The first iPod wasn't a success

Everything needs 3 generations. You make the product, you fix the product, then you fix the business, which means make the margins. I've never seen anyone get it all right the first time. The iPod wasn't big enough. It took 3 generations of the iPod before it became successful. The first generation was only successful with the Mac geeks, and the Mac geeks were less than 1% of the market. And then the second generation was also that way. We'd sell everything for the most part in the first quarter, and then it would die because it was just the Mac aficionados, the loyalists. Who'd come and buy everything. And it wasn't until the third generation where we made it work on Windows and we had the iTunes Music Store did it actually start to take off. So sometimes you have to say, we're on the right thing, but we need to make some changes to get this market going.