Friday, July 29, 2005, 03:00 pm

HP to stop selling Apple\'s iPods

By Kasper Jade

Hewlett-Packard Inc. has decided to stop reselling Apple's popular iPod portable music player, the Wall Street Journal reported on its Web site Friday.

The two companies confirmed that HP will immediately phase out sales of the iPod through its retail distribution partners, whom HP notified of the changes on Thursday.

"They've decided that reselling iPods doesn't fit with their company's current digital media strategy," Apple spokeswoman Katie Cotton told the Journal.

HP, which began selling iPods last September, has been met with frustration overs Apple's marketing tactics, sources familiar with the partnership have told AppleInsider.

In January, HP stopped ordering iPods from Apple's factory, protesting a lack of price protection offered with each player Apple sold to HP. Shortly thereafter HP resumed orders, but the issue was left unresolved.

Reliable sources told AppleInsider last week that the same price protection issues played a major roll in Apple's ability to secure a deal with RadioShack to place iPods in nearly 7000 of its electronics stores this holiday shopping season.

HP had previously formed an exclusive partnership with RadioShack to sell iPods, but was unable to offer the retailer proper price protection. When Apple recently came knocking on RadioShack's door with more amicable terms, the electronics retailer was eager to form a deal and did so.

HP accounted for 8 percent of total iPod sales last quarter, which was up from 3 percent during the previous quarter.