2003: Steve Jobs Lets iPod + iTunes into Windows World - Apple Breaks Through
Apple iPod digital media player has indisputably changed the music industry and significantly influenced media industry in general. But what few people understand is that iPod and its mass availability essentially transformed Apple from a computer maker into a leading maker of consumer electronics. In fact, the whole Apple’s roadmap in the last decade was catalyzed by one decision: enabling of iPod and iTunes on Windows.
Although Steve Jobs was a great innovator, he was also a big fan of closed eco-systems. When Apple designed the iPod in 2001, the device was meant to be a gadget for Macintosh users. In fact, many, Steve Jobs included, thought that it would drive sales of Macs upwards, something that was extremely important for the company in 2001 - 2002 as sales of Macs had been on the decline for a while back then. Steve Jobs thought that by ceasing to advertise Macs and shifting resources to iPod would catalyze sales of both iPods and Macintosh computers.
"I had this crazy idea that we could sell just as many Macs by advertising the iPod. In addition, the iPod would position Apple as evoking innovation and youth. So I moved $75 million of advertising money to the iPod, even though the category didn’t justify one hundredth of that. That meant that we completely dominated the market for music players. We outspent everybody by a factor of about a hundred," Steve Jobs later explained to his biographer Walter Isaacson.
Steve Jobs. Photo by ibitimes.com
Although sales of iPod personal digital media players gradually increased, specifically after the company launched the iTunes online music store in 2003, its success were constrained by the fact that the iPod and iTunes were compatible only with Macintosh systems that were still very low. When top executive at Apple at the time – Phil Schiller, Jon Rubinstein, Robbin and Faddel – approached Steve Jobs with proposal to port iTunes to Windows and enable operation of iPod, he reportedly went furious as Windows and even relatively open eco-system was against his nature. Moreover, Steve Jobs continued to think that Mac-exclusive iPod could help to boost sales of Macintosh PCs.
"Until you can prove to me that it will make business sense, I’m not going to do it," he said back then.
The Apple team of executives developed a spreadsheet and under all scenarios, there was no amount of cannibalization of Mac sales that would outweigh the sales of iPods. So, after a while, Steve Jobs finally agreed that it made a great sense to make iPod compatible with Windows and afterwards even insisted onto porting iTunes to Windows PCs. The iTunes for Windows released in October, 2003, as well as iPod mini launched in January, 2004, helped sales of Apple’s players to skyrocket from hundreds of thousands per quarter in late 2003 to a couple of millions in early 2005.
The success of the iPod among hundreds of millions of Windows users clearly showed Apple the path to success on the mass market, opened the door for all other products made by Apple, including iPhone, iPad and new generations of Macintosh systems as well as changed the paradigm of how Apple products are designed and made. Macs were made for hundreds of thousands or millions of users. The iPhone and iPad are aimed at hundreds of millions of consumers, a radical change for Apple and a major shift for the industry.
Later on, the iTunes became a universal store for everything: music, videos, movies, books and apps, marking another shift for Apple and showing an example of a large legal content hub.