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HP Licenses Apple's iPod & iTMS
grouchomarxist writes "According to the press release here and this article at Forbes HP is licensing Apple's iPod technology for its own MP3 player and use the iTunes Music Store. 'HP and Apple today announced a strategic alliance to deliver an HP-branded digital music player based on Apple's iPod, the number one digital music player in the world, and Apple's award-winning iTunes digital music jukebox and pioneering online music store to HP's customers.'"
This is a pretty huge sign that the PC world is impressed with what Apple has done. From a company that clearly has the ability to enter a new market behind other market leaders and have success (iPaq PDAs), they recognize that they can't build something to defeat the iPod (unlike Dell's DJ move) and their best move is to join 'em.
Beter still, HP is preloading apple software on their systems. This will be a boon to Apple as it makes it even easier to access the music store.
With AOL, HP, and Pepsi all endorsing iTMS and the iPod, 2004 is shaping up to be a big year for Apple and On-line Music.
I only came here to do two things; kick some ass, and drink some beer...looks like we're almost out of beer.
well if competition drops the iPod price, then Apple has jumped the gun and gets royalties, license fees, or whatever, which might exceed what which they would expect to make off sales of iPod at the lower cost which competition will force.
holy run-on batman. did any of that make sense? what i think i'm trying to say is that Apple expects the price of iPods to go down sometime soon. While they are a hot commodity, they license the technology at a very good price for themselves. the competing products will both be less expensive, and sales matter less to Apple now, since they get a peice of the competitions pie anyway.
how the hell do you respond to this? HP is the largest PC manufacturer behind Dell, correct? And Dell has its plans to do its own Music Store, correct?
So Apple, who has already made great inroads to the PC market, is going to make it in even deeper. I think this bodes well for Apple, and I don't know how even MS could fight this off, at least not without doing something that would violate the rulings or what not from the monopoly trial.
Of course, if they did do something that might violate it, and it wouldn't surprise me if they did and it went unnoticed, this time Apple might get into it...
Anyways, the only bad thing I can see coming out of this for Apple is the fact that it might stop people from switching to Apple computers, since, unless the marketing is done well, newbies might not realize this is an Apple product, not an HP product.
BTW, I didn't RTFA so feel free to flame me, but how will Apple keep the supply up? Is HP going to help manufacturing etc.?
Blake
With the iPod, iTMS, and now HP-branded iPods, Apple is working hard to keep WMA from controlling online music. That also makes it more difficult for MS to dominate in the video playback market as well, because one of the supposed advantages of WMP is that it acts as a playback mechanism for a wide variety of media, all delivered in Windows Media formats.
Read the EFF's Fair Use FAQ
Sounds like Apple is going for mass-mass production of the iPod/iPod mini players to get per-unit costs down. Having a guaranteed buyer for a significant portion of them allows Apple to produce that many units without having to worry about excess inventory on their end.
Look for Apple to either make more per iPod on the ones that they sell, plus the revenue on units that they wholesale to HP. Also, I'd expect the recent shortages of iPods to be a thing of the past once manufacturing is ramped up. This is great news for 3rd party equipment manufacturers (like Belkin, and th replacement battery sellers) as they get to sell more product, at possibly lower prices.
Plus, Apple gets more clout with record distributors when negotiating future rates (or trying to get hard-to-license songs) since the available pool of iTunes/iPod users will grow.
This is win-win-win, for Apple, Apple partners, and iPod/iTunes buyers/users. The only people this would be bad news for are Microsoft and the other WMA player folks.
I wonder. It's long been speculated that Apple may some day bring OS X to the x86 platform. It's technically feasible and has most likely already been proven so. OS X is now at a stage where it's stable and reached a point where even the die-hard OS 9 users can't avoid it any longer - and has essentially become what OS X should've been in the first place. They are however still selling product to the converted - and this is where iTunes comes in. It all starts with introducing iTunes to Windows users. Windows users use iTunes and soon realise that Apple can write some fantastic software. It's free, without ads and it works famously. Apple then decides to partner with HP to sell an HP branded iPod to those Windows users who still can't get themselves to buy an Apple branded iPod even though it will work with Windows. An HP iPod on the other hand will be easier for them to swallow - it's all about establishing a comfort factor. Once the HP pod starts getting more glowing reviews and iTunes becomes even more prevelent on Windows desktops, Apple and HP would be in a great position to produce HP branded computers (x86?) running OS X - as by that time they'd have established their market. HP has the manufacturing and cabibility to pull this off whereas it's doubtful that Apple does, esp with a potentially different platform.
www.brownsauce.org
In a classic HBR (Harvard Business Review) article back in the early 90s, the domination of the computer industry by Microsoft and Intel was predicted.
The foundation of this article was the position that control of a lower layer in the stack allowed you to extract significnatly more revenue higher up in the stack. Microsoft by controlling the OS could extract revenue for applications; Intel by controlling the processor could extract revenue for support chips and logic boards.
This has turned out to be a "law" and has worked to the advantage of both these companies.
It now looks like Apple is working to grab the "Music Sales and Distribution" layer, and it looks like this will allow them to extract revenues they previously were not able to get.
Interesting...gives hope for Apple down the road...
Yours,
Jordan
PS. Love my iPod!