Apple Celebrates Historic iPod Anniversary

Apple (NASDAQ: AAPL  )  has sparked several tech revolutions and ridden the recent successes of three pivotal products to become the world's largest publicly traded company in terms of market capitalization.

Source: Apple.

Yesterday, Apple celebrated a date that will go down in history, the 12th anniversary of the product that marked the beginning of its modern renaissance and its shift deeper into consumer electronics: the iPod.

So on this historic date, it's worth looking back at the device that set Apple on its current trajectory and to see just how far the company has come since.

1,000 songs in your pocket
Banking on its strategy of different devices for different aspects of consumers' lives serving as the spokes around a "digital hub," Apple was able to transform the MP3 industry and make billions for itself and its investors in the process.

At the unveiling of the first iPod in October 2001, CEO Steve Jobs summed up the new device, saying, "With iPod, listening to music will never be the same again."

He couldn't have been more right.

Although the technical specs of Apple's original iPods are laughable by today's standards, they were still a significant improvement over the existing devices on the market at the time. Apple's game changer featured a black-and-white LCD screen, scrolling wheel for easy navigation, and came with a 5 GB hard drive that enabled a user to hold an impressive 1,000 songs.

And perhaps just as important, the iPod integrated seamlessly into Apple's iTunes music software. Apple created a user experience that enabled consumers to purchase or rip music and download it onto a device that was attractive and easy to operate.

Game-changing results
With the highly compelling one-two punch of the iPod and iTunes, Apple clearly had a winner on its hands. Certainly, other companies had already released MP3 players that worked decently, and there was other jukebox software on the market. Apple's great breakthrough was to combine the powerful iTunes software with an attractive, easy-to-use piece of hardware. However, doubts remained that Apple would be able to sell its new iPod en masse given its $399 price.

There as well, Apple also defied the skeptics.

Although the first iPod only worked on Macs, Apple sold 125,000 iPods in the first quarter on the market. iPod sales continues to boom after releasing a version that was compatible with Microsoft's Windows the next year. Apple saw its iPod sales increase fourfold, to 600,000, in 2002. All told, Apple has sold more than 375 million iPods as of its most recently reported fiscal quarter.

Source: Apple earnings releases. 

And although Apple's iPod sales have been surpassed more quickly by later Apple products like the iPhone and iPad, its overall unit shipments are still immensely impressive.

A sign of things to come
Apple would go on to revolutionize the smartphone and tablet space by unveiling the iPhone in 2007 and the iPad in 2010. Including iTunes in both the iPhone and iPad has helped to cannibalize iPod sales in the years since each devices' respective launch. iPod sales reached their all-time peak quarterly sales of 22.7 million in Q1 2008, just as the iPhone was helping to accelerate the smartphone revolution.

Given that Apple has more valuable profit centers today, it's easy to forget just how tremendously successful the device it was in its own right. The iPod has been a resounding success in every regard.

However, Apple's iPod, in the context of Apple's greater history, is perhaps most significant as a harbinger of things to come. In the iPod, Apple notched its first meaningful win in the consumer technology space it dominates today.

As they say, the rest is history.

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