HP Dumped Napster for Apple

Pieter Townshend writes "Found on GMSV: 'In the days leading up to Napster's re-launch last October, a deal that would have put Napster links on millions of Hewlett-Packard computers went bad. HP withdrew from the agreement at the last minute, its reasons for doing so becoming clear three months later when it announced a surprise partnership with Apple to feature the iTunes Music store on HP computers and sell Hewlett-Packard branded iPod music players.'"

Comments

HP don't play that way, Microsoft.

[ackthpt]

]Hewlett-Packard] withdrew from the agreement at the last minute, its reasons for doing so becoming clear three months later when it announced a surprise partnership with Apple to feature the iTunes Music store on HP computers and sell Hewlett-Packard branded iPod music players.'

Which would make Microsoft unhappy and it did and for other reasons as well. That Microsoft took iTunes so lightly is a mystery.

Re:HP don't play that way, Microsoft.

[ackthpt]

In the same way that Microsoft took the internet lightly. Coming to a Theatre near you: Microsoft inbeds its music service in Windows $version.

That Microsoft has to grow is a fact, that they keep missing the ball is evidence they were lucky with the OS and not terribly good business people besides that. Of course, they'll integrate a search engine with music service and eveything else into Windows is a given. That HP is playing maverick to Microsoft and Intel is fascinating.

i would love to have been a fly on the wall...

[JWG]

... during the HP meetings. I can think of so many reasons to dump Napster in favour of Apple, such as: DRM, WMA, and cross-platform compatibility issues. All of these are, of course, aside from the fiscal reasons to favour Apple. From my /. perspective, I wonder which technical reasons, if any, came into play.

Re:One reason why I think

[vonPoonBurGer]

I think the major reason HP jumped from Napster to iTMS is the iPod itself. Comparing the two music distro partnerships, I doubt HP saw much difference in terms of the profit potential. But selling rebranded iPods?? The margins on those things are huge! And they have serious cool factor going for them right now. It's no wonder HP would switch to iTMS, given the chance to tap the kind of hardware profit margins Apple is currently enjoying.

Napster's Public Image

[PurdueGraphicsMan]

One obvious consideration is the fact that Napster's name isn't exactly crystal clear in the public's eye. With all of the lawsuit stuff they went through back in the day, the name Napster has a lot of negative baggage with it. That alone would be enough to keep me from dealing with them.

HP isn't dumb

[scifience]

I think that the reason HP didn't go through with the deal with Napster is that they aren't dumb. Anybody with half a brain can see that Napster is doomed to failure.

No company that has no source of generating any profit is going to exist. The only reason Apple can afford to do iTunes is because they are using it to sell iPods, which do make them money. Napster has no such device, and as such have no hope of staying in business for long. Roxio may have thought that they would sell CD burning software as a reuslt of Napster, but I imagine most people already have burning software that they are happy with.

I give Napster another 6 to 12 months, at best.

Re:One reason why I think

[Patik]

The problem with the $15 a month is, I don't want to have to pay if I don't use it for a month. As it is I have spent less then $10 a month on iTunes store (and this month I might not spend anything), for me it has been cheaper.

That's the same rationale I use for choosing my cell phone provider. My friends laugh when I tell them it's 25 cents/min, but since I only use maybe 30 min/month I'd just be wasting 470 minutes with a "normal" $30/month plan. And if I don't use it one month, my balance waits until I need it.

Reg article on HP and dropping the ball on tunes

[plopez]

http://www.theregister.co.uk/content/archive/34980 .html

This is an interesting article. It appears that Compaq had a good device for tunes before being purchased by HP. THe question is why did HP go and outsourced tunes appliance when it already had one it purchased from Compaq? Lack of faith in Compaq? Then why did they they buy Compaq? Did they even know it existed? Then the question becomes did they even know what they bought?

Interesting...

5 reason of why Napstare will fail

[brainnolo]

As many pointed out, the first is certainly - They dont sell a player like iPod other's are: - User experience isn't at iTunes level - Napster history doesnt make it sound "clean" - They are not coming out with Pepsi caps :P - Doesnt work on Mac, that is the platform of artists since its creation. In my opinion HP doesnt want to break good relelations with Apple especially when they can enter in profitable business through Apple itself (last is the ITMS, but what about pro-printers?)

Re:iTunes!=Money

[shark72]

"Why would HP deal with Napster? Song distribution does not bring any money. In fact, Apple claimed (in an old article on TheRegister.co.uk; sorry for no URL) that their iTunes online store did not bring any profit."

I think people are extrapolating way too much from Jobs' statement. When he stated that they were breaking even on iTunes and making the bulk of their money on the iPod, lots of Slashdotters have assumed:

1. That he was being fundamentally truthful (ie. not counting the entire iTunes/iPod ad campaign expenses as an iTunes expense, or similar shifting of numbers which companies do all the time)
2. That this is to be a permanent situation -- that is, that iTunes, unlike many other new businesses, doesn't have a bunch of startup costs like development and advertising which will go down over time, and that their cost of sale will remain constant (ie. they are not expecting fees paid to the record companies to every go down).
3. That the profit and expense model of any other given music download service is fundamentally identical to iTunes -- that is, the other vendors are spending the same amount on advertising, have spent the same amount on development and other startup costs, and make the same margins and have the same costs per sale.

Those who've run a business know that these are groundless assumptions. Extrapolating "song distribution does not make any money" based on a statement that Jobs made about Apple's own unique business many not be accurate.