HP To Launch Online Music Store, MP3 Player (With Analysis)

by , 4:15 PM EST, December 2nd, 2003

It seems that everyone wants to follow Apple into the space that Apple says can't make money. Reuters is reporting that HP is going to be the latest me-too company in the music download business, following such runners-up as Roxio, MusicMatch, BuyMusic.com, and Dell Computer. Like Dell, HP is also going to be selling its own HP-branded MP3 player to complement its online music store. Reuters cites HP executive Peter Appl, which we point out so that you will not mistake it for a misspelling of "Apple." From Reuters:

Hewlett-Packard Co., one of several computer companies pushing into the consumer electronics market, plans to launch an HP-branded online music store in the first quarter, most likely at a January trade show, an HP executive said on Tuesday.

The music service will be run in conjunction with an existing service like Musicmatch.com and compete with music stores from Apple Computer Inc. and Dell Inc., HPShopping.com chief executive officer Peter Appl said in an interview.

Following the planned launch of the service at the Consumer Electronics Show, HP expects to unveil a digital music player, Appl said. Appl said the company had not yet decided the exact design of the product, adding that HP wants to be sure to set its digital music player apart from competitors.

You can read the full article at Yahoo!'s Web site.

The Mac Observer Spin:

We have a certain admiration for HP. The company makes great printers, and even though its Mac support tends to be on the weak side, the company does support the Mac. HP is also helping to keep Dell honest, sort of, and as long as Dell has to worry about HP, the company has fewer resources to target Apple. So, rock on with HP.

But an HP-branded music download service? Are you kidding us? HP has even less opportunity than Dell to make headway in this market, and Dell's service is just about guaranteed to be a failure. An HP music player might well do well, but the music download service?

Also, and this is the biggee, if HP goes with Windows Media Player, as it will almost assuredly do, it will have no chance to tie its music service to its players like Apple can. That means that the music download service will be a loss-leader for...well...nothing. Smart.

TMO's prediction: HP's music download service will be an utter dud, making even Dell's service look like a comparative success. Both companies will exit that market within 18 months (more likely a year), citing great "new partnerships with Microsoft that serve the customer even better" than their own failed services. Or something like that.

We do not predict this in some sort of vain attempt to favor Apple; the fact is that neither HP nor Dell has any cachet with customers for such cultural/consumer markets as music.

All that said, this could well be a case of HP (and Dell) knowing that new deals from the labels are in the works. Remember, the labels are making money hand over fist with Apple's iTunes Music Store and the other services, while the service providers and artists make next to nothing. Change in the business model will come, one way or another, and perhaps HP and Dell are planning ahead for that change. We'll see.

Reuters Article