If the original iPod design was truly revolutionary, then the iPod Nano is simply the next logical step. Its technological innovations aren’t exactly groundbreaking. The slim, sleek Nano has a color screen, it’s a little bit lighter and smaller than the Mini, and like the Shuffle, it uses flash memory instead of a hard drive. But from a pure business perspective, the Nano is truly ingenious. Released in September, the device persuaded legions of consumers to pay $249 for 4 gigabytes of storage (or $199 for 2GB) when they could have paid just $50 more for an iPod with over seven times the capacity. Why? “The other ones are just too heavy,” says juror Hartmut Esslinger, founder and co-CEO of Frog Design. But even he admits that the Nano doesn’t deserve to win based on portability alone: “These awards are about the bottom line.”

BOTTOM LINE: Apple sold 14 million iPods during the quarter that ended in December, up from 4.5 million a year earlier. Execs attribute the increase in large part to the Nano.