The HP-Apple deal seemed very strange when it happened - if this story is accurate it is another example of Jobs taking advantage of yet another CEO who wasn't playing at his level.
One might even argue that since Carly Fiorina wasn’t making much profit from selling computers, each machine her company sold under this deal delivered more value to Apple than it did to HP.
In return, HP got the right to sell iPods. But not in a way that could possibly succeed. Fiorna boasted to me that she would be able to sell the devices in thousands of retail outlets; up to that point Apple mostly sold them online and in its own stores. But by the time in mid-2004 that HP actually began selling its branded iPods, Apple was expanding to multiple retail outlets on its own. And soon after HP began selling iPods, Apple came out with new, improved iPods — leaving HP to sell an obsolete device. Fiorina apparently did not secure the right to sell the most current iPods in a timely fashion, and was able to deliver newer models only months after the Apple versions were widely available.
So it was no wonder that even at the program’s peak, it represented no more than about five percent of total iPod sales.
Even with a detail like the color of the iPod, Jobs totally rolled over Fiorina. When I spoke to Fiorina at CES, she crowed that HP’s iPods would be distinctive in their look; unlike Apple’s pristine white, the Pod would be a fetching shade of blue. Presumably, this would distinguish its iPod from Apple’s and provide a reason, however slight, for a consumer to choose it over the Cupertino model. She was adamant that HP had the right to determine what color the HP iPod would be. Knowing Steve Jobs and his protectiveness about all things design, this sounded dubious to me. I got on the phone with him that very day, and asked him if HP would be producing blue iPods. There was a significant pause. “We’ll see,” he finally said with a bit of ice in his voice.