iTunes came into its own with the release of the iPod in October 2001, which was accompanied by version 2.0 of the software. Although many commentators initially wrote off the iPod as being too expensive, the combination of stylish industrial design, ease of use and high capacity made it an industry leader.
iTunes was the result of Apple's acquisition of SoundJam MP3 when it hired SoundJam developer Jeffrey Robbin. (Robbin is credited as co-inventor of various patent applications lodged by Apple.)
The first version of iTunes was little more than an MP3 and CD player, and the main change from SoundJam was the ability to burn CDs.
A significant part of the ease of use was the way tracks on a CD could be 'ripped' into the MP3 format and added to the user's iTunes library with a couple of mouse clicks. Once there, they were automatically and quickly transferred to the iPod via the FireWire interface. (USB 2.0 support was added later, and eventually FireWire was dropped, apparently as a cost-saving measure.)
Apple later reached agreements with major music labels to start selling music one track at a time via the Internet, providing a Digital Rights Management scheme was applied. Since Apple had control of the software (iTunes) and hardware (iPod), this was relatively easy to achieve. April 2003 saw the debut of iTunes 4.0 for Mac OS X, along with the iTunes Music Store which was originally restricted to North America, but by September 2006, covered 21 countries including Australia. iTunes has always been the 'face' of iTunes Music Store, allowing users to browse the catalogue, listen to samples, and purchase and download songs.
Windows 2000/XP support arrived with iTunes 4.1 in October 2003, cementing the iPod's place as the leading music player.
While some pundits believe subscription services are the way ahead and several record companies want to charge more for some tracks than others, Apple CEO Steve Jobs has stuck to his vision of selling music outright and at a flat price. iTunes Music Store is still the market leader, selling its billionth song on February 23, 2006.