• Business Week, Friday, July 6, 2007 12 PM

Apple, Inc. continues to strike a series of significant deals with companies like AT&T, Google and Universal Music Group, but the computer maker-cum-electronics giant has a spotty history with its business partnerships. The iPhone launch once again showed that the company's ability to attract buzz is unparalleled, but early reports of sluggish network performance and customer activations killed some buzz.

But Apple's problem isn't finding partners--everyone from software developers to airline companies are lining up--it's sustaining them. UMG's decision not to renew its standing contract with Apple is symptomatic of a greater problem, analysts say. "Apple always looks out for No. 1, in the short term," says Roger Kay, founding partner of Endpoint Technologies Associates. Adds one former Apple partner: "I don't think [CEO Steve Jobs] appreciates this concept of a win-win."

Adobe Systems and HP head a list of former unhappy Apple partners. Adobe was angered in the 1980s when Apple started developing competing software. HP used to bundle iTunes with its PCs but failed to earn much from a deal that heavily favored Apple. Then there's Motorola's ROKR, the original iTunes phone. That partnership bombed. MIt looks like UMG is next. The music giant wants to ensure anti-piracy standards for its music, while Apple wants them relaxed. UMG is playing hardball this time.

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