Steve Jobs and IPod

The iPodOne of the things Apple had occasionally done to increase the appeal of the Macintosh platform was to build its own applications to match the style of the Mac and show off its capabilities. With the Mac’s revival and the launch the new Mac OS X operating system in 2001, Apple resurrected the strategy of making some of its own software apps.

One of the apps that it decided to build was a software jukebox so that users could copy music CDs to their Macs and manage all of their music digitally. This was part of Jobs’ strategy of turning Apple into a digital lifestyle brand and the Mac into a personal media hub.

In the process of making the software that would become iTunes, the Apple team also decided to make it compatible with some of the new MP3 players that allowed users to carry some of their songs in the digital equivalent of a Sony Walkman. However, after looking at the various MP3 players, Apple decided that all of them were crap and decided to design its own player instead. That’s when the iPod was born.

The first iPod launched on October 23, 2001 with 5GB of storage and the promise of “1,000 songs in your pocket.” Initially, it was only compatible with Macs and Apple viewed it as an accessory to help increase the appeal of the Mac. But, Jobs quickly realized that the iPod had much broader appeal, and much bigger sales potential.

In 2003, Apple ported iTunes to Windows and sales of the iPod skyrocketed. By the end of 2004, Apple had sold over 8 million iPods and was the dominate force in the digital music player market. Despite this dominance, and the fact that Jobs had convinced the music industry to sell its songs through the iTunes store, there were still a lot of doubts at that point about whether Apple would continue to own this market. With new players coming from Sony, Rio, Creative, Dell, and (eventually) Microsoft, a lot of analysts expected Apple to fade into a niche player, just as it had done in the computer business. It never happened.

By 2009, the iPod accounted for over 70% market share in the digital music player business.