The story of the iPhone, beginning with the original in 2007, which wowed the world with multitouch... and locked the U.S. to AT&T
On January 9, 2007 the late Steve Jobs put sneaker to Macworld stage to give one of the most incredible keynote presentations of his life - a life filled with incredible keynotes - and in the history of consumer electronics. There, he said he would be introducing a wide-screen iPod with touch controls, a revolutionary mobile phone, and a breakthrough internet device. But it wasn't three products. It was one product. We got it. It was the iPhone.
After setting up and knocking down everything from the physical keyboard and stylus pens that dominated BlackBerry, Motorola, and Palm smartphones of the day, Jobs went over the multitouch interface that let the iPhone smoothly pinch-to-zoom, and the delightful interface that included touches like inertia and rubber banding in the scrolling, and the multitasking that let him move seamlessly from music to call to web to email and back. Apple:
“iPhone is a revolutionary and magical product that is literally five years ahead of any other mobile phone,” said Steve Jobs, Apple’s CEO. “We are all born with the ultimate pointing device—our fingers—and iPhone uses them to create the most revolutionary user interface since the mouse.”
The original iPhone, code named M68 and model number iPhone1,1, had a 3.5-inch screen at 320x480 and 163ppi, a quad-band 2G EDGE data radio, 802.11b.g Wi-Fi, Bluetooth 2.0 EDR, and a 2 megapixel camera. It was powered by an ARM-based Samsung 1176JZ(F)-S processor and PowerVR MBX Lite 3D graphics, with an 1400 mAh battery, and had 128MB of RAM on board, as well as 4GB or 8GB of NAND Flash storage. The iPhone could also be charged - and synced to iTunes - via the same 30-pin Dock connector as Apple's incredibly popular iPod.
The iPhone did include several sensors to enhance the user experience, including an accelerometer that could automatically rotate the screen to match device orientation, a proximity sensor that could automatically turn off the screen when close to the face, and an ambient light sensor to automatically adjust brightness. It also had a remarkably good web browser and rendering engine, especially for its time, in Safari and WebKit.
What the original iPhone didn't have was CDMA and EVDO rev A network compatibly. That meant it couldn't work on two of the U.S.' big four carriers, Verizon and Sprint. Not that it mattered; the original iPhone was exclusive to AT&T. It also lacked GPS, or support for faster 3G UTMS/HSPA data speeds. In addition to no hardware keyboard or stylus, the iPhone also didn't have a removable, user-replaceable battery. None of that pleased existing power users of the time. Nor did the absence of features like MMS (multi-media messaging), an exposed file system, copy and paste or any form of advanced text editing, and, critically to many, support for third party apps.
The original iPhone's price was also high. It debuted at $499 for the 4GB and $599 for the 8GB model - on-contract. Those prices weren't unheard of at the time; early Motorola RAZR flip phones were pricey in their day as well. However, it meant Apple couldn't penetrate the mainstream market.
On June 6, 2007 Steve Jobs again took the stage at Moscone West, this time for Apple's Worldwide Developer Conference, again showed off the original iPhone, and announced the launch date: June 29, 2007.
At Apple Stores, especially flagship stores like the glass cube in New York City, lineups formed and people waited for hours. It was an event. The novelty and experience were so good, many people simply didn't care about missing features or high price tags. Walt Mossberg and Katherine Boehret of The Wall Street Journal
Our verdict is that, despite some flaws and feature omissions, the iPhone is, on balance, a beautiful and breakthrough handheld computer. Its software, especially, sets a new bar for the smart-phone industry, and its clever finger-touch interface, which dispenses with a stylus and most buttons, works well, though it sometimes adds steps to common functions.
Ryan Block, former Editor-in-Chief of Engadget:
It's easy to see the device is extraordinarily simple to use for such a full-featured phone and media player. Apple makes creating the spartan, simplified UI look oh so easy -- but we know it's not, and the devil's always in the details when it comes to portables. To date no one's made a phone that does so much with so little, and despite the numerous foibles of the iPhone's gesture-based touchscreen interface, the learning curve is surprisingly low. It's totally clear that with the iPhone, Apple raised the bar not only for the cellphone, but for portable media players and multifunction convergence devices in general.
On September 5, 2007, at Apple's "The Beat Goes On" music event, Steve Jobs announced they were dropping the 4GB model entirely, and dropping the price of the 8GB model to $399. Apple:
“The surveys are in and iPhone customer satisfaction scores are higher than we’ve ever seen for any Apple product,” said Steve Jobs, Apple’s CEO. “We’ve clearly got a breakthrough product and we want to make it affordable for even more customers as we enter this holiday season.”
On February 5, 2008, at the they introduced a 16GB model. Apple:
“For some users, there’s never enough memory,” said Greg Joswiak, Apple’s vice president of Worldwide iPod and iPhone Product Marketing. “Now people can enjoy even more of their music, photos and videos on the most revolutionary mobile phone and best Wi-Fi mobile device in the world.”
There was still no subsidized price, even on contract, but there was movement.
While the iPhone certainly wasn't universally adored, the entrenched incumbents in the smartphone space were, as was absolutely expected, some of its harshest critics. Ed Coligan, former CEO of Palm:
We've learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They're not going to just walk in.
But they did, and precisely because they weren't making a phone that was smart, they were making a PC that could make calls. Palm figured that out too late, struggled to launch the excellent webOS, ended up being sold to another set of PC guys - HP - and then discontinued and licensed to LG for use in TV sets. Maybe.
Steve Ballmer, now retiring CEO of Microsoft:
You can get a Motorola Q for $99. [...] [Apple] will have the most expensive phone, by far, in the marketplace. There's no chance that the iPhone is going to get any significant market share. No chance.
Apple reduced price, first total and then, thanks to the subsidy model, up front as well, making it competitively priced, and its market share grew steadily. Ballmer was correct, at the time, but failed to foresee the future. Now he's leaving Microsoft as their mobile phone platform has become a distant third place.
Mike Lazaridis, former CEO of RIM (now BlackBerry):
Talk -- all I'm [hearing] is talk about [the iPhone's chances in Enterprise]. I think it's important that we put this thing in perspective. [...] Apple's design-centric approach [will] ultimately limit its appeal by sacrificing needed enterprise functionality. I think over-focus on one blinds you to the value of the other. [...] Apple's approach produced devices that inevitably sacrificed advanced features for aesthetics.
Yet it turned out consumers valued design and experience so much, they eventually forced iPhones into enterprise, beginning the bring-your-own-device (BYOD) movement. It was Lazaridis' insistence on hardware keyboards and data compression as primary consumer demands that lacked perspective. And now he's gone and BlackBerry remains years behind, struggling to catch up.
None of them realized the game had changed, and none of them would respond for years to come. Ironically, the only company that did realize what had happened, and was able to spin on a dime, wasn't a competitor at all. At least not yet...
By June of 2008, when Apple discontinued the original iPhone - later to be nicknamed the iPhone 2G - total sales had reached over 6 million units. That was on four carriers in four countries. But its impact was felt far beyond those numbers or borders. And it was just beginning...