Not the iPod, nor Steve Jobs, but the two physicists who discovered the process that led to the vast shrinking of the hard drive won the prize. As covered in a New York Times article, iPods and other small devices that carry large amounts of digital information would not be possible without this discovery.
Albert Fert and Peter Grünberg, both working independently in 1988, discovered “giant magnetoresistance,” an effect in which tiny changes in magnetic fields can produce a huge change in electrical resistance. Note the discovery date: 1988! Unlike the Grammies, which might shower awards on “one-hit wonders” that quickly drop off the map, the Nobel Foundation spends some time reflecting on the true significance of the development.
And don’t feel bad for Fert and Grünberg having to share the cash prize. Dividing US $1.4 million two ways provides a significant amount of party money for both.