The news: That Apple discontinued its iPod brand after 21 years is not surprising given that the iPhone and AirPods have long replaced the music player—but a lot of credit goes to the product category that set Apple on its way to dominate consumer electronics.

Scroll back: Before the iPod was launched in 2001, Apple made desktops and laptops and owned a measly 2.3% of the global PC market. There was a burgeoning yet fragmented MP3 player segment, but the iPod was initially dismissed as an overpriced accessory exclusive to Mac users. What changed?

• Apple didn’t lower the iPod’s price, but it did open it to Windows users for wider adoption. Nearly 400 million units have since been sold, per Global News.
• The iPod and its variants provided the template for Apple’s product strategy, which it cyclically repeated for iPhone, iPad, Apple Watch, and other products that come in different sizes, various colors, and a range of price points. 
• The iPod’s click-wheel was the marquee innovation that set it aside from the competition. The iPhone followed suit with a multi-touch display, and the Apple Watch with the digital crown.
• The iPod also led to the creation of the iTunes music service, which became the No. 1 music retailer in the US in 2008. iTunes was the progenitor of Apple’s Services division that encompasses the App Store, Apple Music, Apple TV, Apple Pay, Apple Card, and Apple Arcade.
• iPod hardware and iTunes services can be considered the genesis of Apple’s wider iOS ecosystem, the first seeds that grew into the company’s walled garden.

Scroll forward: Apple’s mix of savvy marketing, product design, and its retail store user experience were honed during the iPod’s heyday. In context, the iPod owned 76% share of the US MP3 player market at its peak.

This formula remained a key component in the transition to iPhone and Apple’s subsequent status as most valuable company, with a near $3 trillion valuation, just as Apple looks to the next product category that could someday replace the iPhone.

(Source: Apple)