apple licenses iPod to HP

in iPod + iTunes + AppleTV edited January 2014
is this a big deal? when was the last time apple did something like this.


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.

HP will also bundle Apple's iTunes music software and online music store with its personal computers, potentially further boosting Apple's lead in online music sales.

The deal represents a change of strategy at Apple, which has traditionally refused to license its core technologies, only to lose market leadership positions to rivals. This occurred with the company's groundbreaking Macintosh computer, introduced 20 years ago, the first mainstream computer to feature a mouse and graphic user interface.

The two companies declined to comment on the financial details of the alliance, but people close to the companies said there was a revenue-sharing arrangement.

Carly Fiorina, HP chief executive, said: "We explored a range of alternatives to deliver a great digital music experience and concluded Apple's iPod music player and iTunes music service were the best by far."

The alliance with HP is also a boost to Apple's digital rights management (DRM) technology, which helps protect music from piracy by restricting the number of copies that digital music buyers can make. This has been key to the willingness of music publishers to allow Apple's iTunes online music store to sell their songs.

HP said that Apple approached it several months ago to discuss the deal, and it was iPod's huge sales in the December quarter that persuaded it to adopt the Apple technology. Apple said it was attracted to HP's number one position in retail PC sales.

The HP music player will be introduced this summer and will look different from the Apple device. Apple's entry level iPod costs $299 and stores about 10,000 songs.

Apple did not say if it will seek similar arrangements with other companies.

On Monday, Steve Jobs, Apple chief executive, said that iPod sales reached a record in the December quarter, selling 730,000 units. It holds the lion's share of the market for digital music players with about 31 per cent of units sold in 2003, and about 30 per cent of revenues. The iTunes music store has sold more than 30m songs and is nearing 2m song sales per week. In addition, Pepsi will give away 100m iTunes songs in February as part of a promotional campaign for its soda drinks.


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