According to Schiller, this is a multi-year exclusive contract
Quote:
Schiller said the multi-year exclusive deal has Apple building the players with the H-P name and in colors that are more familiar to H-P's product line. Schiller said the deal involves the current line of iPods, but not the iPod mini, which could be added at a later date
I wonder if this one way exclusive or bi-directional? If it is one way, HP can only sell iPods, this is terrific. If it is exclusive to both and Apple can't make iPods for anyone else it might not be as great. I hope that Apple got a one way deal on this.
The title of this thread is misleading. HP is not manufacturing the player. Apple will sell the iPods to HP. HP will get a great price and in return will promote iTMS on their computers. All around an excellent arrangement. Apple controls both the hardware and software.
this is great news for apple....
but they better not fuck it up...
they also should expand this idea to more components... like set top boxes and other peripherals where they can provide a distinct advantage, not only for their platform but for others as well.
the next logical expansion of this is either iChat with iSight or iPhoto with some kind of media device (or one that plugs into the iPod ala the belkin media reader)
but this still leaves out VIDEO content... Apple NEEDS to develop an "iTunes for videos"... something that will organize media files from DVDs to downloaded content such as trailers and music videos...
as soon as it matures in OS X port it to windows, with a DLD (digital lifestyle device read: $$$$) and then re-brand it with other wintel manufactures... (apple and DELL??? shudder... I can't wait to read what AtAT has to say about this !)
they need to compete on features and price... and not tie it to the macintosh platform...
the idea is to push people to a mac after they see how easy it can be with specially picked applications for windows (AND LINUX!!!/beos/"your OS here")
So Apple gets paid for every iHPod sold or what? I guess they figure the profit will have to be pretty decent even with re-branding because that is where they get their money from, not from the iTMS.
Also does anyone know how the iTMS works. I know it doesn't make money amazingly, well, but I'd be curious if it makes more money the more songs it sells, scales linearly or loses money the more it sells.
By more I mean like say a million in a week instead of a million in two.
Am I reading this right? Is Apple licensing iPod clones?!
No. Apple is not licensing iPods. They are making them for HP. (That's why I previously mentioned that the title of this thread is misleading). They are not clones. They are the same design with a different color case. That's all. Apple controls manufacturing.
As far as iTMS.
The more songs Apple sells, the lower the cost of operating iTMS. The lower the cost, the higher the eventual profits.
Apple will manufacture the player, which will not have the iPod name, but will have the same design and features as Apple's third-generation iPod players, Phil Schiller, senior vice president at Apple, said in an interview. Also, the HP music player will come in "HP Blue," he said.
The deal with HP involves only the traditional iPod design and not the new mini models, Schiller said, though he added, that's "obviously something we can look at in the future."
Schiller would not say whether Apple may look to craft similar deals with other computer or electronics makers. While that part of the deal is not exclusive, Schiller said HP's promotion of the iTunes Music Store through its PCs is a "multiyear, exclusive" deal.
Edit: That's Odd. My URL For Google must be too big, and it got aligned funny. \
I think we are going to need a few days to hear all the details of this deal. The FT said:
Quote:
Apple Computer_said it would license its leading iPod digital music technology to Hewlett-Packard, the world's second largest computer company, as it seeks to break out from its niche markets.
Is it purely a hardware rebranding and manufacturing or is it the beginning of a licensing ?
I've been reading all the above comments with decidedly mixed feelings. My conclusion is that this is partly good and partly bad for Apple.
Good because iTunes gets installed on new computers, and Apple DRM gets a boost.
Bad for the following reasons:
1) Why do we think that it is good for HP to sell an almost identical iPod clone? Why would they be able to sell new iPods when Apple can't? This is the same market segment, same target market, same price, same product.
2) Talk about brand dilution. . . . Look at how much has been invested in the iPod brand - people know about it, understand it, value it. By associating HP with this product, I think Apple is shooting itself in the foot.
3) Why cut into your hardware margins? It doesn't make sense. Apple relies on these. I would be all for licensing the sofware, but for goodness sake, make HP manufacture a different product.
Don't read wire service reports. Read the PR release at Apple's or HP's site. Reuters claims it starts in the Spring. WRONG. It starts in the Summer. Also read Phil Schiller's comments. They and the Press Release cannot be more clear.
Geez. Apple doesn't want to license their technology and they're not. They tried that to disastrous results before. They are doing a similar thing they did with Dell, selling iPods to HP. This time however, they're supplying HP with a machine of a different color and name - that's all. The other big part of this is having iTunes loaded on every computer HP sells. This is a first for Apple I believe. The desktop will also have a logo for iTMS. Wall Street likes the deal. Investors like the deal as both stocks were up 5% today. Everybody always whines about lack of market share. This improves Apple's digital market share even more in both players and potential iTMS sales and shows PC users that Apple is not a toy or minor player in the field.
SAN FRANCISCO, Jan. 8 ? Hewlett-Packard said today that it would begin selling a version of Apple Computer's iPod digital music player and bundling its iTunes jukebox software, in a strategic alliance that hints at the potential for significant shifts within the computer industry.
As part of the agreement, the terms of which were finished only after a late-night bargaining session on Wednesday, Apple will manufacture its popular iPod player in a HP corporate blue hue, and Hewlett, the world's second-largest computer maker, will place an icon on the desktop of its consumer PC's, directing its customers to Apple's software and music store.
The deal is a coup for Steven P. Jobs, Apple's chief executive, who has gained tremendous leverage and clout in the past year because of his success in the burgeoning digital music business that far outstrips Apple's relatively tiny share in the overall personal computer business.
For Hewlett-Packard, the alliance potentially gives it instant brand and technology identification, newfound independence from Microsoft and a significant advantage over Dell, which does not have a strong presence at electronic retail stores for distributing its own music players.
The alliance also underscores the fast-paced deal-making now going on in the market for digital entertainment products, as computer makers and content providers jostle for position in new and growing markets.
"It's frenetic out there," said Gary Johnson, chief executive for PortalPlayer Inc., the Santa Clara, Calif.-based hardware design company that provided the first iPod design. "The world of the PC and the consumer electronics industry are combining, and digital music is becoming a key service."
PortalPlayer has also designed portable audio and video products for Philips, RCS, Samsung and others.
I'm thinking of products such as the Victorinox Swiss Army Knife. Although the original version is red, if you have enough money you can order a customised batch of Swiss Army Knives customised in whatever colour you want, and with your own logo.
I see the same could happen to the iPod. Say IBM orders a batch of a few thousand customised iPods - in blue - complete with a Big Blue logo. It would be the perfect gift to reward its own employess, and also to hand out to selected customers.
Someone over on Slashdot or MacRumors (I forget which)made the excellent point that Apple will now get QuickTime onto a huge number of machines. That's a nice little plus right there!
I've been reading all the above comments with decidedly mixed feelings. My conclusion is that this is partly good and partly bad for Apple.
Good because iTunes gets installed on new computers, and Apple DRM gets a boost.
Bad for the following reasons:
1) Why do we think that it is good for HP to sell an almost identical iPod clone? Why would they be able to sell new iPods when Apple can't? This is the same market segment, same target market, same price, same product.
2) Talk about brand dilution. . . . Look at how much has been invested in the iPod brand - people know about it, understand it, value it. By associating HP with this product, I think Apple is shooting itself in the foot.
3) Why cut into your hardware margins? It doesn't make sense. Apple relies on these. I would be all for licensing the sofware, but for goodness sake, make HP manufacture a different product.
Look forward to the response!
1) Not an almost identical iPod, it's a blue iPod with the same controls that boots with an Apple logo. Why? Because there are a whole bunch of small-minded bigots who would never buy anything with an Apple logo front-and-centre and because HP probably has better direct global distribution and penetration than Apple which means there will be countries that will now have the opportunity to get the iPod/iTMS experience. Just think how many developing nations exist where Macintosh is just a word you see on a website, but HP actually has a real office with real people.
2) See point 1: iPod big in UK, big in US, big in Canada, Australia: Not big in Austria (by all accounts) or other countries where Apple and Macintosh do not have a big presence. Apple is thinking globally here, so I wouldn't get your Calvins in a knot.
3) Where does it cut into Apple's margins? Apple will manufacture the HP unit and sell it to HP so that the latter has the opportunity to make a small amount of margin. HP benefit from having exclusive access to THE market-leading digital music solution which gives them the ability to sell a holistic solution to their consumer marketplace.
I don't see that in the article. Anyway, it is an exclusive multi-year deal on the player between Apple and HP.
Quote:
The announcement was made as part of a co-agreement with Apple at the Consumer Electronics Show in Las Vegas. The deal is a multiyear partnership, but does not preclude Apple from forming other deals.
Comments
Schiller said the multi-year exclusive deal has Apple building the players with the H-P name and in colors that are more familiar to H-P's product line. Schiller said the deal involves the current line of iPods, but not the iPod mini, which could be added at a later date
I wonder if this one way exclusive or bi-directional? If it is one way, HP can only sell iPods, this is terrific. If it is exclusive to both and Apple can't make iPods for anyone else it might not be as great. I hope that Apple got a one way deal on this.
Originally posted by MacsRGood4U
The title of this thread is misleading. HP is not manufacturing the player. Apple will sell the iPods to HP. HP will get a great price and in return will promote iTMS on their computers. All around an excellent arrangement. Apple controls both the hardware and software.
this is great news for apple....
but they better not fuck it up...
they also should expand this idea to more components... like set top boxes and other peripherals where they can provide a distinct advantage, not only for their platform but for others as well.
the next logical expansion of this is either iChat with iSight or iPhoto with some kind of media device (or one that plugs into the iPod ala the belkin media reader)
but this still leaves out VIDEO content... Apple NEEDS to develop an "iTunes for videos"... something that will organize media files from DVDs to downloaded content such as trailers and music videos...
as soon as it matures in OS X port it to windows, with a DLD (digital lifestyle device read: $$$$) and then re-brand it with other wintel manufactures... (apple and DELL??? shudder... I can't wait to read what AtAT has to say about this
they need to compete on features and price... and not tie it to the macintosh platform...
the idea is to push people to a mac after they see how easy it can be with specially picked applications for windows (AND LINUX!!!/beos/"your OS here")
I need to sit down... can't take it...
(I did read what Schiller said, but functionally these are clones).
Screed
Also does anyone know how the iTMS works. I know it doesn't make money amazingly, well, but I'd be curious if it makes more money the more songs it sells, scales linearly or loses money the more it sells.
By more I mean like say a million in a week instead of a million in two.
Am I reading this right? Is Apple licensing iPod clones?!
No. Apple is not licensing iPods. They are making them for HP. (That's why I previously mentioned that the title of this thread is misleading). They are not clones. They are the same design with a different color case. That's all. Apple controls manufacturing.
As far as iTMS.
The more songs Apple sells, the lower the cost of operating iTMS. The lower the cost, the higher the eventual profits.
Originally posted by Paul
this is great news for apple....
<snip of quasi off-topic post>
see my new thread here
to discuss this possibility...
They have a revenue sharing agreement (sounds like Per Pod type thing).
Content from ZDNet
Apple will manufacture the player, which will not have the iPod name, but will have the same design and features as Apple's third-generation iPod players, Phil Schiller, senior vice president at Apple, said in an interview. Also, the HP music player will come in "HP Blue," he said.
The deal with HP involves only the traditional iPod design and not the new mini models, Schiller said, though he added, that's "obviously something we can look at in the future."
Schiller would not say whether Apple may look to craft similar deals with other computer or electronics makers. While that part of the deal is not exclusive, Schiller said HP's promotion of the iTunes Music Store through its PCs is a "multiyear, exclusive" deal.
Edit: That's Odd. My URL For Google must be too big, and it got aligned funny.
Apple Computer_said it would license its leading iPod digital music technology to Hewlett-Packard, the world's second largest computer company, as it seeks to break out from its niche markets.
Is it purely a hardware rebranding and manufacturing or is it the beginning of a licensing ?
Good because iTunes gets installed on new computers, and Apple DRM gets a boost.
Bad for the following reasons:
1) Why do we think that it is good for HP to sell an almost identical iPod clone? Why would they be able to sell new iPods when Apple can't? This is the same market segment, same target market, same price, same product.
2) Talk about brand dilution. . . . Look at how much has been invested in the iPod brand - people know about it, understand it, value it. By associating HP with this product, I think Apple is shooting itself in the foot.
3) Why cut into your hardware margins? It doesn't make sense. Apple relies on these. I would be all for licensing the sofware, but for goodness sake, make HP manufacture a different product.
Look forward to the response!
Hewlett Teams Up With Apple to Sell iPod
By JOHN MARKOFF
Published: January 8, 2004
SAN FRANCISCO, Jan. 8 ? Hewlett-Packard said today that it would begin selling a version of Apple Computer's iPod digital music player and bundling its iTunes jukebox software, in a strategic alliance that hints at the potential for significant shifts within the computer industry.
As part of the agreement, the terms of which were finished only after a late-night bargaining session on Wednesday, Apple will manufacture its popular iPod player in a HP corporate blue hue, and Hewlett, the world's second-largest computer maker, will place an icon on the desktop of its consumer PC's, directing its customers to Apple's software and music store.
The deal is a coup for Steven P. Jobs, Apple's chief executive, who has gained tremendous leverage and clout in the past year because of his success in the burgeoning digital music business that far outstrips Apple's relatively tiny share in the overall personal computer business.
For Hewlett-Packard, the alliance potentially gives it instant brand and technology identification, newfound independence from Microsoft and a significant advantage over Dell, which does not have a strong presence at electronic retail stores for distributing its own music players.
The alliance also underscores the fast-paced deal-making now going on in the market for digital entertainment products, as computer makers and content providers jostle for position in new and growing markets.
"It's frenetic out there," said Gary Johnson, chief executive for PortalPlayer Inc., the Santa Clara, Calif.-based hardware design company that provided the first iPod design. "The world of the PC and the consumer electronics industry are combining, and digital music is becoming a key service."
PortalPlayer has also designed portable audio and video products for Philips, RCS, Samsung and others.
Originally posted by HOM
MacObserver is saying that Apple is free to do this with other companies if they want.
I don't see that in the article. Anyway, it is an exclusive multi-year deal on the player between Apple and HP.
I'm thinking of products such as the Victorinox Swiss Army Knife. Although the original version is red, if you have enough money you can order a customised batch of Swiss Army Knives customised in whatever colour you want, and with your own logo.
I see the same could happen to the iPod. Say IBM orders a batch of a few thousand customised iPods - in blue - complete with a Big Blue logo. It would be the perfect gift to reward its own employess, and also to hand out to selected customers.
Meanwhile, Apple rakes in the cash.
Originally posted by kumrabai
I've been reading all the above comments with decidedly mixed feelings. My conclusion is that this is partly good and partly bad for Apple.
Good because iTunes gets installed on new computers, and Apple DRM gets a boost.
Bad for the following reasons:
1) Why do we think that it is good for HP to sell an almost identical iPod clone? Why would they be able to sell new iPods when Apple can't? This is the same market segment, same target market, same price, same product.
2) Talk about brand dilution. . . . Look at how much has been invested in the iPod brand - people know about it, understand it, value it. By associating HP with this product, I think Apple is shooting itself in the foot.
3) Why cut into your hardware margins? It doesn't make sense. Apple relies on these. I would be all for licensing the sofware, but for goodness sake, make HP manufacture a different product.
Look forward to the response!
1) Not an almost identical iPod, it's a blue iPod with the same controls that boots with an Apple logo. Why? Because there are a whole bunch of small-minded bigots who would never buy anything with an Apple logo front-and-centre and because HP probably has better direct global distribution and penetration than Apple which means there will be countries that will now have the opportunity to get the iPod/iTMS experience. Just think how many developing nations exist where Macintosh is just a word you see on a website, but HP actually has a real office with real people.
2) See point 1: iPod big in UK, big in US, big in Canada, Australia: Not big in Austria (by all accounts) or other countries where Apple and Macintosh do not have a big presence. Apple is thinking globally here, so I wouldn't get your Calvins in a knot.
3) Where does it cut into Apple's margins? Apple will manufacture the HP unit and sell it to HP so that the latter has the opportunity to make a small amount of margin. HP benefit from having exclusive access to THE market-leading digital music solution which gives them the ability to sell a holistic solution to their consumer marketplace.
Originally posted by MacsRGood4U
I don't see that in the article. Anyway, it is an exclusive multi-year deal on the player between Apple and HP.
The announcement was made as part of a co-agreement with Apple at the Consumer Electronics Show in Las Vegas. The deal is a multiyear partnership, but does not preclude Apple from forming other deals.
That's where I got it from