📱iPhone: The Device Steve Jobs Didn’t Want to Build

[music] Honestly, I didn't know how hard we had to jack back in the day without technology. I mean back in the day I'm talking like 2007, but yeah, back in the day. Jack, if you wanted to know a movie is playing, you had to call Mr. Movie Phone. Um, the phone from your parents place. At 7 o'clock, you can watch Death Blow. But then it was even worse if you were abroad. How would you connect to technology, Jack? Nick, when I visited Prague to see my buddy there, I didn't have his address. So I had to find an internet cafe, cough up a couple of croners, log into my email, and find the address, and then find a map to locate where that is in the city. Basically an entire brick and mortar industry that was based on the idea that you needed to access email. Jack and I are talking about the gadget that changed all of that, though. The one that kicked off the smartphone revolution and that made apps a thing, because before this product, apps were just something you ordered at a restaurant. This is the most important invention of the 21st century and the most profitable product of all time. And we are calling it iPhone. Apple has sold over 2.3 billion iPhones and over 1.5 billion people use one every single day. That is nearly a fifth of humanity. After its launch in 2007, the iPhone turned Apple into the most valuable company in the world. And the iPhone is Apple's very own perfectly formed profit puppy still today. Apple sells around 200 billion dollars worth of iPhones every year. It is the best selling phone ever. But it's also the biggest selling computer, camera, GPS system, music player, and game console of all time too. iPhone is one of the rare Frankenstein creations to successfully merge multiple products into one and put them all in the palm of your hand. It freed us from clunky keyboards and it ushered in the pinch and swipe revolution. It created an entirely new economy, the app store. So without the iPhone or the app store, there might not be any Instagram or Tinder or TikTok. And all those apps helped the iPhone change your life. From boring daily tasks like cash and checks and hailing arrived, it's more exciting stuff like FaceTime and your grandpa in India or recording this entire podcast. The iPhone is the platform that led to all of it. But this story doesn't start where you'd expect. Steve Jobs, the guy off-incredited being the godfather of the iPhone, he actually hated the idea of Apple making a phone. That's right, the tech visionary who saw the future before anyone else thought that smartphones would never take off. This is a story about why you need to take a live and let diet approach to your ideas. And the stars of the story are a secret team named Project Purple. Plus, we'll tell you why in business, the one thing more important than storytelling is story selling. Here's why the iPhone is the best idea yet. From Wondery and T-boy, I'm Nick Martel and I'm Jack Krovici Kramer. And this is the best idea yet. The untold origin stories of the products you're obsessed with and the bold risk takers who made them go viral. You're coming out of Tower Records in downtown San Francisco, collecting a plastic bag with your new hall of CDs. Jack, I was trying to build up a credence clear water collection because John Fogrid's voice gets me every time. For me, it was Chumbo Wamba. I was pissing the night away at this stage of my life as we all were, as we all were. Well, you're Sony Discman, that's a portable CD player for everyone born after Y2K, is hungry. And you're going to feed it. But first, you want to find an internet cafe, where you can update your Geo City's profile on a grimy beige public computer. And you'll also want to see how your AOL stock is doing. Is this bull market ever going to end? I don't know, man, but I need a dial tone before you hit me up on that aim. You reach for your Palm Pilot PDA to update your to-do list. But before you can find your stylist and start jabbing at the black and white display, your Fanny Pack Vibrates. I don't know who's screen name this is. Uncle Leo? So you extend the antenna and you answer the call, but the reception is so bad? You can't make out what the caller is even saying before the call drops. This is the reality of being a digital nomad in the late 1990s. Tech feels like it's trying to be the future, but it's all still heavy, awkward, and just a bit too much. Oh, yeah. Being cut and edge, it is tough when you got to haul around 20 pounds of equipment and chargers. But as you are fumbling around with all those gadgets in that Fanny Pack, there is someone watching you from across the street. He's an intense looking guy. He's got ice blue eyes, cropped, bleached hair, and he's just shy of 30 years old. He's watching you struggle with all that cumbersome tech and he's inspired. That guy's name is Tony Fadau. And someday he'll be known as the Podfather. Tony is a few years away from inventing the iPod, the revolutionary digital music player that saved Apple from near bankruptcy. And he'll end up playing a huge part in creating the iPhone. We'll get to that in a bit. Tony's been a total Apple fanboy since he was a kid in the late 1970s. When most preteen boys, veterans were plastered with Julius Irving or AC/DC posters. Tony, he's got Steve Wozniak quotes and pictures of circuit boards up on his walls. Tony wants in on the new world of computers. So in 1981, 12-year-old Tony gets a summer job as a golf caddy and he earns enough money to buy an Apple II. The computer that put Apple on the map. Before it, computers were a business product. They were the things the science labs and fortune 500 firms. But the Apple II, that was the first true consumer computer. It was something people wanted to show off in their homes next to their high-fi stereos and their colored TVs. It's boxy and it's beige, except for the rainbow-colored Apple logo. But by 1980 standards, this is how the future looks and it looks pretty good. So Tony stays up night after night. And code "line by lines." Sounds brutal. It's a passion for Tony and it carries him through college where he earns a bachelor's degree in computer engineering. And by the time he graduates in 1991, there's this new thing that's getting tech nerds like Tony, all hot and body. It's called the Internet. Well, at this point, only a few people are using the Internet. There's as much thing as like a web browser. This is all text-based. The only people online are academics, government workers and bedroom hackers like Tony. Then Tony spots something in one of his computer magazines that makes him do a double-tick. A bunch of the geniuses who built the Apple II have left Apple and started their own company. They're calling it "General Magic." They're a mission to create a new kind of computer, one you can hold in your hand. These General Magic people actually tried building a mobile device while they were still in Apple, but they couldn't get the project greenlit. Times were tough back then. Steve Jobs have been booted by the board in 1985 and he doesn't come back to Apple until 1997. So in 1990, Saun Steve, Apple is struggling. So when Tony Fidel moves to Silicon Valley, he bleaches his hair to look as cyberpunk as possible and he lands a job with General Magic. And at first, he is awestruck. But soon, Tony realizes that all these creative geniuses, trolling around the office, are full of ideas, but totally lacking focus. There's no one at the top setting a clear vision, so they're spending plenty of time experimenting, but not enough time implementing. So when General Magic flames out, Tony jumpship to Phil's, which is exactly when Tony discovers a new phenomenon, digital music, specifically MP3s. Now for anyone who doesn't remember yelling at their sister to get off the phone so I can download some Dr. Dre. In the last years of the 20th century, the internet was slow and confusing and most households only had one connection. Even so, everyone wanted a piece of it. Those speeds, they were just way too slow for Jack to download anything before someone needed to use the phone line. But 3 minute MP3 music files, they would only take a few minutes to download. So people started sharing music online and downloading it onto their computers. Most famously through a website called Napster. Napster! I remember getting an MP3 player downloading an entire Credence album and listening to it on the subway on the way to school. Was the music industry happy that you were freely downloading CCR's discography without any compensation to the artist? Nope. But Tony, he's on board with these MP3 players. They're way more convenient than lugging around those 208 sleeve binders of CDs that were always falling apart. But there's something that bothers Tony about the whole thing. Because finding and downloading these music files isn't only illegal, the websites are also sketchy. You never know if you're getting the live version of Free Bird with the 14 minute guitar solo or without it. So Tony gets an idea. How about a unified digital music player and online music store where you can purchase music legally? And then Tony takes that idea further. He actually starts shopping that idea around to investors. But when it comes to starting a company, the critical variable no one thinks about is timing. And this happens to be the year 2000. in aka.com bubble? Yeah, that just burst. So he pitches to 80 venture capitalists and gets 80 rejections. Because VCs just lost a ton of money with the dot-com bubble, they're pretty much closed for business. But it turns out that Tony is not the only one thinking about a better way to do a digital music business, and pretty soon a certain childhood hero of his gets wind of Tony's idea. Steve Jobs has been back in charge at Apple for three years, and since returning to the company that he co-founded and then was fired from, he's pulled the company out of its death spiral with a banger of a new product. It's the iMac. Whoa. These translucent, candy-colored, bulbous, desktop computers are the opposite of the beige boxes that IBM, Dell, and every other computer maker is cranking out. I actually got a lime green one because I just loved Kila and Pi. Well, pretty soon, iMac starts sprouting up in design studios, ad agencies, and pretty much any office that encourages cargo pants and midday meditation sessions. Computer labs across America start looking like a bag of skittles exploded. Apple's making products that don't look like functional appliances. They look like fashionable furniture. And that opens up a whole new market and customer for computers. Apple is back, baby. It's 1998. The year the iMac came out. And Apple stock more than triples that year, but some context. Although the iMac was the hipster's choice for computer, by the early 2000s, Apple still only has 3% market share of computers. So Steve's looking at these numbers and he's like, "You know what? We gotta find a way to diversify." Like Tony, Steve also happens to be interested in digital music. So when Steve gets wind of Tony's idea for the grand ad of MP3 players, coupled with a legit digital music marketplace, Steve makes Tony's boyhood dreams come true and beams him aboard the Apple mothership to head up this new project. And less than a year later, in the year 2001, Apple releases the iPod. iPod. A thousand songs in your pocket. It is sleek, it is easy to use, it is innovative jack. Remember the click wheel? I felt like a DJ turned in that thing. Well, shortly after that comes the iTunes store. Finally, an easy legal way to get your music on your iPod. The year the iPod launches, Apple's revenue was just under $4 billion. Five years later, it hits 20 billion. And the iPod, it controls a whopping 3/4 of the entire MP3 player market. And it drove a 5X surge in Apple's total sales. The iPod success didn't just shake up the music industry. It reignited Steve Jobs status as a visionary. He was back, back, baby. And inside the company, it also made this new guy, Tony Fidel, the golden child of Apple. But Tony, he isn't celebrating for too long. Because Tony notices something that makes his bleached blonde locks stand on end. Mobile phones are getting smarter. They're even being marketed with a new term, smartphones. And you can do more with these new smartphones than just make calls, send text messages and break your high score on snake. These smartphones included the Motorola Q, the Samsung Blackjack and the Blackberry. The interfaces aren't great. And even if they support music files, it's still a hassle getting the music onto these phones. But Tony is looking three steps ahead. He sees the writing on the wall. Eventually, these phones are going to be as good as iPods that play in music files. And when that happens, no one's going to need a phone and an iPod. Tony knows the smartphone will eventually kill the iPod. Apple needs to make a phone because the iPods days are numbered. There's just one major problem. Steve Jobs hates the idea of Apple making a phone. In fact, he thinks smartphones are a niche market only for stuffy business execs. When Steve wants to yell at you, he picks up an old school landline and he does it the old fashioned way. Or he just screams across the office to make a public demonstration of fear. Someone Tony tell Steve they've got to make a phone before the iPod gets overtaken. Steve just leans back, gives Tony a death stare with those piercing sharp eyebrows and says something like, "Apple is not a phone company." Steve and his turtleneck are not budget. Apple will not make a phone. Steve doesn't care what Tony's saying. He's got a zero buzz in and the iPod volume cranked up to 11. Bob in his head to his own beat. Actually, probably, to yell a submarine. Meanwhile, Samsung, Nokia, Motorola, Blackberry, they are closing in and they are packing music into their phones, threatening to make the iPod in-depth or obsolete. I'm Indra Vama and in the latest season of The Spy Who, we open the file on Larry Chin, The Spy Who Outplayed Nixon. For decades, Chin was embedded deep inside US intelligence. Chin comes an opportunity, Richard Nixon's secret plan to reopen relations with China. Information Chin can place directly into Mao's hands. But the CIA has a weapon of their own. A Chinese mole ready to defect. How long until Chin's gig is up? Follow The Spy Who Now, wherever you listen to podcasts. One infinite loop is the most famous address in Silicon Valley. Inside, sunlight streams into the atrium. Apple employees sprawl on the wide couches and plush bean bags doing their best to think different. In a side office, a young coder named Eric returns from the cafe, clutching a green power smoothie for his colleague Nadia. But her desk is empty. Her bag is gone. Where is Nadia? Eric asks her coworker. Hello. She was here a minute ago. Nadia doesn't show up for the rest of the day. Or the next. Eric's been here in whispers about similar disappearances across the Apple campus. Hot shot engineers are just vanishing without a trace. There are plenty of rumors and there's plenty of speculation. But one phrase just keeps cropping up. Project Purple. Eric feels his heartbeat faster. Project Purple. The secret everyone pretends not to know about. It's taken his friend. Now it seems all too real. Project Purple. It's actually the code name for Apple's newest project. It's 2005 and Steve Jobs has finally given the go-ed to an Apple-made phone. But remember, Steve, he's been dead set against making a phone. So Jack, what changed his mind? Well, the course of phone advocates has grown significantly. Besides podfather Tony Fidel, other leaders have been telling Steve that phones are the future. The late night phone call that lasted hours, an Apple VP named Michael Bell finally convinces Steve to change course on the phone. Steve Jobs, yeah, he's opinionated, he's combative, but he's also able to admit when he is wrong. Pretty soon he goes all in and Project Purple is born. The best minds in business, as we always say, change their minds. But for Project Purple, only the best employees are invited. And Steve wants absolute secrecy. Just when people across Apple start disappearing, Project Purple is the tech industry's Manhattan project. Well, they're not being kidnapped, they're being pitched. But the pitch, it doesn't appeal to everyone and it goes something like this. Hey, would you like to come and work on a project that's going to be the hardest thing you've ever done? You're going to lose sleep, damage relationships, and it's going to last at least two growing years. Oh, and you can't tell your former colleagues why you've suddenly left your department. You can't tell anyone anything about the project, actually. Not your friends, not your spouse, not your therapist, not even your dog. Also, we can't tell you anything about the project until you agree to it. And you need to decide right now. Are you in or are you out? This is a real blue pill, red pill moment. Now if you say yes, you immediately sign an NDA. Then you learn what Project Purple is. Then straight away, you have to sign a second NDA to confirm that you signed the first NDA and that you still promise not to tell a soul. This extreme secrecy, it's actually quite strategic. This is how Apple manages to surprise everyone when they unveil new products. Other companies have leaks, but Apple is notoriously watertight. One moment, you're sitting at your desk, checking your gage chart. The next, you're being led through a series of key card access doors to get to Project Purple's lab. And it better bring you jammies because insiders call it the purple dorm. You're spending the night. Okay, Marfius, red pill. We're in. Guess who's already picked out his bed in the purple dorm? Is Tony Fidel, the pod father himself. Now you'd think he'd look happier. Now that Steve's finally gotten behind the Apple phone, but he's looking stressed. He's cooped up with his Project Purple pals. Tony is stressing about how to add a phone function to an iPod. They've actually gotten a prototype already. And that's the problem. From the outside, this thing looks like an iPod. It's still got that wonderful feeling and wonderful sounding click wheel. But while a click wheel on the iPod was a thing of elegant beauty on this new Frankenstein iPod phone prototype thingy, it is an abomination. The more they work on it, the worse it gets. Tony has a sinking feeling in his stomach. That iPod click wheel that they become so attached to. It's fine for scrolling through your catalog of Janet Jackson bootlegs. But for this new smartphone, it's a nightmare. Dowling phone numbers is bad enough. But try writing a text message with a click wheel. The engineers try all sorts of things to solve this problem. They even add a keypad on the back. they can't put a physical keyboard on the phone like Blackberry does because Steve Jobs hates tiny little keyboards. Shocker, a keyboard means that you lose half your screen real estate and you've now got these permanent little keys that don't work for every app. It's actually a red line for Steve, and this time there is no convincing him otherwise. Tony saved Apple with the iPod, but if this phone flops, he'll be the guy that killed Apple. And Steve, he'll be the guy who kills him. While Tony's sweating bullets with Project Purple, Steve has been setting up another project, a secret project within a project, and it all starts with Johnny Ive. Arguably the most important designer of our age, he's the industrial design genius who came up with the sublime combination of form and function that is unmistakably Apple. The iMac, that sleek, colorful new desktop computer that brought Apple back from a obscurity, that design was Johnny Ive's first big hit over at Apple. Ive's biggest obsession is buttons. He thinks that buttons are the perfect combination of fashion and function. He's a butterfly, and though Johnny Ive loves the simple humble button, when it comes to making sleek tech, he ironically wants to get rid of him. Hence, the original iPod interface is centered on that click wheel. But finally, Johnny thinks he may be able to eliminate buttons forever, and he wants Steve to come and see it. So Johnny takes Steve down into the basement of Apple HQ. He flicks on the lights and reveals this strange new device. It looks like an air hockey table, with a projector hanging above it. The projector casts an enlarged image of a computer's home screen onto a giant track pad. When Johnny taps one of the projected icons with his finger, it opens a file. He pinches his fingers together and pulls them apart, and the document zooms in, and zooms out. This is basically a giant early mock-up of the iPhone home screen. It's huge, it's ugly, and it took a heck of a lot of work to get it this far. It's important to note here, this isn't a touch screen, it's a giant track pad, like a crude version of the one you probably have on your laptop right now. But Steve, he can see through the crudeness to the underlying beauty. They call this interface multi-touch, and it is light years ahead of the other touch interfaces. Remember Blackberry? They're like clack clackin' away with 35 different buttons, and computers are still using mice. Multi-touch might be the most important technology at Apple you've never heard of, because those other interfaces only respond to one touch point. Your finger or stylus can basically only do one thing. Click, but with multi-touch, you can use your fingers to do all sorts of subtle movements, a two-finger pinch to zoom in and out, or three-finger swipe to get back to your home screen. Now, what few know is that this multi-touch interface was actually created by an overlooked team in Apple's basement called Enri, which stands for Explore New Rich Interactions. They'd actually been tinkering with a new, more natural way to interact with desktop computers, despite being relegated to a room with no windows literally below everybody else like engineering moles. Steve immediately sees potential. What if they make this multi-touch interface work on a screen instead of a trackpad, and then shrink that screen down to fit on a phone? Then the phone won't need a keyboard at all. In fact, it won't need any keys. For this new Apple phone, Steve orders the touchscreen interface, which means the beloved click wheel of the iPod is out. The most iconic element of Apple's best-selling product to date is basically set up state into retirement. Meanwhile, Tony Fidel is losing his mind trying to turn the iPod into a phone. His bleached hair is turning gray with stress. He finally works up the courage to tell Steve this just isn't working. Oh boy. He braces himself for that famous Steve Jobs fire in Brimstone, but instead, Steve just looks at him and smiles. It is time for Tony to now see the multi-touch prototype. So Steve brings him down to that windows basement and turns on the lights. Tony is in awe. But when Steve tells him that they've got to shrink this interface down and fit it in a really cool, really small, really thin phone, Tony's jaw hits the floor. Looks like Tony is going to be spending even more time in the purple door. Current touchscreen tech just isn't up to the task of detecting all that pinching and swiping. Touch screens of this era, they use something called resistive technology, which is very pressure sensitive. Picture when you go to your local ATM machine. You know, when you're like tapping away at it to put in your password and you're like, "Three, I press three." Yeah, you have to like use your thumb to get it to react to your touch. Well, those ATMs are using that old school tech. The ones they have to jab three or four times until they register your choice. And then half the time they're getting them wrong. Fortunately for Tony, the N-Regroup who created the multi-touch interface, they have a new type of touchscreen known as capacitive. Instead of using pressure, capacitive screens detect touch using the electrical conductivity of the human body. So when a finger comes into contact with screen, it detects it no matter what. Your body's natural electric signal disturbs the screen's electrostatic field. Even better, it can tell one more than one finger is touching the screen, and where they are in relation to each other. This screen tech is perfect for multi-touch. If the resistive screen allows for the expressiveness of a chimpanzee with a paintbrush, then the capacitive touchscreen is for a Picasso with a Michael's Arts and Crafts expense account. But making a phone that gets all this to work together is a mind-bogglingly complex challenge. They need thousands of people working on this all at the same time. And it's not just the screen and the multi-touch tech, the phone will basically be a computer. This thing is also going to need an operating system. And that is going to require an incredible feat of miniaturizing as well. Plus, Steve is insisting on a glass screen instead of a plastic screen. So they have to source a new kind of scratch-resistant glass, and he doesn't want an antenna stick ahead of his phone. So they have to find a way to put it in the body without dampening the signal. So Tony's to-do list is longer than the user terms in an iTunes update, making for a powder cake of intense pressure. There is yelling, there is crying, there is exhaustion, all the things they wanted them about before he signed the NDA. Don't even know how to start a little ragged. That gray hair sort of took over more of his head. And to top it all off, Steve Jobs wants to announce the iPhone in January 2007. And he wants to launch date six months after that. But as 2006 draws to an end, Tony and his team don't even have a working prototype. Steve Jobs strides on to the stage of San Francisco's Musconi Center. The crowd of 4,000 Apple Devotees erupts at their Turtle Neck Cura. They know something big is coming, but they have no idea. They're about to witness a moment that will forever change technology and the world as we know it. After the audience finally settles, Steve begins his introduction. Every once in a while, a revolutionary product comes along, that changes everything. Over the next 80 minutes, minds are blown. Dreams are reshaped. And tech nerds weep with joy over the four and a half inch by two and a half inch, curved rectangle of polished aluminum and glass that Steve Jobs calls the iPhone. After introducing the audience to the user interface tech that makes it all possible, called multi-touch, Steve says, "And yeah, we patented the hell out of it." Not since Moses brought the 10 Commandments down from Mount Sinai as there were such a rapturous response to a rectangular slab. It is a rhapsody of sleek minimalism. There's no antenna, there's no keyboard. You don't look like a first-year finance analyst, click-clack-and-away on a blackberry. It's just a sleek sheen of metal and glass with a subtle solitary home button just beneath the screen. To the crowd watching Steve Jobs, that first iPhone looks like something Tony Stark would order his Earl Grey on. But Steve's also showing that this iPhone has substance and style. The crowd ooze and oz as he taps and swipes and zooms and pans through his address book, his photos and his web pages. But I see what you're saying, Jack. It's not just what he's showing. It's how he's showing it, right? Like the audience gasps when Steve hits reply to an email and a virtual keyboard swooshes onto the screen. And then Steve effortlessly taps out a few little words. What we're going to do is get rid of all these buttons and just make a giant screen. It's so funny watching this presentation nearly 20 years later and seeing people absolutely lose their minds over these swipes that we take for granted. Even the slide to unlock demonstration got a gasp from the audience. I mean, Jack, can you imagine what it'll be like when they see angry birds? Oh, but Steve's not done. His show-stopping stunt is pulling up Google Maps. Apple Maps is still five years away, by the way. And he uses Google Maps to find a nearby Starbucks. Then he calls that Starbucks and gets an unsuspecting barista online in order for 4,000 lattes to go. Why? The audience is loving it. A barista not so much though. And then he says, just kidding, wrong number and hangs up the phone. Remember looking up a business on your phone, that's like every day to us now, but to the audience. Steve is performing PT Barnum levels of showmanship. Funny thing about that iPhone Steve's waiting around. It's actually nowhere near finished. This is a one-off device they made specifically for this product unveil event. It's got extra circuitry crammed inside to make sure that everything Steve's doing runs smoothly. And the software, at this point, it's got more bugs than a mattress at a youth hostel. This phone is actually so flaky that the engineers spent hours of trial and error trying to find a golden path for Steve to follow. That's a tech term for specific demo sequence that won't make the iPhone crash. Like if Steve goes off script at all, let's say he opens the photo app instead of iTunes, then this phone could just seize up and break on the spot, on stage, in front of 4,000 people. iPhone's reputation, the device that Apple has bet the far more will be in the gutter in one errant swipe. Even Apple's stock is nimbley waiting as investors digest whether this is a good product or bad product. Steve looks confident on stage, but he's actually walking a technological tightrope. Steve Jobs wasn't being needlessly reckless here. The iPhone, yeah, it wasn't finished and putting on that demonstration, it was a risky move. But Steve knew that any delay could have handed an advantage to his competitors. If you wait for perfection, you might miss your whole moment or never launch it all. Don't let perfect be the enemy of the good, or you'll never launch anything. Luckily, the presentation goes flawlessly. Everyone is hyped, but for Apple engineers' Schfitzing backstage, the celebration is short. They're strung out after two years of punishing production schedules and impossible deadlines. There have been arguments, burnouts, ruin relationships, crying in the project purple bathroom and unremitting stress. And they're still not done, because they have just six months to pull everything together and make an iPhone, and they can ship in the millions, somehow, against all the odds, working around the clock literally. They make the deadline. Sure, some corners are strategically cut to make that calendar day. Like the camera's only two megapixels, it has no flash or zoom. No problem, we can update that in the second version. You can't record video on the first iPhone. Hey, you can't do that in the blackberry anyway either, man. There's no GPS, it only runs on the painfully slowed 2G network. Also, Jack, the price $499, that is twice as expensive as the other smartphones. And AT&T has an exclusive deal with Apple, making it the only carrier that the iPhone will work with. It's hard to believe now that you could only get the iPhone on AT&T, but back then, no one knew if the iPhone would be ahead. So this was actually a big gamble for the mobile service provider. Everyone's taken a huge risk on this thing. So Jack, it's Friday, June 29, 2007. AT&T and Apple across the United States are opening their doors to sell the first phones. And by the end of the weekend, we get the first numbers and how does the iPhone sell? A quarter of a million units in the first weekend. And by the end of the summer, it's over a million. Not too shabby. AT&T's exclusive deal pays off. The last four years long, and it gave AT&T nearly twice the average revenue per user of all the other carriers. But Jack, I'm looking at this original iPhone and there's something critical missing from the home screen. It's the App Store. Because Apple hasn't actually made one yet. All those early iPhone adopters, they only got 16 apps they could play around with. No App Store means no way to spice up your iPhone. And once the excitement of actually having an iPhone wears off, lots of users get frustrated. They've got this groundbreaking piece of technology in their pocket, but they can't take full advantage of it. So Jack, there is demand for an App marketplace. An App Store, if you will. The users, they want it. Software developers, they want it. Lots of people at Apple. Yeah, they want it too. But Jack, why isn't there an App Store? You should probably be able to guess by now. Yeah, I think I know what you're going to say. Steve Jobs. Yeah, he's against it. Steve Jobs wants nothing to do with an App Store. He thinks it's a distraction and that will open the floodgates for third parties to ruin the iPhone. He thinks people are going to make like fart apps, which they eventually do. But Tony's for Dell and several Apple board members argue that opening the iPhone to outside developers means more innovation. And way more apps than Apple could ever hope to build themselves. People are already jail breaking their iPhones, basically hacking the operating system to run unauthorized apps created by independent developers. People are willing to break their warranties, maybe even their iPhones, because they simply want more apps. Apple doesn't get any revenue from this. But with an App Store, it could get a piece of every single sale. Like cars driving on the turnpike, it could have an entirely new revenue source, a digital toll. Another factor here, the success of Apple's iTunes Store. That's a huge profit puppy for the company. It actually helped rescue the entire music industry from privacy. If a digital marketplace for music is such a game changer for the business, then why not an App Store? If all these carrots aren't enough to convince Steve, there's a huge stick on the horizon too. Google announces its working on its own mobile platform called Android. And it's an open platform, meaning anyone could make apps for it. Steve is not happy about Android. And the thought of millions of frustrated iPhone users jumping to the competition makes him see. Oh, Jack, letting Google steal iPhones' thunder? No way Steve Jobs is going to let that one happen. So on July 10th, 2008, a little over a year since the iPhone's debut, Apple launches the App Store. The results, instant hit, creating an entirely new economy of mobile apps. The App Store starts out with 500 apps. And you'll later, it's got 50,000 apps, and 1.5 billion downloads. Today, there are over 1.5 million apps available. Total downloads are in the hundreds of billions. Financially, it also happens to be the most lucrative toll since the Romans control the roads. Yeah, with Apple taking a sweet 30% cut of sales and app subscriptions. That 30% cut, it's actually led to lawsuits from the likes of Spotify and others. Because it is basically a pay to play toll that all apps need to pay for access to the store. We call it the app tax. And it generates huge revenue for Apple. In fact, the App Store is Apple's most consistent product. But besties, the App Store didn't just supercharge Apple's revenue. It changed society forever. Nothing would ever be the same again after this product. From ordering pizza to finding a day to depositing your paycheck. If you met your fiancee and hinge, you better make sure to thank Tony Fidel and Project Purple at your wedding. It was truly the App Store that turned the iPhone into so much more than a phone. The launch of the App Store wasn't the end of iPhone's innovation. The second gen iPhone had GPS. The third gen had a three megapixel camera that rivaled dedicated digital cameras and paid the way for Instagram. The iPhone 4 added a front-facing camera lens for easier facetimes and selfies. And the iPhone 4S gave us love and to hate it. Siri. Hey, I heard that. Sorry about that, Arbath. You're doing great, you're doing great. This breakneck pace has kept Apple's stressed-out engineers busy. But you know what? It also kept Apple one step ahead of Google's android the whole time. And a year after iPhone's debut, Blackberry Stock began to fall. Over 60% in one single year, and it just never recovered. Sadly, the iPhone 4S was the last iPhone Steve Jobs would see released before his death in 2011. Johnny Ives stuck around in the Apple to bring us the iPad and the Apple Watch. And then he left in 2019 and founded the design studio called Love From, working with brands like Ferrari and Airbnb, straight out of San Francisco. As for Tony Fidel, he worked on the first three generations of the iPhone and then left Apple to found Nest Labs, where he made another device with a satisfying clicky wheel, the Nest thermostat. And a few years later, he sold Nest's innovative thermostats for $3.2 billion to Google. In many ways, the iPhone really began with a bleached hair, music loving kid with a passion for gadgets. The dynamic we've downloaded the newest update on the story of the iPhone. What's your takeaway? To quote one of Steve Jobs' favorite musicians, Paul McCartney, "Live and let die." Go on. Part of being a founder is the ruthless ability to sadly kill your darlings. Even if you like them, the project's initiatives or features that are bad for your business, you just gotta let them go. Like the iPod click wheel, it's the perfect example of that. This was the defining user interface of the iPod that Steve Jobs and everyone loved, but Steve knew it just wouldn't work on a phone, so sadly, he killed it. It must've been tough to kill his baby, thought he did it. Jack, what about you? The most important skill in business is story selling. This is our tag on a technique you may have learned from your high school English teacher about Goodradi, "Show Don't Tell." Steve Jobs' most remarkable skill was story selling. And we saw it at the first iPhone launch event. He brought that event to life by showing all the ways that the iPhone could improve your life. His pitch was to let you experience the product with him, not just describe it to you, and that's why people rushed straight out and pre-ordered one. If he just stood there with a PowerPoint and told everyone, "Hey, you can check Google Maps, you can call people, you can order food from your pocket," that just wouldn't have landed. There wouldn't have been record sales. Steve's ability to story sell is what brought Apple, Revenue, Market Chair, and the best employees. And whatever job you have to sell something, tell a story. Story sell. And Steve Jobs was the master of story selling. But one more thing. (laughs) Before we go yet, he's just telling for our favorite part of the show, the best facts yet. These are the hero stats, the facts, and the surprises we discovered in our research and couldn't fit into the story. So we'll give him an empty an out. Whenever you see an iPhone screen in an ad, check the clock on that iPhone because it will almost certainly be set to 9.41 AM and why is that Jack? That's a nod to the exact time on January 9th, 2007 that Steve Jobs unveiled the iPhone to the world. Yeah, and after the iPhone was launched, it was a boon for a lot of businesses, including a snack sausage maker. It turns out people were buying sausages to use as a meaty stylist for their iPhones, so they didn't have to take off their gloves in the cold weather. The result, a snack sausage company actually saw sales spike during the winter thanks to the iPhone. Here's another one. iPhone once survived the fall of 16,000 feet. Remember when that Alaska Airlines airplane, the door blew off shortly after taking off? Yeah, yeah. No one was injured by the way, but someone's fallen flew out that open door and it was still working when it was found on the ground. And that, my friends, is why the iPhone is the best idea yet. (upbeat music) If you've got a product you're obsessed with, but wish you knew its backstory, drop us a comment right here and we'll look into it for you. Oh, and don't forget to rate and review the podcast. That's how we grow the show. Coming up on the next episode of the Best Idea Yet, the surprising story behind the soft, fluffy marshmallow candy for all seasons. Beeps! The best idea yet is a production of Wanderer, hosted by me, Nick Martel, and me, Jack Kruvici Kramer. Our senior producers are Matt Beagle and Chris Gautier. Peter Arcoony is our additional senior producer. Our senior managing producer is Nick Ryan and Taylor Sniffen is our managing producer. Our associate producer and researcher is H. Carneley. This episode was written and produced by Adam Scuse. We use many sources in our research, including The One Device, the secret history of the iPhone by Brian Merchant. Sound design and mixing by Kelly Kramerik, fact checking by Erica Janik, music supervision by Scott Alazquez and Jolena Garcia for Free Sun Sync. Our theme song is Got That Feeling Again by Black Alac. Executive producers for Nick and Jack Studios are me, Nick Martel, and me, Jack Kruvici Kramer. Executive producers for Wandery are Dave Easton, Jenny Lauer Beckman, Erin O'Flayerty, and Marshall Louis. (upbeat music)