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by Mark Evans
The National Post
January 09, 2004
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Apple Computer Inc. and Hewlett-Packard
Co. said yesterday they have entered into a partnership that will push
Apple's iTunes music service and iPod digital music player deeper into
the mainstream Windows marketplace.
HP will sell an HP-branded version of the iPod later this year, and
it will install the iTunes jukebox software on its consumer personal
computers by April. The news was a surprise because there was speculation
HP was looking at launching its own digital player and online music
service, albeit with partners.
For Apple, joining forces with HP will give it more firepower to establish
the iPod as the lead digital player at a time when there is increasing
competition from rivals such as Dell Inc., Creative Labs and Rio. By
putting iTunes on HP's PCs, Apple will be able to give its music service
a boost by exposing millions of Windows users to a service that has
primarily been the domain of the Macintosh community.
Steve Jobs, Apple's chief executive, said the agreement is all about
selling more iPods.
"Apple's goal is to get iPods and iTunes into the hands of every
music lover around the world, and partnering with HP, an innovative
consumer company, is going to help us do just that," he said in
a statement.
Since the iPod was launched to widespread acclaim in 2001, Apple has
sold more than two million units, including 730,000 in the last quarter.
Apple has 31% market share of all MP3 players sold and 55% market share
in terms of revenue.
The company this week announced plans for the iPod Mini, a smaller player
with 4GB of storage that will cost US$249. Apple recently expanded its
standard-sized 10GB iPod to 15GB while keeping the price tag at US$299.
The iPod is in its third generation and also sells for US$399 for a
20GB model. The top-end 40GB model sells for US$499.
HP and Apple did not disclose how much the HP-branded iPod will cost
or how it will differ from the Apple-branded models, but the companies
said it will be "competitively priced to other digital music players
currently available."
Tom Anderson, HP's vice-president of marketing for consumer PCs, said
the agreement with Apple was consummated because it became obvious the
iPod is the superior digital player while iTunes has been a major success
story with more than 30 million songs downloaded since it went live
last April.
"IPod and iTunes have been available but I don't think the Windows
potential is even close to being achieved," he said. "So,
we think by HP selling this product and supporting it and bundling iTunes
on all consumer PCs, it will open the iPod to a new market. It is great
for Apple, great for us and, most important, great for our customers."
Kaan Yigit, president with Solutions Research Group Consultants Inc.,
said the HP partnership is yet another "brilliant" move made
by Mr. Jobs since he came back to revive Apple in 1997.
While Apple is intent on selling more iPods, he said, the deal will
also let HP position itself as a larger player in the consumer electronics
market.
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