Moldy Peaches

An mp3 player the size of a business card and an iPod to boot, it is almost too good to be true. It is, however, finally in stores. The Nano has been in stores for a little over two weeks, but so far, it looks like Apple has another hit on its hands —and another opportunity to crush competitors.

In computers, Apple was the early innovator but lost the advantage when companies such as IBM, Microsoft, Dell and Hewlett-Packard came in with lower-priced solutions. Its market share is now just 3% of the computer market.

In digital music, however, Apple has "defied the laws of business," says analyst Gene Munster of securities firm Piper Jaffray. Apple has 74% of the digital music device market, according to researcher The NPD Group. Closest rival SanDisk has just 6.4%.

Apple wasn't the first to introduce a digital music player. Rio, Creative Technology and others were active players when Apple unveiled the first iPod in October 2001. But its breakthrough ease of use and sleek design changed the market dynamics. It is also has had some of the best commercials and uses the best indie-low fi tunes around. When is the last time someone bought an mp3 player that wasn't an iPod?