Hewlett-Packard Co. said Friday it would stop reselling Apple Computer Inc.’s popular iPod digital music players, ending a partnership introduced with much fanfare by H-P’s now-ousted CEO Carly Fiorina.
Both companies confirmed the end of a deal that has contributed to about 5 percent of the iPod’s total shipments.
“H-P has decided that reselling iPods does not fit within the company’s current digital entertainment strategy,” Apple spokeswoman Natalie Kerris said. “As a result, H-P plans to stop reselling iPods by the end of this September.”
Kerris declined to comment on how H-P’s decision will affect Apple’s financial results. The company’s profits have been driven largely by iPod sales — with 6.2 million shipped in the most recently reported quarter. Of those, H-P-branded iPods accounted for about 500,000 units.
Ross Camp, a spokesman for H-P, said the Palo Alto company will continue to offer other digital entertainment devices, including televisions and computers running Microsoft Corp.’s Windows Media Center operating system. He declined to comment on whether H-P will launch its own portable digital music player.
“H-P is constantly evaluating how we can make the most of our digital entertainment experience for consumers,” he said.
However, according to H-P’s original agreement with Apple, it cannot sell another player that competes with the iPod until August 2006.
Shaw Wu, an analyst at American Technology Research, said the breakup was logical for H-P.
“For a company like H-P, it does not make sense for them to resell someone else’s product,” he said. “They are a technology company. They’re an innovator. ... It makes a lot of sense for H-P to do their own. Whether it actually sells or not, that remains to be seen.”
H-P said it will continue to honor all warranties and service contracts. The H-P devices will remain on sale until supplies run out sometime in September, Camp said.
The announcement ends one of Fiorina’s biggest announcements before her ouster earlier this year. Since then, new CEO Mark Hurd has embarked on a major reorganization that includes 14,500 job cuts and the undoing of some of Fiorina’s initiatives, including her combination of the company’s printer and personal computer businesses.
“This was Carly’s deal and it’s being unwound,” Wu said. Hurd “is putting his own stamp on the company.”
Camp said the decision was made by senior leaders in H-P’s digital entertainment team.
“As CEO, Mark Hurd obviously sets the tone and visions for the company,” he said. “His management team executes against that vision as accountable business managers.”
Still, H-P’s move is a surprise, particularly after it recently started offering other models of the music player, such as the iPod Shuffle and iPod Mini, besides regular iPods.
As part of the original agreement, H-P also installed Apple’s iTunes music jukebox program in its desktop and notebook computers. Apple said the software bundling would continue.
Apple has sold more than 20 million iPods since launching it in 2001.