HP to stop selling iPod, will keep iTunes on its PCs

HP will stop selling Apple's iPod through its Web site and distribution network, but plans to keep iTunes on HP PCs.

Hewlett-Packard has decided to stop reselling Apple Computer's popular iPod music player, representatives from both companies confirmed Friday.

Several varieties of the MP3 player were still available on HP's Web site Friday, but the company will end its relationship with Apple's iconic iPod by the end of September, said Ross Camp, a company spokesman. HP will continue to install Apple's iTunes software on its PCs, he said.

HP and Apple announced a distribution partnership at the 2004 Consumer Electronics Show that also included an agreement for HP to install Apple's iTunes software on its PCs. Over the course of the relationship, sales through HP only accounted for about 5 percent of all iPod sales, according to Apple.

HP rival Dell Inc. chose to develop its own MP3 player, the Dell DJ, to compete with Apple. But Apple has owned the market for handheld music players with its iPod, iPod Mini, and iPod Shuffle music players, almost from the inception of the first iPod in 2001.

HP is now left without a digital music player strategy. As part of its agreement to sever ties with Apple, HP must refrain from selling a competing music player for a year, according to a report Friday on the Web site of the Wall Street Journal. Camp declined to comment on that report, but reiterated that HP is committed to selling digital entertainment products to consumers.

With the arrival of new Chief Executive Officer Mark Hurd in March, HP has taken a critical look at many business relationships and strategies established by former CEO Carly Fiorina. Some financial analysts have called for HP to separate its PC and printer business from the company so it can focus on high-end enterprise products and services, but Hurd has thus far maintained a commitment to consumer business, according to comments he made earlier this month while announcing a broad company restructuring.

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Tom Krazit

IDG News Service
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