iPhone
The Problem
• Skyrocketing iPod sales – 45% of total revenue
• What could possibly stop the tremendous growth
of the iPod?
• A cell phone. Nobody wanted to carry around a
two devices.
• If a cell phone company started building decent
music players, it could render the iPod
unnecessary
• Initially, Apple partnered with Motorola to create
the ROKR
Phones were terrible
• At company meetings, Jobs and his associates
would often find themselves talking about
how much they hated their phones
• Ugly, complicated, features nobody needed
and nobody could figure out
• This got the team excited to create a product
people actually wanted to use
• With 825 million phones sold in 2005, the
market was there
Creating the iPhone
• Project was given to the iPod division headed by
Tony Fadell
• Initial approach was to modify the iPod, using the
trackwheel as the input method
• This was cumbersome and annoying to use
• At the same time, there was another project
being developed for a tablet
• Jobs wanted a multi-touch display screen that
didn’t use a keyboard or stylus. This was risky,
because no one was certain they could pull off
the engineering for it
Creating the iPhone
• Two separate iPhone projects were
commissioned
– One with Tony Fadell’s iPod team and their
trackwheel interface. This team had an
uninventive and uninspired culture.
– Another with the tablet team trying to develop
the multi touch interface for the phone. This team
had an innovative culture to it.
iPod Phone?
Creating the iPhone
• It took six months for the team to come up with a
workable prototype tablet
• This technology was then applied to create the
iPhone – it would be much easier to dial numbers
and perform tasks with a touchscreen than with a
clumsy trackwheel
• The entire iPhone project from start to finish was
about two and a half years. Imagined in 2005,
released in summer 2007.
Creating the iPhone – Supplier Issues
• A big issue was the glass needed for the
display, Gorilla Glass
• Strong, scratch resistant, but needed
complicated ion-exchange process needed to
create it
• Wendell Weeks, CEO of Corning Glass,
doubted it was possible to make as much of it
as Jobs demanded
Creating the iPhone – Supplier Issues
• Jobs wanted as much Gorilla Glass as the
company could make within six months
• Jobs created his signature “reality distortion
field” and told Weeks “Get your mind around
it. You can do it.”
• Weeks converted an LCD factory into a gorilla
glass factory overnight and was able to
manufacture enough in time for the launch
iPhone Launch
• Typical Steve Jobs showmanship
• 2007 iPhone keynote
• http://www.youtube.com/watch?v=vZYlhShD
2oQ
The iPhone – features and scope
• Fully integrated a phone and the first
widescreen/touchscreen iPod
• During Jobs’ big reveal, he described it as
three devices in one – A phone, iPod and a
“breakthrough internet communications
device”
• Focus on simplicity. Only four buttons and a
switch to turn the phone on silent.
The iPhone – features and scope
• The software, named iPhone OS, was developed
alongside the device, ensuring the hardware and
software worked together seamlessly
• Everything was simple- unlocking it, opening
apps, taking pictures, etc.
• Keeping true to Jobs’ obsession with control,
there was literally no customization at first. Even
had to use Apple headphones!
• The touchscreen keyboard was a major feature
Jobs pushed for
The design, and the genius of Jony Ive
• Jobs’ favorite shape was a rounded rectangle.
He felt it was simple and “perfect”
• Of course, Ive made the device in that shape
• A sleek, simple look with anodized aluminum
encasing it and a black plastic over the
antenna
• The device was all about the display, with no
ugly keyboard or confusing buttons to distract
you from it
Price point controversy
• At $599 for the 8 gig and $499 for the 4 gig
model, iPhone was very expensive and was truly
a premium product
• Two months after the launch, the 4 gig was
discontinued and the $599 8 gig was dropped
down to $399
• Early adopters were outraged
– Jobs issued an open letter afterwards, acknowledging
the issue and gave $200 credit to recent adopters and
$100 to everyone else
Criticism
• iPhone lacked a few key features that
bothered some consumers
• No copy/paste, no multitasking, no additional
applications, screen rotation, fingerprints
• All of these were addressed with later
iterations of iPhone
• 300 page bill!
Lessons Learned
• High risk, very high reward. Apple decided to
invest their resources into the touchscreen
project rather than the iPod phone project. No
one was certain that the project would
succeed or whether they could pull off the
technology needed.
Lessons Learned
• Recipe for success: identify a problem and
develop a creative solution to it
– Everyone hates their phone
– Trackwheel can’t dial numbers efficiently
– Physical keyboards unable to adapt to different
needs
– Difficult to turn phones on silent mode
– People hate carrying their phone and their iPod
separately
Lessons Learned
• Don’t doubt yourself
– We can’t pull off the touchscreen…let’s use the
trackwheel!
– We can’t create enough Gorilla Glass for you in six
months!