Steve Jobs

Jobs added a CD burner to the iMac, but that wasn’t enough. His goal was to make it simple to transfer music from a CD, manage it on your computer, and then burn playlists. Other companies were already making music-management applications, but they were clunky and complex. One of Jobs’s talents was spotting markets that were filled with second-rate products. He looked at the music apps that were available—including Real Jukebox, Windows Media Player, and one that HP was including with its CD burner—and came to a conclusion: “They were so complicated that only a genius could figure out half of their features.”

That is when Bill Kincaid came in. A former Apple software engineer, he was driving to a track in Willows, California, to race his Formula Ford sports car while (a bit incongruously) listening to National Public Radio. He heard a report about a portable music player called the Rio that played a digital song format called MP3. He perked up when the reporter said something like, “Don’t get excited, Mac users, because it won’t work with Macs.” Kincaid said to himself, “Ha! I can fix that!”

To help him write a Rio manager for the Mac, he called his friends Jeff Robbin and Dave Heller, also former Apple software engineers. Their product, known as SoundJam, offered Mac users an interface for the Rio and software for managing the songs on their computer. In July 2000, when Jobs was pushing his team to come up with music-management software, Apple swooped in and bought SoundJam, bringing its founders back into the Apple fold. (All three stayed with the company, and Robbin continued to run the music software development team for the next decade. Jobs considered Robbin so valuable he once allowed a Time reporter to meet him only after extracting the promise that the reporter would not print his last name.)

Jobs personally worked with them to transform SoundJam into an Apple product. It was laden with all sorts of features, and consequently a lot of complex screens. Jobs pushed them to make it simpler and more fun. Instead of an interface that made you specify whether you were searching for an artist, song, or album, Jobs insisted on a simple box where you could type in anything you wanted. From iMovie the team adopted the sleek brushed-metal look and also a name. They dubbed it iTunes.

Jobs unveiled iTunes at the January 2001 Macworld as part of the digital hub strategy. It would be free to all Mac users, he announced. “Join the music revolution with iTunes, and make your music devices ten times more valuable,” he concluded to great applause. As his advertising slogan would later put it: Rip. Mix. Burn.

That afternoon Jobs happened to be meeting with John Markoff of the New York Times. The interview was going badly, but at the end Jobs sat down at his Mac and showed off iTunes. “It reminds me of my youth,” he said as the psychedelic patterns danced on the screen. That led him to reminisce about dropping acid. Taking LSD was one of the two or three most important things he’d done in his life, Jobs told Markoff. People who had never taken acid would never fully understand him.

The iPod

The next step for the digital hub strategy was to make a portable music player. Jobs realized that Apple had the opportunity to design such a device in tandem with the iTunes software, allowing it to be simpler. Complex tasks could be handled on the computer, easy ones on the device. Thus was born the iPod, the device that would begin the transformation of Apple from being a computer maker into being the world’s most valuable company.

Jobs had a special passion for the project because he loved music. The music players that were already on the market, he told his colleagues, “truly sucked.” Phil Schiller, Jon Rubinstein, and the rest of the team agreed. As they were building iTunes, they spent time with the Rio and other players while merrily trashing them. “We would sit around and say, ‘These things really stink,’” Schiller recalled. “They held about sixteen songs, and you couldn’t figure out how to use them.”

Jobs began pushing for a portable music player in the fall of 2000, but Rubinstein responded that the necessary components were not available yet. He asked Jobs to wait. After a few months Rubinstein was able to score a suitable small LCD screen and rechargeable lithium-polymer battery. The tougher challenge was finding a disk drive that was small enough but had ample memory to make a great music player. Then, in February 2001, he took one of his regular trips to Japan to visit Apple’s suppliers.

At the end of a routine meeting with Toshiba, the engineers mentioned a new product they had in the lab that would be ready by that June. It was a tiny, 1.8-inch drive (the size of a silver dollar) that would hold five gigabytes of storage (about a thousand songs), and they were not sure what to do with it. When the Toshiba engineers showed it to Rubinstein, he knew immediately what it could be used for. A thousand songs in his pocket! Perfect. But he kept a poker face. Jobs was also in Japan, giving the keynote speech at the Tokyo Macworld conference. They met that night at the Hotel Okura, where Jobs was staying. “I know how to do it now,” Rubinstein told him. “All I need is a $10 million check.” Jobs immediately authorized it. So Rubinstein started negotiating with Toshiba to have exclusive rights to every one of the disks it could make, and he began to look around for someone who could lead the development team.

Tony Fadell was a brash entrepreneurial programmer with a cyberpunk look and an engaging smile who had started three companies while still at the University of Michigan. He had gone to work at the handheld device maker General Magic (where he met Apple refugees Andy Hertzfeld and Bill Atkinson), and then spent some awkward time at Philips Electronics, where he bucked the staid culture with his short bleached hair and rebellious style. He had come up with some ideas for creating a better digital music player, which he had shopped around unsuccessfully to RealNetworks, Sony, and Philips. One day he was in Colorado, skiing with an uncle, and his cell phone rang while he was riding on the chairlift. It was Rubinstein, who told him that Apple was looking for someone who could work on a “small electronic device.” Fadell, not lacking in confidence, boasted that he was a wizard at making such devices. Rubinstein invited him to Cupertino.

Fadell assumed that he was being hired to work on a personal digital assistant, some successor to the Newton. But when he met with Rubinstein, the topic quickly turned to iTunes, which had been out for three months. “We’ve been trying to hook up the existing MP3 players to iTunes and they’ve been horrible, absolutely horrible,” Rubinstein told him. “We think we should make our own version.”