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iPhone. The Problem . Skyrocketing iPod sales – 45% of total revenue W hat 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
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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.
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=vZYlhShD2oQ
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 JonyIve • 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!
