HP cuts off its nose to spite its face by giving up iPods
Tags: Marketing, HP, Apple, iPod
In what we assume must be an attempt to focus on its core business, HP today announced that it is not going to sell iPods any more. That move leaves an interesting question unanswered: How is HP going to participate in portable digital music? The iPod accounts for 80% of the music player market now. The next largest player only has 5%. So not selling iPods means that either HP intends to bypass this market or is engaged in wishful thinking that some magical Microsoft/Intel combination will allow it to change those figures. Either way, we can forget about HP being a consumer electronics company until it figures out that music is important to consumers.
This is a great example of how high-tech management by the numbers without a clearly communicated strategy doesn't work. Blackfriars noted previously that a CEO who focuses primarily on cost-cutting was not the type of person who was going to revitalize HP into any semblance of its former self. When you combine this move with the decision last week to eliminate 10% of its workforce, we can only conclude that the new HP strategy is not about innovation and new markets. With the PC business stuck in the doldrums and its printer business under assault from Dell and the Japanese, unless HP starts communicating clearly what it plans to do and why, the HP way is gone for good -- and maybe HP as a high-tech leader as well.
In what we assume must be an attempt to focus on its core business, HP today announced that it is not going to sell iPods any more. That move leaves an interesting question unanswered: How is HP going to participate in portable digital music? The iPod accounts for 80% of the music player market now. The next largest player only has 5%. So not selling iPods means that either HP intends to bypass this market or is engaged in wishful thinking that some magical Microsoft/Intel combination will allow it to change those figures. Either way, we can forget about HP being a consumer electronics company until it figures out that music is important to consumers.
This is a great example of how high-tech management by the numbers without a clearly communicated strategy doesn't work. Blackfriars noted previously that a CEO who focuses primarily on cost-cutting was not the type of person who was going to revitalize HP into any semblance of its former self. When you combine this move with the decision last week to eliminate 10% of its workforce, we can only conclude that the new HP strategy is not about innovation and new markets. With the PC business stuck in the doldrums and its printer business under assault from Dell and the Japanese, unless HP starts communicating clearly what it plans to do and why, the HP way is gone for good -- and maybe HP as a high-tech leader as well.
posted by Carl Howe at
5:32 PM
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