Some of you may remember that CES in January 2004 in Las Vegas. carly florina, then CEO of HP/Compaq, showed off 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 conceived with a single objective: to leave its competitor far behind in this market.
Fiorina ended up leaving HP and in 2015 she ran for primary elections in the United States. The former head of HP usually brags about her friendship with the late Steve Jobs, but what she doesn’t tell is how that agreement was a master stratagem that made HP unable to react in the portable music player segment until it was too late.
Jobs and Wozniak worked (somewhat) for HP
Before founding Apple with Steve Wozniak, Steve Jobs explored job opportunities in the technology industry while still very young. In fact at age 12 restless Stevewho was already exploring the world of electronics, needed certain components for a personal project.
Since he couldn’t find them, he thought that a company like HP would have them, so he didn’t call the company’s CEO, Bill Hewlett. At that time the telephone directories included the numbers of all citizens, so it was not difficult to make the call. Hewlett treated him very well, Jobs recalls. He got the components he needed but also a job for the summer where he basically “tightened screws”.
Wozniak himself also worked at HP for a time, and in fact was still on staff at that company when he began work on the development of his newly formed company’s first computers, the Apple-1 and Apple II. That professional relationship would end shortly after, but there are more curiosities: HP had a campus in Cupertinobut in 2010 he sold it to Apple so that it could build its Apple Park.
With friends like these who needs enemies
Steven Levy tells it on Backchannel: the agreement allowed HP to place its logo on iPods, but in exchange for two conditions. First, that HP had to preinstall iTunes on all its PCs. Second, that HP couldn’t develop or market an iPod-competing music player 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 the time was “Invent!, but at the most important event in the technology segment, HP’s biggest announcement was that it was going to sell someone else’s invention.
To Fiorina, a terrible CEO with whom HP lost half its value, that seemed like real candy. The iPod that was launched in 2001 gradually gained traction, 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.
At HP they wanted to get infected with that joy, but it was ironic (not to say ridiculous) that they used that ‘Invent’ as a slogan in a big way while they ended up admitting that the invention was actually someone else’s and that they only put a logo on the back Of the device. Jobs also managed to convince Fiorina that iPod+HP based on fourth-generation iPods out of a slightly different color that allowed to differentiate HP.
That actually backfired because users didn’t want the HP iPod, they wanted the Apple iPod, the original. In the end those iPods with the HP logo accounted for no more than 5% of total iPod sales. Fiorina had been wrong, and she had been wrong.
Another Steve Jobs masterstroke
The launch of that iPod marketed by HP it was a failureAnd it was for one simple reason: Shortly after that announcement, Apple began expanding its physical stores, and by the time HP began selling those players in mid-2004, Jobs ended up presenting new models (the iPod Classic Photo in October 2004 -which Apple would try to market later-, or the Shuffle in January 2005, for example) and left those models that HP could sell biting the dust.
Fiorina would eventually realize the error and stopped selling iPods in July 2005. By then the damage was done: Apple had secured iTunes pre-installation on millions of HP machines, but there was more to that victory.
In fact with said movement Jobs had hindered the success of Windows Media and other alternatives that might have had that same native support from the world’s largest PC maker, and had made HP’s iPods obsolete around the same time they were released.
Master move, Steve.
Image: L’aventure Apple