You also have to consider the following:
When Apple entered the market with Macintosh computers, noone prior had brought out an affordable consumer computer with a GUI. It was a completely new paradigm compared to DOS-based and BASIC-based CLI-driven computers. So while it was groundbreaking, it was almost alarmingly so, and it was actually in many ways before it's financially feasible time.
Flash forward...
The iPod came out long after portable MP3 products were on the market, and were on the market for an affordable sum. None of the product out was compelling, many of the products were unreliable, and the interfaces and storage capabilities were abysmally low and in many ways... they were a product ahead of it's time.
Sound familiar?
Key being "Ahead of it's time."
In the first instance, Microsoft and Intel and the clone vendors were opportunistic. They downplayed the importance of a GUI-based system for awhile until they had a suitable GUI system and then, to their masses, showed them a GUI-based system that was backwards compatible with existing formats while bringing in their own. That being the fact that you could run DOS and Windows on the same machine, later on DOS within a window as you can still today in XP. They ran the old DOS compatible apps. for a lonnnnng time, and eventually we began seeing custom API's within Windows that created software apps. that were Windows dependant more and more 'til DOS was being phased away.
Apple, in this case, is the Microsoft/Intel of the modern portable audio market that started eons ago with transistor radios and the Walkman. As time went on and a format burst onto the scene, other companies produced product forecasting a market. Apple built software for the Mac that worked as a conduit for the products that were out there, and then in analysis began to realize how craptacular much of what was out there was.
They produced their own player that worked with existing formats. They then leveraged their investment into video to take the next wave, MPEG 4, and generate a higher quality, smaller file size audio format that allowed greater song capacity for their players. They gave people a unit based on a readily available and cheap compared to it's capacity hard disk inside a very compact enclosure. They used their expertise in user interfaces to produce a GUI for the devices that worked and worked well.
Moral of the story... Apple didn't start out as an early adopter in this sense and get caught like a deer in the headlights when the ensuing freight train of competition came sailing through. Contrary... they saw deficiencies and leveraged their creative thought process to take what was out there and one-up it.
Apple has in many instances been a first or near-first to market over the course, only to get beaten down. A case in point was taking Xerox's considerable efforts and bringing it to market with the Apple Lisa first (even bigger failure) and then the Mac (which we can call a success but I feel moreso in it's third generation with OS X considering what it started out with at the previous OS's end). They were closer to the bar than Xerox was, but they were still expensive and the hardware just wasn't there to build Macs affordably early-on. After a sustained hit and lower than demand initial sales, the next few waves of Macintosh had to attempt to recoup some of the initial hits taken by the less than successful early models that had a miniscule amount of usable software available.
The iPod:
Used an existing large base of software as it's foundation, the MP3.
Apple also was the first into the PDA market, and they were almost the first out. If you count that Apple also helped develop the GUI for what became the Sony Magic Cap, you could say they fell out of the market first too. They also were ahead of their time as the initial handwriting recognition wasn't anywhere near as good as it was by the end of the Newton's lifetime. In fact, many today believe the Newton's handwriting recognition is still superior to PocketPC and Palm-based systems.
The iPod:
Came later, built on the other players weaknesses, increased capacities and provided an improved user interface, and eventually added new higher quality file formats, the iTunes Music store, video playback, yada, yada, yada.
Now... I agree with the others. What Apple has done is markedly different than what they did back in the Mac era, and what Microsoft did to them. Microsoft never had to compete with 80%+ market penetration and attempt to defeat a juggernaut that is compatible with most of the important formats, and has an entrenched media system (iTunes iTMS) to provide source for the product. When Microsoft slaughtered Apple's early marketshare... Apple had a slim lead, was struggling to get quality apps., was selling overpriced hardware to try to recoup early losses, had no entrenched business applications, and had a miniscule amount of software in comparison to the already entrenched PC market.
But...
Apple can not become complacent. They have an impeccable track record thus far with the iPod. The few hiccups along the way have been handled typically in a rather respectable fashion, with replaced units and/or batteries. The "scratch" issue is going to be the case with any electronics device. In the 1980's if you dropped a Walkman or any knock-off cassette player... if it shattered or broke, you typically had to "just deal". In today's society if you drop a unit and it scratches, that's fodder for a civil suit. I had pals with GE and Sony portable cassette players that were held together with duct tape and had the batteries held in with tape too. I never once heard them calling up either company demanding a fix.
It is imperative that Apple continues to produce good product, innovative "needed" features, with elegant design, and continues to provide an awesome and compelling integration with the computer with the right amount of available product and the right amount of flexibility as needed. Where Microsoft keeps slipping in areas because of public perception, whether it be virus problems, security issues/loopholes, falling behind on delivering product to market in a timely fashion, not seeing demands forecasted for certain features and implementing compelling ways to using them in their own products, etc. Apple *MUST* see these elements and must avoid failing where other's have. While Apple's marketshare is healthy, robust, and considerable... not even Microsoft is guaranteed to hold the desktop market forever. Apple should heed that bit of wisdom in the portable media market as well. Even Sony, with the ubiquitous Walkman, knows that all too well. That argument alone would be far more compelling and corresponding than Apple's past computer circumstances when compared to the iPod.
