HP is planning a sales drive on its own-branded iPod, as well as digital cameras and home-entertainment systems in China, the company has revealed.

HP announced its deal with Apple under which it will sell its own-branded licensed iPod at the Consumer Electronics Show (CES) in January. It's understood that Apple CEO Steve Jobs was instrumental in this arrangement, and that Apple trounced Napster with the deals success.

Apple chief financial officer Fred Anderson confirmed the strategy Apple is following: "The HP deal shows a willingness to partner where it makes sense and Apple will continue to employ that philosophy. It gives us tremendous momentum behind establishing our standard AAC as the standard (for digital music distribution)," he told analysts last week.

In a note to clients, Needham & Co. analyst Charles Wolf praised Apple's HP deal as it will take iPod into brand new markets – such as China. HP operates through 110,000 retail outlets globally, in contrast to Apple's estimated 8,000.

Speaking at a presentation in Shanghai yesterday HP CEO Carly Fiorina said: "HP's promise to invest in China has remained a priority and our level of investment is on the rise."

China will fuel growth

According to the Taipei Times, Fiorina said: "China is the largest and fastest growing consumer market in the world today with more than 1.3 billion consumers. The use of computers is spreading more rapidly here than any other nation.

"The Chinese market is extremely important to HP. We cannot achieve our objective to be the leading technology company without success here in China."

HP returned to China eight months ago after withdrawing in 2001. According to vice president of Hewlett-Packard's imaging and printing group Ken Koo: "In the seven top cities in China, HP has achieved a 12 per cent market share for personal computers in the eight months of operations since returning to the market."

According to the Taipei Times, HP is now the fifth-largest seller of personal computers in China.

HP plans Chinese IT takeaways

Koo said: "HP plans to open more than 1,000 stores in over 100 cities in China and spend several million dollars on brand-building in China."

The report states that the company plans to introduce its full range of consumer products to China, including the HP-branded iPod music player, projectors, entertainment hubs and displays.

China has an estimated population of 1.286 billion (July 2003, CIA World Factbook). Approximately 69.5 per cent of these are between 15-64 years old.

China is now the world's second-largest economy and its GDP has quadrupled since 1978, reaching $5,000 per head in 2003 for a book purchasing power the equivalent of $5.989 trillion, according to the CIA.

Apple China charges the equivalent of $363 for its own 15GB iPod (according to current exchange rates).