WSJ.com - Apple, H-P Unwind iPod Deal: "The deal between the two companies, which compete against each other in the PC market, was originally viewed as a major step for both companies, but the breakdown of the partnership isn't likely to be a big loss for either side. H-P on average accounted for only about 5% of iPod sales, which totaled about 6.2 million of the devices, worth more than $1.1 billion in revenue, for Apple last quarter. H-P plans to continue distributing copies of Apple's iTunes music software on H-P computers.
Similarly, people familiar with the matter say H-P never profited heavily from selling the iPod and that Apple had more control over the financial terms of the deal. The two companies haven't disclosed terms of the partnership.
One key provision of the Apple-HP deal will remain in place: according to people familiar with the terms of the agreement, H-P cannot sell a competitive digital music player from another company or begin development its own player until August of next year."
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