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CHAPTER THIRTY-SIX
THE iPHONE
Three Revolutionary Products in One
An iPod That Makes Calls
By 2005 iPod sales were skyrocketing. An astonishing twenty million were sold that year,
quadruple the number of the year before. The product was becoming more important to the
company’s bottom line, accounting for 45% of the revenue that year, and it was also burnishing
the hipness of the company’s image in a way that drove sales of Macs.
That is why Jobs was worried. “He was always obsessing about what could mess us up,” board
member Art Levinson recalled. The conclusion he had come to: “The device that can eat our lunch
is the cell phone.” As he explained to the board, the digital camera market was being decimated
now that phones were equipped with cameras. The same could happen to the iPod, if phone
manufacturers started to build music players into them. “Everyone carries a phone, so that could
render the iPod unnecessary.”
His first strategy was to do something that he had admitted in front of Bill Gates was not in his
DNA: to partner with another company. He began talking to Ed Zander, the new CEO of
Motorola, about making a companion to Motorola’s popular RAZR, which was a cell phone and
digital camera, that would have an iPod built in. Thus was born the ROKR. It ended up having
neither the enticing minimalism of an iPod nor the convenient slimness of a RAZR. Ugly, difficult
to load, and with an arbitrary hundred-song limit, it had all the hallmarks of a product that had
been negotiated by a committee, which was counter to the way Jobs liked to work. Instead of
hardware, software, and content all being controlled by one company, they were cobbled together
by Motorola, Apple, and the wireless carrier Cingular. “You call this the phone of the future?”
Wired
scoffed on its November 2005 cover.
Jobs was furious. “I’m sick of dealing with these stupid companies like Motorola,” he told
Tony Fadell and others at one of the iPod product review meetings. “Let’s do it ourselves.” He
had noticed something odd about the cell phones on the market: They all stank, just like portable
music players used to. “We would sit around talking about how much we hated our phones,” he
recalled. “They were way too complicated. They had features nobody could figure out, including
the address book. It was just Byzantine.” George Riley, an outside lawyer for Apple, remembers
sitting at meetings to go over legal issues, and Jobs would get bored, grab Riley’s mobile phone,
and start pointing out all the ways it was “brain-dead.” So Jobs and his team became excited about
the prospect of building a phone that they would want to use. “That’s the best motivator of all,”
Jobs later said.
Another motivator was the potential market. More than 825 million mobile phones were sold in
2005, to everyone from grammar schoolers to grandmothers. Since most were junky, there was
room for a premium and hip product, just as there had been in the portable music-player market.
At first he gave the project to the Apple group that was making the AirPort wireless base station,
on the theory that it was a wireless product. But he soon realized that it was basically a consumer
device, like the iPod, so he reassigned it to Fadell and his teammates.
Their initial approach was to modify the iPod. They tried to use the trackwheel as a way for a
user to scroll through phone options and, without a keyboard, try to enter numbers. It was not a
natural fit. “We were having a lot of problems using the wheel, especially in getting it to dial
phone numbers,” Fadell recalled. “It was cumbersome.” It was fine for scrolling through an
address book, but horrible at inputting anything. The team kept trying to convince themselves that
users would mainly be calling people who were already in their address book, but they knew that
it wouldn’t really work.
At that time there was a second project under way at Apple: a secret effort to build a tablet
computer. In 2005 these narratives intersected, and the ideas for the tablet flowed into the
planning for the phone. In other words, the idea for the iPad actually came before, and helped to
shape, the birth of the iPhone.
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