iPhone - The Untold Story. Part 1
The demonstration was not very smooth.
Again.
It was late autumn morning of 2006. A year earlier, Steve Jobs gave the task to almost two hundred leading Apple engineers to create an iPhone. And now, in the meeting room of Apple, it was clear that the prototype still represents a catastrophe. He was not just full of mistakes, he was completely inoperative. The phone was constantly dropping calls; the battery stopped charging even before it finally charged; applications crashed daily, and the data fell into disrepair. The list of problems seemed endless. At the end of the demonstration, Jobs took a calm look at the dozen people in the room and said: “We still do not have the product!”
')
The effect was even more terrifying than with his trademark anger. When the head of Apple shouted at his subordinates - it was scary, but familiar. This time his relative calm deprived of strength. "It was one of the few times at Apple when I got cold," says one of those who were at this meeting.
The consequences were serious. The iPhone was supposed to be the foundation of MacWorld — the annual Apple forum starting in a few months. Since his return to Apple in 1997, Jobs has used this event as a show to launch new major products, and Apple fans have been waiting for another dramatic statement. Jobs had already recognized that the release of Leopard, the new Apple operating system, would be postponed. If the iPhone is not ready before the start of the convention, MacWorld will be junk, critics will jump at Jobs, and Apple shares will begin to plummet in price.
This glass and aluminum device, weighing only 135 grams, has forever changed the mobile market, taking power from operators and giving it to manufacturers, developers and consumers.
What will AT & T think? After a year and a half of secret negotiations, Jobs got an agreement with the wireless division of the telecommunications giant (Cingular at the time) to become the exclusive carrier for the iPhone. In exchange for a five-year exclusive contract, about 10% of iPhone sales in AT & T stores and a small piece of sales revenue in the iTunes store, AT & T provided Jobs with unprecedented power. He persuaded AT & T to spend millions of dollars and thousands of man-hours to create a new service, the so-called visual voice mail, and redo the time-consuming process of signing an agreement in the operator’s stores. In addition to this, he insisted on a unique agreement, thanks to which he received about $ 10 from each AT & T customer account that owns the iPhone. And in addition to everything, Apple reserved the right to develop the design, production and advertising of the iPhone. Jobs made the unthinkable: "knocked out" an excellent deal from one of the largest players entrenched in the wireless market. Now all that remained for him was to be in time.
For those who worked on creating the iPhone, the next 3 months were the most stressful for their careers. Flashes of inspiration tore up the routine of the laboratories. The engineers, exhausted by the nightly programming sessions, left to return in a few days to catch up while they slept. The product manager slammed the door so hard that the door knob bent and locked it; colleagues had to spend more than an hour and apply several serious blows with an aluminum baton to release it.
But by the end of the breakthrough, a few weeks before MacWorld, Jobs had a prototype in his hands that could be shown to people from AT & T. In mid-December 2006, he met with AT & T boss Stan Sigman in a room at the Four Seasons Hotel in Las Vegas. He showed him the brilliant iPhone screen, his powerful web browser, his charming user interface. Sigman, a taciturn Texan, immersed in the tradition of conservative design that infiltrated the large American telephone companies, behaved atypically violently, calling the iPhone "the best device he has ever seen." (The details of this and other key points in creating the iPhone were provided by people familiar with these events. Apple and AT & T will not discuss these meetings or other specific conditions of their relationship.)
Six months later, on June 29, 2007, the iPhone went on sale. At press conferences, analysts said that consumers would buy about 3 million devices by the end of 2007, which would make the iPhone the fastest selling smartphone. And this is undoubtedly the most profitable device from Apple. The company earns $ 80 from each iPhone sold for $ 399, and that is not counting the $ 240 it receives for each 2-year contract that every iPhone buyer signs with AT & T. At the same time, about 40% of iPhone buyers are new customers for AT & T, and the iPhone has tripled the size of operator traffic in cities such as New York and San Francisco.
But for Apple and AT & T, not only the iPhone itself was important, but also its impact on the structure of the mobile market at the cost of $ 11 billion a year. For decades, mobile operators viewed manufacturers as slaves, using the ability to access their networks, as a lever to dictate which phones will be produced, how much they will cost, and what functions will be available in them. Phones were viewed mainly as cheap, one-time bait, massively subsidized in order to lure consumers and get them to use the services of certain operators. But the iPhone breaks this balance of power. Now operators will learn that the right phone, even if it is very expensive, can attract customers and generate revenue. Now, in the race for the contract, like Apple, each manufacturer is trying to create a phone that consumers would love, instead of creating one that would be approved by the operators. “The iPhone is already changing the way operators and manufacturers behave,” says Michael Olson, a securities expert at Piper Jaffray.
In 2002, shortly after the release of the first iPod, Jobs began to think about the production of the phone. He saw millions of Americans using phones, BlackBerry, and now MP3 players, although in truth, consumers would prefer to use one device. He also saw a future where mobile phones and mobile devices for emailing would contain even more functions, and eventually oust the iPod from a dominant position in the music player market. Jobs knew that in order to protect his new product, he would eventually have to enter the world of wireless technology.
If the idea was obvious, the obstacles were the same. Information networks were sluggish and not ready for a pumped portable device for the Internet. Apple’s iPhone will have to create a completely new operating system; The iPod operating system is not powerful enough to manage complex network connections or graphics, and even a simplified version of Mac OS X will be too heavy for a mobile device processor. Apple will also have to face tough competition: in 2003, consumers loved the new Palm Treo 600, which combined the phone, PDA and BlackBerry. He proved that the demand for so-called multi-function devices still exists, but also raised the bar for engineers from Apple.
There were also telecom operators. Jobs knew that they dictated terms regarding what to create and how to create, and that they viewed devices as nothing more than a means to get new customers for their networks. Jobs, with his infamous management approach, was not going to let a group of executives tell him what his phone should look like.
By 2004, the iPod business was drying up for Apple, and was even more vulnerable than before. iPod accounted for 16% of the company's revenues, but with the growing popularity of 3G phones, the imminent emergence of Wi-Fi phones, lower prices for media, the growth of rivals in music sales, the company's long-term dominant position was threatened.
Therefore, that summer, when Jobs publicly stated that there would be no Apple phone, he sat and worked on his entry into the mobile market. In an attempt to get around the operators, he decided to get close to Motorola. This decision seemed more elegant: a mobile manufacturer recently released a very popular RAZR, and Jobs knew Ed Zander, president of Motorola, from the time when he served as acting president of Sun Microsystems. This deal would allow Apple to develop music software, while Motorola and Cingular will discuss complex hardware details.
Naturally, Jobs' plan suggested that Motorola would create a good device no worse than RAZR, but it soon became clear that this would not happen. Three companies traded on trifles about almost everything - how the songs will flow into the phone, how much music will fit in it, even how the names of each company will be displayed. And when the first prototype appeared at the end of 2004, another problem appeared. The device itself looked terrifying.
Jobs unveiled ROKR in September 2005 with all his inherent confidence, and described it as "iPod Shuffle on your mobile." Jobs probably knew that he had stuff on his hands; consumers, in turn, hated him. ROKR, which did not allow direct download and contained only 100 songs, appeared quickly to point out all that was not so in the wireless communications industry in the US: causing confusion of conflicting parties, for which the consumer was secondary. Wired summed up his disappointment in November 2005: “AND DO YOU CALL THE FUTURE TELEPHONE?”
Apple has created two music phones. ROKR, created in partnership with Motorola in 2005, observed the tradition of relations between manufacturers and operators. The iPhone, which went on sale last summer, has turned everything upside down.
Even when ROKR went into production, Jobs realized that he would have to create his own phone. In February 2005, he met with Cingular to discuss a partnership without Motorola. At a top-secret meeting in a hotel in central Manhattan, Jobs revealed his plans to the Cingular administration, among whom was Sigman (when AT & T acquired Cingular in December 2006, Sigman remained the leader). Jobs' message consisted of three parts: Apple had the technology to create something truly revolutionary, "many light years ahead of all that exists." Apple was ready to consider an offer of an exclusive agreement regarding this transaction. But Apple was also ready to buy in bulk minutes of wireless communication in order to become an operator itself.
Jobs was sure of himself. Apple engineers have been working on a touch panel for a tablet for almost a year, and convinced him that they could create a similar interface for the phone. Plus, thanks for having an ARM11 chip, thanks to which the processors for mobile phones have become fast enough and powerful enough to combine the functionality of a phone, a computer, and an iPod. And wireless minutes have become cheap enough for Apple to be able to resell them to consumers; for example, Virgin does just that.
This is the first part of the translation of the article "The Untold Story: How the iPhone Blew Up the Wireless Industry." The second part is made by ManPavel and is located here .
This text is the first part of the translation of the article “The Untold Story: How the iPhone Blew Up the Wireless Industry” by Fred Vogelstein, published January 9, 2008 in Wired.
http://www.wired.com/gadgets/wireless/magazine/16-02/ff_iphone?currentPage=all
When reprinting the translation, please refer to the original and the present text.
Authors of the translation will be grateful for comments, comments, corrections of possible inaccuracies and participation in the correction of the translation of the article.
Again.
It was late autumn morning of 2006. A year earlier, Steve Jobs gave the task to almost two hundred leading Apple engineers to create an iPhone. And now, in the meeting room of Apple, it was clear that the prototype still represents a catastrophe. He was not just full of mistakes, he was completely inoperative. The phone was constantly dropping calls; the battery stopped charging even before it finally charged; applications crashed daily, and the data fell into disrepair. The list of problems seemed endless. At the end of the demonstration, Jobs took a calm look at the dozen people in the room and said: “We still do not have the product!”
')
The effect was even more terrifying than with his trademark anger. When the head of Apple shouted at his subordinates - it was scary, but familiar. This time his relative calm deprived of strength. "It was one of the few times at Apple when I got cold," says one of those who were at this meeting.
The consequences were serious. The iPhone was supposed to be the foundation of MacWorld — the annual Apple forum starting in a few months. Since his return to Apple in 1997, Jobs has used this event as a show to launch new major products, and Apple fans have been waiting for another dramatic statement. Jobs had already recognized that the release of Leopard, the new Apple operating system, would be postponed. If the iPhone is not ready before the start of the convention, MacWorld will be junk, critics will jump at Jobs, and Apple shares will begin to plummet in price.
This glass and aluminum device, weighing only 135 grams, has forever changed the mobile market, taking power from operators and giving it to manufacturers, developers and consumers.
What will AT & T think? After a year and a half of secret negotiations, Jobs got an agreement with the wireless division of the telecommunications giant (Cingular at the time) to become the exclusive carrier for the iPhone. In exchange for a five-year exclusive contract, about 10% of iPhone sales in AT & T stores and a small piece of sales revenue in the iTunes store, AT & T provided Jobs with unprecedented power. He persuaded AT & T to spend millions of dollars and thousands of man-hours to create a new service, the so-called visual voice mail, and redo the time-consuming process of signing an agreement in the operator’s stores. In addition to this, he insisted on a unique agreement, thanks to which he received about $ 10 from each AT & T customer account that owns the iPhone. And in addition to everything, Apple reserved the right to develop the design, production and advertising of the iPhone. Jobs made the unthinkable: "knocked out" an excellent deal from one of the largest players entrenched in the wireless market. Now all that remained for him was to be in time.
For those who worked on creating the iPhone, the next 3 months were the most stressful for their careers. Flashes of inspiration tore up the routine of the laboratories. The engineers, exhausted by the nightly programming sessions, left to return in a few days to catch up while they slept. The product manager slammed the door so hard that the door knob bent and locked it; colleagues had to spend more than an hour and apply several serious blows with an aluminum baton to release it.
But by the end of the breakthrough, a few weeks before MacWorld, Jobs had a prototype in his hands that could be shown to people from AT & T. In mid-December 2006, he met with AT & T boss Stan Sigman in a room at the Four Seasons Hotel in Las Vegas. He showed him the brilliant iPhone screen, his powerful web browser, his charming user interface. Sigman, a taciturn Texan, immersed in the tradition of conservative design that infiltrated the large American telephone companies, behaved atypically violently, calling the iPhone "the best device he has ever seen." (The details of this and other key points in creating the iPhone were provided by people familiar with these events. Apple and AT & T will not discuss these meetings or other specific conditions of their relationship.)
Six months later, on June 29, 2007, the iPhone went on sale. At press conferences, analysts said that consumers would buy about 3 million devices by the end of 2007, which would make the iPhone the fastest selling smartphone. And this is undoubtedly the most profitable device from Apple. The company earns $ 80 from each iPhone sold for $ 399, and that is not counting the $ 240 it receives for each 2-year contract that every iPhone buyer signs with AT & T. At the same time, about 40% of iPhone buyers are new customers for AT & T, and the iPhone has tripled the size of operator traffic in cities such as New York and San Francisco.
But for Apple and AT & T, not only the iPhone itself was important, but also its impact on the structure of the mobile market at the cost of $ 11 billion a year. For decades, mobile operators viewed manufacturers as slaves, using the ability to access their networks, as a lever to dictate which phones will be produced, how much they will cost, and what functions will be available in them. Phones were viewed mainly as cheap, one-time bait, massively subsidized in order to lure consumers and get them to use the services of certain operators. But the iPhone breaks this balance of power. Now operators will learn that the right phone, even if it is very expensive, can attract customers and generate revenue. Now, in the race for the contract, like Apple, each manufacturer is trying to create a phone that consumers would love, instead of creating one that would be approved by the operators. “The iPhone is already changing the way operators and manufacturers behave,” says Michael Olson, a securities expert at Piper Jaffray.
In 2002, shortly after the release of the first iPod, Jobs began to think about the production of the phone. He saw millions of Americans using phones, BlackBerry, and now MP3 players, although in truth, consumers would prefer to use one device. He also saw a future where mobile phones and mobile devices for emailing would contain even more functions, and eventually oust the iPod from a dominant position in the music player market. Jobs knew that in order to protect his new product, he would eventually have to enter the world of wireless technology.
If the idea was obvious, the obstacles were the same. Information networks were sluggish and not ready for a pumped portable device for the Internet. Apple’s iPhone will have to create a completely new operating system; The iPod operating system is not powerful enough to manage complex network connections or graphics, and even a simplified version of Mac OS X will be too heavy for a mobile device processor. Apple will also have to face tough competition: in 2003, consumers loved the new Palm Treo 600, which combined the phone, PDA and BlackBerry. He proved that the demand for so-called multi-function devices still exists, but also raised the bar for engineers from Apple.
There were also telecom operators. Jobs knew that they dictated terms regarding what to create and how to create, and that they viewed devices as nothing more than a means to get new customers for their networks. Jobs, with his infamous management approach, was not going to let a group of executives tell him what his phone should look like.
By 2004, the iPod business was drying up for Apple, and was even more vulnerable than before. iPod accounted for 16% of the company's revenues, but with the growing popularity of 3G phones, the imminent emergence of Wi-Fi phones, lower prices for media, the growth of rivals in music sales, the company's long-term dominant position was threatened.
Therefore, that summer, when Jobs publicly stated that there would be no Apple phone, he sat and worked on his entry into the mobile market. In an attempt to get around the operators, he decided to get close to Motorola. This decision seemed more elegant: a mobile manufacturer recently released a very popular RAZR, and Jobs knew Ed Zander, president of Motorola, from the time when he served as acting president of Sun Microsystems. This deal would allow Apple to develop music software, while Motorola and Cingular will discuss complex hardware details.
Naturally, Jobs' plan suggested that Motorola would create a good device no worse than RAZR, but it soon became clear that this would not happen. Three companies traded on trifles about almost everything - how the songs will flow into the phone, how much music will fit in it, even how the names of each company will be displayed. And when the first prototype appeared at the end of 2004, another problem appeared. The device itself looked terrifying.
Jobs unveiled ROKR in September 2005 with all his inherent confidence, and described it as "iPod Shuffle on your mobile." Jobs probably knew that he had stuff on his hands; consumers, in turn, hated him. ROKR, which did not allow direct download and contained only 100 songs, appeared quickly to point out all that was not so in the wireless communications industry in the US: causing confusion of conflicting parties, for which the consumer was secondary. Wired summed up his disappointment in November 2005: “AND DO YOU CALL THE FUTURE TELEPHONE?”
Apple touch
Apple has created two music phones. ROKR, created in partnership with Motorola in 2005, observed the tradition of relations between manufacturers and operators. The iPhone, which went on sale last summer, has turned everything upside down.
Even when ROKR went into production, Jobs realized that he would have to create his own phone. In February 2005, he met with Cingular to discuss a partnership without Motorola. At a top-secret meeting in a hotel in central Manhattan, Jobs revealed his plans to the Cingular administration, among whom was Sigman (when AT & T acquired Cingular in December 2006, Sigman remained the leader). Jobs' message consisted of three parts: Apple had the technology to create something truly revolutionary, "many light years ahead of all that exists." Apple was ready to consider an offer of an exclusive agreement regarding this transaction. But Apple was also ready to buy in bulk minutes of wireless communication in order to become an operator itself.
Jobs was sure of himself. Apple engineers have been working on a touch panel for a tablet for almost a year, and convinced him that they could create a similar interface for the phone. Plus, thanks for having an ARM11 chip, thanks to which the processors for mobile phones have become fast enough and powerful enough to combine the functionality of a phone, a computer, and an iPod. And wireless minutes have become cheap enough for Apple to be able to resell them to consumers; for example, Virgin does just that.
This is the first part of the translation of the article "The Untold Story: How the iPhone Blew Up the Wireless Industry." The second part is made by ManPavel and is located here .
This text is the first part of the translation of the article “The Untold Story: How the iPhone Blew Up the Wireless Industry” by Fred Vogelstein, published January 9, 2008 in Wired.
http://www.wired.com/gadgets/wireless/magazine/16-02/ff_iphone?currentPage=all
When reprinting the translation, please refer to the original and the present text.
Authors of the translation will be grateful for comments, comments, corrections of possible inaccuracies and participation in the correction of the translation of the article.
Source: https://habr.com/ru/post/31371/
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