iPod Nation

The primary way to exploit this ability is the iPod's "shuffle" feature. This takes your entire music collection, reorders it with the thoroughness of a Las Vegas blackjack dealer and then plays back the crazy-quilt melange. "Shuffle throws up almost anything--you don't know it's coming but you know you like it," says Bull. "Because of this people often say, 'It's almost as if my iPod understands me'."

Shuffle winds up helping people make connections between different genres of music. "People feel they're walking through musicology," says rock-er John Mayer. These abilities have a predictable effect: peo-ple who use iPods wind up listening to more music, and with more passion.

And since the iTunes store encourages customers to eschew buying entire CDs, instead buying the best song or two for a buck a pop, it's easy to see why some think that the era of the CD is playing its final tracks, a circumstance many will lament. "The one cool thing about a CD is really getting to know an album," says iPod fan Wil-Dog Abers, bassist for the hip-hop collective Ozomatli. "I don't know what we're gonna do about that."

In Silicon Valley, the question is what Apple can do to maintain its dominant position in the field. While Apple execs say that they are surprised at how lame the competition has been to date, it's reasonable to think that rivals might eventually close the gap. Almost all the hounds chasing Apple use technology from its longtime rival Microsoft. And Sony, whose initial efforts in the field were constrained by the copy-protection demands of its music unit, is introducing a new line of digital players this summer. "We feel that the experience is as good as Apple's, and we have the Walkman brand, which has sold 200 million units. We're in the game," says Sony America's CEO Howard Stringer. Meanwhile, the ultimate competition may come from services that stream unlimited music for a monthly fee, like Real Networks' Rhapsody. "The fat lady isn't even on the stage yet," says Chris Gorog, CEO of Napster.

But at the moment, the iPod is the category. And everything points to a humongous Christmas season for the iPod. The introduction of the new iPods this week extends the company's technology lead. If Apple, as promised, manages to get enough drives to satisfy the demand, the Mini iPod --may achieve the ubiquity of its wide-bodied companion. And later this summer, when computer giant HP begins selling a co-branded version of the iPod, consumers will be able to get iPods in thousands of additional retail stores.

All this is infinitely gratifying for Steve Jobs, the computer pioneer and studio CEO who turns 50 next February. "I have a very simple life," he says, without a trace of irony. "I have my family and I have Apple and Pixar. And I don't do much else." But the night before our interview, Jobs and his kids sat down for their first family screening of Pixar's 2004 release "The Incredibles." After that, he tracked the countdown to the 100 millionth song sold on the iTunes store. Apple had promised a prize to the person who moved the odometer to 10 figures, and as the big number approached, fortune seekers snapped up files at a furious rate. At around 10:15, 20-year-old Kevin Britten of Hays, Kans., bought a song by the electronica band Zero 7, and Jobs himself got on the phone to tell him that he'd won. Then Jobs asked a potentially embarrassing question: "Do you have a Mac or PC?"