MP3 technology was developed in the mid-1980s in Germany. All digital music, be it on CD or in MP3 format, is stored as 1s and 0s, or bits. A typical song is 32 megabytes (MB) of data, or 256,000,000 bits. A CD can store close to 800 MB, meaning 74 minutes in practice, or essentially an album. MP3 is a format that compresses the data by removing information that either the human ear cannot hear or that is much quieter than other sounds, making them hard to hear. This allows storage of almost the same quality music in one-tenth the number of bits. So a CD could now store 10 albums! The issue for portability is certainly size. MP3 players either work through “flash,” where songs are stored on a stationary medium, or through small hard drives, as with the iPod. Either way, there is limited storage space that, if each bit had to be stored, would make it impossible to store enough songs to keep the consumer happy in the small space of the player. MP3, and other compressed digital audio formats, such as the one iTunes uses, is a technological breakthrough that was a tipping point in making portable digital music desirable.
For any new technology, there is always a group of innovators who enjoy the cutting edge, the lead users who tolerate usability glitches in order to own the benefits of the new features. The purchases of lead users can serve as early indicators of trends, of changes in opportunities. But it is critical to keep in mind that lead user purchases point to new opportunities rather than to new products that will eventually hit big time; after all, the solutions that lead users tolerate do not necessarily “cross the chasm” into mainstream purchase.
The iPod, for instance, was not new technology. Since the late 1990s, there had been several MP3 players on the market. With a bit of research, innovators had been able to find MP3 players that met their functional needs—reliable MP3 music with a usable interface. For everybody else, the majority of people, it was an abstract technology for kids and nerds. As Geoffrey Moore would say, there was a chasm or gap between the small group of early adopters and the large early majority market who liked new technology as long as it was a complete product. In this case, cultural and economic trends had readied the majority market for a complete product and had provided opportunity for the insightful company.