Some may remember that CES of January 2004 in Las Vegas. Carly Fiorina, then CEO of HP / Compaq, boasted there of an iPod with the HP logo on the back of the device. The firm became the distributor of the most popular portable player in the world after an agreement that Steve Jobs had devised with a single objective: to leave its competitor far behind in this market.
Fiorina ended up leaving HP and in 2015 she ran for the primary elections in the United States. The one who was ultimately responsible for HP often boasts of his friendship with the late Steve Jobs, but what does not count is how that agreement was a masterful ploy that made HP could not react in the segment of portable music players until now It was too late.
With friends like these who need enemies
It tells Steven Levy in Backchannel : the agreement allowed HP to place their logo on the iPod, but in exchange for two conditions. The first, that HP had to pre-install iTunes on all their PCs. The second, that HP could not develop or market a music player that competed with the iPod until August 2006.
It was at CES that year that HP announced its version of the iPod. That in itself was pathetic. The company’s slogan at that time was “Invent !, but in the most important event of the technology segment, HP’s biggest announcement was that it was going to sell the invention of others.
To Fiorina, an atrocious CEO with whom HP lost half of its value, that seemed like a real candy. The iPod that was launched in 2001 was gaining strength little by little, and by the end of 2003 it was more than clear that the iPod was an iconic product that marked a before and after for Apple.
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At HP they wanted to be infected with that joy, but it was ironic (not to say ridiculous) to use that ‘Invent’ as a slogan while admitting that the invention was actually from others and that they only put a logo on the back Of the device. Jobs also managed to convince Fiorina that the iPod + HP based on the fourth-generation iPod was a slightly different color that allowed differentiate HP.
That was actually counterproductive because the users did not want the HP iPod, but the Apple iPod, the original. In the end those iPod with the HP logo did not represent more than 5% of total sales of iPods. Fiorina had been wrong, and she had done it in a big way.
Another masterful move by Steve Jobs
The launch of that iPod marketed by HP was a failure, and it was for a simple reason: shortly after that announcement Apple began to expand its physical stores, and by the time HP started selling those players in mid-2004, Jobs ended up presenting new models (the iPod Classic Photo in October of 2004 – that Apple would try to commercialize later, or the Shuffle in January of 2005, for example) and left those models that could sell HP biting the dust.
Fiorina would come to realize the error and stop selling the iPod in July 2005. By then the damage was done : Apple had secured the pre-installation of iTunes on millions of HP machines, but there was more to that victory.
In fact, with this movement Jobs had hindered the success of Windows Media and other alternatives that could have had that same native support in the largest PC manufacturer in the world, and also had left the HP iPods obsolete almost at the same time that it put on sale.
Master play, Steve.