HP CEO explains why company stopped selling iPod | iLounge News

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HP CEO explains why company stopped selling iPod

In an interview with BusinessWeek, Hewlett-Packard’s new CEO Mark Hurd explains why his company decided to stop selling rebranded versions of Apple’s iPod.

“There are a lot of bets we can make, but we want to make those bets in markets that are exciting, have growth, are worth dominating—make that ‘leading,’ the lawyers don’t like ‘dominating’—and in which, by the way, we can lead,” Hurd said. “So think about putting our logo on the iPod. Is the market worth leading? Maybe it is. But can we lead it, with no or very little technology differentiation? Doubtful. You have to go into places where you can lead.”

HP said it would stop reselling Apple’s line of iPods in late July, saying only that “the iPod doesn’t fit in with our digital entertainment strategy.”

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Comments

1

What doublespeak language is Hurd speaking? Sad, the end of once great company in the hands of a babbling idiot. Hurd doesn’t know the difference between an iPod and another brand of an MP3 player. Sad, very sad.

Posted by FahrenheiPod 451 on September 1, 2005 at 11:50 AM (PDT)

2

That statement makes no sense whatsovever.
They obviously weren’t making enough money off sales.

On a different note, the HP iPod should be worth something in 80 years!

Posted by A on September 1, 2005 at 12:35 PM (PDT)

3

Guys-

What he said was crystal clear.  He said the MP3 market may be a market worth leading, but that he was doubtful that HP could lead it.

I thought his statement was both humble and accurate.

Posted by Talking Madness in Los Angeles on September 1, 2005 at 12:44 PM (PDT)

4

TM,

I can assure you that Mark Hurd is not a humble man; that’s one aspect he’s far from. I would go so far as to say that his statement is both doublespeak and arrogant.

Posted by FahrenheiPod 451 on September 1, 2005 at 1:22 PM (PDT)

5

Fahrenheipod-

You’re right about him not being humble.  To make an adjustment let me say that Hurd’s statement was humbling…I believe HP was humbled by the fact that they will not dominate the filed of digital music.

But, I don’t think it was doublespeak…it was quite clear what he said…he admitted it was doubtful HP would dominate that market.

Posted by Talking Madness in Los Angeles on September 1, 2005 at 2:00 PM (PDT)

6

TM,

You’re right about your statements. And Jack I somewhat express your same thoughts. I don’t know about the blowing thing, but the Board of Directors obviously hired this shill to insure them, and their large investors of getting their pockets lined. HP was once about innovation, and had strong values practiced by Bill and Dave along with the people they worked with to build a hallmark tech company—no more.

Posted by FahrenheiPod 451 on September 1, 2005 at 4:31 PM (PDT)

7

He’s lying through his teeth.  Hp was making no money on the iPod because Jobs gave them no margin.

Posted by BSer on September 1, 2005 at 10:31 PM (PDT)

8

Doublespeak? I don’t think so. Organizationalspeak? Ya betcha by golly wow.

“But can we lead it, with no or very little technology differentiation? Doubtful”

That Hurd statement above to me is the most telling. I read it as:

“How in hell can WE lead if we’re relying 100% on Apple’s technology, with NOTHING other than a simple logo and different art on the packaging to make any distinction for US in the DAP marketplace?”

He’s right. They can’t hope lead, at least using someone else’s badge-engineered product. Everyone who cares pretty much sees the HP iPod as a follower riding on Apple’s coattails.

And HP is too proud of a company to want to put up with that sort of BS. The fact that morale was reportedly as bad as it was under Carly only reinforces that concept.

Posted by flatline response on September 1, 2005 at 11:53 PM (PDT)

9

Flatline,

I just do not believe that Hurd has the personal goods to lead a major tech company. He’s a salesman and has no idea about tech in comparison to someone like VJ, in HP’s printer division. Carly’s biggest mistake was merging Compaq, which in itself proved to add very little, and in fact actually took away from HP. Hurd will not last—he’s no better. HP to me is like General Motors, it has a cash cow funds, but the burn rate will dissipate those if HP doesn’t get back to the their once strong internal values—Hurd does not share those values. Besides that, the market has changed and the personal consumer expect more product for less price; the players in that league have been dominated by DELL. The HP iPod gig was an expensive flash-in-the-pan and no one believed that they were purchasing an HP iPod, they knew they were simply getting an iPod with an HP logo on it; it was a Carly’s idea to make HP hip. HP has never been in the hip market, it has been in the reliable/dependable market; that’s a tough market to say the least. HP did major groundbreaking by hiring a woman CEO, and now they are trying to rid every aspect of Carly to the point she never existed at HP, including the removal of her portrait that once graced, along with the other CEO’s, the main HP building. Shameful. If nothing else HP, under Carly meant something to the burgeoning women’s market in more ways than one. Instead, it’s back to the good ol’ boys backslapping which is exactly what Hurd represents in every facet—a backwards step in the tech world.

Posted by FahrenheiPod 451 on September 2, 2005 at 12:57 AM (PDT)

10

I agree with you FahrenheiPod 451. Sometimes I do tend to exaggerate things and go for the gross-out, but the main idea is there. This guy is a shill. I just think that most people think that this guy didn’t seem like quite the attention and media-hog that the last CEO was, so they don’t want to raise a fuss about it.

Posted by Jack on September 2, 2005 at 6:08 PM (PDT)

11

I’ll reserve my judgement on Mark Hurd until some tangible results—good or bad—are reported back. But an almost 40% rise in HP’s stock since his arrival isn’t something to easily cast off; some others—and fairly influential and powerful, I’d gather—seem to believe in him as well.

Hurd’s tenure as CEO at NCR was pretty damn impressive as well.  Sustained sales growth and TRIPLE the stock value from the time he took the reigns until his resignation; he may not know laser printers and blade servers like he did cash registers but he does seem to have a handle on managing to get results. The fact that he believes in letting his department heads lead their own divisions rather than trying to centrally micro-manage everything doesn’t seem so insane for a company as diverse as HP is. They may not have a flamboyant leader there anymore, but then HP also doesn’t have to deal with the usual associated strong-willed baggage as well.

I agree that Carly’s Compaq merger was her biggest mistake (but NOT her only one); the cross-pollination between the two companies really gained little if anything in the end (HP DID gain the iPAQ name—okay, big whoop—and some major enterprise cliente). So they temporarily took the PC lead away from Dell. Boy, that lasted all of ten minutes. The fact that she pushed the deal through despite the open divisiveness and skepticism from within the company and from Wall Street over the merger shows what sort of pig-headed arrogance she had as well; crossing the line from visionary to conceited stubborness is often way too easy to accomplish, and the Compaq merger bore that out.

As for HP shedding their Carly Era…they aren’t the first to intentionally forget a CEO’s reign and they won’t be the last. Usually when any corporation fires a leader, remaking themselves in ANY image OTHER than the former boss is a mandatory and obligatory given. Shameful? Perhaps. But first and foremost is the necessary attention the board and company must pay to the shareholders, and if heads and personas must roll, then roll they must; keeping the investors happy overrides pretty much everything else, especially for an established company like HP. Considering that few on Wall St. shed tears over Fiorina’s departure (she DID have this constant habit of missing earnings expectations—a real no-no for CEOs wanting to keep their jobs), I’d guess that HP will do ok by Hurd, or at the very least better than the level at which Carly was continually underacheiving at while at HP. Perhaps there was a bit of the good ol’ boy network going on at HP, but Carly never showed them up by doing a Meg Whitman-like performance, either.

Posted by flatline response on September 5, 2005 at 1:07 AM (PDT)

12

Flatline,

It will be interesting to see how matters resolve themselves as Hurd is simply initiating textbook policy to reduce costs and increase the bottom line: workforce reduction; buy back stock. The real value of HP for the investors will be what products and services they provide to drive sales. Hurd is not remotely facile in those technical areas that have made the bottom line at HP; NCR is not even remotely close to being a tier business the likes of HP. Hurd in many ways is a move to head back to a conservative base (somewhat resembling the current political situation and read that he is more a figurehead with others in the background running the real show).

The HP iPod implementation failed are several levels: agreements between Apple/HP; poor rollout on HP’s part; dumb idea to begin with. The bigger question is whether HP is no longer viable in certain markets, such as PC’s. The best PR for an HP iPod would have been Jobs giving Carly a special HP blue iPod and the PR spin that HP would be including iTunes with their PC systems.

Posted by FahrenheiPod 451 on September 6, 2005 at 8:16 AM (PDT)

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