Hewlett-Packard (NYSE:HPQ) Enters into a Partnership Deal with Bang & Olufsen for Audio Systems


Apple Inc. (NASDAQ:AAPL) bought Beats Audio last year for a total of $3 billion. It was after this deal that Beats Audio severed their contract with Hewlett-Packard (NYSE:HPQ).

When Apple Inc. (NASDAQ:AAPL) was getting the deal implemented, HP was selling its Beats Audio integrated laptops in the market. It was due to Beats Audio that the sound aesthetics of those laptops were so better. It is important to mention here that the partnership of Hewlett-Packard (NYSE:HPQ) and Beats Audio happened when the latter went viral back in the year 2011.

Laptops with a Beats logo on them gained much popularity among teens and music lovers. Once Apple (NASDAQ:AAPL) acquired the sound company, HP could only use the logos and equipments till December 31st, 2014. Moreover, HP could sell beats logo laptops till the end of 2015, which meant that the company had to install either custom speakers or enter into a deal with a new music partner.

Hewlett-Packard (NYSE:HPQ) stopped using the logo of Beats Audio and shifted the integration of sound system to in-house. The in-house speakers of HP were quite latest and everybody knew that the company would do well even without any partnership.

Hewlett-Packard (NYSE:HPQ), nonetheless, signed a deal with one of the biggest sound companies, Bang & Olufsen. The tech company will use Bang’s custom made speakers in all of its products, including the speakers and laptops. The company will also be using Bang’s logo once it starts the delivery of new laptops in the spring of 2015.

Vice President of PC and Printing at Hewlett-Packard (NYSE:HPQ), Mike Nash, told the media that HP and Beats Audio had learned a lot from their partnership, and it was time to use that expertise with a new company.

According to market analysts, this deal with Bang & Olufsen will enable Hewlett-Packard (NYSE:HPQ) to maintain its reputation as one of the best laptop providers in the market. The company is planning on incorporating Bang’s music system to its latest tablets and computers. Since Apple will be using Beats Audio system now, chances are that HP will face severe competition in music related gadgets.

Bang & Olufsen was founded back in the year 1925. Since then, the company has been known for the top notch audio quality of its products. Bang uses its speaker technology in cars, speakers, televisions and headphones. Bang entered into a partnership with ASUS back in 2010 whereby the sound company provided an audio system to ASUS.

News has it that HP will incorporate Bang’s technology in its Envy, Omen and Spectre laptops. Another brand of Bang & Olufsen, ‘B&O Play,’ will be used in HP’s tablets, headphones and Pavilion PCs.

The stocks of Hewlett-Packard (NYSE:HPQ) saw a decline of 3.33 percent on the last trading day. The company started its stocks at $33.42 and closed at $32.20, after hitting the highest price of $33.50. HP has a market cap of $60.54 billion with a P/E (price to earnings) ratio of 12.32.

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