TMO Exclusive - HP's Fiorina: iPod Sales 'Going Extremely Well'; 'Excited' About Accessories

by , 8:00 AM EST, November 17th, 2004

Hewlett-Packard chairman and chief executive officer Carly Fiorina told The Mac Observer Tuesday the company's fiscal fourth-quarter iPod sales were "very strong" and going forward she is "excited" the company has a good strategy to increase sales of iPod accessories.

Refusing to give specifics of HP-branded iPod sales and revenue, Ms. Fiorina responded to questions from TMO during a media conference call saying she felt good about the launch of its portable media player.

"(The launch of the iPod) is going extremely well," she said. "We continue to believe this is going to be a strong product for us."

Ms. Fiorina said the company is encouraged by HPs second place position in market share among hard-drive based digital media players. The NPD Group research firm reports HPs iPod commands a 3.6% market share, first reported by The Mac Observer in early November.

"I think the fact that we have already achieved the number two position in the U.S. after only about a month in the market is fairly significant," she commented.

Although specific HP iPod sales and revenues figures were not released, Apple Computer did acknowledge on October 14 that HP's version of the iPod player accounted for about 6% of its fiscal fourth-quarter sales of 2 million iPod's. Apple is projecting sales of iPod's in the current quarter of nearly 4 million units, but it is not known how many of that number will be units sold to HP.

Ms. Fiorina said the company is also pleased with sales of third-party iPod accessories, including its exclusive HP printable 'tattoos'.

"We are quite excited about the HP accessories that we can wrap around the iPod and the way we can integrate the iPod into a broader HP solution," she said.

Ms. Fiorina would not elaborate on plans HP might be making to expand its solutions with regard to the iPod. It is known that HP has an option in its contract with Apple to expand its line of iPod models, if it so desires. At present, it is selling the fourth-generation iPod, but not the recently announced iPod Photo.

HP sells a variety of iPod accessories online, including Griffin, Altec, and Belkin products. In addition, HP was first to market with water-resistant, removable, printable stickers, or tattoos, that affix to the exterior of Apple and HP iPod's. The tattoos, first introduced in late August, protect the iPod from scratches and scuffs. Users can download and print pre-made tattoo files or create their own and share them online with others. HP sells a box of 10 printable tattoos for US$14.99.

HP began selling its HP-branded iPod in late August and its Q4 results are the first full quarter reflecting sales from it. Apple Computer announced last January the partnership with HP to sell its own iPod device.

Ms. Fiorina made her comments following HPs fiscal fourth-quarter revenue results of US$1.09 billion, or 37 cents a share. Excluding charges, HP earned $1.5 billion, or 41 cents a share, on revenue of $21.39 billion. Estimates of analysts surveyed by Thomson First Call forecasted a profit of 37 cents a share on $21.15 billion in revenue. Ms. Fiorina forecasted the company will earn between 72 cents and 74 cents a share on revenue of $41.8 billion to $42.3 billion for the first half of its 2005 fiscal year.