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.

Technical Specifics

It's not until he's articulated the why Apple focused on music that Jobs goes into any detail about the iPod where it fits into the Apple product line and the technical details of the device. From a branding perspective things were extremely clean: the product line was previously the iMac and iBook but after the introduction of this device it now included the iPod: "iMac, iBook, and now iPod".

Jobs then describes the high level product description, the customer value proposition and outlines the major technical breakthroughs needed to make this device a reality before revealing what the device looks like.

Product Description

The iPod would be an mp3 music player that lets you play CD-quality music and will play any format of music. Because it was a hard drive, it could play 1000 songs which he described as a "quantum leap" for most people who were used to playing one CD at a time. In terms of customer value prop, Jobs kept reiterating that the iPod lets you have your "whole music library in your pocket."

Major Breakthroughs

• Ultra Portable – The iPod was made to be ultra portable and their frame of reference was a pack of cards. The original iPod was 0.2 inches thick, could store 1000 songs at a 160k bit rate, had 20 minute skip protection and at 6.5oz was lighter than most cell phones.

• FireWire – The iPod needed to get music onto it and FireWire let you download a whole CD in 10 seconds which was 30x faster than any other MP3 on the market.

• Battery Life – A portable music player is no use if the battery is always dead. To ensure 10 hours of battery life, they created a state of the art rechargeable lithium polymer battery which could recharge the battery to 80% of its capacity in 1 hour.

• Design and Ease of Use – For the iPod, Apple had to invent not just the form factor of the device as well as the software you use to interface with the device. They debuted two design innovations: the UI which used Playlist, Artist, Album, and Song as the organizational units and the industrial design of the device which included, most notably, the Piezoelectric clicker.

• Auto-Sync – In addition to the software operating on the iPod, Apple also wanted iTunes songs/playlists to automagically sync to the device (recall. at the beginning of the presentation Jobs pointed out that software often knows about the hardware but it's rare for the hardware to know anything about the software). To achieve this, Apple built an auto-sync feature so that when a change happened to your playlists in iTunes, it would automatically be updated on your iPod.

Pricing

When he finally gets to the pricing, Jobs is clear to articulate the user benefits including a 5GB hard drive, FireWire, 10h battery life and 1000 songs in your pocket before citing the $399 price tag. Rather than making it about the dollars and cents of the device, he made it about how this device let you do something truly unique which he articulated as letting a user have "[Y]our whole music library in your pocket".

Anyway, enough text. If you want to see one of the greatest introduction/demo videos of all time, just watch Steve Jobs' masterclass on YouTube. Trust me, it's worth your while.