Smash hit

The creative genius behind the look and feel of the iPod was Jonathan Ive, an affable Briton who had arrived at Apple nearly a decade earlier. He had already earned much praise and the appreciation of consumers for his creation of the futuristic look that became the iMac’s signature style.

“From early on, we wanted a product that would seem so natural and so inevitable and so simple, you almost wouldn’t think of it as having been designed,” said Ive.

“Like everyone else on the project, I knocked myself out, not so much because it was a challenge — which it was — but because I wanted to have one. As a design team, I cannot remember the last time we were collectively lusting after a product as badly as we are after an iPod.”

The time had come to introduce iPod to the world. On October 23, 2001, Apple introduced what would turn out to be its most successful product ever — so successful in fact, that it appears to be changing the character of Apple from a computer company into . . . well, time will tell.

The iPod had struggled past battery problems to offer as much as 10 hours of playing time between charges. It was white, and not just everyday white but a stunning, luminous, brilliant, attention-getting white. Inside, it carried 32 megabytes of chip memory, far more than almost any Palm Pilot. By being built around a 5-gigabyte hard drive instead of the widely used flash memory, the iPod offered storage for 1,000 songs.

“With iPod, listening to music will never be the same again.” That statement proved to be truer than Jobs could ever have imagined.

Whether by extraordinary good luck, the sheer love of music, or astounding foresight, Jobs had found a goldmine.

The third piece of the music equation was the iTunes Music Store. The toughest part was not the technology but securing the co-operation of Sony, Warner, Universal, EMI and BMG — the five big music companies. Jobs’s solution couldn’t have arrived at a better time. The music business had suffered a loss of revenue from hordes of people illegally swapping music files over the internet. Features had been built into the iPod to deter piracy. But they were not the rigid, customer-be-damned kind of restrictions that the music industry favoured. Nor were they the anything-goes freedom of the song-swappers; but a sensible, carefully thought-out plan that would collect appropriate royalty payments on a scale that music lovers could live with.

Even for Jobs, breaking the logjam of the music industry was no pushover. Hilary Rosen, then chief executive of the Recording Industry Association of America, explained that top executives of leading music companies were wary of people from the computer industry.

Jobs won them over for two reasons, Hilary believes. The first is almost laughable: “Apple had such a small market share that it made their risk low.” And the other: “The shift came about above all because of the sheer willpower of Jobs. His charisma and his intensity absolutely made a difference.”

The backing of the music companies allowed Jobs to pronounce “a new era for digital music consumption”. The Music Store was opening with a library of 200,000 songs, available for purchase individually for 99 cents — an impulse item.

Jobs said, “This will go down as a turning point for the music industry. This is landmark stuff. I can’t overestimate it.” If Jobs has often been overly enthusiastic in promoting the prospects of his products, this time he was on the mark.

In short order, the iTunes Music Store had taken more than 70% of the legitimate download music business. A year later, the store had sold an incredible 85m songs and been named Fortune magazine’s Product of the Year for 2003.

This is not a space that Apple will own for ever. Some erosion is already occurring; early this year Apple announced price cuts for its iPods.

But how much is cool worth? In a world of undifferentiated products, wouldn’t most consumers be willing to pay $50 more to have something undeniably cool? Years of Apple work stand behind the combination of hardware, software and online machinery that makes having an iPod such a satisfying experience. No other company on earth has this combination of qualities.

No other company has Steve Jobs, either. Will he and his team come up with more ingenious products for remaining among the dominant players? It will be fascinating to see. You certainly shouldn’t bet against them.

© Jeffrey S Young and William L Simon, 2005

Extracted from iCon: Steve Jobs, the Greatest Second Act in the History of Business by Jeffrey S Young and William L Simon, published by Wiley at £16.99. Copies can be ordered for £13.59 + £2.25 p&p from The Sunday Times Books First on 0870 165 8585