Regarding #1: "Taking their beautiful hardware and subjecting it to Windows users must have been controversial inside of the company. It just didn't seem like something Jobs would do." -- Having read Jobs' biography, it wasn't something he would do: he argued against it, and even said that Windows users could use iPods "over my dead body." However, business sense prevailed, and Jobs realised that it made sense to open up the iPod world to Windows users.
Jobs was a proponent of porting iTunes to Windows, but Schiller didn't want this. As a result, Apple joined leagues with MusicMatch, and they made a music player, but Jobs said it was a terrible piece of software:
"To make the iPod work on PCs, we initially partnered with another company that had a jukebox, gave them the secret sauce to connect to the iPod, and they did a crappy job. That was the worse of all worlds, because this other company was controlling a big piece of the user experience. So we lived with this crappy outside jukebox for about six months, and then we finally got iTunes written for Windows. In the end, you just don't want someone else to control a big part of the user experience. People may disagree with me, but I am pretty consistent about that."
So Caldwell appears to be right in both points: it was understood that it would bring a lot of value back to Apple, but it also took a lot of smart people to convince Jobs to let it happen.
However, business sense prevailed, and Jobs realised that it made sense to open up the iPod world to Windows users.
Here's the Jobs quote from the biography:
"'Screw it,' he said at one meeting where they showed him the analysis. 'I'm sick of listening to you assholes. Go do whatever the hell you want.'"
I don't think Jobs should get any credit for the iTunes/Windows port. It's for the people that finally managed to wear Steve down and get the decision made.
It seems like it would have been an odd decision to keep the iPod locked to the mac. Either they assumed that it would stay a niche product that would only appeal to apple fans and gadget freaks. Or they really thought that people would throw out their PCs and get Macs just to use the MP3 player. Bear in mind that this was the time before Intel Macs , so getting one instead of a PC would greatly restrict your software choices.
Jobs was a proponent of porting iTunes to Windows, but Schiller didn't want this. As a result, Apple joined leagues with MusicMatch, and they made a music player, but Jobs said it was a terrible piece of software:
"To make the iPod work on PCs, we initially partnered with another company that had a jukebox, gave them the secret sauce to connect to the iPod, and they did a crappy job. That was the worse of all worlds, because this other company was controlling a big piece of the user experience. So we lived with this crappy outside jukebox for about six months, and then we finally got iTunes written for Windows. In the end, you just don't want someone else to control a big part of the user experience. People may disagree with me, but I am pretty consistent about that."
So Caldwell appears to be right in both points: it was understood that it would bring a lot of value back to Apple, but it also took a lot of smart people to convince Jobs to let it happen.