Apple has finally admitted that a British man who left school at 15 is the inventor behind the iPod.

Kane Kramer, 52, came up with the technology that drives the digital music player nearly 30 years ago but has still not seen a penny from his invention.

And the father of three had to sell his home last year and move his family to rented accommodation after closing his struggling furniture business .

Kramer
Good idea: Apple admitted Kane Kramer invented the technology behind the iPod

Now documents filed by Apple in a court case show the US firm acknowledges him as the father of the iPod.

The computer giant even flew Mr Kramer to its Californian headquarters to give evidence in its defence during a legal wrangle with another firm, Burst.com, which claimed it held patents to technology in the iPod and deserved a cut of Apple’s £89billion profits.

Two years ago, Mr Kramer told this newspaper how he had invented and built the device in 1979 – when he was just 23.

His invention, called the IXI, stored only 3.5 minutes of music on to a chip – but Mr Kramer rightly believed its capacity would improve.

His sketches at the time showed a credit-card-sized player with a rectangular screen and a central menu button to scroll through a selection of music tracks – very similar to the iPod.

He took out a worldwide patent and set up a company to develop the idea.

But in 1988, after a boardroom split, he was unable to raise the £60,000 needed to renew patents across 120 countries and the technology became public property.

prototype
Look iLike: Kramer's prototype digital music player he invented back in 1979

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Real deal: Apple sells 100 iPods a minute

Apple used Mr Kramer’s patents and drawings to defend itself in the legal wrangle with Burst last September and he gave evidence under fire from Burst’s lawyers.

Mr Kramer, of Hitchin, Hertfordshire, said: ‘I was up a ladder painting when I got the call from a lady with an American accent from Apple saying she was the head of legal affairs and that they wanted to acknowledge the work that I had done.

‘I must admit that at first I thought it was a wind-up by friends. But we spoke for some time, with me still up this ladder slightly bewildered by it all, and she said Apple would like me to come to California to talk to them.

'Then I had to make a deposition in front of a court stenographer and videographer at a lawyers’ office. The questioning by the Burst legal counsel there was tough, ten hours of it. But I was happy to do it.’

The dispute between Apple and Burst.com has since been settled confidentially out of court.

Mr Kramer said: ‘To be honest, I was just so pleased that finally something that I had done which has been a huge success and changed the music industry was being acknowledged. I was really quite emotional about it all.’

He is now negotiating with Apple to gain some compensation from the copyright that he owns on the drawings.

But so far he has received only a consultancy fee for providing his expertise in the legal case.

A staggering 163million iPods have been sold since the device was launched by Apple in 2001.

Every minute, another 100 are snapped up worldwide, earning Apple an estimated £5.5billion last Christmas alone.

But Mr Kramer, in contrast, last year had to close his struggling furniture design business and move with his wife Lorraine and children, Jodi, nine, Luis, 14, and Lauren, 16, into rented accommodation.

‘I can’t even bring myself to buy an iPod for myself,’ he said. ‘Apple did give me one but it broke down after eight months.’

Mr Kramer, who organises the annual British Invention Show, is now working on a patented invention he claims will be bigger than the iPod.

Called Monicall, it will allow people to have phone calls recorded and emailed to the various parties as an audio file.

He said: ‘It will speed up business deals and provide a low-cost third-party witness to conversations and agreements.

‘A deal will be done on the phone and that is it – an audio file gets emailed over within 30 seconds.

The new Apple has built itself on its iconic MP3 player, which grew to a commanding market share and now holds roughly 90 percent of the hard drive-based MP3 player market and 70 percent of the total MP3 player market. This dominant position has led many; including readers at DailyTech to suggest that it has a monopoly on the market and may be abusing its position. Now a Taiwanese competitor, Luxpro has accused Apple of holding an abusive monopoly, formerly filing charges in Arkansas court.

Luxpro has had a lengthy and heated legal war against Apple over the last few years. The company was originally founded in December of 2002. In January of 2004 it released its first product -- the EZ Share MP3 player. Following its minor success, Luxpro proceeded to introduce new players. In March, 2005, at the CeBit trade show in Hanover, Germany it unveiled its new model, the Super Shuffle MP3 player.

Apple was not happy. Not only did the new player sound suspiciously like its iPod Shuffle in name, but it also resembled the first generation iPod Shuffle design in form factor. Apple sought an injunction against Luxpro to prevent its sale. After a German court granted the injunction, Luxpro responded by renaming its player the "Super Tangent".

Unable to force the upstart company out of the market by legal means, Luxpro claims Apple resorted to thuggish tactics to put it out of business. It "engaged a third-party to purchase a Super Tangent from LuxPro" and also obtained copies of two proprietary Luxpro price lists. Luxpro claims that Apple then began to send it threatening letters, demanding that it remove its players from the market.

Apple has already lost once to Luxpro. Apple sought another injunction in July 2005 in Shihlin District Court in Taipei. The battle was hard fought and the injunction was eventually granted. However, it was relatively quickly overturned on a spirited appeal by Luxpro. A frustrated Apple took its efforts to stomp out the competitor to the Taiwanese Supreme Court, only to lose.

Emboldened by its victory announced January, 2007, it decided it would take the fight to Apple. It announced that it would be $100M USD in damages. That complaint has at last been filed in U.S. court. It is not seeking a specific amount of damages with the current filing but now is requesting damages "determined by a jury trial, plus attorneys' fees".

Luxpro calls Apple "abusive" and says that it used its dominant position to "stomp out competition". It not only accuses Apple of aggressive tactics towards Luxpro, but also towards its suppliers and partners.

According to the complaint, "While Apple's over-reaching injunctions were on appeal, Apple sent warning letters to other companies doing business with Luxpro demanding that they cease doing business with Luxpro. For example, Apple placed significant pressure on InterTAN, a subsidiary of U.S.-based consumer electronics giant Circuit City, to drop Luxpro's MP3 players from its retail shelves."

Indeed, it is reported that in September, 2005 InterTAN destroyed 4,500 Luxpro players. It also stopped placing orders with the company, says Luxpro. Luxpro adds that after the InterTAN rejection Radio Shack and Best Buy also stopped doing business with it.

According to the complaint, Apple also unsuccessfully issued similar demands to Singapore's Orchard Company, Japan's Kaga Electronics, and Germany's Web Worker. It also claimed that suppliers ASUSTek Computer and Synnex Technology International were urged by Apple to pressure Luxpro's distributors, including Carrefour, ET Mall, EUPA, and 3C.

If Luxpro wins, it could open the floodgate for a plethora of other suits, as Apple has reportedly forced many smaller competitors out of the market, through various tactics.

Apple has refused to comment on the case.

Aside from its corporate and class action suits pending, Apple also is subjecting to an ongoing antitrust investigation by the European Union. The EU, which takes a tougher stance on antitrust issues, has indicated that Apple and its iTunes software may have an abusive monopoly on the MP3 player or online music market.
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