http://www.wired.com/wired/archive/14.11/ipod.html There is a book recently published called The Perfect Thing all about the iPod and its cultural impact. Keep meaning to buy it.

"The iPod line came from Apple's "digital hub" category, when the company began creating software for the growing market of personal digital devices. Digital cameras, camcorders and organizers had well-established mainstream markets, but the company found existing digital music players "big and clunky or small and useless" with user interfaces that were "unbelievably awful," so Apple decided to develop its own. As ordered by CEO Steve Jobs, Apple's hardware engineering chief Jon Rubinstein assembled a team of engineers to design the iPod line, including hardware engineers Tony Fadell and Michael Dhuey, and design engineer Jonathan Ive. The product was developed in less than one year and unveiled on 23 October 2001. Jobs announced it as a Mac-compatible product with a 5 GB hard drive that put "1,000 songs in your pocket." Apple did not develop the iPod software entirely in-house, instead using PortalPlayer's reference platform based on 2 ARM cores. The platform had rudimentary software running on a commercial microkernel embedded operating system. PortalPlayer had previously been working on an IBM-branded MP3 player with Bluetooth headphones. Apple contracted another company, Pixo, to help design and implement the user interface under the direct supervision of Steve Jobs." Source and further information: http://en.wikipedia.org/wiki/Ipod