Friday, January 09, 2004

Hewlett Joins With Apple in Music Deal

Hewlett Joins With Apple in Music Deal "The deal calls for Apple to make its popular iPod player in a Hewlett corporate blue hue, while Hewlett, starting this summer, will place an icon on the desktop of its consumer PC's, directing its customers to Apple's software and music store. Financial terms were not disclosed and the alliance does not include - at least not yet - the new mini-iPod that Apple announced earlier this week.
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Despite being two of the companies that most clearly define Silicon Valley, Apple, based in Cupertino, Calif., not far down the highway from Hewlett's headquarters in Palo Alto, has never been particularly close to Hewlett. The love-hate relationship between the two companies is part of the valley's lore. As a teenager, Mr. Jobs brazenly called William Hewlett, Hewlett-Packard's co-founder, to ask for parts for an electronics project. Later Mr. Jobs' co-founder, Stephen Wozniak, then a Hewlett employee, asked his bosses if they wanted to market a personal computer before starting Apple with Mr. Jobs in 1976.
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Microsoft has said that it plans to offer its own MSN music store later this year. Thursday the company appeared unprepared for the Apple-Hewlett agreement, which clearly stung Microsoft executives. They said the agreement would limit choice and harm consumers.
"Windows is about choice, you can mix and match all of this stuff," said David Fester, general manager of Microsoft's Windows digital media division. "We believe you should have the same choice when it comes to music services."
He said that Hewlett would end up confusing its customers because the company has supported several other Microsoft media products that are not compatible with the iPod, including its Windows Media Center software, which Microsoft sees as the crucial digital hub in the home.
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Ms. Fiorina sought to limit any impression that Hewlett, which is a leader in computer printers and designs other consumer products like digital cameras and calculators, was becoming merely a "distribution" company - a term she used to refer to Dell."

I suspect this will turn out to be an infinitely expensive move for HP, in terms of opportunity costs, but it was certainly a well-timed (MacWorld, CES, etc.) press-centric maneuver. Of course, it'll also be a bit awkward if the pre-installed iTunes music service continues to not work with Pocket PC devices, which HP happens to be a leader in...
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