Apple stops iPod production after nearly 22 years

The iPod started with a modest goal: let’s create a music product that makes people want to buy more Macintosh computers. Within a few years, it would change consumer electronics and the music industry and lead Apple to become the most valuable company in the world.

First arriving in October 2001, the pocket rectangle with a white face and polished steel frame weighed 6.5 ounces. It came with white headphones in a custom color, Moon Gray, and contained 1,000 songs.

It exploded in popularity in the years that followed, creating what became known as the iPod generation. For much of the 2000s, people traveled the world with headphones dangling from their ears. The iPod was ubiquitous.

On Tuesday, Apple officially said goodbye to all that. The company announced it had stopped production of its iPod Touch, ending two decades of a product line that inspired the creation of the iPhone and helped make Silicon Valley the epicenter of capitalism global.

Since the iPod’s introduction in 2001, Apple has sold about 450 million of them, according to Loup Ventures, a venture capital firm specializing in technology research. Last year it sold about three million iPods, a fraction of the estimated 250 million iPhones it sold.

Apple assured customers that music would live on, thanks in large part to the iPhone, which it introduced in 2007, and Apple Music, a seven-year-old service that speaks to modern customer preferences. The days of buying and owning songs for 99 cents on an iPod have largely given way to monthly subscription offerings that provide access to larger catalogs of music.

The iPod has served as a model for Apple for decades, providing unparalleled industrial design, hardware engineering, software development and service. It also demonstrated that the company was rarely first to market with a new product, but often triumphed.

At the end of the 1990s, the first digital music players began to appear. Early versions could hold a few dozen songs, allowing people in the early days of copying CDs to their computers to transfer those songs into their pockets.

Steve Jobs, who returned to Apple in 1997 after being kicked out more than a decade earlier, saw the emerging category as an opportunity to give modern appeal to Apple’s legacy computing business. A die-hard music fan, who listed the Beatles and Bob Dylan among his favorite artists, Mr Jobs believed that tapping into people’s love for music would help persuade them to switch to Macintoshes from Microsoft personal computers, which had more than 90 percent market share.

“You didn’t need to do any market research,” said Jon Rubinstein, who headed Apple’s engineering at the time. “Everyone loved the music.”

Mr. Rubinstein helped spark product development when he discovered a new hard drive made by Toshiba during a trip to Japan. The 1.8 inch drive had the capacity to store 1,000 songs. Essentially, this made possible a digital player the size of a Sony Walkman with a capacity for multitudes greater than anything on the market.

The development of the iPod coincided with Apple’s acquisition of a company with MP3 software that would become the basis for iTunes, a digital jukebox that organized people’s music libraries so they could quickly create playlists and transfer songs. This fueled Mr. Jobs’ vision for how people would buy music in the digital age.

“We think people want to buy their music on the Internet by buying downloads, just like they bought LPs, just like they bought cassettes, just like they bought CDs,” he said during a a conference in 2003.

At the time, a service called Napster plagued the music industry, allowing people to share any song with anyone in the world for free. Mr. Jobs addressed the woes of the music industry by marketing the new Macs’ ability to rip CDs with the marketing slogan: “Rip.” To mix together. Burn.” The campaign put the music industry in Apple’s corner, according to Albhy Galuten, then an executive at Universal Music Group.

Mr Galuten said the labels eventually agreed to let Apple sell songs on iTunes for 99 cents. “We folded because we had no leverage,” Galuten said. “The easiest way to fight piracy was convenience.”

The first-generation iPod’s $399 price blunted demand, limiting the company to sales of less than 400,000 units in the first year. Three years later, Apple released the iPod Mini, a 3.6-ounce aluminum case available in silver, gold, pink, blue, and green. It cost $249 and contained 1,000 songs. Sales exploded. By the end of its fiscal year in September 2005, it had sold 22.5 million iPods.

Apple amplified the power of the iPod Mini by making iTunes available for Windows computers, allowing Apple to introduce its brand to millions of new customers. Although the move was later heralded as a stroke of business genius, Mr. Jobs resisted it at the time, former executives said.

Soon, iPods were everywhere. “He took off like a rocket,” Mr. Rubinstein said.

Still, Mr. Jobs pushed Apple to make the iPod smaller and more powerful. Mr Rubinstein said the company has stopped production of its most popular product – the iPod Mini – in order to replace it with a slimmer version called Nano which starts at $200. The Nano helped the company nearly double its unit sales to 40 million over the next year.

Perhaps the iPod’s most important contribution was its role as the catalyst for the creation of the iPhone. As mobile phone makers began to introduce devices capable of playing music, Apple executives feared they would be overtaken by better technology. Mr. Jobs decided that if this were to happen, then Apple should be the one to do it.

The iPhone continued to build on the mix of software and services that made the iPod so successful. The success of iTunes, which allowed customers to back up their iPhones and put music on the device, was mirrored by the development of the App Store, which allowed people to download and pay for software and services.

In 2007, the company dropped its longtime corporate moniker – Apple Computer Inc. – and became simply Apple, an electronics juggernaut in six years.

“They showed the world they had an atomic bomb, and five years later they had a nuclear arsenal,” said Talal Shamoon, chief executive of Intertrust Technologies, a digital rights management firm working with the music industry at the time. “After that, there was no longer a shadow of a doubt that Apple was going to own everyone.”

About Nicole Harmon

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