:
Originally posted by frawgz
I did

Only the first link he provides corroborates what he says, and it's an older version of the AP story that appears in the latter link. All up-to-date versions of the same AP story, including the one appearing on USA Today, say that it was HP that decided to quit -- from the mouth of an Apple spokeswoman, no less.

AI got it right, according to all the major news sources out there. The only spin, it seems, is coming out of this thread.

Yes, that mis-information was what I was replying to.
post #35 of 48
Quote:
Originally posted by wnurse
Don't want to defend HP but you don't work there. You have no idea what they are coming up with and one does not have to have a hot consumer item to survive. Microsoft is doing all right without an ipod, aren't they. HP will survive without an Ipod. I'm sure HP forgot to keep you in the loop about their future product plans. I'll send them an email to remind them to CC you on internal communications.

I was just saying that HP hasnt innovated a damn thing in years, they make commodedy stuff, and Dell is spanking them on price.
HP-UX is now dead, the PA-RISC chip is dead, thus the HP big iron is just another Intel linux cluster, like Dell. The quality on the iPaq, in my oppinion has fallen since the Compaq aquasition to the point where the Dell Axim would be a better buy, The one strength they still have is laser priners, but Dell is striving to commoditize that market as well, and most likely will in the next ~12 months.

Where is the vision? the innovation, the invention?
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post #36 of 48
Applewiz's trolling aside, it isn't good to go into Best Buys and get booted out, join with HP and get booted out, set up clones and boot them out.

There is nothing wrong with "being Dell with stores", but Dell outcompeted other makers, it didn't screw them as far as I know. It made a great value to the uninitiated and a skin flint business model work. Apple makes a great value to the initiated with a boutique business model and it is a slow and painful transition to Wal-Marts unless it really has some great products for the next few years.

Imagine GAP labelled jeans in Wal-Mart, Harmon Kardon systems at Radio Shack ...hopefully rising waters of sophistication - what the general public wants in a computer - raises Apple's boat and that Dell's anchor (Windows) slows it down.

Apple can't keep burning bridges if it is going to be in stores other than bright shiny aluminum ones.
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post #37 of 48
Apple doesn't have to worry about competing against Hp. Hp itself is having problems competing. It continues to lose marketshare.

The iPod was intended to give it some "coolness" factor. Appearently it wasn't enough to make up for the problems in the relationship.
post #38 of 48
Quote:
Originally posted by melgross
Apple doesn't have to worry about competing against Hp. Hp itself is having problems competing. It continues to lose marketshare.

The iPod was intended to give it some "coolness" factor. Appearently it wasn't enough to make up for the problems in the relationship.

But my question is WHY were there ANY problems in the relationship? Since you are correct, Apple and HP DON'T compete!

Jobs has been shown to give when it came to the RIAA, so he needs to do the same with resellers ... simple as that. Apple can do whatever it wants if it just leaves its ego at the store front door.
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post #39 of 48
Quote:
Originally posted by MacGregor
But my question is WHY were there ANY problems in the relationship? Since you are correct, Apple and HP DON'T compete!

Apple can do whatever it wants if it just leaves its ego at the store front door.

The last sentence says it all, doesn't it?

Actually, Breen from Macworld has it right. Now that Fiorina is gone from Hp, they are undoing what she had done. Much as Jobs did when he came back to Apple.

Hp is over the the hipness of her era. It's back to business. If Hp had price protection, and greater sales resulting from the lower prices, they MIGHT have kept it. But they didn't, so they didn't.

Apple doesn't care anymore because they have enough sales of their own. They are getting into companies like WalMart and Radio Shack. It was thought that it wouldn't happen. But it has. My Radio Shack guys are happy about the idea. The manager is hoping that Apple will have Mac's there as well, because people are always coming in and asking if they have iPods.

So they may have been squeezing Hp on price. It's too bad because Hp had a better warranty. Hp reportedly was NOT happy about apple moving into Radio Shack, one of their major distributors.
post #40 of 48
Quote:
Originally posted by a_greer
Where is the vision? the innovation, the invention?

What about this?
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