Selling out: the pocket jukebox that's shaking up the world's music industry

Weighing little more than a tube of toothpaste and fitting easily inside the palm of the hand, an innocuous British-designed gadget is leading a revolution in the music industry.

The iPod, slickly designed in Apple's trademark style, heralds a new generation of digital music players and is swiftly becoming the consumer phenomenon of the year. Since January, tens of thousands of Britons have bought MP3 players, which enable owners to download tracks from the internet and store them in their pocket.

The trend confirms industry predictions that the days of the humble CD are numbered and that the future (or for many, the present) lies in the online world of digital music.

"The music industry is fragmenting," said Keith Jopling, director of market research at the International Federation of the Phonographic Industry. "Three years ago, there was only really one option for consumers: you would walk into a music shop and buy a CD. Now, within a very short space of time, the digital music industry is growing at a phenomenal rate. Products such as the iPod are revolutionising the music scene and I think they are definitely here to stay."

The most coveted product of all is the iPod. Created by Jonathan Ive, the award-winning British designer, the latest model weighs little more than 170g (6oz), is less than 2.5cm (1in) thick - and can store up to 7,500 songs at a time. Since its British launch seven weeks ago, the product has sold out at many of its 500 stockists across the country.

While figures are unavailable for iPods sold directly by Apple's online store in the UK, more than 1,100 Britons have bought one in the past four weeks in high street stores, according to Chart-Track, the retail analysts. Thousands more have been sold at Apple-approved chains, such as Micro Anvika and John Lewis.

One John Lewis salesman said: "It's the same everywhere at the moment. They sold out very quickly, the whole lot. They are extremely popular."

A salesman at the online Apple Store added: "Demand has been very, very high - more than expected. It's been too high for many of the dealers, so they are hard to get hold of at the moment. It's been a big problem."

The design of the latest range of iPods, which cost between £249 and £399, earned Mr Ive a £25,000 award from the Design Museum this month.

Key to its success was the simplicity of its design, according to Marc Newson, the product designer who was on the panel of judges for the award. He said: "It is a product that is revolutionary in terms of the impact it's having on the music industry. But it also manages to look really good and, most importantly, it's incredibly simple. I'm not a technically minded person at all and I actually have three iPods. The beauty of it is, I didn't even need to look at the instruction manual. It's idiot-proof."

The growth in the number of iPod owners goes hand in hand with the decline in sales of CDs, according to recent figures. British CD sales are following the trend in the United States, dropping from £2.11bn in 2001 to £2bn last year.

As the CD market shrinks, the digital music market is on the brink of an explosion, according to forecasts. A report published by Forrester Research, the technology analysts, predicted that sales from digital music in Europe would grow from €24m (£17m) this year to €1.3bn in 2007.

The boom in digital sales is poised to explode further when Apple launches the European iTunes Music Store later this year, enabling customers to download tracks for less than £1 a track. The service was launched in the US earlier this year and became an instant hit, with more than 1 million downloads in the first week alone.

A growing number of digital music players are vying for a share of the market, including those made by Creative Labs, Archos, Terratec and Sonic Blue. John Moseley, UK marketing manager at Creative Labs, which has five different models and has emerged as the most powerful competitor to iPod, said: "The industry is changing. There has been an explosion in sales this year. We've already sold several tens of thousands.

"It's really taking off because more people are becoming aware of MP3 players and there are more products with increased capacity and lower prices."

THE ESSENTIAL PLAYLIST?

By Andy Gill

Now you've got the most stylish music box in the world, what should you play on it? Well, just about anything: the iPod's vast capacity and infinite playlist turns users into DJs, endlessly sequencing their favourite selections of individual tracks according to genre, era, artist, or other more cryptic parameters.

But with room for 7,500 tracks, you would be well advised to download entire albums rather than separate tracks, and delete the duff songs. How much better, for instance, might the Beatles' Revolver be without "Yellow Submarine", or Radiohead's OK Computer without "Fitter, Happier"?

The "Best Albums of All Time" lists that periodically appear in classic-rock periodicals such as Mojo, Uncut and Q suggest there is now a generally agreed pantheon of great rock albums, and it's a fair bet that most iPods feature some, if not all, of the following on their hard disks. To start with, The Beach Boys' Pet Sounds is probably so ubiquitous it ought to come as part of the iPod software, just to save punters the effort of downloading it. Ditto Revolver, and the triple peaks of Bob Dylan's electric period, Bringing It All Back Home, Highway 61 Revisited and Blonde On Blonde.

You would probably include a Stones album, but it's debatable whether you should go for a "proper" album such asSticky Fingers or Let It Bleed, or settle for a compilation. Likewise, compilations are generally the best way of covering soul music, with the exception of Stevie Wonder. Motown Chartbusters Vol 3 is perhaps the greatest such collection ever released.

That's starting to look like a pretty good personal jukebox to carry in your pocket, and we're barely out of the Sixties - yet to ponder the varied delights of hip-hop, indie, techno, Americana, Britpop (but not punk, the most gestural and least durable of musical movements), Krautrock, and the myriad splinters and sub-divisions of dance music, not to mention the limitless wonders of older forms such as blues, jazz, country and gospel.

Alternatively, you could load up the entire output of Mozart, Beethoven and Wagner and work your way through it in chronological order. Or alphabetical. Or any way you please, come to that. But when would you have time to live?