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HP Drops iPod Reselling

This took a surprisingly long time...

The whole Apple+HP thing was definitely tied to Carly Fiona, and regime that the new guy wants nothing to do with. HP was not likely making any kind of "killing" on this deal, so it isn't surprising that he wasn't to hep on keeping it going. I'm surprised that he waited for the deal to be "up" before killing it, but I suppose he didn't want to appear too "vigorous" in cleansing out the old...
 
Freg3000 said:
I vote negative...people were always going around "not understanding" why HP sold iPods.
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Yeah, fer sure.

Last Christmas I was standing in a Radio Shack store, and happened to overhear the guy behind the counter trying to sell one to a confused prospect:

[RS]: Here you go! iPods are in short supply, so you're lucky we have this!
[Confused]: What's that??
[RS]: It's an iPod. See? (points to writing on box)
[Confused]: Uh, I thought Apple made iPods. That's not Apple.
[RS]: Sure, it's just the HP version. Same thing! You even get, ah, tatoos...skins...er...
[Confused]: No, I want a TRUE iPod, not some copy...
[RS]: IT'S THE SAME THING, REALLY!
[Confused]: Naw, I'll pass. I've seen some real iPods at Best Buy.
[RS]: Grrrr...!

I asked the guy if this was a common exchange with prospective buyers. Yep, he said. Quite a few were suspicious that they were just getting a knockoff copy of the real thing.

So much for HP branding strategy.

WCat
 
FaasNat said:
What? Did you work for Sun? ;)
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Better Sun than SGi.

"Frank, it's the end of the quarter. Order another Ferrari for each employee. And let me know when the earnings statements come in -- I'd like to see how much those stupid PCs impacted our sales [condescending chuckle]. I'll be out playing golf."
 
dernhelm said:
This was a ridiculously bad example. You've obviously never been in the automotive industry; where this exact things happens ALL the time. Witness: Geo Prism == Chevy Nova == Toyota Corolla: all produced at the NUMMI facility. Also GM, Ford, and Chrysler rebadged their vehicles all the time to fall under their different divisions - Ford Taurus == Mercury Sable, etc.

They justified all this on the basis of brand loyalty. Mercury lovers would never purchase a Ford, but would purchase a rebadged one if it was called a Mercury Sable. Same car, different name, sometimes a different price.
Click to expand...

Second part of your statement is an even worse example. The Taaurus and Sable were for years based upon thesame chasis, but in no way were they the same car. The interior options, luxury levels and in some instantces powertrains were different.

Back on topic. I don't see this as a big deal for Apple, but if the iTunes preinstallation goes away... I vote negative.
 
Superdrive said:
I doubt HP is making its own MP3 player. That would be a disastrous move. I wonder if this means that the bundling of iTunes (aka the whole deal) is off.
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Curious, how would making their own mp3 player be a disastrous move?
 
I bought a Pontiac Vibe. It is the same as the Toyota Matrix. My "Pontiac" has a Toyota gas cap and Engine. I am assuming it has a toyota everything else. However, I foolishly paid a lot more money. I should have bought the Toyota!

I am sure hPod owners are feeling the same way. I just hope they didn't end up paying more.

Additionally, I hope all HP's come with iTunes pre-loaded. I really don't want Windows Media Player to be what most people use. Did you hear that family members! It's driving me crazy.
 
I just heard on CNBC that HP cannot make it's own DAP until August '06...so they are dead in the water for a little while.
 
FaasNat said:
What? Did you work for Sun? ;)
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Ha! No, it was 3Com. I designed all of their Bluetooth and 802.11 products. Now they sell VoIP phones mostly (it was an acquisition). All of their wireless stuff is actually designed by ODM partners in Taiwan and China now. They went from about 15,000 employees to about 1,500 now. CEO keeps his job and gets a raise, of course...

WCat
 
Superdrive said:
Ouch, I suppose someone is not happy with the iPod outlook.
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If they're not happy, it's only because they would have finally realised that it might not be in their best interests to help spread the halo effect, which isn't in their long term interests. So the problem was that the iPod outlook was too good!
 
dernhelm said:
This was a ridiculously bad example. You've obviously never been in the automotive industry; where this exact things happens ALL the time. Witness: Geo Prism == Chevy Nova == Toyota Corolla: all produced at the NUMMI facility. Also GM, Ford, and Chrysler rebadged their vehicles all the time to fall under their different divisions - Ford Taurus == Mercury Sable, etc.

They justified all this on the basis of brand loyalty. Mercury lovers would never purchase a Ford, but would purchase a rebadged one if it was called a Mercury Sable. Same car, different name, sometimes a different price.
Click to expand...

True, I've never been a car-sales person. :p ;)
 
Prob weren't making enough $ off the deal?? IDK not really a big deal anyways.
 
joeconvert said:
Second part of your statement is an even worse example. The Taaurus and Sable were for years based upon thesame chasis, but in no way were they the same car. The interior options, luxury levels and in some instantces powertrains were different.

Back on topic. I don't see this as a big deal for Apple, but if the iTunes preinstallation goes away... I vote negative.
Click to expand...

Not to rain on your parade but the interior of a car does not mean it is not the same car. Two cars are the same if the chassis is the same. Of course the interior is diffferent.. duh!!!. I am sure someone who works in the automotive industry is doubling over in laughter at your post.
 
"GM thought they could take a Chevy Cavalier, slap some Cadillac stuff on it, add an extra $5,000.00 and sell a bundle. Tragically enough, they pulled it off-for a while."

"Hands down, worst car for the money spent. Yugos were junk, but at least they were cheap. This heap had a Caddy price tag!"

"A stupid marketing ploy. Nothing more than a Chevrolet Cavalier, which Roger Smith gussied up and called a Cadillac."

"When we traded it in my wife was upset because we didn't keep it long enough for her to buy a gun and shoot it."



Cadillac Cimarron

This is from http://www.cartalk.com/content/features/Worst-Cars/results1.html
 
You wanna know what I think. I think MS offered HP a much better deal to offer WMP on their computers INSTEAD of iTunes. Or maybe they threatened them, no more windows unless you ditch iTunes. MS is so evil, why are they allowed to exist?
 
wnurse said:
Not to rain on your parade but the interior of a car does not mean it is not the same car. Two cars are the same if the chassis is the same. Of course the interior is diffferent.. duh!!!. I am sure someone who works in the automotive industry is doubling over in laughter at your post.
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Funny, but that is probably what a sleazy car salesman is saying to some shmuck like me, RIGHT NOW!
 
Distribution

I may have an idea as to the why of this whole HP iPod thing. It appears to be a move to get the iPod into as many stores as possible. For example, Costco sells the HP iPod because they sell HP computers and printers. I've noticed that every place that sells HP stuff has the HP iPod. However, only places that sell Apple stuff have the Apple iPod. The notable exceptions are Best Buy, Target and Circuit City. There may also be others that I'm not aware of.

From shopping in my city, here is what I've noticed.

Costco: HP iPod
Sam's Club: HP iPod
Walmart: HP iPod
Office Depot: HP iPod

Target: Apple iPod
Best Buy: Apple iPod (Apple Mac Mini too by the way)
Circuit City: Apple iPod

Thus, places that don't want or haven't gotten around to becoming an Apple authorized reseller and already sell HP stuff get to sell the iPod. Without the HP iPod you wouldn't be able to get an iPod at all these places.
 
wnurse said:
Not to rain on your parade but the interior of a car does not mean it is not the same car. Two cars are the same if the chassis is the same. Of course the interior is diffferent.. duh!!!. I am sure someone who works in the automotive industry is doubling over in laughter at your post.
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Actually, we're doubling over in laughter at your post.
 
walkingmac said:
I agree, I don't know of anyone who actually bought one, I am sure somewhere, some fool (sorry if your one) did
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I honestly don't get this sentiment. Why is buying an HP iPod make someone a fool? There's no difference between the two items, what's it matter which one they bought, it's not like they bought an inferior mp3 player

Coca-Cola said:
I am sure hPod owners are feeling the same way. I just hope they didn't end up paying more.
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Actually in most cases they paid less, Many places would offer rebates, and price-drops and sales on HP iPods when they'd never be allowed to offer such incentives with Apple iPods.
 
This AP article quotes the Apple spokesperson as saying "Apple has decided that reselling iPods does not fit within the company's current digital entertainment strategy..."

So who wanted out, HP or Apple? I'm assuming it's HP, since that's what the majority of news outlets are reporting and her use of the word "reselling" suggests HP and not Apple, since HP is the one doing the reselling. So I guess the AP is currently misquoting Apple.
 
Good, I always thought this was an odd anomaly that may have been tied more to Carly trying to cling to her Job than any real sound strategy. It just didn't make any sense, the iPod brand is a big part of it's charm. HP doesn't have that same vibrancy and it's not like they were priced any different, so it just seemed like a useless PR stunt that represented no value to the consumer other than to confuse. Buh-bye hp, go try to boost your stock with some internal innovation... enjoy sitting in that hot garage in Palo Alto with your focus groups. :p
 
Freg3000 said:
I vote negative...people were always going around "not understanding" why HP sold iPods. It simply opened up so many more channels for the iPod to be sold in. It also put iTunes on HP desktops and notebooks...no downloading needed. When this deal was announced in Jan 2004 I saw tons of positives for Apple and virtually no negatives.

The end of this relationship is something I feared would happen, and is bad for Apple in my opinion.
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Apple has sooo many distribution channels for iPod, at this point. I can't imagine the loss of HP having any material affect on Apple whatsoever.
 
Some likely reasons

I would guess that HP was not turning much profit selling the HP branded iPod, and just decided it wasn't worth it anymore. As some others have pointed out, it's doubtful they sold all that many of them anyway, so what was in it for HP anymore?
I know this much. They didn't drop it because they're making their own music player. The MacCentral article notes that HP signed a non-competition contract with Apple that prevents them from making a competing player until Aug. 2006. So that wasn't the reason.
Also, HP will apparently continue to install iTunes on their PCs going forward, which costs them nothing. This further leads me to believe this was a pure profit business decision, nothing more.

Also, as was pointed out already, Apple doesn't really need HPs help selling iPods anymore. Who in the world hasn't heard of the iPod by now? Its not as if HP was reaching a large amount of customers selling them iPods with their PCs who had never heard of the iPod before.

So all in all, this is no big deal. But of course, the one way it MAY hurt Apple is when the inevitable pundits and analysts come out of the woodwork proclaiming doom and gloom and the demise of the iPod, just because HP isn't selling about 3 iPods a month anymore. :rolleyes:
 
The distribution deal had a minor effect on both companies, so ending it shouldn't have a significant effect. HP iPods were a small percentage of total iPods sold, much less than probably expected.

From HP's side, well they have a lot on their hands right now and like someone else said, this was probably Fiorina's deal mainly.

From Apple's side, iPods are so big that they don't need HP branding or distribution anyways.
 
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