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But every time Jobs and his executives examined the idea in detail, it seemed like a suicide mission. Phone chips and bandwidth were too slow for anyone to want to surf the Internet and download music or video over a cell phone connection. Email was a fine function to add to a phone. But Apple couldn’t leverage all the work it had put into building a music player such as the iPod to do that. Research in Motion’s BlackBerry was fast locking up that market, anyway. Apple even considerd buying Motorola in 2003, but executives quickly concluded it would be too big an acquisition for the company then.
Worst of all
, if Apple wanted to make and sell a phone in the United States, it would be at the beck and call of the U.S. wireless carriers. Back then, phone manufacturers such as Motorola were the serfs of high tech in the United States. They depended on carriers’ marketing dollars to get consumers into stores, and then they depended on carriers to make the phones affordable by subsidizing their purchase price. That made manufacturers powerless to resist carriers’ meddling in how each phone should be built. Manufacturers occasionally pushed back against this dominance and were always met with the same response from the carriers: “You can build the phone your way, but we might not subsidize it, market it, or allow it on our network.” Manufacturers always caved in the face of this threat.
Jobs was personally offended
by this way of doing business and wanted no part of it. “We’re not the greatest at selling to the Fortune 500, and there are five hundred of them—five hundred CIOs [chief information officers] that are orifices you have to go through to get” that business. “In the cell phone business there are five. We don’t even like dealing with five hundred companies. We’d rather run an ad for millions and let everyone make up their own mind. You can imagine what we thought about dealing with five,” he said during an onstage interview at the All Things D conference in May 2003. Translation: I am not about to spend hundreds of millions of dollars to have a bunch of suits tell me how to build and sell my phone.
That sounded tough and principled. But by the end of 2003, as the iPod became Apple’s most important product since the Macintosh, it was also starting to look misguided. Cell phone makers were putting music-listening applications in their phones. And companies such as Amazon, Walmart, and Yahoo! were beginning to sell downloadable music. Executives such as iPod boss Tony Fadell worried that if consumers suddenly gave up their iPods for music phones, Apple’s business—only five years removed from its flirt with bankruptcy—would be crushed. “We didn’t really have a hit on our hands [with the iPod] until late 2003, early 2004, so we were saying maybe we don’t have the market domination—the retail channels—to expand the iPod’s business properly,” Fadell said.
It’s hard to imagine
a time when the iPod wasn’t an iconic product, selling more than 50 million units a year; but back then Apple had sold only 1.3 million devices in two years and was still having trouble getting retailers such as Best Buy to carry it. “So we were thinking, ‘How do we get above the noise? How do we make sure that we are at least competitive so that anyone who is carrying a cell phone can get iTunes music?’ Because if we lost iTunes, we would have lost the whole formula,” Fadell said.
Publicly, Jobs continued his
harangue against the carriers. At the D conference in 2004, Stewart Alsop, Jr., the venture capitalist and former journalist, actually begged Jobs to make a smartphone that would improve on the popular Treo. “Is there any way you can get over your feelings about the carriers?” Alsop asked, offering to connect Jobs with Verizon CEO Ivan Seidenberg, who was also in the audience. Not a chance, Jobs said. “We’ve visited with the handset manufacturers and even talked to the Treo guys. They tell us horror stories.” But privately, Jobs was thinking hard about the content of Alsop’s pitch.
Jobs’s first answer to the growing competition wasn’t the iPhone, but something much more modest—a music phone called the Rokr, to be built in partnership with Motorola and Cingular, the big wireless carrier that would, via two mergers, become AT&T. The deal, agreed to in early 2004, seemed like the best of all worlds for Apple. It would license its iTunes software to Motorola to be put on Motorola’s supersuccessful Razr cell phone, and Motorola would handle the rest. Apple would get a license fee for letting Motorola use the software, and Jobs wouldn’t have to deal with the wireless carriers. iTunes would help Motorola sell more phones, get Cingular more wireless customers, and enable Apple to compete with the music phones it feared. “We thought that if consumers chose to get a music phone instead of an iPod, at least they would be using iTunes,” Fadell said.
Instead, the Rokr was an embarrassment. When Jobs unveiled it nearly eighteen months later in September 2005, it was not capable of over-the-air music downloads, the device’s main selling point. It was big and chunky—nothing like the sleek Razr that Motorola had made famous. And its music capacity was artificially limited to a hundred songs.
The tension between the partners
, especially Apple and Motorola, was obvious quickly after Jobs was done demoing the device onstage at Moscone Center in San Francisco. Jobs had released the first iPod nano at the same time, and when a reporter asked Motorola CEO Ed Zander a few weeks later if he felt upstaged by the other products Jobs had unveiled, his answer was succinct: “Screw the nano.” Wired magazine soon put a story of the fiasco on its cover under the headline YOU CALL THIS THE PHONE OF THE FUTURE?
Jobs successfully pinned the Rokr screwup
on Motorola, but the fiasco was mostly Apple’s fault. Yes, Motorola had produced an ugly phone, and it continued to produce phones that didn’t sell well for the next four years until Zander resigned. But the Rokr project’s real problem was that Jobs’s reason for the deal evaporated almost as soon as it was signed, Fadell said. The deal was designed as a defensive maneuver, a hedge against companies’ trying to build music phones without having to deal with the carriers themselves. But with each passing month in 2004 it became clearer that the last thing Apple needed to do with iTunes and the iPod was to play defense. It didn’t need the Rokr to help it more broadly distribute iTunes. It just needed to hang on as iPod sales took off like a rocket ship. In the summer 2003 Apple was selling only about three hundred thousand iPods a quarter. At the beginning of 2004 it was selling only eight hundred thousand a quarter. But by summer 2004 sales exploded. It sold 2 million during the quarter that ended September 30, 2004, and another 4.5 million in the final quarter of the year. By the time ugly Rokr prototypes showed up in the fall of 2004, many Apple executives saw clearly that they were on the wrong path, and by year-end Jobs had all but abandoned the project. He was still driving the iTunes team to deliver the software that would go in the Rokr, but he was listening more carefully to executives who thought the Rokr project had been folly from the start.
It wasn’t just the iPod’s success in 2004 that diluted Apple’s enthusiasm for the Rokr. By the end of the year, building its own phone no longer seemed like such a bad idea. By then it looked like most homes and cell phones would soon have Wi-Fi, which would provide high, reliable bandwidth over the homeowner’s DSL or cable connection. And outside-the-home cell phone bandwidth looked like it would soon be fast enough to stream video and run a fully functioning Internet browser. Phone processor chips were finally fast enough to run cool-looking phone software. Most important, doing business with the carriers was starting to seem less onerous. By the fall of 2004, Sprint was beginning to sell its wireless bandwidth wholesale. That meant that by buying and reselling Sprint bandwidth, Apple could become its own wireless carrier—an MVNO, short for “mobile virtual network operator.” Now Apple could build a phone and barely have to deal with the carriers at all. Disney, on whose board
Jobs sat, was already in discussions with Sprint about just such a deal to provide its own wireless service. Jobs was asking a lot of questions about whether Apple should pursue one as well.
Cingular executives involved in the Rokr project such as Jim Ryan watched Jobs’s interest in an MVNO with Sprint grow, and it terrified them. They worried that if Apple became a wireless carrier, it would cut prices to win customers and crush profits in the industry as other carriers cut prices to compete. So while they had access to Jobs and his team, they gently lobbied him to cut a deal with them instead. If Jobs would agree to an exclusive deal with Cingular, they said, they would be willing to throw out the rule book on carrier–manufacturer relations and give Jobs the control he needed to build a revolutionary device.
Ryan, who has never talked publicly about those days until now, said the experience taxed every ounce of his negotiating skills. He’d been assembling complex carrier deals for nearly a decade and was known in the industry as one of the early thinkers about the future of wireless. He’d grown Cingular’s wireless data business from almost nothing to $4 billion in revenue in three years. But Apple and Jobs had little experience negotiating with carriers, making it much harder for Ryan to predict how they would respond to his various offers. “Jobs hated the idea of a deal with us at first. Hated it,” Ryan said. “He was thinking that he didn’t want a carrier like us anywhere near his brand. What he hadn’t thought through was the reality of just how damn hard it is to deliver mobile service.” Throughout 2004, during the dozens of hours he and his team spent in meetings with Apple executives in Cupertino, Ryan kept reminding Jobs and other Apple executives that if Apple became a carrier itself, it would get stuck with all the hassles of running an inherently unpredictable asset—a cell phone network. A deal with Cingular would insulate Apple from all that. “Funny as it sounds, that was one of our big selling points to them,” Ryan said. “Every time the phone drops a call, you blame the carrier. Every time something good happens, you thank Apple.”
Cingular wasn’t just playing defense
. Executives such as Ryan thought partnering with the inventor of the iPod would transform the way customers thought about their own company. Apple’s explosive success with the iPod in 2004 and 2005—it sold 8.2 million iPods in 2004 and another 32 million in 2005—had taken Jobs’s status as a business and cultural icon to unparalleled heights. The likely torrent of new customers who would come to Cingular if it were the carrier for a phone as revolutionary as the iPod had been made them salivate.
Another Cingular executive who worked on the deal but who would not be named put it this way to me when I was working on a story for Wired in 2008: “Jobs was cool. He was hip. There were studies done in colleges that asked, ‘What is the one thing you can’t live without?’ For twenty years it was beer. Now it was the iPod. Things like that made us say this guy has got something. That probably gave us that much more energy to make sure this deal happened.”
While Cingular was lobbying Jobs from the outside, a handful of Apple executives, such as Mike Bell and Steve Sakoman, were pushing Jobs to sign off on building a phone from the inside. “We were spending all this time putting iPod features in Motorola phones. That just seemed ass-backwards to me,” said Bell, who now is cohead of Intel’s mobile-device effort. He told Jobs that the cell phone itself was on the verge of becoming the most important consumer electronics device of all time, that no one was good at making them, and that, therefore, “if we [Apple] just took the iPod-user experience and some of the other stuff we were working on, we could own the market.”
Bell was a perfect executive to be making this pitch. He’d been at Apple fifteen years and had helped build some of the products, such as the iMac, that enabled Apple to avoid bankruptcy in 1997. Most important, because he ran not only a chunk of the Mac software division but the software group responsible for Apple’s AirPort Wi-Fi devices, he knew more about the wireless industry than most other senior executives inside Apple. He doesn’t claim credit for being the father of the iPhone. He ultimately didn’t run or even work on the project. Fadell ran it, before Scott Forstall took it over. But even today most say Bell was an important catalyst.
“So I argued with Steve for a couple of months and finally sent him an email on November seventh, 2004,” Bell said. “I said, ‘Steve, I know you don’t want to do a phone, but here’s why we should do it: [Design director Jony Ive] has some really cool designs for future iPods that no one has seen. We ought to take one of those, put some Apple software around it, and make a phone out of it ourselves instead of putting our stuff on other people’s phones.’ He calls me back about an hour later and we talk for two hours, and he finally says, ‘Okay, I think we should go do it.’ So Steve and I and Jony [Ive] and Sakoman had lunch three or four days later and kicked off the iPhone project.”
It wasn’t just Bell’s persistence and Ive’s designs that helped convince Jobs. Sakoman came to lunch having already done some early engineering work about what it might take to build a phone. He’d been at Palm until 2003, where, among other things, he helped build the software that went inside Treo smartphones. And as vice president of software technology at Apple, he had become the executive most familiar with the software inside the iPod. If Apple was going to make a smartphone, the iPod was a logical place to start. That’s what consumers were expecting Apple to do. So by the time Sakoman arrived for lunch, he and his team had already figured out a way to put a Wi-Fi chip inside an iPod and get it to connect to the Internet.
They’d even begun working on new software for the music player—a version of Linux—so that it could handle the increased demands of being a phone and an Internet browser. Linux, the open-source software made famous by Linus Torvalds in the 1990s, had not supplanted Microsoft Windows as many geeks predicted it would. But by then it had become the software of choice for less powerful and sophisticated electronics. Sakoman briefed Jobs on his team’s progress and later that afternoon told his team, “You better start figuring this out because this [phone project] is going ahead.”
Bell says one reason why he remembers the meeting is that he’d never seen anyone eat the way Jobs did that day. “You know how you remember certain things because of their bizarreness? So we’re meeting outside at the Apple cafeteria, and when Steve walks out, on his tray is a glass bowl full of avocado halves. Not one or two, but, like, fifteen covered in salad dressing. So I remember sitting there with Jony and Sakoman and watching Steve mow through a mound of avocados. I guess, having read Walter Isaacson’s biography [of Jobs], it was one of those food phases he was in to cure his cancer, but at the time I had no idea what was up.”
The final deal between Apple and AT&T, which acquired Cingular in 2006, took more than a year to hammer out. But it would prove easy compared to what Apple went through just to build the device. Many executives and engineers, riding high from their success with the iPod, assumed it would be just like building a small Macintosh. Instead, Apple designed and built not one iPhone but three entirely different devices in those two years. One executive on the project thinks Apple made six fully working prototypes just of the device it ultimately sold—each with its own set of hardware, software, and design tweaks. Many on the team were so burned-out, they left the company shortly after the first phone hit store shelves. “It was like the first moon mission,” said Fadell, who was one of the key executives on the project, and who left Apple to start his own company, Nest, in 2010. “I’m used to a certain level of unknowns in a project, but there were so many new things here that it was just staggering.”
Jobs wanted the iPhone to run a modified version of OS X, the software that comes with every Mac. But no one had ever put
a gigantic program like OS X on a phone chip before. The software would have to be a tenth the size, and even then there wasn’t a phone chip being made in 2005 that could run it fast enough and with a long enough battery life. The chips that run Apple laptops were never considered because they generated too much heat and would suck a phone battery dry in minutes. Millions of lines of code would have to be stripped out or rewritten, and until 2006 engineers would have to simulate chip speed and battery drain because actual chips weren’t available until then. “Initially we just worked on Gumstix boards [cheap circuit boards hobbyists buy],” said Nitin Ganatra, one of the early software engineers. “We started with the Mac address book—a list of names—and to see if we could make it scroll [on a screen] at between thirty to sixty frames a second. We just wanted to figure out if there was any way to make this [OS X on a phone chip] work—whether we were even in the right ballpark. We wanted to know if we could push bits fast enough to get that iPhone look and feel. If we couldn’t get it to work on a Gumstix board, we knew we might have a problem.”
No one had ever put a capacitive multitouch screen in a mainstream consumer product before either. Capacitive touch technology—which creates “a touch” when a finger or other conductive item completes a circuit on the device—had been around since the 1960s. Elevator buttons in office buildings and screens on ATMs often used it. And research into multitouch technologies had been around since the 1980s. Trackpads on laptops were probably the most sophisticated use of this technology because they could recognize the difference between one- and two-finger inputs. But it was also well known that to build the multitouch screen Apple put on the iPhone and produce it in volume was a challenge few had the money or guts to take on. The next steps—to embed the technology invisibly in a piece of glass, to make it smart enough to display a virtual keyboard with auto-correct, and to make it sophisticated enough to reliably manipulate content such as photos or web pages on that screen—made it hugely expensive even to produce a working prototype. Few production lines even had experience manufacturing multitouch screens. There were touchscreens in consumer electronics, but over the years these had typically been pressure-sensitive touchscreen devices on which users pushed on-screen buttons with a finger or a stylus. The PalmPilot and its successors such as the Palm Treo were popular implementations of this technology. Even if multitouch iPhone screens had been easy to make, it wasn’t at all clear to Apple’s executive team that the features they enabled, such as onscreen keyboards and “tap to zoom,” were enhancements that consumers wanted.
As early as 2003 a handful of Apple engineers, who had done cutting-edge academic work with touch interfaces, had figured out how to put multitouch technology in a tablet. But the project was mothballed. “The story was that Steve wanted a device that he could use to read email while on the toilet. That was the extent of the product spec,” said Josh Strickon, one of the earliest engineers on that project. “But you couldn’t build a device with enough battery life to take out of the house, and you couldn’t get a chip with enough graphics capability to make it useful. We spent a lot of time trying to figure out just what to do.” Before joining Apple in 2003, Strickon had been a student at MIT for a decade, getting his B.A., master’s, and Ph.D. in engineering. He was a huge proponent of touchscreen technology, having built a multitouch device for his master’s thesis. But he said given the lack of consensus at Apple about what to do with the prototypes he and his fellow engineers developed, he left the company in 2004 thinking it wasn’t going to do anything with multitouch.
Tim Bucher, one of Apple’s top executives at the time and the company’s biggest multitouch proponent, said part of the problem was that the prototypes they were building used software, OS X, that was designed to be used with a mouse, not a finger. “We were using ten- or twelve-inch screens with Mac mini–like guts … and then you would launch these demos that would do the different multitouch gestures. One demo was a keyboard application that would rise from the bottom—very much what ended up shipping in the iPhone two years later. But it wasn’t very pretty. It was very much wires, chewing gum, and bailing wire. It left too much to the imagination.” Bucher, who has never before talked publicly about his work at Apple, had hoped to keep pushing the effort forward, but he lost a political battle with other top executives and left Apple in early 2005.
Few even thought about making touchscreen technology the centerpiece of a new kind of phone until Jobs started pushing the idea in mid-2005. “He said, ‘Tony, come over here. Here’s something we’re working on. What do you think? Do you think we could make a phone out of this?’” Fadell said. “So we sat there and played with the demo (he was showing me) for a while. It was huge. It filled the room. There was a projector mounted on the ceiling and it would project the Mac screen onto this surface that was maybe three or four feet square. Then you could touch the Mac screen and move things around and draw on it. I knew about it [the touchscreen prototype], but I didn’t know about it in detail because it was a Mac thing [Fadell ran the iPod division]. So we all sat down and had a serious discussion about it—about what could be done.”
Fadell had serious doubts about whether such an enormous prototype could be shrunk so much. But he also knew better than to answer no to Steve Jobs. He was one of Apple’s superstars, and he didn’t get there by being timid about thorny technological problems. He’d joined Apple in 2001 as a consultant to help build the first iPod. By 2005, with iPod sales exploding, he had become, at thirty-six, arguably the single most important line executive at the company.
“I understood how it could be done,” Fadell said. “But it’s one thing to think that, and another to take a room full of special, one-off gear and make a million phone-sized versions of that in a cost-effective, reliable manner.” The to-do list was exhausting just to think about. “You had to go to LCD vendors [companies that make the screens that go in computer monitors and TVs] who knew how to embed technology like this in glass; you had to find time on their line; and then you had to come up with compensation and calibrating algorithms to keep the pixel electronics [in the LCD] from generating all kinds of noise in the touchscreen [sitting on top of it.] It was a whole project just to make the touchscreen device. We tried two or three ways of actually making the touchscreen until we could make one in enough volume that would work.”
Shrinking OS X and building a multitouch screen, while innovative and difficult, were at least within the skills Apple had already mastered as a corporation. No one was better equipped to rethink OS X’s design. Apple knew LCD manufacturers because it put an LCD in every laptop and iPod. The peculiarities of mobile phone physics, on the other hand, were an entirely new field, and it took those working on the iPhone into 2006 to realize how little they knew.
To ensure the iPhone’s
tiny antenna could do its job effectively, Apple spent millions buying and assembling special robot-equipped testing rooms. To make sure the iPhone didn’t generate too much radiation, Apple built models of human heads—complete with goo to simulate brain density—and measured the effects. To predict the iPhone’s performance on a network, Apple engineers bought nearly a dozen server-size radio-frequency simulators for millions of dollars apiece. One senior executive believes Apple spent more than $150 million building the first iPhone.
The first iPhone prototype was not ambitious. Jobs hoped that he would be able to develop a touchscreen iPhone running OS X. But in 2005 he had no idea how long that would take. So Apple’s first iPhone looked very much like the joke slide Jobs had put up when introducing the real iPhone—an iPod with an old fashioned rotary dial on it. The prototype was an iPod with a phone radio that used the iPod click wheel as a dialer. It grew out of the work Steve Sakoman had used to pitch Jobs on a phone project in the first place. “It was an easy way to get to market, but it was not cool like the devices we have today,” Grignon said. He worked for Sakoman at the time and is one of the names on the click wheel dialer patent.
The second iPhone prototype in early 2006 was much closer to what Jobs would ultimately unveil. It incorporated a touchscreen and OS X, but it was made entirely of brushed aluminum. Jobs and Ive were exceedingly proud of it. But since neither of them were experts in the physics of radio waves, they hadn’t realized they’d created a beautiful brick. Radio waves don’t travel through metal well. “I and Ruben Caballero [Apple’s antenna expert] had to go up to the boardroom and explain to Steve and Ive that you cannot put radio waves through metal,” said Phil Kearney, one of Bell’s deputies, who left in 2008. “And it was not an easy explanation. Most of the designers are artists. The last science class they took was in eighth grade. But they have a lot of power at Apple. So they ask, ‘Why can’t we just make a little seam for the radio waves to escape through?’ And you have to explain to them why you just can’t.”
Jon Rubinstein, Apple’s top hardware executive then and known to many as the Podfather for driving the creation and development in the iPod, said there were even long discussions about how big the phone would be. “I was actually pushing to do two sizes—to have a regular iPhone and an iPhone mini like we had with the iPod. I thought one could be a smartphone and one could be a dumber phone. But we never got a lot of traction on the small one, and in order to do one of these projects you really need to put all your wood behind one arrow.”
It all made the iPhone
project so complex that it occasionally threatened to derail the entire corporation. Many of the top engineers in the company were being sucked into the project, forcing slowdowns in the timetables of other projects. Had the iPhone been a dud or not gotten off the ground at all, Apple would have had no other big products ready to announce for a long time. Worse, its top engineers, frustrated by the failure, would have left Apple for other jobs, according to 2012 testimony by Scott Forstall, one of Apple’s top executives on the project and Apple’s head of iOS software until October 2012. He testified during the Apple v. Samsung patent trial.
Even Apple’s experience designing screens for iPods didn’t help the company design the iPhone screen. After much debate, Jobs decided the iPhone screen needed to be made of hard Plexiglas. He and his executives thought a glass screen would shatter when dropped—until Jobs saw how scratched a plastic prototype had gotten when he carried it around in his pocket with his keys. “Jobs goes, ‘Look at this. Look at this. What’s with the screen?’” said an executive who witnessed the exchange. “And the guy [a midlevel executive] takes the prototype and says, ‘Well, Steve, we have a glass prototype, but it fails the one-meter drop test one hundred out of one hundred times, and blah blah blah …’ Jobs cuts him off and says, ‘I just want to know if you are going to make the fucking thing work.’”
There was a good reason the executive argued with Jobs. This was September 2006. The iPhone would be unveiled in four months. And Jobs wanted to rethink the phone’s most prominent component.
Through his friend
John Seely Brown, Jobs reached out to Wendell Weeks, the CEO of glassmaker Corning in upstate New York, invited him to Cupertino, and told him he needed the hardest glass ever made for the screen of the iPhone. Weeks told him about a process developed for fighter-jet cockpits in the 1960s. But Weeks said the Defense Department never ended up using the material, known as gorilla glass, so it had never found a market. He said Corning had stopped making it decades ago. Jobs wanted Weeks to start production immediately, convincing Weeks that he could in fact get Jobs the glass he needed in six months. Weeks told Jobs’s biographer Walter Isaacson that he remains amazed at what Jobs convinced him to do. Corning took a factory in Harrodsburg, Kentucky, that had been making LCD displays and converted it, getting Jobs the glass he needed on time. “We produced glass that had never been made. We put our best scientists and engineers on it and we just made it work,” Weeks said.
“I still remember PC Magazine doing a screen durability test once the phone came out in July 2007,” said Bob Borchers, Apple’s then head of iPhone marketing. “They put it in a bag of coins and shook it up. They put keys in the bag and shook it up. They dropped it a few times on a carpet. And then they went out on the street and dropped it on the concrete three times. It survived all of that. We all laughed, looked at each other, and said, ‘Right, we knew that.’”
On top of all that, Jobs’s obsession with secrecy meant that despite being exhausted from working eighty hours a week, the few hundred engineers and designers working on the project couldn’t talk about the project to anyone else. If Apple found out you’d told a friend in a bar, or even your spouse, you could be fired. Before a manager could ask you to join the project, you had to sign a nondisclosure agreement in his office. Then, after he told you what the project was, you had to sign another document confirming that you had indeed signed the NDA and would tell no one. “We put a sign on over the front door of the iPhone building that said FIGHT CLUB because the first rule of fight club is you don’t talk about fight club,” Forstall would explain in his court testimony. “Steve didn’t want
to hire anyone from outside of Apple to work on the software, but he said I could hire anyone in the company I wanted,” Forstall said. “So I’d bring recruits into my office. Sit them down and tell them, ‘You are a superstar at Apple. Whatever you are doing now, you’ll do fine. But I have another project that I want you to consider. I can’t tell you what it is. All I can say is that you will have to give up untold nights and weekends and that you will work harder than you have ever worked in your life.”
“My favorite part,” said one of the early iPhone engineers, “was what all the vendors said the day after the unveiling.” Big companies such as Marvell Electronics, which made the Wi-Fi radio chip, and CSR, which provided the Bluetooth radio chip, hadn’t been told they were going to be in a new phone. They thought they were going to be in a new iPod. “We actually had fake schematics and fake industrial designs,” the engineer said. Grignon said that Apple even went as far as to impersonate employees of another company when they traveled, especially to Cingular (and, later, AT&T) in Texas. “The whole thing was you didn’t want the receptionist or whoever happens to be walking by to see all [preprinted Apple] badges lying out.”
On the other hand, Jobs wanted a handful of the top engineers on the iPhone project to use iPhone prototypes as their permanent phones. “It wasn’t ‘Carry an iPhone—and a Treo,’” Grignon said. “It was ‘Carry an iPhone and live on it,’ because that’s how we found bugs. If you can’t make a phone call because of a bug, you are going to be extra-motivated to start yelling to get that fixed. But it made for some awkward times where, if you were, say, in a club or an airport, you could spot an iPhone user a mile away because they were the person hunched over with their arms around their phone doing something mysterious. Snorting a line of coke—or using an iPhone?”
One of the most obvious manifestations of Jobs’s obsession with secrecy was the growth of lockdown areas all over campus—places that those not working on the iPhone could no longer go. “Each building is split in half, and there is this corridor that runs through the middle of them with common areas, and after one weekend they just put doors around the common areas so that if you were not on the project, and you were used to using that space, it was now off-limits,” Grignon said. “Steve loved this stuff. He loved to set up division. But it was a big ‘fuck you’ to the people who couldn’t get in. Everyone knows who the rock stars are in a company, and when you start to see them all slowly get plucked out of your area and put in a big room behind glass doors that you don’t have access to, it feels bad.”
Even people within the iPhone project itself couldn’t talk to one another. Engineers designing the iPhone’s electronics weren’t allowed to see the software it would run. When they needed software to test the electronics, they were given proxy code, not the real thing. If you were working on the software, you used a simulator to test hardware performance.
And no one outside Jobs’s inner circle was allowed into chief designer Jony Ive’s wing on the first floor of Building 2. The security surrounding Ive’s prototypes was so tight that employees believed the badge reader called security if you tried to badge in and weren’t authorized. “It was weird, because it wasn’t like you could avoid going by it. It was right off the lobby, behind a big metal door. Every now and then you’d see the door open and you’d try to look in and see, but you never tried to do more than that,” said an engineer whose first job out of college was working on the iPhone. Forstall said during his testimony that some labs required you to “badge in” four times.
The four months leading up to announcement day were particularly rough, Grignon said. Screaming matches broke out routinely in the hallways. Engineers, frazzled from all-night coding sessions, quit, only to rejoin days later after catching up on their sleep. Forstall’s chief of staff, Kim Vorath, slammed the door to her office so hard that the handle bent and locked her in; it took colleagues more than an hour and some well-placed whacks with an aluminum bat to free her. “We were all standing there watching it,” Grignon said. “Part of it was funny. But it was also one of those moments where you step back and realize how fucked-up it all is.”
To Grignon’s amazement
and to that of many others in the audience, Jobs’s iPhone demo on January 9, 2007, was flawless. He started the show saying, “This is a day I have been waiting for two and a half years.” Then he regaled the audience with a myriad of tales about why consumers hated their cell phones. Then he solved all their problems—definitively. Virtually everyone in the audience had been expecting Jobs to announce a phone, yet they were still in awe.
He used the iPhone to play some music and watch a movie clip to show off the phone’s beautiful screen. He made a phone call to show off the phone’s reinvented address book and voice mail. He sent an email and a text, showing how easy it was to type on the phone’s touchscreen keyboard. He scrolled through a bunch of photos, showing how simple pinches and spreads of two fingers could make the pictures bigger or smaller. He navigated Amazon’s and The New York Times’ websites to show that the iPhone’s Internet browser was as good as the one on his computer. He found a Starbucks with Google Maps—and called the number from the stage—to show how it was impossible to get lost with an iPhone.
By the end, Grignon wasn’t just happy, he was drunk. He’d brought a flask of Scotch to calm his nerves. “And so there we were in the fifth row or something—engineers, managers, all of us—doing shots of Scotch after every segment of the demo. There were about five or six of us, and after each piece of the demo, the person who was responsible for that portion did a shot. When the finale came—and it worked along with everything before it, we all just drained the flask. It was the best demo any of us had ever seen. And the rest of the day turned out to be just a shit show for the entire iPhone team. We just spent the entire rest of the day drinking in the city. It was just a mess, but it was great.”
2 (#ulink_77f423d7-4293-5da8-87e2-70f6b6556e8d)
The iPhone Is Good. Android Will Be Better. (#ulink_77f423d7-4293-5da8-87e2-70f6b6556e8d)
For all its fame and notoriety, Silicon Valley, as a place, isn’t much of a tourist attraction. There is no sign or Walk of Fame as in Hollywood. There isn’t an address, such as Wall Street, where the New York Stock Exchange has been for 150 years. It is just a slew of office parks sprawling thirty miles southeast from the San Francisco Airport to San Jose.
But a visual encapsulation
of the Valley’s brilliant, driven, and zany gestalt does exist. You just have to know someone at Google to go see it. Located thirty-five miles southeast of San Francisco next to Highway 101 in Mountain View, Google’s sprawling campus resembles few other corporate facilities in the world. The company started in a Stanford University dorm room in 1998 and has in fifteen years grown into one of the most important and powerful companies in the world. Google now controls more than sixty-five buildings in Mountain View and employs a third of its roughly fifty-five thousand workers there. Size hasn’t made Google slow or stuffy. Visual signs of its unconventional approach to problem solving remain everywhere. Googlers on red, green, and blue bicycles and motorized scooters zip from building to building. A fifteen-foot-high replica of a T. rex named Stan presides over the main outdoor lunch patio. A few feet away is a replica of SpaceShipOne, Burt Rutan’s first manned private spaceship in 2004. Many lobbies have pianos and vibrating massage chairs; and many restrooms have heated Japanese toilet seats—an odd experience on a hot day when the person before you has forgotten to turn the heater off. Google uses so many solar panels for power that it ranks as one of the largest corporate solar installations in the world. Meanwhile, an entire fleet of Wi-Fi-enabled commuter buses run to and from San Francisco, Berkeley/Oakland, and San Jose. They not only encourage employees to conserve gas by not driving, but they allow Google to tap into a bigger population of potential employees. Food and drink everywhere on campus are free.
It feels like a college campus, and that’s exactly how it’s supposed to feel. The source of Google’s success has been the quality of the engineers it hires out of top colleges. Rather than make them feel as if they’ve just joined the marines—as other corporations might—Google wants to keep them feeling that they’ve never left school so that they stay creatively wide-eyed. The campus has a swimming pool, gyms, a convenience store, a day-care center, a place to get haircuts, and drop-off dry cleaning. Almost every building has a laundry room. One summer back in 2004 a bunch of summer interns tried to live at Google rather than search for housing. They slept on couches and ran their whole lives out of the Googleplex until they were told they were violating the fire code.
“We made an explicit decision
to keep the buildings crowded,” Google executive chairman and former CEO Eric Schmidt told me back then. “There’s kind of a certain amount of noise that kind of gets everybody to work and gets them excited. It’s really based on how computer-science graduate schools work. If you go to a graduate school, like go to the Stanford Computer Science building, you’ll see two, three, or even four in an office. That model is one which is very familiar to our programmers and for us because we were all in those offices too, and we know it’s a very productive environment.”
Over the years
these perks and oddities have been so widely imitated by other corporations that it is now impossible to explain Silicon Valley without mentioning them. Google’s company bus fleet is arguably driving an entire reconfiguration of work-life patterns in the Bay Area. Most big Silicon Valley companies now offer such buses. The one downside of working in Silicon Valley after college used to be living in suburban Mountain View, Palo Alto, or Sunnyvale. City life in San Francisco wasn’t worth the more than two hours of driving it required to live there. Google’s buses, which all have Wi-Fi, make those commutes not only tolerable but some of the most productive hours of the day. So many high-tech workers now live in San Francisco that some of the newest technology companies have followed them. A decade ago companies such as Zynga and Twitter would have automatically located in Silicon Valley. When they started more than six years ago, they located in San Francisco. Benchmark Capital, a top venture capital firm, just opened its first office in their neighborhood too.
All this has made Google a rigorous yet chaotic place to work. Especially back in 2005 there were often dozens of engineering projects going at the same time. Many of them had conflicting ambitions. And some were so secret that only a handful of top executives knew about them. The most secret and ambitious of these was Google’s own smartphone effort—the Android project. Tucked in a first-floor corner of Google’s Building 44, surrounded by Google ad reps, its four dozen engineers thought that they too were on track to deliver a revolutionary device that would change the mobile phone industry forever. By January 2007, they’d all worked sixty-to-eighty-hour weeks for fifteen months—some for more than two years—writing and testing code, negotiating software licenses, and flying all over the world to find the right parts, suppliers, and manufacturers. They had been working with prototypes for six months and had planned a launch by the end of the year … until Jobs took the stage to unveil the iPhone.
Chris DeSalvo’s reaction to the iPhone was immediate and visceral. “As a consumer I was blown away. I wanted one immediately. But as a Google engineer, I thought, ‘We’re going to have to start over.’”
For most of Silicon Valley—including most of Google—the iPhone’s unveiling was something to celebrate. Jobs had once again done the impossible. Four years before he’d talked an intransigent music industry into letting him put their catalog on iTunes for ninety-nine cents a song. Now he had convinced a wireless carrier to let him build a revolutionary smartphone. But for the Google Android team, the iPhone was a kick in the stomach. “What we had suddenly looked just so … nineties,” DeSalvo said. “It’s just one of those things that are obvious when you see it.”
DeSalvo wasn’t prone to panic. Like many veteran engineers in the Valley, laconic would be a good description of his personality. He’s an expert sailor who had just returned from taking his family on a three-week excursion in Indonesia. He’d been writing software for two decades, first for video-game developers, then for Apple, and by 2000 for a start-up called Danger. There were few software-development issues he hadn’t encountered. After joining Google and the Android team in Mountain View at the end of 2005 and spending a year writing thousands of lines of code out of a utility closet (he likes writing code in silence), he’d moved to Chapel Hill, North Carolina, the week before to help the team integrate a recent acquisition. But as he watched Jobs’s presentation from a run-down office above a T-shirt shop there, he knew his boss, Andy Rubin, would be thinking the same thing he was. He and Rubin had worked together for most of the previous seven years, when DeSalvo had been an engineer at Danger, Rubin’s first start-up. Rubin was one of the most competitive people DeSalvo knew. Rubin was not about to release a product that suddenly looked so dated.
Six hundred miles away in Las Vegas, on his way to a meeting with one of the myriad handset makers and carriers that descend on the city for the Consumer Electronics Show, Rubin reacted exactly as DeSalvo predicted. He was so astonished by what Jobs was unveiling that, on his way to a meeting, he had his driver pull over so that he could finish watching the webcast. “Holy crap,” he said to one of his colleagues in the car. “I guess we’re not going to ship that phone.”
What the Android team had been working on, a phone code-named Sooner, sported software that was arguably more revolutionary than what had just been revealed in the iPhone. In addition to having a full Internet browser, and running all of Google’s great web applications, such as search, Maps, and YouTube, the software was designed not just to run on Sooner, but on any smartphone, tablet, or other portable device not yet conceived. It would never need to be tethered to a laptop or desktop. It would allow multiple applications to run at the same time, and it would easily connect to an online store of other applications that Google would seed and encourage. By contrast, the iPhone needed to connect to iTunes regularly, it wouldn’t run more than one application at a time, and in the beginning it had no plans to allow anything resembling an application store.
However, the Sooner phone was ugly. It looked like a BlackBerry, with a traditional keyboard and a small screen that wasn’t touch-enabled. Rubin and his team, along with partners HTC and T-Mobile, believed consumers would care more about the great software it contained than its looks. This was conventional wisdom back then. Revolutionary phone designs rarely succeeded. The Nokia N-Gage, which in 2003 tried to combine a gaming system with a phone and email device, often gets mentioned here. RIM had become one of the dominant smartphone makers on the planet by making BlackBerry’s unadorned functionality one of its main selling points: you got a phone, an incredible keyboard, secure email, all in one indestructible package.
The iPhone, in contrast, was not only cool looking, but it used those cool looks to create entirely new ways to interact with a phone—ways that Android engineers either hadn’t thought possible or had considered too risky. By using a virtual keyboard and replacing most real buttons with software-generated buttons on a big touchscreen, every application could now have its own unique set of controls. Play, Pause, and Stop buttons only appeared if you were listening to music or watching video. When you went to type a web address into the browser, the keyboard appeared, but it disappeared when you hit Enter. Without the physical keyboard taking up half the phone, the iPhone had a screen twice the size of virtually every other phone on the market. It all worked the same way whether the user held the phone in portrait or landscape mode. Apple had installed an accelerometer to use gravity to tell the phone how to orient the screen.
A lot was wrong with the first iPhone too. Rubin and the Android team—along with many others—did not think users would take to typing on a screen without the tactile feedback of a physical keyboard. That is why the first Android phone—the T-Mobile G1 from HTC, nearly two years later—had a slide-out keyboard. But what was also undeniable to the Android team was that they had underestimated Jobs. At the very least, Jobs had come up with a new way of interacting with a device—with a finger instead of a stylus or dedicated buttons—and likely a lot more. “We knew that Apple was going to announce a phone. Everyone knew that. We just didn’t think it would be that good,” said Ethan Beard, one of Android’s early business development executives.
Within weeks the Android team had completely reconfigured its objectives. A phone with a touchscreen, code-named Dream, that had been in the early stages of development, became the focus. Its launch was pushed out a year until fall 2008. Engineers started drilling into it all the things the iPhone didn’t do to differentiate their phone when launch day did occur. Erick Tseng, then Android’s project manager, remembers suddenly feeling the nervous excitement of a pending public performance. Tseng had joined Google the year before out of Stanford business school after Eric Schmidt, himself, sold him on the promise of Android. “I never got the feeling that we should scrap what we were doing—that the iPhone meant game over. But a bar had been set, and whatever we decided to launch, we wanted to make sure that it cleared the bar.”
In many ways the Android project is the perfect reflection of Google’s zany and chaotic culture. At most companies, outlandish ideas are discouraged in favor of ideas that are doable. At Google, especially back then, the reverse was true. The easiest way
to get on cofounder and now CEO Larry Page’s bad side was not to think big enough and to clutter a pitch with how much money an idea could make. Back in 2006 Page famously gave Sheryl Sandberg praise for making a mistake that cost Google several million dollars. That was when Sandberg was a Google vice president in charge of its automated ad system, not the chief operating officer of Facebook. “God, I feel really bad about this,” Sandberg told Page, according to Fortune magazine. But instead of hammering her for the error, Page said, “I’m so glad you made this mistake because I want to run a company where we are moving too quickly and doing too much, not being too cautious and doing too little. If we don’t have any of these mistakes, we’re just not taking enough risk.”
The cell phone industry in 2005 was a perfect example of a hairy Google-size problem. The software industry for mobile phones was one of the most dysfunctional in all technology. There wasn’t enough wireless bandwidth for users to surf the Internet on a phone without frustration. Phones weren’t powerful enough to run anything but rudimentary software. But the biggest problem, as Jobs had learned, was that the industry was ruled by an oligopoly: Few companies besides the carriers and the phone makers were writing software for phones, and what existed was terrible. Wireless bandwidth would improve and phone chips would get more powerful; but back then it looked as if the carriers and phone makers would control it all. “We had done a deal with Vodafone [the big European carrier] to try to get Google search on their phones,” said one top Google executive who would not give his name. “But the search they offered us was that we could put some results on, but that they would control most of them, and that our results would be at the bottom of every query. They didn’t have a good mobile browser. Ringtones [that they were selling] sometimes got prioritized in search results. All the carriers were doing this. They thought they could provide all the services inside a walled garden [as AOL had in the 1990s], and that this control was the best way to make money.”
The reason few developers built software for mobile phones was because anytime they tried, they lost money. There was no standardization in the industry. Virtually every phone ran its own software and set of applications, meaning software written for a Samsung phone often wouldn’t run on a Motorola phone, which wouldn’t run on a Nokia. Software platforms were incompatible even within companies. For example, there were a handful of different versions of Symbian. Put simply, the mobile industry screamed “money pit” to any enterprising developer. Most stayed away. The most lucrative business was not writing apps for phones. It was owning a testing company that would make sure your apps worked on all the phones in the market. Larry Page has never been shy
talking about how frustrating those days were for him and Google. “We had a closet full of over 100 phones [that we were developing software for], and we were building our software pretty much one device at a time,” he said in his 2012 report to shareholders. In various remarks over the years he has described the experience as both “awful” and “incredibly painful.”
But Page and the rest of Google’s executives knew that someone would figure out the mobile business eventually, and they were particularly concerned that that company would be Microsoft. Back then, Microsoft was still the richest and most powerful technology company in the world, and it was finally getting traction with its Windows CE mobile phones and software. Windows CE smartphones were still a niche market, but if consumers took to the platform en masse as they did later with the iPhone, Google’s entire business could be in jeopardy.
This wasn’t an exaggeration
. Back then, Microsoft and Google were in the midst of a nasty battle of their own for dominance in search, and for top dog in the tech world. After two decades of being the first-choice workplace of top engineering talent, Microsoft was now losing many of those battles to Google. Chairman Bill Gates and CEO Steve Ballmer had made it clear they took Google’s challenge personally. Gates seemed particularly affected by it. Once or twice he made fun of the way Page and his Google cofounder Sergey Brin dressed. He said their search engine’s popularity was “a fad.” Then, in the same breath, he would issue the ultimate compliment, saying that of all his competitors over the years, Google was the most like Microsoft.
Google executives were convinced that if Windows on mobile devices caught on, Microsoft would interfere with users’ access to Google search on those devices in favor of its own search engine. The government’s successful antitrust trial against Microsoft in the 1990s made it difficult for the company to use its monopoly on desktops and laptops to bully competitors. It could not, for example, make Microsoft’s the default search engine in Windows without giving users a choice between its search engine and those from Google, Yahoo, and others. However, on smartphones, few rules governed how fiercely Microsoft could compete. It didn’t have a monopoly there. Google worried that if Microsoft made it hard enough to use Google search on its mobile devices and easy enough to use Microsoft search, many users would just switch search engines. This was the way Microsoft killed Netscape with Internet Explorer in the 1990s. If users stopped using Google’s search engine and began using a competitor’s such as Microsoft’s, Google’s business would quickly run aground. Google made all its money back then from the search ads that appeared next to its search results. “It’s hard to relate
to that [fear of Microsoft] now, but at the time we were very concerned that Microsoft’s mobile strategy would be successful,” Schmidt said in 2012 during testimony in the Oracle v. Google copyright trial.
All these fears and frustrations
were top of the mind for Page when he agreed to meet with Rubin in early 2005 in the first-floor conference room of Google’s Building 43. Back then, Page’s office was on the second floor overlooking Google’s main courtyard. He and Brin shared it and continued that setup until Page became CEO in 2011. The space looked more like the dorm room of two engineering students than anything you would expect to see in a major corporation. You had to work to see their two desks and computers because the room was so jammed with their latest electronic-gadget passions—cameras typically for Page, along with Brin’s radio-controlled planes and cars and his roller-hockey gear. When Brin and Page were not there, the office was often filled with other programmers, who felt free to take it over. Rubin had reached out to Page because Rubin had started Android the year before and had enough software written to show potential customers such as carriers. He thought some kind of sign from Google—such as an email from Page saying that Android was doing interesting work—would help Rubin raise more money to keep going and give his sales pitch more zing.
Few people can just email Larry Page directly and successfully ask for a meeting, but back then Rubin was one of them. Three years earlier, when Google was still scrabbling for users, attention, and revenue, Rubin had made Google the default search engine on the T-Mobile Sidekick, the device Rubin designed and built when he ran Danger. Page remembered the gesture not just because Google had desperately needed search traffic at the time, but also because he thought the Sidekick was one of best-engineered mobile devices he’d ever seen.
The Sidekick was odd looking—shaped like a bar of soap with a screen in the middle. To operate it, one flipped up the screen, rotating it 180 degrees, and typed on the keyboard underneath. Its nonstandard looks and a nonexistent marketing budget kept it from being a hit product. But it had a cult following among two groups: savvy high school and college students and Silicon Valley engineers. Students liked that it was the first mobile device to have instant-messaging software built in. Engineers such as Page loved that it was the first mobile device to allow users to surf the Internet the same way as on their office computers. BlackBerry had mobile email down to a science, and everyone at Google had a BlackBerry. But the Internet browsers on it and other mobile devices were terrible. To deal with smaller bandwidth back then, browsers were designed to show only the bare bones of a web page’s content—typically just text. But that also made the browsing experience all but useless for businesses. One of the things that wouldn’t work in these crippled browsers were Google search ads. You couldn’t click on them. Soon Page and Brin were walking around with Sidekicks themselves, enthralling their friends and colleagues with a mobile device that nearly replaced their laptops.
According to Wired, when Page arrived for the meeting, late as usual, Rubin jumped to the whiteboard to begin his pitch: phones with computer capabilities, not laptops or desktops, were the future of technology. It was a huge market, Rubin said. More than 700 million cell phones were sold worldwide every year, compared to 200 million computers, and that gap was widening. But the phone business was stuck in the dark ages. Android would fix that problem by convincing carriers and phone makers that they didn’t need to spend money on their own proprietary software. Frustrated consumers would flock to phones that worked better. Software developers would rush to write software for a platform in such demand. A self-reinforcing software ecosystem would be born.
Page listened gamely
. He looked at the prototype Rubin had brought with him. But Page had pretty much decided what he was going to do before the meeting even started: What if Google just bought Android? he asked. He later told Steven Levy, the author of In the Plex, “We had that vision [about what the future of mobile should look like], and Andy came along and we were like ‘Yeah we should do it. He’s the guy.’” Google bought Android for about $50 million plus incentives, and by July 2005 Rubin and his seven other Android cofounders were sharing their vision of the world with the rest of Google’s management team.
