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HP To Brand Apple iPod Player

TMO Reports - HP To Brand Apple iPod Player

by , 4:15 PM EST, January 8th, 2004

Computer and printer maker Hewlett-Packard Co. announced on Thursday it will soon sell a digital music player based on Apple's original popular iPod player. HP's unit will allow users to buy, download, and play music from Apple's online music store using the Windows version of iTunes.

HP will begin shipping the HP-branded player later this summer, as well as Apple's iTunes digital music jukebox and online music store to HP customers. HP consumer PCs and notebook PCs will come pre-installed with iTunes and desktop icons to point users directly to the iTunes Music Store. The device will display the Apple logo at start-up and will work with the wide variety of accessories available from Apple and other third-party vendors.

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.

HP would not discuss pricing of the portable player or if they would sell one, two, or all three models of the iPod, but would only say it would be "priced competitively to other digital music players."

"We're very happy about this announcement," Phil Schiller, senior vice president at Apple, told The Mac Observer. "HP has a huge customer base, and they are a great company that is continuing to innovate," he said. "This is just a continuation of our growth with a variety of partners."

Although the deal only includes the original iPod and not the new iPod Mini, Mr. Schiller said it was something both parties might consider in the future. "It's a possibility," he said. Sources close to Apple have told The Mac Observer the reason the iPod Mini was not part of the deal was its limited availability at this time before it is released in the US next month and worldwide in April.

Apple CEO Steve Jobs said the move will ensure more consumers use iPods.

"Apple's goal is to get iPods and iTunes into the hands of every music lover around the world," said Jobs in a statement. "As the industry balkanizes by offering digital music wrapped in a multitude of incompatible proprietary technologies, consumers will be reassured in getting the same unparalleled digital music solutions from both HP and Apple, two leaders in the digital music era."

HP Chairman and Chief Executive Carly Fiorina said in a statement that the company had explored other alternatives in making its own digital player and jukebox but in the end "concluded Apple's iPod music player and iTunes music service were the best by far."

Joe Wilcox, an industry analyst with Jupiter Research, sees the partnership as a good one, but something that could set up a format war.

"In many ways, the move is surprising, considering HP is a Windows/PC manufacturer," said Wilcox. "Cozying up with a Mac maker is like mixing oil and water. From a marketing perspective, the alliance makes a lot of sense. HP and Apple already have a strong relationship in the printer market and HP is a very strong consumer marketing company. Also, it allows HP to differentiate from its major competitor, Dell, which uses MusicMatch and Windows Media technology to deliver its music service."

"The partnership is very important to Apple. HP and Dell vacillate between the number one and two PC makers. So you have one of the largest PC makers acting as a distributor for Apple's music store and more importantly its music player. Great brand recognition doesn't hurt either."

Wilcox thinks the concern moving forward is that the iTunes partnership between Apple, America Online and HP will set up a format war with its other competitors that might not be good for consumers.

"The stage is now set for a format war between iTunes, Windows Media and to some degree, RealPlayer 10. That's not good for consumers because consumers won't be able to play the music everywhere they want like they can do right now with a music CD they buy at a store."

Apple, of Cupertino, California, has already sold more than 2 million of the iPod players - 730,000 in the last quarter - and earlier this week announced the iPod Mini, a smaller and slightly cheaper version of its regular iPod player. Its online music store boasts a library of more than 500,000 songs and has sold consumers a total of more than 30 million songs.

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