Hewlett-Packard Gets Out of Apple's iPod Pie

H-P will stop reselling the popular digital music player.
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Updated from 3:31 p.m. EDT

Apple Computer

(AAPL) - Get Report

said

Hewlett-Packard

(HPQ) - Get Report

is suspending a deal with Apple to license and sell iPods.

Apple spokesperson Natalie Kerris confirmed a report on

The Wall Street Journal's

Web site Friday that H-P, which has accounted on average for about 5% of overall iPod sales, would stop reselling the popular digital music player. H-P notified its retail distribution partners that it would phase out iPods, the

Journal

said.

"H-P has decided that reselling iPods does not fit within the company's current digital entertainment strategy," said Kerris. "As a result, H-P plans to stop reselling iPods by the end of this September."

Kerris said that H-P would continue to support iPod warranties and bundle the Apple's iTunes software on its PCs. H-P did not immediately return a call seeking comment.

The end of the deal was driving down the stock prices of Apple and further hit

Synaptics

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, which supplies parts for the iPod.

Apple's stock, which had been trading as high as $44.38 Friday, closed down 2.6% at $42.65. Hewlett-Packard's stock was up 0.5% at $24.62.

Synaptics, already having a bad trading day after issuing dismal guidance after the bell Thursday, ended Friday trading down 25% to $15.85.