iPod Release

It’s hard to believe that the iPod became available 21 years ago. I remember after seeing the iPod I instantly wanted one since it was way easier to carry around that device rather than my Sony Walkman and folio full of CDs. That said, it wasn’t until much later that I sat down and re-watched Steve Jobs introducing the iPod to really understand the clarity of his product strategy/vision which is what I'm mainly going to focus on in this post.

My main goal is to outline the structure of his presentation since I thought it was one of the clearest example of corporate strategy, using the strategy to determine where to focus energy, and finally how to leverage technology to make something great (rather than having a problem in search of a solution).

There are a couple other things that I think are important to note about the way Jobs presents.

1. First is the way he always starts with the why (with slides) quickly followed by a demo.
2. Second is the way that everything is framed in a way that highlights the user benefits. For example, when he talks pricing he first reiterates all the key features of the iPod including the 5GB hard drive, FireWire, 10h battery, and the fact that you can have 1,000 songs in your pocket which was 2 orders of magnitude more than you could hold on a CD and then says that it's being sold for $399.

Strategy
Jobs outlines Apple’s “Digital Hub Strategy” which boiled down to the idea that the Mac could become the center of your digital lifestyle. The Mac would become the sun around which every other digital device floated.

Jobs then articulated the broad categories of these digital peripherals which included:

1. Video
2. Music
3. DVDs and
4. Photos
   

Software Updates

Apple has always been about the synthesis of hardware and software so Jobs spoke to the different pieces of software that they had for each quadrant. Over the course of the year, they made improvements to iMovie, iTunes, iDVD, and Image Capture which he spoke to and then demo'd.

In speaking to the software, Jobs points out that the software often knows about the hardware but it's rare for the hardware to know anything about the software.

Why focus on music?

At this point, Apple could have built a pice of hardware for any of the quadrants. They could have made a camera, a camcorder, or a DVD player. Why focus on music and how did they make this decision?

• Inherent interest – Jobs and the folks at Apple had a deep love of music and he points out that it's always good to do something you love.
• Large TAM – Music is part of everyone's life and so it's not a speculative market: it's a massive, global market.
• Weak Competition – Jobs points out that of the competitors in the market including Creative, SonicBlue, and Sony, there is no market leader.

What to build?

Now that they focused the search space to music both for aesthetic and business purposes, how do they actually decide what to build?

Jobs walks through both the existing options and tries to ballpark how much it costs per song using some back-of-the-napkin math. The existing portable music players were as follows:

• CD Player
• Flash Player
• MP3 CD Player
• Hard Drive Disk Juke Box

From there he gives a rough accounting of the cost per song for each of the player options and points out that a company like Apple wants to be living in the last row of the chart because it lets you store far more than you could otherwise.