HP's iTunes obligations coming to an end

Hewlett Packard's deal with Apple, requiring HP to bundle iTunes with its PCs, will lapse in January. HP says it plans to pursue a new digital entertainment strategy in 2006, but isn't telling what that strategy will look like.  Business Week reports that there has already been some "cozying up" between HP and Microsoft, and suggests that HP will once again become a "chess piece," although not a very powerful one, in Microsoft's efforts to beat Apple in the music and digital media markets. Ah, what a tangled weave these companies weave.

A little history puts the demise of the HP-Apple deal in perspective. Back in January 2004, HP's former CEO Carly Fiorina, inked a deal with Apple allowing HP to resell iPods with the HP logo on the back and requiring HP to pre-install iTunes on its PCs. HP insiders criticized the deal from the start, concerned that it distracted HP from developing Windows Media products, and that it made the company look like anything but an innovator. To make a long story short, HP quit selling iPods this summer and will soon be free of obligations to bundle iTunes with its PCs. Does Apple care? We'd bet not.