The wheel of fortuneThe iPod at 18: the gadget that changed music and tech for ever

ANYONE WHO has owned an iPod remembers the thrill of unwrapping it. The first ones, which Steve Jobs unveiled 18 years ago on October 23rd 2001, were a slab of science-fiction in your pocket. The name for the sleek rectangles came from a copywriter who thought they resembled the activity pods in “2001: A Space Odyssey”. Easing the lid off the cardboard container felt like preparing the device for launch.

Sir Jonathan Ive, Apple’s chief designer, later explained that “packaging can be theatre”. He insisted that everything be white, including the distinctive earbuds, to give the product the “cultural gravity” that its grey, plastic competitors lacked. Jobs was as enthusiastic about the device’s appearance as its capabilities. “It’s beautiful,” he marvelled to his audience at Apple’s headquarters.

To watch him announcing the iPod today is to return to a world with only rudimentary technology to harness digital media. Napster, a file-sharing service launched in June 1999, allowed millions of internet users to download MP3 tracks illegally, before a lawsuit shut it down in July 2001. Even the greediest music pirates could do little more than load their ill-gotten booty onto CDs. Other companies released hard-drive players for MP3s, but they were clunky and required users to click through songs. “No-one”, Jobs insisted, “has really found the recipe yet for digital music.”

The iPod’s wheel elegantly removed the scrolling problem. A tiny hard-drive built by Toshiba packed five gigabytes of memory (enough for 1,000 songs) into 1.8 inches (4.5cm), allowing the iPod to offer as much storage as any competitor in a smaller body. And the earlier launch of iTunes meant that every Apple computer had a programme dedicated to managing the device’s contents.

Critics wondered whether ordinary music fans would fork out $399 (about $580 today) for such a strange contraption. By 2007 Apple had sold 120m of them, and soon launched the smaller Mini, the tiny Nano and the screenless Shuffle. The classic iPod gained a colour screen, then the ability to play videos, and finally a hard-drive of 160 gigabytes, which was more than most laptops had. Historians of Apple generally note that the iMac computer, which Jobs launched shortly after returning to the ailing company in 1997, revived its fortunes. But the iPod introduced most people to the firm’s aesthetic and technical brilliance. At its peak it accounted for 40% of Apple’s revenue.

This popularity turned the music industry upside down. Earnings from physical sales in America had already started to decline in the Napster era, falling from $21.5bn (in today’s dollars) in 1999 to $19bn in 2001. But after the iPod arrived revenues plummeted, to just $8bn by 2008. Though the iTunes Store tried to nudge charitable listeners into paying for MP3 files, it took five years for digital sales in the music industry to reach even $2bn. Many notable artists, such as the Beatles and AC/DC, kept their work off the platform.

That encouraged users to ransack the CD collections of friends and relatives—and then to hunt for tunes online. Napster’s successors were LimeWire and the Pirate Bay, which had more success evading legal challenges. Now that users had a handy gadget for listening to MP3 files, they pillaged as many as they could, though the process was a lucky dip. Sometimes the downloaded song was a cover, or a live version, or low in quality. Often it had the wrong artist and recording information attached.

Along with the iPod’s shuffle function—which jumbled artists together, rather than flicking between songs on a disc—this pick-and-mix approach hurt the album. In 2001 over 95% of American sales came in that format, thanks to the prominence of the CD and the cassette, which were rarely sold as singles. Today, that share is barely 15%.

Even larger disruptions were yet to come. Spotify, a Swedish company, identified that it was a hassle for listeners to find, download and store any song that they wanted to hear. It was more convenient to have a limitless collection of tunes, which could be streamed instantly. The firm found that people were willing to pay for that seamless access, or at least to endure the occasional advert. Overall music sales in America have recovered from barely $6bn in 2015 to over $8bn last year. Today, streaming revenues make up nearly 80% of the total.

The ability to wirelessly fetch any song owes much to the iPhone—which itself would not have existed without the iPod. Jobs had initially collaborated with Motorola to release the ROKR, an ill-fated, brick-like phone which could only hold 100 tunes. Irritated by this failure, he sought to combine the iPod’s media capabilities with an internet connection. When Apple revealed the iPhone in late 2007, with its touch screen and several native apps, some technology writers dubbed it the “Jesus Phone”. It has sold more than 1.5bn units.

This makes the iPod the musical and technological equivalent of John the Baptist. The device was quickly superseded, but it prepared the way for the great innovations to come. It showed consumers that technology could be beautiful and that the most enthralling possessions could fit in the palm of a hand.