Here's the interesting tale that I stumbled upon and wanted to share with you guys.
It was somewhere in 2005 that Steve Jobs was struggling with iTunes. With a bad deal following his Motorola experince and the partnership with Rokr E790 candy bar cell phone, Apple Inc had to recover. The E790 was the first handset to host the iTunes and play the AAC format audio files. The success of iTunes is what helped Apple retain its patent/copyright control over its hardware-n-software products in the future.
Coming to the ringtones, it is reported from some sources that Steve Jobs had a particular dislike for the then famous Nokia tune. Interestingly, the Nokia tune is a 1902-era guitar riff, much popular with cellphone users in 2005. But Jobs idea was to develop high fidelity audio files for his iPhones, not some low sounding beeps and MIDI ringtones.