Apple, HP Call it Quits on iPod Deal

After a relationship that lasted just a little over a year and a half, Apple and Hewlett-Packard are calling it quits. Various news sources on Friday reported that the two companies mutually agreed to end the deal under which Apple produced co-branded iPods for the computer maker.

The falling out comes as a surprise, since HP as recently as July 1 announced that it would sell a co-branded version the iPod Shuffle, along with an iPod+HP Mini that was announced in June.

At the same time, however, HP had been losing key distribution points, as RadioShack announced on July 21 that it had opted to deal directly with Apple to sell the popular music player. The only major retailer left that was selling the HP version of the iPod in substantial volume was Circuit City.

"HP has decided that reselling iPods does not fit within the company's current digital entertainment strategy. As a result, HP plans to stop reselling iPods by the end of this September," Apple spokesperson Natalie Kerris confirmed to BetaNews.

For current HP-branded iPod owners, Kerris said that HP was intending to continue support for the product. "As with all HP products, HP will support the Apple iPod from HP consistent with the terms of HP's limited warranty and award-winning service."

It is not immediately clear how much the loss of HP would affect iPod sales. Apple said that HP iPods have accounted for an average of about five percent of total sales of the player. Apple does not normally speculate on future products or sales of individual products, and did not provide any sales guidance.

The deal is not a complete loss for Apple, however, as HP will continue to bundle the iTunes software with its PCs for the foreseeable future.