HP: To Invent or Not to Invent?

Since HP’s logo has for some time read ‘HP invent’, one might justifiably wonder exactly why it is that instead of coming up with its own version, HP is about to start reselling the runaway success story that is Apple’s iPod. Especially given the fact that the company should really have some great thinkers in the portable computing space, thanks to its acquisition of Compaq.

Compaq, remember, developed the hugely successful iPaq PDA, which HP still sells today (the fact Apple called its portable music player an iPod may have been a subtle dig at HP’s iPaq, or it may just have been a coincidence). HP does, in fact, offer a version of the iPaq tailored specifically for playing music and other multimedia, which really brings us full circle.

Reselling the iPod is a telling admission that as far as HP is concerned, in this particular space Apple has won. Dell, on the other hand, isn’t giving up quite so easily, and is selling a Dell-branded digital music player. Dell probably didn’t do much of the invention behind its music player – its model is to use industry standards and thus save on proprietary R&D – but it will certainly make more money per device than HP will from selling iPods, not least because Dell also happens to be about the most lean manufacturer on the block. Taken together, these kinds of decisions help to explain why Dell’s revenue was up almost 20% in its most recent quarter, while HP’s were up 9%. Just a thought.

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