For a long time the iPod was the only device capable of making sense of the huge, chaotic mess of file people had after making "file sharing" a hobby. The competition had perfectly workable solutions for the amount of data you would get from buying CDs or doing the occasional "backup copy", but only Apple was providing tools for to comfortably deal with the massive increase in music availability. And the high price nicely fitted the inverse budget gap left when people stopped to buy music. Apple was pretty much saved by music piracy before using that position to become the biggest music distributor themselves, all while still not having properly bought the bootlegged trademark from Apple Corp.