It was very obvious even then. Apple was selling 50 million iPods per year at $200 a piece. During the iPhone introduction, SJ said he was aiming to sell 10 million phones to capture 1% of the market the first year.
That means even then, the phone market was 1 billion devices a year. That was a much larger market than the stand alone music player market.
It was also clear that’s where the market was headed. Phone makers were already starting to sell music capable phones
