iPod Nation

Assessing the final product, Jobs bestows, for him, the ultimate accolade: "It's as Apple as anything Apple has ever done."

The October 2001 launch was barely a month after 9/11, with the country on edge and the tech industry in the toilet. Skeptics scoffed at the $399 price and the fact that only Macintosh users, less than a twentieth of the marketplace, could use it. But savvy Mac-heads saw the value, and the iPod was a hit, if not yet a sensation. What pushed it to the next level was a number of Apple initiatives beginning with a quick upgrade cycle that increased the number of songs (while actually lowering the price). Then Apple released a version that would run on Windows and Mac, dramatically increasing the potential market. Finally, after intense negotiations with the record labels, Apple licensed hundreds of thousands of songs for its iTunes Music Store, which blended seamlessly with the iPod. As with the iPod itself, the legal-download store was not the first of its kind but was so felicitous and efficient that it leapt to a 70 percent market share.

Then sales began to spike. No one was surprised that Apple sold an impressive 733,000 iPods during the Christmas season last year, but the normally quiet quarter after that saw an increase to 807,000. And last week Apple announced that sales in the just-completed third quarter, traditionally another dead one--hit 860,000, up from 249,000 a year ago.

That total would have been higher had Apple not had problems getting parts for the latest iteration, the iPod Mini. Though critics praised its compactness and its panache--a burnished metallic surface made it look like a futuristic Zippo--they sniffed at its relatively low capacity (only 1,000 songs!). But apparently there were lots of people like Los Angeles chiropractor Pat Dengler, who saw the Mini as a must. "At first I thought, I already have an iPod, I don't need it," she says. "But after I played with it, I thought, I really dig it. Now I use them both." Dengler was lucky, as many had to suffer through a monthlong waiting list. To the delight of Apple (and the chagrin of Sony), the no-brainer description of the iPod is "the Walkman of the 21st century." And just as the Walkman changed the landscape of music and the soundscape of our lives, the iPod and the iTunes store are making their mark on the way we handle our music, and even the way we listen to it.

The store has proved that many people will pay for digital music (though certainly many millions of gigabytes of iPod space are loaded with tunes plucked from the dark side of the Internet). "The iPod and iTunes store are a shining light at a very bleak time in the industry," says Cary Sherman, president of the Record Industry Association of America. Since just about everybody feels that within a decade almost everybody will get their music from such places, this is a very big.

An equally big deal is the way the iPod is changing our listening style. Michael Bull, a lecturer at the University of Sussex, has interviewed thousand of iPod users, finding that the ability to take your whole music collection with you changes everything. "People define their own narrative through their music collection," says Bull.