In late 2000, Tony Fadell approached RealNetworks with the idea of building a premium MP3 player, one that was sleeker than existing designs and backed by a streamlined content-delivery system. RealNetworks declined the offer, seeing little room for a personal music device in its portfolio.
Fadell also discussed the business idea with Phillips with no success before talking to Apple, who loved the idea considering only months prior it had purchased music delivery service Soundjam MP, which was further developed to create the first version of iTunes.
The first iPod hit store shelves on November 10, 2001, and by the end of that year the company had sold 125,000 of the devices. Over the years the iPod saw over a dozen iterations, Apple sold over 390 million units of the players, and the iPod success put them in a position to create the iPhone years later.
Also of note, RealNetworks is known to have rejected Valve's idea for building a game client like Steam before the game developer wound up taking on the project all by itself (ouch x2, for real).
Tony Fadell's tenure at Apple lasted almost a decade, later on he became the co-founder of home automation company Nest Labs, which was acquired by Google.