Apple: Making Up and Breaking Up.

Peter Burrows

There's lots of change afoot in Apple land on the partnering front these last few days. One big player, Disney, is buddying up closer than before; the company announced that it will be making much more of its content available on iTunes, including condensed versions of some of this week's Bowl Games, various ESPN shows and even old Schoolhouse Rock segments.

But two heavy-hitters are taking big steps in the other direction. Having said it will stop offering iTunes on its PCs this month, Hewlett Packard is expected to announce its new partner at the Consumer Electronics Show (if you think about who is the leader in subscription services, that shouldn't be any REAL surprise.) And Motorola announced today that it would not include iTunes on future versions of the much-criticized ROKR.

That's two big players on the outs, and one on the ins. But I think the calculus works in Apple's favor, in the end. Steve Jobs has already benefitted by having HP's help in expanding its distribution network for iPods. As for Motorola, most analysts now expect Apple to launch its own iPod-equipped phone--or will it be more of a phone-equipped iPod--possibly to be called the iPhone. As AppleInsider points out, Apple already owns the domain name. Either way, Apple will have learned something about the cell-phone market via its ROKR experiment.

The Disney deal could be more strategically important going forward. For starters, Disney must be feeling good about sales of shows such as Lost and Desparate Housewives via iTunes, for it to expand the relationship in so many directions. That bodes well for the video download business. Also, I find it interesting that Apple agreed to offer some free, adverstising-supported content as well, such as the ABC World news Tonight webcast. This is the same company that on the music side has refused to budge from its $.99 a la carte pricing model, despite calls from many of its partners to let them run pricing experiments or to offer subscription services. That makes me wonder if Jobs might be looking at taking a different, more multi-pronged approach to the video busines--say, a subscription service that would let people watch (and store) their favorite shows for a monthly fee? After all, while most people are used to the idea of owning their music, this is how most consumers already pay for their TV--by cutting a check to a cable company.

And what about movies? While I'm told that Jobs feels it currently takes too long to download a full-length movie given today's broadband pipes, that will change over time. I find it hard to believe that Disney's decision today to offer short films such as the 1935 classic "The Tortoise and the Hare" will one day give way to offering more recent Disney animated flicks such as the Lion King. And if Disney can help make Apple a center of gravity for video distribution for Hollywood, it can do more for Apple than Moto or HP can. Not to mention the fact that a close Disney-Apple partnership obviously raises the already high chances of a rapprochement between Disney and Pixar.

Before it's here, it's on the Bloomberg Terminal.