Instant Expert: A Brief History of iPod

Dennis Lloyd
By Dennis Lloyd - Senior Editor
Instant Expert: A Brief History of iPod

Instant Expert: A Brief History of iPod

2001|2002|2003|2004|What’s Changed|iPod Sales|Global iPod Availability|iPod Trivia
As the pace and importance of iPod announcements have accelerated in recent days, iLounge has taken this opportunity to assemble an “instant expert” guide to the history of Apple’s popular device. For an updated version of this article, please Download the iLounge 2007 iPod Buyers’ Guide.
Key Milestones in the Life of the iPod 2001
    January 9, 2001
    Apple introduces iTunes for the Macintosh, a program that converts audio CDs into compressed digital audio files, organizes digital music collections, and plays Internet radio.
    October 23, 2001
    Apple unexpectedly announces the first iPod (codename Dulcimer) at a price of $399. Unlike most (but not all) competing digital audio players available at the time, Apple relies on a hard disk for storage instead of flash memory or interchangeable CD-ROMs, and uniquely focuses on promoting the small size, power, and ease of use of its device. The first iPod has a 5 GB storage capacity – enough for over 1,000 songs – and works only on Macs, using iTunes as a music organization and CD-to-iPod conversion tool. Did Apple release iTunes with the iPod in mind? According to an official Apple timeline, development of the iPod began only six months earlier.
    Instant Expert: A Brief History of iPod

    November 10, 2001
    Apple ships the first iPod.

    Mid-November, 2001
    Third-party developers begin to write workaround software that lets the iPod work with PCs. While first demo versions of the software are available in January of 2002, final versions won’t emerge until June of 2002.

    December 31, 2001
    By the end of 2001, Apple has sold a total of 125,000 iPods.

    Instant Expert: A Brief History of iPodInstant Expert: A Brief History of iPod


    March 20, 2002
    Apple announces a 10GB / 2,000 song update to the iPod for $499. Taking a cue from crafty third-party developers, Apple ships new iPods with the ability to display business card-like contact information, a feature that makes some wonder about future PDA-like expansion of the iPod’s abilities. As of this date, the iPod is still a Mac-only product, though workaround programs for PCs are circulating and largely functional.
    July 17, 2002
    Apple makes four major announcements. First, PC versions of the iPods are unveiled, including MusicMatch software instead of iTunes. Second, a 20GB iPod is introduced. Third, 10GB and 20GB models now sport a new touch-sensitive Scroll Wheel instead of an actual moving wheel, which was easier to damage. And finally, iPod prices are lowered: 5GB drops to $299, 10GB drops to $399, and the 20GB model sits at $499. However, all iPods at this point still require users to have computers with FireWire connectivity ports, which are faster than competing USB ports but far less common on PCs.

    Instant Expert: A Brief History of iPod

    October, 2002
    By this point, retailers Best Buy, Dell, and Target have all started to sell iPods. Sensing the appeal of high-capacity music players, Creative releases the Nomad Zen Jukebox as a cheaper but larger competitor to the iPod.

    December, 2002
    Apple unveils its first and only limited edition iPods, with either Madonna’s, Tony Hawk’s, or Beck’s signature engraved on the back for an additional $49. (Another iPod featured the engraved logo of rock band No Doubt.) At a total price of $548, these limited edition iPods were the most expensive ever sold by Apple.


    March, 2003
    Microsoft announces Media2Go portable video and audio players, originally targeted for a holiday 2003 release. The players will eventually be renamed Windows Portable Media Centers, deemed Microsoft’s “iPod killer,” and delayed until late 2004.

    April, 2003
    Dell, which has been offering aggressive discounts on the iPod, temporarily stops selling the device after failing to renew its reseller agreement with Apple, but then renews.

    April 28, 2003
    Big news: Apple unveils the updated “third-generation” iPod and the iTunes Music Store for Mac users. The new iPods are thinner and smaller than before, feature a bottom Dock Connector port rather than a top-mounted FireWire port, and have entirely touch sensitive controls. Each new iPod has a higher capacity than the previous generation model it replaces by price point: new 10GB / 2,000 song ($299), 15GB / 3,700 song ($399) and 30GB / 7,500 song ($499) models are available. All third-generation iPods now work on either Macs or PCs. Apple’s iTunes Music Store launches with 99 cent per track / $9.99 per album pricing and a library of 200,000 songs, but isn’t yet available for PC users.

    Instant Expert: A Brief History of iPod

    May 1-4, 2003
    Retailers begin to sell third-generation iPods, and one week after launching the Mac iTunes Music Store, Apple has sold 1,000,000 songs.

    June 19, 2003
    Taking advantage of the iPods’ proprietary (and FireWire/USB agnostic) Dock Connector port, Apple releases Dock Connector-to-USB 2.0 cables and drivers for third-generation iPods, expanding the range of PCs that can connect to the devices.

    June 23, 2003
    Apple sells the one millionth iPod, more than a year and a half after the release of the device.

    September 8, 2003
    Apple refreshes the middle and top of the third-generation iPod line with higher storage capacities at familiar pricing. A 20GB / 5,000 song ($399) model replaces the 15GB version, and a 40GB / 10,000 song ($499) model replaces the 30GB version introduced in April. Apple also announces that it has sold 10,000,000 songs through the iTunes Music Store since launch.

    October 16, 2003
    Apple releases both iTunes and the iTunes Music Store for U.S.-based PC users, phasing out support for MusicMatch PC software in the process. Belkin and Apple jointly announce voice recording and digital photo storage peripherals for the iPod, further and more tangibly expanding the unit’s capabilities past music playback. Apple also announces total sales of 13,000,000 songs via iTunes since launch.

    Instant Expert: A Brief History of iPod

    October 27, 2003
    Running a month behind its expected launch date, Dell announces the Digital Jukebox (DJ) as a cheaper competitor to the iPod, and partners with MusicMatch to offer a music downloading service. (By December, Dell will announce that it has permanently stopped reselling iPods to focus on the DJ.)

    November, 2003
    Complaints about iPod battery problems reach a fever pitch as the ‘iPod’s Dirty Little Secret’ video spreads across the Internet. Apple subsequently publicizes a cheaper battery replacement alternative for existing users.


    January 6, 2004
    Apple debuts the iPod mini, a diminutive 4GB version of the iPod available in five colors at $249. Despite an impressive simplifying redesign of the iPod’s control scheme and casing, critical opinion of the device is initially mixed because of price and capacity concerns. Apple simultaneously replaces the $299 10GB entry-level iPod with a 15GB model, and retailers almost immediately discount the discontinued 10GB model to $249, further clouding the value equation.

    Instant Expert: A Brief History of iPod

    January 6, 2004
    Apple announces the sale of the two millionth iPod, less than six months after hitting the one million mark.

    January 8, 2004
    In an entirely unexpected move, personal computer heavyweight Hewlett-Packard announces at the Las Vegas Consumer Electronics Show that it will license the iPod from Apple rather than develop a competing product.

    HP CEO Carly Fiorina promises to release and sell a “HP blue”-colored iPod by Summer, and agrees to market iTunes to its PC customers almost immediately.

    February 17-20, 2004
    Apple ships its first iPod minis starting on Tuesday, and long lines form at stores for its official Friday on-sale date. Sell-outs and near-sell-outs are reported nationwide, and critical opinion quickly turns in the device’s favor.

    March 25, 2004
    Apple pushes back the international release of the iPod mini from April to July, citing “much stronger than expected demand” from U.S. customers. Analysts report shortages of the miniature hard drives required by Apple.

    May 5, 2004
    Apple announces the sale of the three millionth iPod, only four months after hitting the two million mark. Analysts widely acknowledge the iPod as the digital audio market’s dominant hardware format, and begin to de-emphasize references to cheaper competitors.

    June 15, 2004
    Apple releases the iTunes Music Store in three European markets: France, Germany, and the United Kingdom. One week later, 800,000 songs have been sold to European customers, 450,000 in the UK alone.

    July 11-12, 2004
    The iTunes Music Store sells its 100,000,000th downloaded song at approximately 1:25AM Eastern Standard Time, July 12 (or 10:25PM Pacific Standard Time, July 11), the first legal music download service to hit that milestone. Thanks to an Apple contest offering a 17” PowerBook laptop computer, 40GB iPod and iTunes gift certificate for 10,000 songs (total estimated value: $13,200) to the person who purchased the 100,000,000th song, approximately 40,000 songs (total estimated value: $39,600) were sold in just the ten minutes before the milestone was reached.

    July 17, 2004
    Leaked by Newsweek magazine two days before Apple’s expected official announcement, the first photograph of the fourth-generation iPod appears on the Internet, depicting a hybrid of the third-generation iPod’s white casing with the Click Wheel controls from the iPod mini.

    July 19-20, 2004
    Offically announced by Apple on July 19, the fourth-generation iPod is physically thinner than the third-generation iPod but remains larger than the iPod mini, boasts improved battery life (12 hours), iPod mini-style Click Wheel controls, and small software tweaks such as a main menu randomized (shuffle) playback feature. Called lower-cost iPods, prices for the new low-end (20GB, $299) and mid-range (40GB, $399) units look like $100 drops from prior models until consumers discover that $100 worth of pack-ins (Docks, remote controls, and cases) have been stripped from their packages. The fourth-generation iPods also lack some widely rumored features, including a 60GB version and a color screen to display digital photographs. Buzz remains significant and first units begin to appear by the 20th.

    July 21, 2004
    Apple adds three top European independent labels to the iTMS catalog, placating the few remaining critics of iTunes.

    July 24, 2004
    Apple releases the iPod mini worldwide, behind schedule but still early enough to excite people around the world. Sell-outs are reported in several countries, including Japan.

    July 26, 2004
    Motorola announces that its next generation of cellular phones will be iTunes-compatible. In response to Apple’s earlier public rebuffing, RealNetworks releases a music technology called Harmony, enabling songs sold by Real through its own music store to be played back on iPods (and other devices) without Apple’s permission.

    August 5, 2004
    Apple announces total sales of 3.7 million iPods.

    August 10, 2004
    The iTunes Music Store library hits 1,000,000 songs.

    August 25, 2004
    Apple quietly begins to search for wireless and video experts to join its iPod division.

    August 27, 2004
    Hewlett-Packard announces the “Apple iPod from HP�? (or “iPod+hp�?), a repackaged version of the 4G iPod with new manuals and HP-supplied technical support. Promising availability by September 15, HP begins to ship units almost immediately, and announces an iPod-compatible printer and “printable tattoos�? to cover iPods.

    August 31, 2004
    Apple announces that it has 58% market share of the U.S. digital music player business, and plans a pan-European iTMS for October.

    September 1, 2004
    iTMS hits 125 million downloaded songs. Apple releases the iMac G5, which is now being marketed as a computer “from the creators of iPod.�?

    September 7 – October 4, 2004
    Microsoft’s unofficial anti-iPod public relations offensive starts. Chairman Bill Gates says in an
    interview that the iPod would have been easy for Microsoft to make. Next, while Internet-based viruses plague Windows PCs, Microsoft announces that the next Windows version will prevent iPods from unleashing viruses on PCs, though no such iPod attack has been reported. Finally, CEO Steve Ballmer publicly calls iPod users music thieves, claiming that Microsoft offers better copy protection. He later apologizes.

    October 12-14, 2004
    Analysts report that iPod sales are 82% of all digital music players and 92% of all hard-drive based players; nearest hard drive competitor Creative has 3.7%. Over 2,000,000 iPods were shipped in the prior 3 months alone, and iTMS downloads hit 150,000,000, a rate of 4 million downloads per week.

    October 26, 2004
    Apple debuts the iPod photo, a new version of the fourth-generation iPod that’s capable of displaying digital photographs and album art on its built-in color screen. Sold in 40GB ($499) and 60GB ($599) capacities, the iPod photo is physically identical to the fourth-generation iPod, only slightly thicker, and includes most of the pack-ins (Dock and case) that disappeared from iPod boxes in July. It also includes a “photo Dock” and AV cable for displaying digital photos on a television, as well as an evolved, colorized interface for using the iPod’s music playback features.

    On the same day, and following considerable Apple co-promotion of a U2 song called Vertigo, Apple introduces the U2 iPod Special Edition ($349), a 20GB fourth-generation iPod with a shiny black front casing, red Click Wheel, and U2-engraved rear metal casing. The U2 iPod includes a $50 coupon towards the purchase of a $149 Apple-innovated “digital box set” called The Complete U2, but not a copy of U2’s latest album as was widely rumored before the product’s launch. Apple notes sales of nearly 6 million iPods to date.

How Have iPods Changed? Obvious differences in size, thickness, and materials aside, the iPod has gone through a number of changes since its debut in 2001. While the first-generation (1G) and second-generation (2G) iPods featured a FireWire data port up top next to the headphone port and hold switch, this data port was removed from the top of third-generation (3G) iPods, fourth-generation (4G) iPods, iPod minis and iPod photos in favor of a bottom-mounted Dock Connector port.

Placement of the four Menu/Play/Forward/Reverse buttons also changed; the original collection of four curved buttons surrounded the 1G and 2G iPods’ Scroll Wheels, but were transformed into circular buttons above the Scroll Wheel for the 3G iPod, and then integrated into the Click Wheel of the iPod mini, 4G iPod, and iPod photo, beginning with the iPod mini.

Finally, the wheel mechanism itself has changed: while the 1G iPod used a wheel that physically moved, each subsequent iPod has used a touch-sensitive circle that emulates the movement of a wheel – a subtle, yet unquestionably superior design.


iPod Boxes and Pack-ins
Though the prices and capacities of iPods are their most often touted differences, each generation of iPods has featured different pack-ins that can add extra value for the dollar. On the hardware side, Apple’s decision to include remote controls, carrying cases, and eventually Docks with premium-priced iPods initially offset those higher prices, though changes to the iPod line-up in mid-2004 muddied this equation somewhat. On the software side, the replacement of PC-ready MusicMatch with the Windows version of iTunes makes newer iPods even easier to enjoy.

    Instant Expert: A Brief History of iPod
    (left to right, boxes for the 1G iPod, 2G iPod, 3G iPod, and iPod Mini)

    Original (1G) iPod
    Included headphones, FireWire cable, iTunes software, AC adapter.

    Second-Generation (2G) iPod

    5GB Mac Version
    Same as above. PC Version included 4-pin to 6-pin FireWire adapter, MusicMatch software instead of iTunes.
    10GB/20GB Versions
    Same as above plus iPod Remote control and iPod Carrying Case. PC versions included 4-pin to 6-pin FireWire adapter, MusicMatch software instead of iTunes.

    Third-Generation (3G) iPod

    10GB ($299) Version
    Slightly new headphones, AC adapter, Dock Connector to FireWire cable, 4-pin to 6-pin FireWire adapter, iTunes software for Mac and MusicMatch software for PC*.
    Initial 15GB ($399)/30GB ($499) Versions
    Same as above plus Dock, new Remote control, and new Carrying Case.
    * Refreshed 15GB / 20GB / 40GB iPods include iTunes for both Mac and PC users, refreshed 15GB ($299, M9460LL/A) iPod does not include Dock, Remote control or Carrying Case.

    iPod mini
    Headphones, plastic Belt Clip, AC adapter, Dock Connector to FireWire cable, Dock Connector to USB cable, iTunes software for Mac and PC users.

    Fourth-Generation (4G) iPod
    Headphones, AC adapter, Dock Connector to FireWire cable, Dock Connector to USB cable, iTunes software for Mac and PC users. 40GB iPod includes a Dock, but neither iPod includes a Remote or Carrying Case, or the older FireWire adapter.

    iPod photo
    Headphones, AC adapter, Dock Connector to FireWire cable, Dock Connector to USB cable, iPod photo Dock, AV cable, Carrying Case, iTunes software for Mac and PC users, Apple stickers.

    iPod U2 Special Edition
    Headphones, AC adapter, Dock Connector to FireWire cable, Dock Connector to USB cable, iTunes software for Mac and PC users, $50 Coupon for The Complete U2 digital box set.

Historical Growth of iPod and iTunes Sales

    iPod Sales
    iPod sales were good but not fantastic until around the May 2003 release of the third-generation iPod, which marked a turning point in the sales history of the device. Prior to that release, Apple’s sales were directed initially towards a relatively small audience of Macintosh users, and even when a PC version of the iPod was released, its FireWire-only design limited its appeal to mainstream PC users.

    Instant Expert: A Brief History of iPod

    It took over a year and a half for Apple to hit the one million mark for iPods sold, but then the third-generation iPod was unveiled in Tokyo. Only six months later, the company had sold its second million iPods. Four months later, aided by the release of the iPod mini, they’d sold another million units of iPod hardware. By late October, aided by the release of the fourth-generation iPod, Apple was up to almost 6 million total units, and an additional 2-4 million units were predicted to be sold by the end of 2004.

    Importantly, Apple’s sales milestones were achieved despite the continued introduction of cheaper alternatives by Creative, Dell, and iRiver, amongst others. None of these companies’ products appears to have significantly impacted the iPod’s sales growth or undermined its perception as king of the digital music hill.

    Instant Expert: A Brief History of iPod
    iTunes Music Store Sales
    Though the history of the iTunes Music Store dates back only a year, there have been two important positive changes in its sales trends. The first was in October of 2003, starting with the release of the PC version of the Music Store. In December 2003, following a flurry of holiday season iPod purchases and media mentions, the second upward tilt began, dramatically accelerating the pace of iTunes Music sales. Apple hit the 100 million song mark in July, 2004, ahead of some expectations (but later than initial Apple predictions), and 150 million by October, 2004, a dramatically increased pace.

Which Countries Have the iPod, iPod mini, and iTunes Music Store?

    Available worldwide from Apple, Apple authorized retailers, and unauthorized retailers.

    iPod mini
    Nearly worldwide. As of July, 2004, Apple released the product into almost every geographic region of the world. While several countries have not received the product officially, supplies may be available from importers.

    iTunes Music Store
    The service was first available (2003) within the United States, then expanded in June 2004 to the United Kingdom, France and Germany, and then on October 26, 2004 added Austria, Belgium, Finland, Greece, Italy, Luxembourg, The Netherlands, Portugal and Spain. On December 1, 2004, Canada was added to the list. Negotiations for Australia, New Zealand, Japan and other countries remain underway.

iPod Trivia

    Q: What’s the most expensive official iPod Apple has ever sold to consumers?
    A: Prior to the release of the iPod photo, the answer was limited edition iPods laser-engraved with the buyer’s choice of four alternatives: the signatures of musicians Beck or Madonna, the logo of band No Doubt, or the signature of pro skateboarder Tony Hawk. Asking price: $49 over the retail price of each iPod, or $548 for the then top-priced 20 GB iPod. The new premium iPod is the 60GB iPod photo, sold for $599.

    Instant Expert: A Brief History of iPod

    Q: Has the iPod ever sparked a legal controversy outside of the United States?
    A: Yes, at least three times. The iPod was briefly taken off the market in France in September 2002 when French authorities notified Apple that the device violated a law limiting the sound output of portable devices to 100 decibels. Apple quickly updated the iPod’s software to remedy the problem, and subsequently implemented a volume cap on all iPods shipped to Europe, much to the consternation of users in other countries. In December 2003, the iPod became a lightning rod for controversy after Canadian authorities imposed an additional governmental levy (charge) of CDN$25 per player to compensate artists whose copyrights were being infringed. The $25 charge was substantially lower than earlier proposals of $21 per GB, which would have equaled a $315-$840 additional charge per 15-40 GB iPod – more in some cases than the cost of the iPod itself.

Dennis Lloyd
By Dennis Lloyd Senior Editor
I'm a passionate, long-time lover of Apple products, and was a civil draftsman and graphic designer before creating the iLounge web site. My prior projects include work for The Los Angeles Times', and the company Creative Domain, where I developed websites for clients including Columbia Pictures, Disney, Fox Studios, Universal Pictures and Warner Brothers. As the Publisher of iLounge, I direct the site's community forums, photo galleries, iPod User Group, and general business affairs, which have grown under my watch to over sixteen million page views every month. I'm happily married with one daughter, one dog (Rocket the Wonderdog), one cat (Ferris), many iPods, iPhones, iPads, and two turntables.