Time: How Apple Does It
The October 24th Time Magazine issue features Steve Jobs on the Cover holding a Video iPod and an iMac with the words "What's Next". (The article is available to subscribers, but is also available in full at TimeCanada).
In it, Jobs talks about how and why Apple continues to be innovative in this industry. He points to their product development cycle as "deep collaboration" or "concurrent engineering". Products don't pass from team to team. Instead products are developed in parallel by all departments "in endless rounds of interdisciplinary design reviews".
Jobs also places emphasis on control. Through controlling the hardware and software, integration can be more seamless. This also reduces your dependance on third party companies. The iPod, iTunes, iTunes Music store is an example of this control and integration.
The product now is the iTunes Music Store and iTunes and the iPod and the software that goes on the iPod. A lot of companies don't really have control, or they can't really work in a collaborative way to truly make a system. We're really about a system.
Jobs also provides more insight into his opinion about the new video capabilities of the iPod:
"There is no market today for portable video," he says. "We're going to sell millions of these to people who want to play their music, and video is going to come along for the ride. Anyone who wants to put out video content will put it out for this. And we'll find out what happens."