Yet here, in Apple's boardroom, it was clear that the prototype was still a disaster. It wasn't just buggy, it flat-out didn't work. The phone dropped calls constantly, the battery stopped charging before it was full, data and applications routinely became corrupted and unusable. The list of problems seemed endless.
At the end of the demo, Jobs fixed the dozen or so people in the room with a level stare and said, "We don't have a product yet. The effect was even more terrifying than one of Jobs' trademark tantrums. When the Apple chief screamed at his staff, it was scary but familiar. This time, his relative calm was unnerving. The ramifications were serious. The iPhone was to be the centerpiece of Apple's annual Macworld convention, set to take place in just a few months.
Since his return to Apple in , Jobs had used the event as a showcase to launch his biggest products, and Apple-watchers were expecting another dramatic announcement.
Jobs had already admitted that Leopard—the new version of Apple's operating system—would be delayed. If the iPhone wasn't ready in time, Macworld would be a dud, Jobs' critics would pounce, and Apple's stock price could suffer. After a year and a half of secret meetings, Jobs had finally negotiated terms with the wireless division of the telecom giant Cingular at the time to be the iPhone's carrier.
On top of all that, Apple retained complete control over the design, manufacturing, and marketing of the iPhone. Jobs had done the unthinkable: squeezed a good deal out of one of the largest players in the entrenched wireless industry. Now, the least he could do was meet his deadlines. For those working on the iPhone, the next three months would be the most stressful of their careers. 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.
A product manager 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.
He showed off the iPhone's brilliant screen, its powerful Web browser, its engaging user interface. Sigman, a taciturn Texan steeped in the conservative engineering traditions that permeate America's big phone companies, was uncharacteristically effusive, calling the iPhone "the best device I have ever seen. Six months later, on June 29, , the iPhone went on sale.
At press time, analysts were speculating that customers would snap up about 3 million units by the end of , making it the fastest-selling smartphone of all time.
It is also arguably Apple's most profitable device. For decades, wireless carriers have treated manufacturers like serfs, using access to their networks as leverage to dictate what phones will get made, how much they will cost, and what features will be available on them. Handsets were viewed largely as cheap, disposable lures, massively subsidized to snare subscribers and lock them into using the carriers' proprietary services.
But the iPhone upsets that balance of power. Carriers are learning that the right phone—even a pricey one—can win customers and bring in revenue. Now, in the pursuit of an Apple-like contract, every manufacturer is racing to create a phone that consumers will love, instead of one that the carriers approve of. In , shortly after the first iPod was released, Jobs started thinking about developing a phone.
He saw millions of Americans lugging separate phones, BlackBerrys, and—now—MP3 players; naturally, consumers would prefer just one device. He also saw a future in which cell phones and mobile email devices would amass ever more features, eventually challenging the iPod's dominance as a music player.
To protect his new product line, Jobs knew he would eventually need to venture into the wireless world. If the idea was obvious, so were the obstacles. Data networks were sluggish and not ready for a full-blown handheld Internet device. An iPhone would require Apple to create a completely new operating system; the iPod's OS wasn't sophisticated enough to manage complicated networking or graphics, and even a scaled-down version of OS X would be too much for a cell phone chip to handle.
Apple would be facing strong competition, too: In , consumers had flocked to the Palm Treo , which merged a phone, PDA, and BlackBerry into one slick package. That proved there was demand for a so-called convergence device, but it also raised the bar for Apple's engineers.
Then there were the wireless carriers. Jobs knew they dictated what to build and how to build it, and that they treated the hardware as little more than a vehicle to get users onto their networks.
Jobs, a notorious control freak himself, wasn't about to let a group of suits—whom he would later call "orifices"—tell him how to design his phone. By Apple's iPod business had become more important, and more vulnerable, than ever. The iPod accounted for 16 percent of company revenue, but with 3G phones gaining popularity, Wi-Fi phones coming soon, the price of storage plummeting, and rival music stores proliferating, its long-term position as the dominant music device seemed at risk. Apple says the typical life-cycle of an iPhone today is three years, and the company times its new releases accordingly, putting out a fairly major redesign every three years, interspersed with more minor updates.
For carriers, iPhone promotions represents an opportunity to shore up existing subscribers and potentially gain new ones, hoping to cover the cost of the devices over multi-year payment schedules.
The new iPhones also support 5G networks, which are still under construction in the United States. Locking customers into month commitments means that some users won't be able to switch if one carrier's network suddenly looks better than the other two. All of the carrier promotions in the U. But they differ in how they are targeting new customers and how the mechanics of the deals work. The best deal for any given user depends on their current carrier. The wave of competing discounts from the three U.
Those contracts also kept a swath of consumers on a two-year smartphone upgrade cycle. Updates for Windows Phone devices must be approved by every carrier. When it was originally released, Microsoft created an official website where users could track Windows Phone 7 updates on a per-carrier basis to see which carriers worldwide were failing to issue updates or issuing them too slowly. Microsoft no longer provides information about the status of updates. Updates for Windows Phone 8 devices must still be approved by carriers before they roll out to Windows Phone devices.
Users can also purchase other unlocked, off-contract devices and receive updates without carrier involvement — assuming the manufacturer releases those updates.
Other phone platforms provide a way for carriers to continue providing the locked-down, customized phones they love so much and continue exercising their control over them. Browse All iPhone Articles Browse All Mac Articles Do I need one? Browse All Android Articles Browse All Smart Home Articles Customize the Taskbar in Windows Browse All Microsoft Office Articles What Is svchost. Browse All Privacy and Security Articles Browse All Linux Articles Browse All Buying Guides.
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