The firm looks set to terminate its 2004 agreement with software giant Apple, which enabled it to sell iPods under the HP brand. The deal originally surprised many because the two companies were in direct competition with each other in the PC market.
At the time HP claimed the agreement would enable it to capitalize on the huge success of the iPod and would help form the focus of its new digital music strategy. Apple was hoping it would be able to exploit HP’s worldwide retail consumer base.
However, the partnership had its downfalls. HP was unable to sell the iPod for nine months after the announcement. The firm also never saw much money from the arrangement. HP accounted for 5% of all iPod sales during the one year agreement.
The move to cut itself off from the iPod comes as HP’s new CEO Mark Hurd attempts to reshape the company by reversing some of the decisions made by his predecessor Carly Fiorina, who was behind the deal with Apple. Fiorina left her position after falling out with the board and failing to generate more revenue for the firm.
