'The iPod will be dead, finished, gone, kaput.'
— Sir Alan Sugar, February 2005
We thought it was hilarious when Sir Alan Sugar predicted that by the end of 2005 the iPod would be “dead, finished, gone, kaput.” I remember saying, “Wow, that’s so weird, because I was just thinking the exact same thing about Sir Alan Sugar.” See, by then we were on the verge of introducing video. We also had prototypes of the iPod Touch and iPhone in the labs. We knew where the iPod was headed and how huge it was going to be. At last count we’ve sold more than 220 million units, and even though iPod sales were down a bit last quarter, that’s only because people are buying iPhones instead of iPods—we’re cannibalizing our own product. People underestimated the iPod because it seemed so simple. It wasn’t the first MP3 player. It didn’t have the most features—in fact, it had fewer features. People like Alan Sugar figured cloners would just crank out cheap knockoffs and kill us. But the real value of the iPod had nothing to do with the hardware—it was the ecosystem around the hardware. The iTunes software, the iTunes store, the deals we made with record labels, the fact that everything was easy to understand and simple to use. These days I’m considered the greatest business genius of all time, the ruler of the digital age—and it all started with that simple little MP3 player. As for Sir Alan Sugar, in 2007 he sold his ailing computer company, Amstrad, for 10 percent of what it had been worth at its peak, and then he signed on to star in the U.K. version of The Apprentice. I rest my case.