Development of iTunes started with the simple wish to play the music on iMacs and it developed into largest online music stores in the world selling 3 million songs per day. Apple was into photos and video from the first iMac, but music was missing. In January 2001, Steve Jobs presented in one of this unique keynote presentations, the most beautiful and easiest to use jukebox software ever seen.

With the launch of iPod, Apple was no longer just the computer company. They were the media company. After only two years they sold over one million iPods and with iPod making 50% of Apple revenue Steve Jobs knew he had to expand iTunes into music retail.

With Napster shut down music industry was looking for a way to sell music online. Public wanted digital music and the music companies couldn’t continue saying no to it. Nobody knew what the system for selling music was going to be. Individual record labels were thinking about starting their own services, but Jobs had a plan for a service where all labels could be bought. A single online service where users could buy music and seamlessly transfer it to their iPod.

Music industry wasn’t enthusiastic in dealing with Apple. They didn’t want to make another giant in the industry with the business plan they themselves could have developed easily. But they soon realized that it wasn’t easy to say no to Steve Jobs. Labels were intrigued with Steve’s pitch, but the one point Steve was insisting on, was not going well with the artists or music labels. This was splitting the songs into singles. Steve Jobs wants to sell individual songs for $0.99 a single. Music companies and artists demand that they sell the albums just as they were recorded. His charisma and energy in selling this idea, sold them on it.

On April 28, 2003, after months of grueling negotiations with music executives and artists Steve launched the iTunes store exactly as he envisioned it. With more than 200,000 songs from all major labels it has become the largest online music store at that time. In only five days iTunes sold over one million songs becoming a huge success.

The system worked, unlike other services available at the time, because people want to own their music. Other services didn’t see this simple fact. They sold subscriptions; in essence you were renting songs. This was the primary reason why iTunes survived and others are still struggling in its shadows. Apple has now done something no other company was able. They are offering their users a digital music player with their own music store.

On the same day Steve Jobs has another announcement. They launched the third generation iPod music players. Unlike the previous models this generation is compatible with PC and Mac. Now for the first time this cult icon was available to everybody with computer. Now hundreds of millions people could try it out and iPod craze has spread around the world.