>Jobs had expressed interest in building a portable music player in late 2000 and had tasked Jon Rubinstein with making it happen. The problem, however, was that Jobs wanted a player that was small and sleek like the flash-based music players of the time but that held as many songs as the hard drive-based players at the time (the flash ones would only hold between 10 and 20 songs depending upon how you compressed the music).
>Rubinstein told Jobs that the components necessary to make a small music player with a lot of storage didn’t exist yet. This was in late 2000, according to the story, which is well-documented in Walter Isaacson’s book.
>However in February of 2001, Rubinstein was in Japan meeting with Toshiba when the following scene played out, according to Isaacson (page 384 of "Steve Jobs"):
>At the end of a routine meeting with Toshiba, the engineers mentioned a new product they had in the lab that would be ready by that June. It was a tiny, 1.8-inch drive (the size of a silver dollar) that would hold five gigabytes of storage (about a thousand songs), and they were not sure what to do with it. When the Toshiba engineers showed it to Rubinstein, he knew immediately what it could be used for. A thousand songs in his pocket! Perfect. But he kept a poker face. Jobs was also in Japan, giving the keynote speech at the Tokyo Macworld conference. They met that night at the Hotel Okura, where Jobs was staying. “I know how to do it now,” Rubinstein told him. “All I need is a $10 million check.” Jobs immediately authorized it. So Rubinstein started negotiating with Toshiba to have exclusive rights to every one of the disks it could make, and he began to look around for someone who could lead the development team.
>"Exclusive rights to every one of the disks it could make" is the key takeaway here. Fast forward to later in the year – October 23, 2001, to be exact – and Apple would roll out a $400 pocketable MP3 player that could hold a thousand songs thanks to a hard drive no other company could use for competing products. The scroll wheel was pretty cool, too.
Source: https://techland.time.com/2013/10/23/watch-steve-jobs-unveil...