Battle of the Titans: How the Fight to the Death Between Apple and Google is Transforming our Lives

It wasn’t just the iPod’s success in 2004 that diluted Apple’s enthusiasm for the Rokr. By the end of the year, building its own phone no longer seemed like such a bad idea. By then it looked like most homes and cell phones would soon have Wi-Fi, which would provide high, reliable bandwidth over the homeowner’s DSL or cable connection. And outside-the-home cell phone bandwidth looked like it would soon be fast enough to stream video and run a fully functioning Internet browser. Phone processor chips were finally fast enough to run cool-looking phone software. Most important, doing business with the carriers was starting to seem less onerous. By the fall of 2004, Sprint was beginning to sell its wireless bandwidth wholesale. That meant that by buying and reselling Sprint bandwidth, Apple could become its own wireless carrier—an MVNO, short for “mobile virtual network operator.” Now Apple could build a phone and barely have to deal with the carriers at all. Disney, on whose board16 Jobs sat, was already in discussions with Sprint about just such a deal to provide its own wireless service. Jobs was asking a lot of questions about whether Apple should pursue one as well.

Cingular executives involved in the Rokr project such as Jim Ryan watched Jobs’s interest in an MVNO with Sprint grow, and it terrified them. They worried that if Apple became a wireless carrier, it would cut prices to win customers and crush profits in the industry as other carriers cut prices to compete. So while they had access to Jobs and his team, they gently lobbied him to cut a deal with them instead. If Jobs would agree to an exclusive deal with Cingular, they said, they would be willing to throw out the rule book on carrier–manufacturer relations and give Jobs the control he needed to build a revolutionary device.

Ryan, who has never talked publicly about those days until now, said the experience taxed every ounce of his negotiating skills. He’d been assembling complex carrier deals for nearly a decade and was known in the industry as one of the early thinkers about the future of wireless. He’d grown Cingular’s wireless data business from almost nothing to $4 billion in revenue in three years. But Apple and Jobs had little experience negotiating with carriers, making it much harder for Ryan to predict how they would respond to his various offers. “Jobs hated the idea of a deal with us at first. Hated it,” Ryan said. “He was thinking that he didn’t want a carrier like us anywhere near his brand. What he hadn’t thought through was the reality of just how damn hard it is to deliver mobile service.” Throughout 2004, during the dozens of hours he and his team spent in meetings with Apple executives in Cupertino, Ryan kept reminding Jobs and other Apple executives that if Apple became a carrier itself, it would get stuck with all the hassles of running an inherently unpredictable asset—a cell phone network. A deal with Cingular would insulate Apple from all that. “Funny as it sounds, that was one of our big selling points to them,” Ryan said. “Every time the phone drops a call, you blame the carrier. Every time something good happens, you thank Apple.”

Cingular wasn’t just playing defense17. Executives such as Ryan thought partnering with the inventor of the iPod would transform the way customers thought about their own company. Apple’s explosive success with the iPod in 2004 and 2005—it sold 8.2 million iPods in 2004 and another 32 million in 2005—had taken Jobs’s status as a business and cultural icon to unparalleled heights. The likely torrent of new customers who would come to Cingular if it were the carrier for a phone as revolutionary as the iPod had been made them salivate.

Another Cingular executive who worked on the deal but who would not be named put it this way to me when I was working on a story for Wired in 2008: “Jobs was cool. He was hip. There were studies done in colleges that asked, ‘What is the one thing you can’t live without?’ For twenty years it was beer. Now it was the iPod. Things like that made us say this guy has got something. That probably gave us that much more energy to make sure this deal happened.”

While Cingular was lobbying Jobs from the outside, a handful of Apple executives, such as Mike Bell and Steve Sakoman, were pushing Jobs to sign off on building a phone from the inside. “We were spending all this time putting iPod features in Motorola phones. That just seemed ass-backwards to me,” said Bell, who now is cohead of Intel’s mobile-device effort. He told Jobs that the cell phone itself was on the verge of becoming the most important consumer electronics device of all time, that no one was good at making them, and that, therefore, “if we [Apple] just took the iPod-user experience and some of the other stuff we were working on, we could own the market.”

Bell was a perfect executive to be making this pitch. He’d been at Apple fifteen years and had helped build some of the products, such as the iMac, that enabled Apple to avoid bankruptcy in 1997. Most important, because he ran not only a chunk of the Mac software division but the software group responsible for Apple’s AirPort Wi-Fi devices, he knew more about the wireless industry than most other senior executives inside Apple. He doesn’t claim credit for being the father of the iPhone. He ultimately didn’t run or even work on the project. Fadell ran it, before Scott Forstall took it over. But even today most say Bell was an important catalyst.

“So I argued with Steve for a couple of months and finally sent him an email on November seventh, 2004,” Bell said. “I said, ‘Steve, I know you don’t want to do a phone, but here’s why we should do it: [Design director Jony Ive] has some really cool designs for future iPods that no one has seen. We ought to take one of those, put some Apple software around it, and make a phone out of it ourselves instead of putting our stuff on other people’s phones.’ He calls me back about an hour later and we talk for two hours, and he finally says, ‘Okay, I think we should go do it.’ So Steve and I and Jony [Ive] and Sakoman had lunch three or four days later and kicked off the iPhone project.”

It wasn’t just Bell’s persistence and Ive’s designs that helped convince Jobs. Sakoman came to lunch having already done some early engineering work about what it might take to build a phone. He’d been at Palm until 2003, where, among other things, he helped build the software that went inside Treo smartphones. And as vice president of software technology at Apple, he had become the executive most familiar with the software inside the iPod. If Apple was going to make a smartphone, the iPod was a logical place to start. That’s what consumers were expecting Apple to do. So by the time Sakoman arrived for lunch, he and his team had already figured out a way to put a Wi-Fi chip inside an iPod and get it to connect to the Internet.

They’d even begun working on new software for the music player—a version of Linux—so that it could handle the increased demands of being a phone and an Internet browser. Linux, the open-source software made famous by Linus Torvalds in the 1990s, had not supplanted Microsoft Windows as many geeks predicted it would. But by then it had become the software of choice for less powerful and sophisticated electronics. Sakoman briefed Jobs on his team’s progress and later that afternoon told his team, “You better start figuring this out because this [phone project] is going ahead.”

Bell says one reason why he remembers the meeting is that he’d never seen anyone eat the way Jobs did that day. “You know how you remember certain things because of their bizarreness? So we’re meeting outside at the Apple cafeteria, and when Steve walks out, on his tray is a glass bowl full of avocado halves. Not one or two, but, like, fifteen covered in salad dressing. So I remember sitting there with Jony and Sakoman and watching Steve mow through a mound of avocados. I guess, having read Walter Isaacson’s biography [of Jobs], it was one of those food phases he was in to cure his cancer, but at the time I had no idea what was up.”

The final deal between Apple and AT&T, which acquired Cingular in 2006, took more than a year to hammer out. But it would prove easy compared to what Apple went through just to build the device. Many executives and engineers, riding high from their success with the iPod, assumed it would be just like building a small Macintosh. Instead, Apple designed and built not one iPhone but three entirely different devices in those two years. One executive on the project thinks Apple made six fully working prototypes just of the device it ultimately sold—each with its own set of hardware, software, and design tweaks. Many on the team were so burned-out, they left the company shortly after the first phone hit store shelves. “It was like the first moon mission,” said Fadell, who was one of the key executives on the project, and who left Apple to start his own company, Nest, in 2010. “I’m used to a certain level of unknowns in a project, but there were so many new things here that it was just staggering.”

Jobs wanted the iPhone to run a modified version of OS X, the software that comes with every Mac. But no one had ever put18 a gigantic program like OS X on a phone chip before. The software would have to be a tenth the size, and even then there wasn’t a phone chip being made in 2005 that could run it fast enough and with a long enough battery life. The chips that run Apple laptops were never considered because they generated too much heat and would suck a phone battery dry in minutes. Millions of lines of code would have to be stripped out or rewritten, and until 2006 engineers would have to simulate chip speed and battery drain because actual chips weren’t available until then. “Initially we just worked on Gumstix boards [cheap circuit boards hobbyists buy],” said Nitin Ganatra, one of the early software engineers. “We started with the Mac address book—a list of names—and to see if we could make it scroll [on a screen] at between thirty to sixty frames a second. We just wanted to figure out if there was any way to make this [OS X on a phone chip] work—whether we were even in the right ballpark. We wanted to know if we could push bits fast enough to get that iPhone look and feel. If we couldn’t get it to work on a Gumstix board, we knew we might have a problem.”

No one had ever put a capacitive multitouch screen in a mainstream consumer product before either. Capacitive touch technology—which creates “a touch” when a finger or other conductive item completes a circuit on the device—had been around since the 1960s. Elevator buttons in office buildings and screens on ATMs often used it. And research into multitouch technologies had been around since the 1980s. Trackpads on laptops were probably the most sophisticated use of this technology because they could recognize the difference between one- and two-finger inputs. But it was also well known that to build the multitouch screen Apple put on the iPhone and produce it in volume was a challenge few had the money or guts to take on. The next steps—to embed the technology invisibly in a piece of glass, to make it smart enough to display a virtual keyboard with auto-correct, and to make it sophisticated enough to reliably manipulate content such as photos or web pages on that screen—made it hugely expensive even to produce a working prototype. Few production lines even had experience manufacturing multitouch screens. There were touchscreens in consumer electronics, but over the years these had typically been pressure-sensitive touchscreen devices on which users pushed on-screen buttons with a finger or a stylus. The PalmPilot and its successors such as the Palm Treo were popular implementations of this technology. Even if multitouch iPhone screens had been easy to make, it wasn’t at all clear to Apple’s executive team that the features they enabled, such as onscreen keyboards and “tap to zoom,” were enhancements that consumers wanted.

As early as 2003 a handful of Apple engineers, who had done cutting-edge academic work with touch interfaces, had figured out how to put multitouch technology in a tablet. But the project was mothballed. “The story was that Steve wanted a device that he could use to read email while on the toilet. That was the extent of the product spec,” said Josh Strickon, one of the earliest engineers on that project. “But you couldn’t build a device with enough battery life to take out of the house, and you couldn’t get a chip with enough graphics capability to make it useful. We spent a lot of time trying to figure out just what to do.” Before joining Apple in 2003, Strickon had been a student at MIT for a decade, getting his B.A., master’s, and Ph.D. in engineering. He was a huge proponent of touchscreen technology, having built a multitouch device for his master’s thesis. But he said given the lack of consensus at Apple about what to do with the prototypes he and his fellow engineers developed, he left the company in 2004 thinking it wasn’t going to do anything with multitouch.

Tim Bucher, one of Apple’s top executives at the time and the company’s biggest multitouch proponent, said part of the problem was that the prototypes they were building used software, OS X, that was designed to be used with a mouse, not a finger. “We were using ten- or twelve-inch screens with Mac mini–like guts … and then you would launch these demos that would do the different multitouch gestures. One demo was a keyboard application that would rise from the bottom—very much what ended up shipping in the iPhone two years later. But it wasn’t very pretty. It was very much wires, chewing gum, and bailing wire. It left too much to the imagination.” Bucher, who has never before talked publicly about his work at Apple, had hoped to keep pushing the effort forward, but he lost a political battle with other top executives and left Apple in early 2005.

Few even thought about making touchscreen technology the centerpiece of a new kind of phone until Jobs started pushing the idea in mid-2005. “He said, ‘Tony, come over here. Here’s something we’re working on. What do you think? Do you think we could make a phone out of this?’” Fadell said. “So we sat there and played with the demo (he was showing me) for a while. It was huge. It filled the room. There was a projector mounted on the ceiling and it would project the Mac screen onto this surface that was maybe three or four feet square. Then you could touch the Mac screen and move things around and draw on it. I knew about it [the touchscreen prototype], but I didn’t know about it in detail because it was a Mac thing [Fadell ran the iPod division]. So we all sat down and had a serious discussion about it—about what could be done.”

Fadell had serious doubts about whether such an enormous prototype could be shrunk so much. But he also knew better than to answer no to Steve Jobs. He was one of Apple’s superstars, and he didn’t get there by being timid about thorny technological problems. He’d joined Apple in 2001 as a consultant to help build the first iPod. By 2005, with iPod sales exploding, he had become, at thirty-six, arguably the single most important line executive at the company.

“I understood how it could be done,” Fadell said. “But it’s one thing to think that, and another to take a room full of special, one-off gear and make a million phone-sized versions of that in a cost-effective, reliable manner.” The to-do list was exhausting just to think about. “You had to go to LCD vendors [companies that make the screens that go in computer monitors and TVs] who knew how to embed technology like this in glass; you had to find time on their line; and then you had to come up with compensation and calibrating algorithms to keep the pixel electronics [in the LCD] from generating all kinds of noise in the touchscreen [sitting on top of it.] It was a whole project just to make the touchscreen device. We tried two or three ways of actually making the touchscreen until we could make one in enough volume that would work.”

Shrinking OS X and building a multitouch screen, while innovative and difficult, were at least within the skills Apple had already mastered as a corporation. No one was better equipped to rethink OS X’s design. Apple knew LCD manufacturers because it put an LCD in every laptop and iPod. The peculiarities of mobile phone physics, on the other hand, were an entirely new field, and it took those working on the iPhone into 2006 to realize how little they knew.

To ensure the iPhone’s19 tiny antenna could do its job effectively, Apple spent millions buying and assembling special robot-equipped testing rooms. To make sure the iPhone didn’t generate too much radiation, Apple built models of human heads—complete with goo to simulate brain density—and measured the effects. To predict the iPhone’s performance on a network, Apple engineers bought nearly a dozen server-size radio-frequency simulators for millions of dollars apiece. One senior executive believes Apple spent more than $150 million building the first iPhone.

The first iPhone prototype was not ambitious. Jobs hoped that he would be able to develop a touchscreen iPhone running OS X. But in 2005 he had no idea how long that would take. So Apple’s first iPhone looked very much like the joke slide Jobs had put up when introducing the real iPhone—an iPod with an old fashioned rotary dial on it. The prototype was an iPod with a phone radio that used the iPod click wheel as a dialer. It grew out of the work Steve Sakoman had used to pitch Jobs on a phone project in the first place. “It was an easy way to get to market, but it was not cool like the devices we have today,” Grignon said. He worked for Sakoman at the time and is one of the names on the click wheel dialer patent.

The second iPhone prototype in early 2006 was much closer to what Jobs would ultimately unveil. It incorporated a touchscreen and OS X, but it was made entirely of brushed aluminum. Jobs and Ive were exceedingly proud of it. But since neither of them were experts in the physics of radio waves, they hadn’t realized they’d created a beautiful brick. Radio waves don’t travel through metal well. “I and Ruben Caballero [Apple’s antenna expert] had to go up to the boardroom and explain to Steve and Ive that you cannot put radio waves through metal,” said Phil Kearney, one of Bell’s deputies, who left in 2008. “And it was not an easy explanation. Most of the designers are artists. The last science class they took was in eighth grade. But they have a lot of power at Apple. So they ask, ‘Why can’t we just make a little seam for the radio waves to escape through?’ And you have to explain to them why you just can’t.”

Jon Rubinstein, Apple’s top hardware executive then and known to many as the Podfather for driving the creation and development in the iPod, said there were even long discussions about how big the phone would be. “I was actually pushing to do two sizes—to have a regular iPhone and an iPhone mini like we had with the iPod. I thought one could be a smartphone and one could be a dumber phone. But we never got a lot of traction on the small one, and in order to do one of these projects you really need to put all your wood behind one arrow.”

It all made the iPhone20 project so complex that it occasionally threatened to derail the entire corporation. Many of the top engineers in the company were being sucked into the project, forcing slowdowns in the timetables of other projects. Had the iPhone been a dud or not gotten off the ground at all, Apple would have had no other big products ready to announce for a long time. Worse, its top engineers, frustrated by the failure, would have left Apple for other jobs, according to 2012 testimony by Scott Forstall, one of Apple’s top executives on the project and Apple’s head of iOS software until October 2012. He testified during the Apple v. Samsung patent trial.

Even Apple’s experience designing screens for iPods didn’t help the company design the iPhone screen. After much debate, Jobs decided the iPhone screen needed to be made of hard Plexiglas. He and his executives thought a glass screen would shatter when dropped—until Jobs saw how scratched a plastic prototype had gotten when he carried it around in his pocket with his keys. “Jobs goes, ‘Look at this. Look at this. What’s with the screen?’” said an executive who witnessed the exchange. “And the guy [a midlevel executive] takes the prototype and says, ‘Well, Steve, we have a glass prototype, but it fails the one-meter drop test one hundred out of one hundred times, and blah blah blah …’ Jobs cuts him off and says, ‘I just want to know if you are going to make the fucking thing work.’”

There was a good reason the executive argued with Jobs. This was September 2006. The iPhone would be unveiled in four months. And Jobs wanted to rethink the phone’s most prominent component.

Through his friend21 John Seely Brown, Jobs reached out to Wendell Weeks, the CEO of glassmaker Corning in upstate New York, invited him to Cupertino, and told him he needed the hardest glass ever made for the screen of the iPhone. Weeks told him about a process developed for fighter-jet cockpits in the 1960s. But Weeks said the Defense Department never ended up using the material, known as gorilla glass, so it had never found a market. He said Corning had stopped making it decades ago. Jobs wanted Weeks to start production immediately, convincing Weeks that he could in fact get Jobs the glass he needed in six months. Weeks told Jobs’s biographer Walter Isaacson that he remains amazed at what Jobs convinced him to do. Corning took a factory in Harrodsburg, Kentucky, that had been making LCD displays and converted it, getting Jobs the glass he needed on time. “We produced glass that had never been made. We put our best scientists and engineers on it and we just made it work,” Weeks said.

“I still remember PC Magazine doing a screen durability test once the phone came out in July 2007,” said Bob Borchers, Apple’s then head of iPhone marketing. “They put it in a bag of coins and shook it up. They put keys in the bag and shook it up. They dropped it a few times on a carpet. And then they went out on the street and dropped it on the concrete three times. It survived all of that. We all laughed, looked at each other, and said, ‘Right, we knew that.’”

On top of all that, Jobs’s obsession with secrecy meant that despite being exhausted from working eighty hours a week, the few hundred engineers and designers working on the project couldn’t talk about the project to anyone else. If Apple found out you’d told a friend in a bar, or even your spouse, you could be fired. Before a manager could ask you to join the project, you had to sign a nondisclosure agreement in his office. Then, after he told you what the project was, you had to sign another document confirming that you had indeed signed the NDA and would tell no one. “We put a sign on over the front door of the iPhone building that said FIGHT CLUB because the first rule of fight club is you don’t talk about fight club,” Forstall would explain in his court testimony. “Steve didn’t want22 to hire anyone from outside of Apple to work on the software, but he said I could hire anyone in the company I wanted,” Forstall said. “So I’d bring recruits into my office. Sit them down and tell them, ‘You are a superstar at Apple. Whatever you are doing now, you’ll do fine. But I have another project that I want you to consider. I can’t tell you what it is. All I can say is that you will have to give up untold nights and weekends and that you will work harder than you have ever worked in your life.”

“My favorite part,” said one of the early iPhone engineers, “was what all the vendors said the day after the unveiling.” Big companies such as Marvell Electronics, which made the Wi-Fi radio chip, and CSR, which provided the Bluetooth radio chip, hadn’t been told they were going to be in a new phone. They thought they were going to be in a new iPod. “We actually had fake schematics and fake industrial designs,” the engineer said. Grignon said that Apple even went as far as to impersonate employees of another company when they traveled, especially to Cingular (and, later, AT&T) in Texas. “The whole thing was you didn’t want the receptionist or whoever happens to be walking by to see all [preprinted Apple] badges lying out.”