“Apple and HP Sitting In a Tree …”

It appears as if Apple actually wants to hold on to its lead role this time – they might even like making money!

Apple Computer on Thursday announced a surprise alliance with Hewlett-Packard, the world’s second largest computer company, in a bid to further bolster its leading position in digital music hardware and song sales.

HP has agreed to sell a version of Apple’s hugely successful iPod digital music player as part of a reseller deal. It will also bundle Apple’s music software iTunes in millions of its PCs, potentially boosting iTunes leading position in online song sales.

The two groups declined to comment on the financial details of the alliance, but people close to the companies said there was a revenue-sharing arrangement.

It is the first time Apple has made such a deal with a rival computer company. In the past, Apple has pioneered several different technologies and markets but has not managed to retain its leading positions.

Carly Fiorina, HP chief executive, said: “We explored a range of alternatives to deliver a great digital music experience and concluded Apple’s iPod music player and iTunes music service were the best by far.”

….On Monday, Steve Jobs, chief executive of Apple said that iPod sales reached a record in the December quarter, selling 730,000 units. Apple holds the lion’s share of the market for digital music players with about 31 per cent of units sold in 2003, and about 30 per cent of revenues. Its iTunes music store has sold more than 30m songs and is nearing 2m song sales per week. In addition, Pepsi will give away 100m iTunes songs in February as part of a promotional campaign for its soda drinks. [FT]

Is Apple actually allowing itself to be integrated into the rest of the computer world? This move strikes me as very sginificant on several levels – I’d like to hear what those more knowledgable about Apple than I have to say about this.