Is HP the Next Apple?

It all started in a California garage for Hewlett-Packard (NYSE: HPQ  ) and Apple (Nasdaq: AAPL  ) , but there seems to be a lot more similarities lately.

No, HP CEO Mark Hurd isn't parading about in denim and a black mock turtleneck. But HP's acquisition this week of Melodeo -- the parent of cloud-based music streaming service nuTsie -- comes just six months after Apple nibbled in this niche with its purchase of Lala.

You don't find too many companies running into the burning building that digital music has become. Short of Apple's own success with iTunes, there aren't too many smiling faces here.

Music subscription services have been in a state of flux. Napster cashed out to Best Buy (NYSE: BBY  ) . RealNetworks (Nasdaq: RNWK  ) announced earlier this year that it would be spinning off Rhapsody. Microsoft's (Nasdaq: MSFT  ) Zune Pass has been running around like an angry headless chicken for years.

Oh, and don't bother telling me that Apple shut down Lala last month. We both know Apple has big plans here. It didn't buy the site a few months ago to simply cast it in a Silicon Valley snuff film.

Apple and HP are buying small digital music sites because they know that they have the wingspan to widen the reach of the upstarts. These are good moves, and opportunistic net swoops.

More than music
Following Apple into the record store doesn't make HP a Cupertino wannabe. However, consider the delayed HP Slate tablet computer. Try on its gutsy $1.2 billion deal for Palm (Nasdaq: PALM  ) for size.

HP and Apple have been making desktops and laptops for ages, but now HP is following Apple into the realm of iPad and iPhone contenders.

Don't get me wrong. I don't believe that the Slate -- either as the original Windows-flavored model or the eventual Palm webOS version that will hit the market -- is going to kill the iPad. No matter what HP does with Palm's bread-and-butter smartphone business, it's not going to eat at iPhone the way that Google's (Nasdaq: GOOG  ) open Android mobile operating system has in recent months.

However, HP isn't spending 10 figures on Palm -- and substantially less on Melodeo -- for kicks. HP wants to stand out with unique operating systems and entertainment services.

When HP grows up, it really, really, really wants to be Apple. Good luck trying to convince me otherwise.

Is HP really trying to be Apple Lite? Share your thoughts in the comment box below.

Best Buy and Microsoft are Motley Fool Inside Value recommendations. Google is a Motley Fool Rule Breakers pick. Apple and Best Buy are Motley Fool Stock Advisor choices. Motley Fool Options has recommended a bull call spread position on Best Buy. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Best Buy. Try any of our Foolish newsletter services, free for 30 days.

Longtime Fool contributor Rick Munarriz is starting to see more smartphone products creep into his home lately, but he does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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  • Report this Comment On June 24, 2010, at 4:06 PM, millsbob wrote:

    why does everyone writing about Apple/AAPL insist on calling it a "mock" turtleneck? it's a turtleneck sweater, plain and simple.

    mock turtlenecks were popular in the '60's, as a way to look like you were wearing a turtleneck sweater *under* a shirt, but were really just the neck part. yes, really.

    i haven't seen one in 40 years, and what Steve wears ain't it.

  • Report this Comment On June 24, 2010, at 4:31 PM, timmythetiger wrote:

    Strong, potent, relevant commentary there, millsbob. Here's hoping that you don't have a job where you handle explosives or give out medical advice. Cheers, dood.

  • Report this Comment On June 24, 2010, at 6:03 PM, chuckbreaux wrote:

    millsbob:

    What you're talking about I believe was called a "dickey." See http://en.wikipedia.org/wiki/Dickey_(garment)

    A "mock" turtleneck is a full shirt or sweater that has a collar going up the neck like a turtleneck, but it is only one layer of cloth, e.g. http://www.landsend.com/pp/WinterlockMockTurtleneck~201061_-...

    A real turtleneck has a collar going up the neck that has a least two layers of cloth folded down on itself, e.g. http://www.landsend.com/pp/SolidTurtleneck~10837_59.html?bcc...

    If you go check out Lands' End, L.L. Bean, or other such clothes retailers, you can see the differences.

    Steve Jobs indeed wears black mock turtleneck shirts.

    Chuck

  • Report this Comment On June 24, 2010, at 6:26 PM, TMFRhino wrote:

    Haha, I love the turtleneck debate :).

  • Report this Comment On June 25, 2010, at 3:58 AM, KurtEng wrote:

    Excellent analysis, Chuck :)

  • Report this Comment On June 25, 2010, at 6:19 AM, notehound wrote:

    I am a dinosaur and an "early technology adopter" at least a decade older (and hopefully richer and wiser) than the hordes that use the Blackberry or the iPhone. Yes, I have been using Palm [highly reliable] devices since 1997 and yes, I bought one of the first Treo Smartphones and used it wore slap out and I had to get the next gen Treo to replace. I have never lost a single contact [knock wood] since I entered the first name & number almost 13 years ago - and I have been surfing the web [slowly at first] using my Treo since well before Apple ever dreamed of its beautiful iPhone object.

    The PalmOS is reliable, fully functional and best of all - the Treo I use has a Blackberry-beating easy-as-pie one-handed typing keyboard you can use with one thumb if nececessary. It doesn't require the undivided attention of the user to navigate using the toggle device and it is tried-and-true through many countries, 2G, 3G, etc.

    The only problems I have ever seen with Palm's approach was its inability to come out with "Push" E-mail within months after the Blackberry was introduced. IMHO, a Push E-mail device using the PalmOS would be a perfect support for work and play. I love a stylus, too (and have only lost one in 12 years).

    Of course, it wouldn't hurt to bring back handwriting recognition as part of the OS, like the PalmPilot used to have. I could write pretty damn fast using the stylus - although typing on the keyboard is almost as fast.

    If HP can do a phone as reliable as the Palm phones have been and include the "gee whiz" aspects of iPhone while maintaining backward compatibility with Palm devices, they should have a good chance at making a run at the iPhone. If they include smooth Skype operability, I'd pay $500 for the device, plus $20 per month forever to have the ability to use the web to make all my calls worldwide.

    -Dinosaur

  • Report this Comment On June 28, 2010, at 2:41 PM, timmythetiger wrote:

    Hey, notehound, what does any of this have to do with mock turtlenecks? Try to stay on topic, ok?

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