Steve Jobs

Sony, the inventor of the Walkman and the biggest player in the portable audio market, was being trounced by Apple.” Sony Connect launched in May 2004. It lasted just over three years before Sony shut it down.
    Microsoft was willing to license its Windows Media software and digital rights format to other companies, just as it had licensed out its operating system in the 1980s. Jobs, on the other hand, would not license out Apple’s FairPlay to other device makers; it worked only on an iPod. Nor would he allow other online stores to sell songs for use on iPods. A variety of experts said this would eventually cause Apple to lose market share, as it did in the computer wars of the 1980s. “If Apple continues to rely on a proprietary architecture,” the Harvard Business School professor Clayton Christensen told
Wired
, “the iPod will likely become a niche product.” (Other than in this case, Christensen was one of the world’s most insightful business analysts, and Jobs was deeplyinfluenced by his book
The Innovator’s Dilemma.
) Bill Gates made the same argument. “There’s nothing unique about music,” he said. “This story has played out on the PC.”
    Rob Glaser, the founder of RealNetworks, tried to circumvent Apple’s restrictions in July 2004 with a service called Harmony. He had attempted to convince Jobs to license Apple’s FairPlay format to Harmony, but when that didn’t happen, Glaser just reverse-engineered it and used it with the songs that Harmony sold. Glaser’s strategy was that the songs sold by Harmony would play on any device, including an iPod or a Zune or a Rio, and he launched a marketing campaign with the slogan “Freedom of Choice.” Jobs was furious and issued a release saying that Apple was “stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod.” RealNetworks responded by launching an Internet petition that demanded “Hey Apple! Don’t break my iPod.” Jobs kept quiet for a few months, but in October he released a new version of the iPod software that caused songs bought through Harmony to become inoperable. “Steve is a one-of-a-kind guy,” Glaser said. “You know that about him when you do business with him.”
    In the meantime Jobs and his team—Rubinstein, Fadell, Robbin, Ive—were able to keep coming up with new versions of the iPod that extended Apple’s lead. The first major revision, announced in January 2004, was the iPod Mini. Far smaller than the original iPod—just the size of a business card—it had less capacity and was about the same price. At one point Jobs decided to kill it, not seeing why anyone would want to pay the same for less. “He doesn’t do sports, so he didn’t relate to how it would be great on a run or in the gym,” said Fadell. In fact the Mini was what truly launched the iPod to market dominance, by eliminating the competition from smaller flash-drive players. In the eighteen months after it was introduced, Apple’s market share in the portable music player market shot from 31% to 74%.
    The iPod Shuffle, introduced in January 2005, was even more revolutionary. Jobs learned that the shuffle feature on the iPod, which played songs in random order, had become very popular. People liked to be surprised, and they were also too lazy to keep setting up and revising their playlists. Some users even became obsessed with figuringout whether the song selection was truly random, and if so, why their iPod kept coming back to, say, the Neville Brothers. That feature led to the iPod Shuffle. As Rubinstein and Fadell were working on creating a flash player that was small and inexpensive, they kept doing things like making the screen tinier. At one point Jobs came in with a crazy suggestion: Get rid of the screen altogether. “What?!?” Fadell responded. “Just get rid of it,” Jobs insisted. Fadell asked how users would navigate the songs. Jobs’s insight was that you wouldn’t need to navigate; the songs would play randomly. After all, they were songs you had chosen. All that was needed was a button to skip over a song if you weren’t in the mood for it. “Embrace uncertainty,” the ads read.
    As competitors stumbled and Apple continued to innovate, music became a larger part of Apple’s business. In January 2007 iPod sales were half of Apple’s revenues. The device also added luster to the Apple brand. But an even bigger success was the iTunes Store. Having sold one million songs in