On January 9, 2007, Steve Jobs gave a masterful presentation at Macworld in San Francisco, introducing the first iPhone. I had been watching presentations by Jobs since the early Apple II days -at an International Apple Core meeting, a Rosen Research Conference, and introducing the NeXT operating system NeXTSTEP during his "years in the wilderness" away from Apple. I saw those in person and have watched countless videos of his product introductions and talks, including his wonderful Stanford University Commencement Speech in 2005. Jobs was an outstanding speaker with a flair for the dramatic who knew how to captivate an audience (often made up of Apple fanatics, already panting to be captivated).
The iPhone introduction was special, though, even among all the mesmerizing Jobs performances that I’ve witnessed. It was special to me because I have used it a number of times to kick off lectures on a subject that I’m passionate about: "creative disruption," or how technological innovation changes the world around us, often under the radar until we or someone close to us loses a job. Even without my particular focus, the presentation was special. Jobs was masterful, teasing the crowd before defining the product, extolling its features, and then demonstrating them.
He began by stating that Apple was introducing three major products: an improved iPod, a superb Internet phone (Apple’s first) and a powerful portable Internet device (also Apple’s first). He repeated the names of the three devices over and over as the crowd roared and then said, "Ok, you got it," and then confirmed that the "three devices" were really one – the iPhone!
Technological Turning Point
Looking back from my perspective, that was not only the day that Apple introduced a breakthrough product, a portable phone with features better than any to date, it was also the day that Jobs changed the world for millions:
- By eliminating the need for carrying both a cell phone and a music player and by linking iTunes and the music player to the Internet, Apple put the final "nails in the coffin" for Tower Records, New York City’s famous Colony Records, and a legion of other small music stores throughout the country.
- The inclusion of a digital camera began the deathwatch for Kodak and the many mall film processing stores throughout the country (there are now more pictures taken on iPhones than any other camera in the world).
- With the introduction of the on-glass pop-up virtual keyboard, Apple dramatically reduced the weight of the unit and threw competitors such as Blackberry, Qualcomm and Palm into downward spirals.
In short, Apple had not only introduced a product to do battle with its competitors in the computer and electronics industries, it had caused major disruptions and loss of jobs in two non-computer industries: music and photography. It had also given Apple a much stronger position vis-a-vis the cell phone carriers (AT&T, Verizon, etc.) than any mobile phone provider previously had.
It was a masterful performance, and it laid the groundwork for the introduction of the iPad three years later. Soon Google, with its Android operating system, would enter the fray as Apple’s only real competitor. (Get a history lesson in Creating the iWorld: The History of Apple.)
A Success for Apple … Or Was It?
It’s often said that the real Age of Mobile Computing began on that January day with Apple’s iPhone introduction, an introduction that, in retrospect, changed our understanding and appreciation of computing. There was, however, one tiny problem. The introduction was a scam! Instead of Jobs saying "The iPhone is …," he should have, to be truthful, said, "The iPhone will be … " or "The iPhone has been designed to …." That’s because at that point the iPhone still didn’t work and the introduction had been gimmicked to make it appear that it did. Jobs had never gotten successfully through even a single practice for the introduction, as the phone kept malfunctioning either through hardware or software problems.
Tense Times at Apple
According to "Dogfight: How Apple and Google Went to War and Started a Revolution" by Fred Vogelstein, Apple engineers were so concerned that things might blow up completely at the iPhone’s unveiling that they sat together in the dark Moscone Center in San Francisco sipping flasks of scotch as each of their particular presentation sections was successfully (and perhaps miraculously) completed. Each understood what a disaster it would be for the company if the product blew up during the introduction. They also understood well what it would do to their careers. And if they didn’t, Jobs had made it very clear for them. In the book, Vogelstein quotes one of the engineers describing how Jobs drove them, "Mostly he just looked at you and very directly said in a very loud and stern voice ‘You are fucking up my company’ or ‘If we fail, it will be because of you.’"
To make up for the many problems, Apple gimmicked the introduction by:
- Having AT&T set up a portable cell tower so that cell reception would be guaranteed.
- Programming the demo machines to show five bars of cell connection strength no matter what it really was.
- Changing the Wi-Fi frequencies to Japanese frequencies, which are not permitted in the U.S., so there could be no interference.
- Setting up multiple demo phones so that if one crashed with memory problems, Jobs could seamlessly switch to another.
With all of the potential disaster points, the introduction went off without a hitch. In fact, it was so flawless that some of the originally fearful Apple execs said it was the best introduction that they had ever seen.
By the time the iPhone shipped a little over six months later, on June 29th, the problems had been corrected. The only post-shipping problem was dropped calls, and Apple was able to blame AT&T for that (later analysis showed that Apple was at least partially culpable for the problem). In January 2014, Apple reported that it had sold a record 51 million iPhones in the final quarter of 2013. Smartphones are now ubiquitous, and iPhones remain among the most popular brands. Essentially, Steve Jobs changed the world by lying to us!
It’s All About the Hype
It’s not unusual for technology executives to claim that the technologies they’re releasing have features or functionality they lack. That’s because these execs believe that their technical staff can make the necessary changes before the system is delivered. I did it myself as an officer of a Wall Street consulting firm when making pitches to prospective clients. When asked if we had some system routine that I knew we did not have, I’d quickly analyze the complexity of the change and, if I determined that our programming staff could rapidly implement the modification, I would confidently say, "Yes," sometimes tempering my answer with, "I should have an analyst sit down with your operational staff to ensure that what we’re doing totally fulfills your requirement." If I knew that there was no way in hell a certain change could be made in a reasonable amount of time, the answer would be, "No. We’ll have to estimate that as a post-implementation modification." In other words, let us put the system in without it and we’ll make the change – and bill you for it.
If the above sounds harsh or deceitful in some ways, it is, but it led to successful – and customer-satisfying – implementations for several major financial companies in the ’60s, ’70s and ’80s. Of course, I always had a working system with software that could be modified by a crackerjack programming staff. What’s remarkable is that Steve Jobs did not, at least not according to the Apple sources interviewed by Vogelstein, have anything working in the iPhone.
What he did have was supreme confidence in both his employees and himself, and he was willing to play "you bet your company" on this confidence. It could have been a major flop, but instead, it changed the world as we knew it. Now it seems that we’ve always had cell phones, and can hardly live without them. Who knew that one big lie would turn out to be an everyday reality?