HP has decided to stop selling iPods as part of a re-evaluation of its strategy in the wake of the departure of former CEO Carly Fiorina.
The world's number two PC manufacturer had contributed around five per cent of total iPod sales, which met their expectations, but is not thought to have made much money from the deal, which was weighted heavily in Apple's favor according to the Wall Street Journal.
An Apple spokeswoman said that the partnership had been terminated because HP 'decided that reselling iPods doesn't fit with the company's digital media strategy'.
In addition to selling iPods through its US online store and retail partners, HP also pre-installed iTunes on all its PCs and plans to continue doing so for the immediate future PC Pro official site reports.
"We do remain committed to our digital-entertainment strategy," HP spokesman Ross Camp said on Friday. "We decided that reselling the iPod does not fit within that strategy."
Although HP plans to stop selling Apple's players, it will take some time for that to happen. The computer maker recently announced a new line-up of HP-branded iPods. Camp said HP plans to continue reselling the music players through the end of September, when it expects to have sold through its inventory of iPods, iPod Minis and iPod Shuffles.
Camp said that HP's "current plan" is to continue including Apple's iTunes software on its desktop and notebook PCs, as it has done since last year.
Under the terms of HP's deal with Apple, the computer maker cannot develop or market a rival digital music player to the iPod until August 2006.
Camp said that HP plans to continue selling other digital entertainment products such as its line-up of televisions and media centre PCs.
Apple also confirmed the unwinding of the deal, noting in a statement "HP's iPod sales have accounted for an average of 5 percent of all iPods sold since the deal was originally struck between the companies in January 2004,” informs Wall Street Journal.
At the time, the deal was viewed as a major departure in strategy for both companies. From Apple’s perspective, it represented the first time Jobs had stepped away from Apple’s go-it-alone strategy, which he had pursued since he returned to run the company in 1997, reminds NYT.
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