In October 2001, Apple Computer, Inc. unveiled the iPod- a digital music player that can store thousands of songs on its hard drive. The iPod weighs less than two CDs, has an amazing battery life of over eight hours, and features up to twenty-five minutes of skip protection. Three different models of the iPod exist, with hard disk storage being the varying feature. The 10 gigabyte, 20 gigabyte, and 40 gigabyte models retail at $299.00, $399.00, and $499.00 respectively. The introduction of the iPod by Apple represents a bold company move into the consumer electronics market, rather than product expansion and differentiation within the computer market. So far, the iPod has been an enormously successful addition to the company’s multi-billion dollar product line, and has opened the door to new products and market niches for Apple Computer, Inc.

Apple’s iPod entered into a very unique marketing environment within the high-tech consumer electronics segment. Consumers in the United States were in a “free music” download frenzy. Services such as Napster and Gnutella created an atmosphere where illegal music downloads and copyright infringement over the Internet had become com

“Apple's iPod spurs mixed reactions” by Ian Fried, CNET news, http://news.com.com/2100-1040-274821.html?legacy=cnet

Recognized namely as a computer company, Apple arranged for many technology conferences and speaking engagements upon the release of the iPod- similar to the promotional activities usually conducted when a new computer or silicon chip is released. In this way, iPods quickly grabbed the attention of Macintosh users and technology savvy persons. In addition, these low-cost promotional activities won Steve Jobs and Apple a considerable amount of “free” press coverage.

Apple also recognized the large number of consumers who were not “tech savvy.” By making the iPod easy to use, along with interactive online help and extensive customer service to its iPod customers, Apple managed to appeal to this huge consumer base.

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