HP to Sell a Branded iPod, Audio Format War Heats Up

Hewlett-Packard on Thursday kicked off a new round in the audio format feud by announcing it will sell a branded iPod and bundle Apple's iTunes software with its computers.

Computer and peripheral maker Hewlett-Packard Co. on Thursday said it will soon sell a branded digital music player based on Apple Computer Inc.s popular iPod player. Introduced at the Consumer Electronics Show in Las Vegas, the deal will mean that many of HPs computers will now come standard with Apples iTunes music jukebox software.

According to analysts, this new alliance is a major escalation in the ongoing audio "format war" between Apples iTunes, Microsofts Windows Media and RealNetworks RealAudio.

Hewlett-Packard will begin shipping the HP-branded player in the summer, as well as Apples iTunes digital music jukebox, which offers an integrated connection to Apples online music store. HP officials said its consumer desktop and notebook systems will come pre-installed with iTunes as well as desktop icons that will point users directly to the iTunes Music Store.

The deal is a multiyear partnership, and will not preclude Apple from forming other licensing deals, officials said. The HP-branded device will display the Apple logo at start-up and will be compatible with the wide variety of iPod accessories available from Apple and other third-party vendors.

HP officials did not comment on pricing of the portable player or which models of the original iPod family it will sell. The forthcoming products would be "priced competitively to other digital music players," an official said.

Currently, the deal covers the original iPod and not the new iPod Mini, introduced earlier this week at the Macworld Expo San Francisco show. However, HP may offer the newly released player in the future, according to an Apple executive.


Apple introduced its new iPod Mini at the Macworld Expo in San Francisco this week. However, some attendees sounded a sour note over its pricing. Click here to read more about the new media player.

In a statement, Apple Chief Executive Officer Steve Jobs said the move will ensure more consumers use iPods.

"Apples goal is to get iPods and iTunes into the hands of every music lover around the world," Jobs said. "As the industry balkanizes by offering digital music wrapped in a multitude of incompatible proprietary technologies, consumers will be reassured in getting the same unparalleled digital music solutions from both HP and Apple, two leaders in the digital music era."

HP Chairman and CEO Carly Fiorina said in a statement that the company had explored other alternatives in making its own digital player and jukebox but "concluded Apples iPod music player and iTunes music service were the best by far."

Joe Wilcox, senior analyst with Jupiter Research of Darien, Conn., saw the partnership as a good one, but something that could set up a "format war."

"In many ways, the move is surprising, considering HP is a Windows/PC manufacturer," said Wilcox. "HP and Apple already have a strong relationship in the printer market and HP is a very strong consumer marketing company. Also, it allows HP to differentiate from its major competitor, Dell, which uses MusicMatch and Windows Media technology to deliver its music service."

Wilcox said a concern moving forward will be that the iTunes partnership between Apple, America Online and HP may set up a format war with its other competitors. He added that this situation may not benefit consumers.

"The stage is now set for a format war between iTunes, Windows Media and RealPlayer 10. Thats not good for consumers because they wont be able to play the music everywhere they want like they can do right now with a music CD they buy at a store."

Apple has already sold more than 2 million of the iPod players—730,000 in the last quarter— and earlier this week announced the iPod Mini, a smaller and slightly cheaper version of its regular iPod player. Its online music store has a library of more than 500,000 songs and has sold consumers a total of more than 30 million songs since it started in October of 2003. Discuss This in the eWEEK Forum