Could someone explain HP to me? (1 Viewer)

[PatB]

If the HP Ipod, is just an ipod, and it sells for the same price as an ipod, what benefit does HP get out of this?

 

[Chris Derby]

well, for one, they aren't competing in the portable music player market with in inferior product (like dell).

apple, on the other hand, is hoping their hardware will get more market penetration though HP selling their ipods.

also, expect to see the HP ipod with more discounts (or bundled with HP PCs) than the apple branded unit.

 

[PatB]

Yes it makes sense for apple, but for HP it seems like they're going to take a loss.

 

[Chris]

HP is using it as a marketing tool to sell their name brand and to bundle it with their PCs. HP believes that bundles featuring their laptops + an HP Ipod make a more attractive offer then say, Dell & their own hardware.

 

[SethH]

Also, HP and Apple have a deal. HP is not selling these things to you at cost. Apple is probably selling to HP at a significant discount -- let's say $20 over costs for Apple. That way Apple still makes a little money, HP probably pulls in $50-$100 per iPod, and Apple gets the increased market share and increased users for iTunes.

Obviously, my numbers are probably off, but nobody knows how much it costs to make an iPod exactly or what the terms of the deal are between Apple and HP. But hopefully you guys can see through the numbers to my point.

 

[PatB]

The market share theory makes some sense, but HP just seems like an odd choice to pair with. But HP making that much more than apple on a deal like this doesn't sound that smart. I'm not being argumentative, I just can't make sense out of this deal.

 

[Chris]

Also, it's a good deal for HP as well on the back-end; Apple gave up their printer industry and now is planning to bundle HP printers

See as an example:

http://tinyurl.com/3w3qc

 

[Peter Kline]

For HP it means extra revenue and being associated with the top-selling player. In the U.S. and world-wide, HP has many more retail outlets then Apple. They also have a large business base with many more accounts then Apple as well. It benefits both companies on the bottom line. It is expected that a total of 1 million iPods (HP and Apple) will be sold per month between October and December. That triples the amount per month when Apple was selling the player themselves.