HP Buys Melodeo Music Streaming Service For $30m

By Peter Lavelle

29 June 2010 12:48 GMT
Image: Brand-M.Biz

Hewlett Packard has bought the mobile music provider Melodeo, sparking rumours that HP intends competition with Apple's music streaming service Lala.

NuTsie: Much much more than an anagram of iTunes.

Ink cartridge manufacturer Hewlett Packard has bought the music streaming service Melodeo in a deal rumoured to be worth $30m. The chief asset of Melodeo is NuTsie, a program that scans the user's iTunes library to create playlists on their mobile device. The purchase enables HP to integrate cloud-based music streaming into their portable products.

The acquisition is important for several reasons:

• Melodeo's NuTsie is an alternative to the Apple-owned music streaming service Lala. NuTsie has to date been a minor player in music streaming. Hewlett Packard's backing though means NuTsie could soon have a much larger presence, encouraging competition and ultimately better deals for consumers.

• Increasingly it looks like Hewlett Packard is seeking a showdown with Apple. HP's recently revealed Slate tablet for example is an obvious iPad competitor, and incorporating NuTsie gives the State greater clout. Once more, this competition can only benefit consumers.
  

Speaking more generally, buying Melodeo could be an astute move by Hewlett Packard. Sales of mobile devices are expected to outstrip PC sales in coming years, and buying Melodeo gives HP an excellent foothold into this market. Moreover, the purchase compliments HP's recent buy-out of mobile OS developer Palm. Palm's webOS operating system gives HP the capacity to produce, if not a smartphone or iPhone competitor, then something similar. HP's recent purchases are certainly converging toward a single mobile-device oriented purpose.

Speaking in a press release, a Hewlett Packard representative said of the purchase: “HP's acquisition of Melodeo is another example of our efforts to bring new, innovative technologies to market. We are excited about the potential of this technology to bring the power of cloud-based delivery services to millions of customers.”

Comment

Hewlett Packard is demonstrating itself a company with foresight recently. Though representatives insists printer and PC sales are buoyant, the corporation's newest initiatives suggest it is investing elsewhere to secure its future. For example:

• HP recently rebranded itself a service provider rather than hardware manufacturer. This refers to the company's buy-out of Electronic Data Systems (EDS) in 2008, a document management service provider. HP has since grown this sector of its business significantly. Further, reports this week stating that the managed print services is worth $20bn give HP every reason to exploit this goldmine while the going's good.
  

Elsewhere though, HP has worked hard to guarantee its relevance in the changing digital landscape. Hence the recent announcement of internet-ready printers featuring individual email addresses. Hence the announcement of the Slate tablet. Hence whatever project HP is planning using the newly acquired Palm WebOS. HP obviously refuses to be left behind in the digital revolution: on the contrary, the company intends to lead the pack.

Hewlett Packard's ambitions may be frustrated though, and by one company in particular: Apple. HP is the world's biggest electronics manufacturer, but in the markets HP is targeting – mobile devices, tablets – Apple are the undisputed leaders and innovators. Hence in this sense Hewlett Packard is already playing catch up. To be sure, no one really knows what HP intends with its newest acquisitions, but one thing is certain: to knock Apple from the top spot the release must be something special.

Sources

Farukh Shaikh, 'HP Snaps Up Mobile Music Service Provider Melodeo,' News. Ebrandz.com, 28 June 2010.
Evelyn Rusli, 'HP Goes NuTsie For Melodeo, Pays $30M For Music Streaming Service,' TechCrunch.com, 23 June 2010.
Thea Chard, 'HP Buys Melodeo, Rumblefish Partners With YouTube, Motoricity Declines & More Seattle-Area Deal News,' Xconomy.com, 29 June 2010.