Youtube has just posted Steve Job's introduction to the very first iPod; almost 5 years ago now. When you watch it, the first thing that hits you is the small room this was done in and all the empty seats. Hardly the introduction you would expect from what became a killer appliance in the music industry.
The initial iPod was only for Mac (Windows would have to wait another year), ultraportable with firewire and with a 10 hour battery life. Apart from a neat design and great performance, there was nothing to suggest here that this would be more than another gadget with another name -- iMac, iBook, iPod, iEverything. Indeed, it was not until the opening of the iTunes Music Store (two years later) that anything special looked like coming from this. Just goes to show: who can predict?
Another interesting bit in the video is a comparison of alternative devices. Here is the table put up:
A CD player costs $75 and has 15 songs equating to $5 per song.
A Flash player costs $150 and has 15 songs equating to $15 per song.
A MP3 CD costs $150 and has 150 songs equating to $1 per song.
A hard drive costs $300 and has 1000 songs equating to $0.30 per song.
Notice the problem here? It assumes that once you put a CD in a CD player you can't change it. I hope that wasn't on the business plan. Hardly a good description of consumer decision-making.