How Steve Jobs fleeced Carly Fiorina

How Steve Jobs Fleeced Carly Fiorina

During Carly Fiorina’s triumphant performance in the wretched carnival that was the second Republican debate, she picked the perfect moment to play the Steve Jobs card. The subject had turned to her tenure as the CEO of HP, the single aspect of her resume that vaguely qualifies her as a presidential candidate. Industry observers have contended that she did her job poorly, and, indeed, when the board dismissed her in 2005, HP’s stock price rose by seven percent. Meanwhile, Fiorina fell to earth with the aid of a $40 million golden parachute.
Her comeback to this at the debate? Steve Jobs was on her side!

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Ms. Fiorina’s trainwreck stint at HP has been well documented. But I want to address one tiny but telling aspect of her misbegotten reign: an episode that involved her good friend Steve Jobs. It is the story of the HP iPod.

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It was at CES that year that HP announced its version of the iPod. That in itself was pathetic. The company’s motto at the time was Invent! But at the biggest event of the technology world, HP’s big newsmaking announcement was that it was selling someone else’s invention. Nonetheless in our interview on January 8, just off the show floor, Fiorina boasted about cobranding the iPod as if it were an innovative coup for her own company.

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let’s contemplate what Apple got in return for allowing HP to rebrand iPods and share the loot. HP agreed to pre-load Apple’s iTunes music software and store into its personal computers. This was a hugely valuable concession. Apple had only recently begun to push this key software into the Windows world. Millions of HP/Compaq customers would instantly become part of Apple’s entertainment ecosystem.

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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.

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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.'

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The deal she struck with Jobs banned HP from selling a competitor to the iPod until August 2006. And until January of that year it still sold computers with iTunes preinstalled. (At that point HP made a deal with the music service Rhapsody to preinstall its software. Rhapsody Co-chair Rob Glaser, who had observed the drama from his Seattle base, now says, “Steve and Apple fleeced HP in that deal — HP’s version of the iPod was a failure, and Apple was able to grow the iPod.”)

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In short, Fiorina’s “good friend” Steve Jobs blithely mugged her and HP’s shareholders. By getting Fiorina to adopt the iPod as HP’s music player, Jobs had effectively gotten his software installed on millions of computers for free, stifled his main competitor, and gotten a company that prided itself on invention to declare that Apple was a superior inventor.

(Medium)

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