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Apple's Phone: From 1980s' Sketches to iPhone. Part 3

	Apple's Phone: From 1980s' Sketches to iPhone. Part 1
	Apple's Phone: From 1980s' Sketches to iPhone. Part 2

Project Purple 2, or creation of iPhone

At conference D in 2010, Steve Jobs was asked why the Apple phone had made its appearance before the tablet. His reply was: "I'll tell you. Actually, it started on a tablet first. I had this idea about having a glass display, a multi-touch display you could type on. I asked our people about it. And six months later they came back with this amazing display. And I gave it to one of our really brilliant UI guys. He then got inertial scrolling working and some other things, and I thought, 'my god, we can build a phone with this' and we put the tablet aside, and we went to work on the phone."

This may sound simple, but it took Apple several years to create its first phone and Jobs personally had to come up with plenty of sensible arguments for the iPhone to make into the commercial product and be released to the market. The name was reserved back in 1999 when the company registered the iphone.org domain, just in the spirit of Apple. It was to be given to the market outcome of the Purple 1 project, upon which in 2002, Steve Jobs commented as follows: "kick-start the market for next-generation mobile phones in the same way that the company's computer popularized personal computing."

However the things turned out to be more complicated and the project was closed later that year. In early 2004, Apple has no phone-related work going on; instead, it has a tablet computer in design. The project takes its normal course and in the meantime the Motorola and iTunes phone story, started in the summer, unfolds. When in January 2007 Steve Jobs makes a public announcement at MacWorld, according to which it took his company 2.5 years to develop the phone, he's not being very sincere. Another year, devoted to the development of a touch-sensitive screen and some UI elements for a tablet computer, is not being taken into account. That work began in 2004. Codenamed the Purple 2, the phone project itself was born in 2005, not without some contribution from Motorola. The latter, however, was not about any technologies, know-how or whatsoever. The company's "help", or rather one coming from its top management, took the shape of the joint work on the music product that was not to Apple's likings. Inability to meet the presentation deadlines, refusal to provide the best models, i.e. the RAZR, - all those problems got accumulated.

In February 2005, Steve Jobs organizes a secret meeting with the Cingular top management behind Motorola's back. He needs to secure the operator support, since the intent is not just to create a phone but to change the business model of the market. And support on the carrier side is vital for that. At the meeting, Cingular is represented by Stan Sigman, who is also working on the joint project with Motorola.

It's Steve Jobs' charisma against the traditional rules of operator games. Who's going to win? Jobs offers a partnership without Motorola, assures Cingular that Apple is capable of creating a phone that can be superior to the competition for years. The phone is not even on paper yet; one can't touch it or discuss its characteristics. Hence one has either to rely on Jobs' gut feeling or reject it. It's one hell of a meeting aimed at selling a pig in a poke. Jobs' next deal is of the same kind, he offers exclusive rights for the agreement. No company other than Cingular gets the product in the U.S. In return, he wants Apple to become some sort of an operator of its own. Having paid for some traffic, the company should then be able to resell it to the customers along with the phone. No carrier is crazy enough to fall for that, nor even to discuss that. Nevertheless we have to pay a compliment to Steve Jobs' charisma: although he doesn't manage to convince the Cingular top management at the meeting, they don't say "No" to him. Stan Sigman becomes appointed to work with Apple on the operator side, and the negotiation process will go on for about another year.

However, it is exactly February 2005 that can be considered as the beginning of the Purple 2 project; Steve Jobs becomes determined to create his own phone after the meeting. It is extremely risky, since the project is doomed without the carrier support. From the start, the whole technical design is built around a touch-sensitive screen and multi-touch support initially developed for the tablet. The choice of an operating system for the phone turns into a hot debate. The winning argument is that the processing power of portable devices will grow, which means that sooner or later they should be capable of running applications comparable to those on the desktop. Therefore, the final decision is to adapt MacOS X to the mobile phone.

For Apple, it's a race against time; there's no contract for the phone, but it needs to be announced as soon as possible. The development of touch-sensitive phones is going on already; other companies don't experience any pressure, present their own models, and research new technologies, steadily approaching what Apple has in mind. That is why Apple splits the project into two separate parts. One team becomes responsible for the hardware, i.e. the phone itself, whereas the other one concentrates on the adaptation of the operating system.

While preparing this material, I have come across the following point of view repeatedly entertained on the forums. It is stated that having two development teams was a matter of confidentiality. However, Jobs' dividing the developers was not dictated by privacy considerations alone. It was also an attempt to speed up the process by means of paralleling the tasks, which is quite logical. At that moment, Apple didn't have time to optimize the process; it didn't even have phone engineers. The company kept hiring the specialists even after the launch of the product in years 2007-2008, as due to the lack of expertise the phone's wireless capabilities were weak. It was the idea that pushed the project forward.

By November 2005, people get hired, the project idea gets formed, and it all gets going. In September, there are around 200 engineers and other Apple employees involved. The project is given the green light, but the full speed is gained only at the end of 2005.

Protracted Negotiations with Cingular

After the first meeting in New York, Stan Sigman becomes Apple's contact in Cingular. He has faith in Apple creating the product that could astonish the public; he is on Jobs' side. However, the Cingular top management is not willing to sign a contract without actually seeing the product, notwithstanding the fact that the potential partner lays a claim on a fraction of their own profits. It takes almost a year for the companies to find a compromise. During that time, Jobs announces that he is eager to work with any operator that would listen to him and could the future potential of his offer. He meets the top management of Verizon and tells them exactly what he told to Cingular. Verizon considers Jobs to be dreaming awake, cannot see the offer beneficial. This fact does benefit Sigman, on the other hand; he is willing to compromise and eventually finds a way to do so.

In 2006, Cingular expands its coverage, adds non-call related services, and sees an increase in the data traffic, which makes the operator interested in data-oriented devices. At the same time, Apple believes its phone to become one of the most popular for mobile browsing and e-mail. Sigman is working on a mutual agreement and finally makes it.

In July 2006, the companies sign a contract, according to which the carrier is to invest a certain amount of money into the marketing and advertising of the product and to obtain the exclusive rights for it for 5 years in return. The latter is also to receive some royalty from any iTunes store purchase of its customers, whereas Apple is to be granted USD 10 from each user of the phone. The amount is considered as a traffic payment, since both companies expect the users to rely heavily on the Internet and e-mail, so the money should be repaid. In addition, Cingular, using its own resources, works in conjunction with Apple to develop the Visual Voicemail feature.

For Sigman, the project is a major one; his whole career strongly depends on it. He hasn't even seen a working prototype of the device by the time of signing the contract, unprecedented for the operator market on its own. The U.S. largest carrier buys a product it has never seen. What can be more insane?

In January 2007, during the iPhone presentation at MacWorld, Sigman makes a public announcement that he couldn't see the product come true when signing the contract. He also adds that the joint work with Apple is not of an MVNO type but rather a real partnership, in which Cingular (or AT&T by the time) is to retain its customers.

iPhone Prototypes or There is No Way Back

Even before the contract with Cingular the product development is in full swing. The first part of 2006 can be easily called the decision time. The company creates many prototypes and studies the interaction of elements. By the spring of 2006 the overall characteristics are known, but the internal components are being constantly changed. Several months after the contract with Cingular is signed Apple discusses the project progress.

This is the autumn of 2006 and Purple 2 team gathers in the meeting room and shows the phone's prototype. The handset is not ready, standard applications are unstable and during the talk time the connection gets broken. The battery does not charge completely and this list can be continued endlessly. The product is raw and Steve Jobs sums it up: "We don't have a product yet". There is less than a year until the product should enter the market, but the model is not ready in all respects: from the software stability to the hardware components. MacWorld has to see a working model without simple mistakes. The developers are mobilized and literally live in the labs, while working on the project.

Another problem influencing the development speed is the absence of the relevant experience. Apple has no equipment to test the phones, antenna radiation, etc. This equipment is purchased when necessary, but requires the personnel to use it, which also affects the speed of project development. For the newcomer to the phones market Apple makes the impossible. The speed of work on the project increases and the price is high for Apple.

The priority of the phone over other projects is obvious. In particular, the developers involved in Mac OS Leopard to be released in spring are transferred to Purple 2, which leads to a half year delay and the OS is released only in October. Speaking in front of the investors a year later Steve Jobs acknowledges that it was his decision. The room bursts into applause.

But let's return to the start of 2006. Two teams are working on their parts of the project. The engineers have the phone design and engineering prototypes, but have no functioning software. The phone has only test utilities. If you look inside you may find not one, but four names for the model.

[Skank is the new black]
[Nine parts perspiration]
[Say hello to the Newton MessagePad 3000]
[Skankphone]

The developers have no phone and they work only with little wooden boxes containing plates. The chips have no symbols on them. Inside of the company no more than three dozens of people know about the model. The secrecy is omnipresent, but since the second half of 2006 it becomes clear that Apple is working on its phone project. The company is bombarded with questions, but Apple denies any involvement in the project. The speculations around Apple phone reach the peak and Cingular is asked similar questions. In November of 2006 Cingular launches the music service: for $15 you can download as much music content on your phone as you want, but the majority of questions to Robert Hyatt, the CEO of Cingular, responsible for entertainment and music services are centered on the future Apple product.

Is it true that the launch of your music service signals the end of cooperation with Apple?
Is Apple planning to unveil new iPhone?
Does your company have any agreement with Apple?
Is Apple working on the phone?

The event is used by the journalists to ask questions about Apple phone and everything else seems irrelevant. Hyatt's answer to the last question is brief and he says: I don't know, actually [laughs]. Fortunately, I don't know. Because if I knew ... I'd have to tell you, "I don't know" [laughs].

Employees of Cingular involved in any communication with Apple remain tight lipped and no information is disclosed. Meetings in Cingular office are carried out with all precautions observed. At the entrance Apple employees indicate Infineon as the workplace and not their own company. In total it allows to keep the maximum level of secrecy – prior to the announcement the model does not feature on the web, nobody knows about it, which helps to create the bombshell effect.

I would like to remind you, that the price of model development according to Apple source cited by the Wired reached almost $150 million. It takes almost two years and a half to accomplish if to include the creation of the multitouch screen.

Plastic Screen or Glass

The new model is first shown in mid December of 2006 or a couple of weeks prior to MacWorld. In Las Vegas Four Seasons hotel Steve Jobs showed iPhone to Sigman. This version is quite stable and Jobs has been using it himself for some time. At the request of Steve Jobs plastic is replaced by glass as in everyday use plastic is subjected to scratches and the CEO did not like this. Surprisingly, but before MacWorld the company was not sure if it could offer this kind of glass and how it would react if dropped. They did not make any tests and had no time for them. The schedule was really hectic.

The history of the screen material surfaced due to eBay. In March of 2009 two prototypes of Apple iPhone were spotted there. This is their description:

Phone #1:

Plastic screen protection
Serial number YM649xxxxxx, referring to the Chinese plant, produced during week 49 of 2006;
iPhone OS 03.06.01_G (iPhone was launched with OS 1.0 03.11.02_G)

Phone #2:

Screen covered with glass
Serial number YM650xxxxxx, referring to the Chinese plant, produced during week 50 of 2006;

All prototypes do not feature the iPhone logo and the storage capacity is not mentioned. The first phone has the test shell, which is used even today to test the models at the plant.

The company was not sure about the reliability of the glass and it was not announced during MacWorld. Before the first models hit the shelves on June 18, 2007 Apple issued the press release mentioning the substitution of plastic by glass. The same document gave new data about the battery and the difference with the old software from January was immense. It highlights again that the product was made in a hurry without any time to spare.

After iPhone reached the consumers many bugs appeared, which proved technical deficiencies of the product, but people were buying Apple name and the stunning interface unrivalled at the time.

Apple iPhone was officially unveiled on January 9, 2007 at MacWorld. Steve Jobs said the following: "Well today, we're introducing THREE revolutionary new products. The first one is a widescreen iPod with touch controls. The second is a revolutionary new mobile phone. And the third is a breakthrough internet communications device. An iPod, a phone, an internet mobile communicator.... these are NOT three separate devices!"

This may be considered the end of iPhone (Purple 2) prehistory, followed by months of launch preparation, work with the points of sales, but this story is well known and does not require a separate article (or maybe it is needed after all?). iPhone appeared despite the market situation, when one person – Steve Jobs managed to succeed and created the product, which was bought by Cingular (and AT&T afterwards) with closed eyes. The first buyers of iPhone were not sure what they got as well. They paid money for the promise of Steve Jobs and Apple as it was always the case with several other products – iPod, MacBook Air and iPad. First iPhone became the benchmark for mobile phones interfaces, though it was technically weak. But this is another story.

P.S. Would you like to read about the history of iPhone on the market, first steps and issues? Price strategy and history, defects, etc. If your answer is yes, then submit your applications on our forum.

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Eldar Murtazin ([email protected])
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Translated by Maxim Antonenko ([email protected]), Olexandr Nikolaychuk ([email protected])