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BECOMING STEVE JOBS: HOW A RECKLESS UPSTART BECAME A VISIONARY LEADER

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INTRODUCTION

Book – BECOMING STEVE JOBS: HOW A RECKLESS UPSTART BECAME A VISIONARY LEADER

Writers – Brent Schlender and Rick Tetzeli

 Chapters – 1. Chapter 12: Two Decisions

2. Chapter 15: The Whole Widget

About: Becoming Steve Jobs is a biography. Emphasis here is on phases of life that shaped thought process and character, enabling Steve to lead creation of most valuable gadget in mankind’s history. The content book covers ranges from pre Apple years, Apple 2, Macintosh, NeXT, Pixar, iPod, iPhone, Stanford speech, sickness, and iPad to name some. It is derived from people like Steve’s wife Laurene, his close ally Jonathan Ive, one his most productive employees Tim Fadell etc. Style involves writing it in the form of interpretations of these people and some of Brent’s own, when they observed Steve in these phases.

The study group focuses on sections of book that specifically deal with iPhone development, and its conceptualization before that. We study about the following:

a.)   Five projects that acted as input for the “idea of iPhone”.

b.)   We then move on to next chapter, where specific challenges, related negotiations, demo, initial and later response, plus overall impact of iPhone is discussed.

a.) is mostly covered in Chapter 12, and b.) in Chapter 15. To enable greater focus, we will skip some portions of chapter 12. Exact details of sections will be explained in Schedule related post in this thread. Chapter 15 is the core, and will be studied to the fullest. Last week will be reserved for conclusion by the participants.

 

Note: Membership of objectivismonline forum is the prerequisite for participating here. Also please confirm your intent to participate in the thread whose link will appear in 3rd post of this thread.

References:

Book - http://www.amazon.com/Becoming-Steve-Jobs-Evolution-Visionary/dp/0385347405/ref=sr_1_1?ie=UTF8&qid=1454938114&sr=8-1&keywords=becoming+steve+jobs

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SCHEDULE

START WEEK - Monday, 11th July, 2016.
END WEEK - Monday, 8th August, 2016.

(Note: Pages in Kindle are not consistent. So refer also to starting and ending text for confirmation in the mentioned and nearby page.)


Week 1

Chapter 12 – Two Decisions (Part 1)

Monday, 11th July - Sunday, 18th July

- Section on Page 297 

Starting with “Apple did not have a formal research and development unit…”

To

Section on Page 301

Last paragraph starting with “Having 5 different projects sprout up around similar technological possibilities….”

Week 2

Chapter 12 – Two Decisions (Part 2)

Monday, 19th July - Sunday, 25th July

- Section on Page 306

Starting with “Out of the five cellphone and tablet related projects…”

To

Section on Page 311

Last Paragraph starting with “As he brainstormed with Jony, and as Fadell’s team started to get going on a real design…..”.

Week 3

Chapter 14 – The Whole Widget (Part 1)

Monday, 26th July - Sunday, 1st August

-       Starting with “Taking care of Catmull, Lasseter, and their staff was a deeply satisfying resolution….”

(Page 347)

To

-       Last paragraph starting with “After the development of iTunes, Steve had come to fully appreciate the power Apple now commanded”

(Page 353)

Week 4

Chapter 14 – The Whole Widget (Part 2)

Monday, 2nd Aug - Sunday, 8th August

-       Starting with “Steve was deeply focused during these years.”

 (Page 353)

To

-       Last paragraph starting with “In other words, Steve had just turned computer industry on its head.”

(Page 364)

Week 5

Conclusion

Monday, 9th Aug - Sunday, 15th August

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Good Morning, today is Monday 11th July. The main study-group starts now. I am posting corresponding content.

CHAPTER 12 – TWO DECISIONS

1.       How ideas developed in Apple : Apple did not have a formal research and development unit per se. Many a times engineers / designers made prototypes without the awareness of Steve. Once the key managers decided that project or technology had real potential, then Steve Jobs will check it out. After that, one of the following things could happen to idea :

 

a.)    Nothing, it would just sit in Steve’s brain.

b.)    He would connect it to something else he had seen.

c.)     Twist it to benefit entirely different project.

 

2.       Projects related to cell phone :

 

a.)    iTunes music store team led by Eddy Cue working on iTunes compatible music players in [existing] cellphones, and iTunes music store accessible right from cellphone headsets.

b.)    Engineers working on airport Wi-Fi Networking were asked by Steve to do some early research on cellular phone technology, although cellular and WiFi technology have very little in common.

 

 

3.       Reason for emphasis on iTunes compatible music players in cell phones, and followup action: After iPod became a hit, everybody carried mobile phone and iPod in their pocket. Eddy Cue concluded that integrating iTunes in cellphone was a software problem.

 

So they decided to collaborate with Motorolla because :

a.)    Motorolla dominated handset market with RAZR flip phone.

b.)    Motorolla was the supplier of Apple, providing microprocessors for Apple PCs till mid-1990s. And also, it was part of consortium that supplied Power PC chips to Mac until 2006.

c.)     Motorolla promised Apple that it would create ROKR phones to vehicle iTunes.

 

 

Edited by RohinGupta

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Continuing the study scheduled for this week...

 

1.       Problems with ROKR project that was to be vehicle iTunes :

a.)    It was difficult for Apple to collaborate with other companies. iPod hardware team led by Tony Fadell didn’t like ceding development of “music phones” to traditional handset industry. And as the project progressed, their apprehensions became correct.

b.)    The Motorolla teams had separate programmers for components like directory of contacts, text messaging, and crude internet browser that could display stripped down version of iTunes store. These components were not as intuitive as iPod.

Tim Fadell responded to complicated communications with multiple Motorolla teams by developing his own prototypes of cellphone. One of these prototypes featured music, and the other focused on videos and photos.

 

2.       Two other projects that later influenced Steve to pursue Apple cellphone seriously :

a.)    Project Purple: It involved researching ultra-light tablets, which were functionally similar to PCs but more interactive due to touch screens. Steve believed his guys can do it, even though proper touch screen “form factor” had eluded Microsoft team for years. Intent was to search for a more intuitive way than keyboard or a mouse, for interacting with computer.

b.)    Project of Apple researchers Greg Christie and Bas Ording: They decided to reconsider possibilities of touch screen monitor, which allowed fingertip to activate an icon or button displayed on a video screen.

 

3.        Evolution of touch screen technology: Developed by IBM in 1960s, first touch enabled mainframe was sold in 1972. In 1977, CERN in Europe developed the interface to control particle accelerators. In 1980s HP gave touch screen monitors as accessory to early desktop PCs. Plus rudimentary touch screens became interface of choice for ATMs, airline checkin kiosks, and cost registers, though not of personal computers.

4.       Evolution of pen computing: “Pen computing” was introduced by researchers to mimic actions of mouse by working directly on the screen of personal computer using special stylus. Writing onto screen was considered natural, familiar, and therefore best possible by these researchers. In 1993, Apple’s message pad Newton introduced by John Scully had this technology. However Newton’s handwriting recognition was very inaccurate.

Further, Microsoft tried to introduce pen computing in tablet version of PCs. Only partial and fleeting success was Palm’s Personal Digital Assistant (PDA), and this too was not a fully featured computer.

 

5.       Evolution of multi-touch interface: The touch technology of 60s and 70s was taken in different direction by academics and some forward looking digital artists. They started experimenting with technology that allowed more than one finger tip to manipulate image on screen. This combination of fingers or hands gave users far more control than mouse. Controls like moving icons and files around, or enlarging and shrinking images on the screen. Researchers at IBM, Microsoft, Bell Labs, and elsewhere also experimented with own multi-touch projects.

 

6.       Reasons and corresponding decisions of Greg Christie, to develop multi-touch technology: After working with pen-computing for Newton, Greg Christie abandoned research on it. Instead he steadily followed all the multi-touch research efforts. He partnered with Ording, who had joined Apple in 1998, and worked in iPod’s scroll wheel project. They believed that the technology can distinguish serious new computer with its new kind of interface.

 

Evolution of multi-touch technology - https://en.wikipedia.org/wiki/Multi-touch#History_of_multi-touch

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Final post for this week's study.      

 

4. Challenges in developing a new interface for computers:   Apart from making images more or at least as much delightful as old interface, new interface needs to consider habits developed using old interfaces. Example being QWERTY keyboard that was there in typewriters first, and then in computer keyboards.

 

5.       User interface alternatives in multi-touch that were explored: Considering user habits, the QWERTY keyboard was retained, but in virtual form. That is, this virtual keyboard appeared when you needed to type. Further, new multi-touch approach was useful for expanding and editing photographic images, for making drawings, and also for editing spreadsheets and word processing documents.

Thus, as Christie and Ording explored multi-touch, they realized they were onto something big.

6.       Bottom up hierarchy of innovation in Apple: Projects like these five innovative projects (multi-touch, computer tablet, cellular networks, iTunes integration to Motorola phone by Eddy Cue, separate apple phone models by Tony Fadell) were not unusual in Apple. Culture was not Steve saying “Let there be iPad”, and employees devoting themselves to the wish. Instead Apple bubbled with possibilities, and Steve sorted or reimagined the possibilities of these innovations.

 

7.       Follow up of cellular and iTunes integration project with Motorola (check previous point for list of all 5 projects): Cellular project with WiFi team was dead.

Motorola’s iTunes ready ROKR was not at all good. It was clunky compared to stylish RAZR phones. The iTunes songs could only be stored on removable micro SD flash memory cards. Also, Motorola decided these cards would accommodate no more than one hundred songs, despite capacity being much more. Thirdly, you could not buy songs from iTunes music stores using phone, even though phone had internet access. Instead ROKR buyer had to buy songs from computer, and transfer those via cable.

8.       Follow up of Fadell’s music phone prototypes: First version had iPod’s thumb wheel as dialer. But it was difficult to dial new number using it, even though thumb wheel had been excellent for scrolling songs in iPod.

Second prototype did not have thumb wheel, and instead put more emphasis on being video player. Though it can be considered forward looking in retrospect, because cellular networks at that time were not reliable enough for consistent video streaming. For this reason Steve chose not to go ahead with Video phone project.

9.       Follow up of project purple, tablet computer that is: The project to make interactive tablet that was also compatible with traditional Macintosh hardware and software was running into different set of problems. These problems were similar to what Microsoft and others had encountered. Bulk, weight, battery life, relatively small ten-inch screen and cost being bottlenecks in these prototypes. WiFi which was the best means to connect to internet, and even laptop microprocessors sucked lots of power. The existing big and heavy batteries made battery problem of tablets very hard to deal with.

So while it was technically possible to integrate technologies for iPad, the actual device was heavy and impractical. Plus Steve knew that price tag similar to traditional Mac laptop would be hard to sell. Still the plugs were not pulled on project purple until Steve had plan B.

10.   Followup of multi-touch project by Christie and Ording: After several months in 2004, they were able to have working prototype of multi-touch screen. The demo involved projecting live video image in computer on a touch-sensitive surface. Size of surface being equivalent to conference room table.

Using two hands you could move folders around, activate icons, shrink and enlarge documents, and scroll around the screen horizontally and vertically in somewhat intuitive manner. The gestures for these operations were limited at this point, but the prototype was interesting enough to offer a sense of what it would be like to control touch screen computer with your fingers.

Jonathan Ive, the person mainly responsible for game changing user interfaces at Apple was very excited by the demo. He named this multi-touch prototype as Jumbotron. He decided that Steve should also see it. Jonathan believed that he could make multi-touch as the basis of new kind of device, which he believed would be tablet computer.

Edited by RohinGupta

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Good Morning, today week 2 begins. Posting my study done

1.       Thought process of Steve regarding Apple’s next step after iPod: Steve too, like Jonathan, thought that Apple’s next step would be some fundamental reconfiguration of traditional personal computer. That was the reason for giving green signal to project purple in first place. But after returning from surgery Steve told Jonathan that he wanted to shelve the project. This surprised Jonathan because he was very excited about the project. Reason Steve gave for shelving was market driven. That is, he would not be able to convince people to buy a tablet. But he would be able to convince people to buy a phone. He considered latter to be a better product category.

Steve was perfectly aware that engineering challenges in building a new phone will be harder compared to new tablet. Phone had to be small, it had to be a good phone, a good computer, and a good music player. Selling this new category of devices was worth the risk for Steve Jobs.

2.       Demo of Jumbotron, the multi-touch prototype, shown to Steve Jobs: On finally checking the demo of Jumbotron, Steve was [apparently] underwhelmed. He did not see any value in the idea. And on knowing Steve’s opinion, Jonathan felt stupid because he had thought of this as a big thing. He tried to explain multi-touch as being interface to camera display, because that’s what he thought on the spot. This thought process of Jonathan Ive being great example of how difficult it is to conceptualize application of the idea early on.

But despite Jonathan’s insistence, Steve was very dismissive. This interaction also showing that Steve’s reaction to demos are not personal, even when people take it that way.

3.       Steve’s later response on multi-touch prototype, after thinking through: After thinking about multi-touch for a few days however, Steve changed his mind. He thought that perhaps this was the UI leap he was looking for.

After concluding on its good prospects, he started further discussions with Jonathan. He also discussed software aspects with VP of software technology Steve Sakoman. Sakoman had worked on Newton and Palm devices as engineer, and had been pushing Apple to make the move into phone. 

Further, Steve Jobs also discussed multi-touch interface with iPod people, like Tony Fadell. Tony had already built two music phone prototypes, plus he had hardware engineering expertise to judge how multi-touch interface can fit into smaller device like phone, and also be mass produced. On seeing multi-touch prototype, Fadell also agreed that technology was really interesting. He also saw shrinking of interface as an engineering challenge. The demo product’s size was equal to Ping-Pong table, but it had to be reduced to pocket sized device.

So Steve gave Tony a challenge. He had to integrate multi-touch interface into the music phone prototypes he had created. Basically to create “a really cool, really small, really thin phone”.

4.       Analyzing Steve’s reaction to multi-touch interface in retrospect: In hindsight it is clear that the demo of multi-touch prototype was a moment of great realization for Steve Jobs. Realization not very different from seeing Graphical User Interface in Xerox Laboratory more than 20 years back.

Helping people interact more directly and intuitively with intelligent devices was the primary motivation behind smart phones. The way Macintosh had been a radical new conception of user interface for a computer, and iPod’s thumb wheel being another user interface breakthrough. Multi-touch interface had same potential. But Steve Jobs had to move quickly in this regard. (Because music phones by other companies like Sony would have eventually replaced iPod).

 

5.       Why Steve thought Apple can make iPhone despite complexities: Success of iPod gave Steve Jobs confidence that his team can make iPhone fast. iPod also gave Steve confidence that any Apple product can be mass produced.

 

6.       Intended features of Apple phone: The intended features of Apple phone were as follows :

 

a.)    It would be as slick as iPod.

b.)    It could download, play, and even video stream music directly.

c.)     It would be a great phone with wonderful voice-mail and directory features.

d.)    And its computing would be as powerful as the engineering workstations at NeXT.

In summary, most people hated their cellphones. Apple would create the one they would love.

7.       Activities when decision to make iPhone was finalized: Decisions to build multi-touch prototype of Apple phone, and to pursue iPhone seriously, took place around January 2005. During that time Mac-Mini computer, iPod shuffle, and iWork application similar to Microsoft Office were unveiled.

Cellphone project however became the main topic of discussion. He and Jony met to discuss it every day. They would discuss it during lunches and long walks after that. Solving problems like how to keep touch screen from reacting to contact with your ear while talking, materials for that screen to prevent it from getting spoiled by keys and loose change etc. Sometimes Steve would also go to Jony’s design lab and sit there for hours as designers tinkered with their prototypes. And sometimes two of them would stand near whiteboard, drawing and modifying each other’s design.

8.       Relationship with Jony: They were spiritually very similar. Steve collaborated more closely with him than he had with Woz or Avie or Ruby or even Ed Catmull and John Lasseter.

 

9.       Description of iPhone vision, and how that vision was derived: Brainstorming with Jony and looking at real prototype from Fadell’s team, increased Steve’s confidence. The creation of new phone turned out to be even more daunting than original Mac project. But Steve was confident that he could negotiate a good deal with telephone company, having gained some experience from Motorola ROKR deal.

 

The iPod, these internal discussions, and prototypes had given Steve the confidence that team could master hardware and software challenges. As it all panned out, he began to get sense that new gadget might be biggest selling electronic product of all time. As described in the features, it wasn’t just a phone or a media player. It was going to be a full blown computer. This meant that it would be a smart phone perpetually connected to internet. And of all these things, easiest part was the name, iPhone.

(

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THE WHOLE WIDGET

(Page 347)

1.       Motivations from the success of Pixar: After Toy Story, Pixar IPO, and Disney acquisition a decade later, the prime movers of Pixar, Catmull and Lasseter flourished. This satisfying resolution was one of the great joys of Steve’s life, even though Pixar started as a curious whim. The Disney deal was great, but it was just one small element of the most productive period Steve’s life, from 2004 to 2008, right after his surgery.

 

2.       Impact on Steve’s professional life after his 2004 surgery: The cancer did not overshadow Apple’s daily operations. Even though succession plans were discussed, board of directors did not know that cancer had spread past his pancreas. As he had turned 50 in 2005, his occasional tiredness seemed reasonable. Also, since he worked fair amount anyway, few days off to see doctors were not alarming. His colleagues were worried that cancer will come back, and looked for signs. But there was nothing unusual until summer of 2008, when Steve’s weight loss became abrupt.

 

3.       Summarizing successes in this most productive period: During this period Steve was effective and visionary, at the height of his power, despite return and spread of cancer. Even though the years were complicated ones for Apple, Steve handled every challenge in the way he wanted. Falling into leadership at a very young age was one of the reasons. Now he was sure of his capacity to guide tens of thousands of employees to the goals he set for them.

 

Success for Steve in Apple included switch to a new Intel based microprocessor for computers, ruthless yet successful transition of executive team, optimizing the efficiency and scale of production assembly line.

 

Most importantly, this is also when he delivered the most notable product of his life, iPhone. One more important contribution was building App system for phones, which transformed the application software business. Degree of transformation through App system being equivalent to what Bill Gates did in software field with Windows field.

 

4.       What these 4 years, or last 7 years of Steve Job’s life demonstrate: During these years he got almost everything right. These years show most completely how he had improved. They manifest the creative person and business genius he had become. In these years he actualized all his potentialities completely.

 

 

 

 

ROLE SUCCESS OF ITUNES AND IPOD PLAYED IN DEVELOPING BRAND AND SKILLS OF STEVE JOBS (AND APPLE IN GENERAL) TO PULL OFF IPHONE

 

5.       Identification of uniqueness of Apple (prior to iPhone): With success of iPod and iTunes, Steve realized even he had underestimated the power of products linked to a computer. With iPod, Apple steadily improved experience of enjoying and managing music, photos, and videos. Making various technologies coherent in a way no other company came close to matching.

 

As against disjointed mess of products by other companies, which confused customers, Apple was too easy. Experience of online purchase of Apple music or computers, or of shopping from App Stores made as glass emporiums staffed with very smart young men and women; the experience was also entertaining apart from being too easy. WiFi, which was the trickiest link in the user experience Apple provided, also started to do quite well.

 

Apple experience included consumer encounters with the brand as a buyer, a store visitor, a passerby seeing a billboard, or someone simply watching an ad on TV. Each thing, Steve thought, contributes to brand’s account.

 

To summarize, each aspect of Apple experience was an unprecedented merger of marketing and technology.

 

6.       Contrasting Apple experience from the experience with other vendors in consumer electronics technology: The Apple experience provided a new kind of quality in technology industry. This quality was never expected from traditional vendors like IBM, Motorola, Canon, or even Sony. Buyers instead had to read through instruction manuals, which were very confusing. The manuals were very similar to technical healthkit Steve used to work with as a kid, while trying to assemble circuits.

 

7.       How “Apple experience” positively impacted “Apple Brand”: Before iPod Apple experience was related to quality of Apple computers. With iPod, millions of new consumers played with Apple hardware and software like iTunes. This gave Apple reputation of building great products and reputation that was better than even Sony’s.

 

This reputation among younger generation, which ignored its products when retail stores first opened, was developed in two years. By 2006, Apple emporiums from Tokyo to Johannesburg to Manhattan were filled primarily by young buyers.

 

This massive improvement in branding made consumers receptive to any new field Apple would enter.

[Reminder: This brand improvement happened prior to iPhone]

 

 

8.       Impact of iPod and iTunes on Steve’s skills: After the successes of these products, Steve’s confidence matched Steve’s skills in figuring out industry soft spot, and to maneuver Apple into a position to solve that problem. With iTunes coup, Steve knew how to enter another industry and alter its business model [selling music online for 99 cents per song]. Altering it in a way that would benefit Apple and industry’s consumers.

 

Launching new phone was taking strategy of reinventing industry to next level. And given the nature and market of product, this could impact billions of potential buyers, as against millions with iPod or thousands with Mac. The only unsolved problem was figuring out how to work with telephone carriers.

 

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Good Morning, today week 3 begins. Posting my study done

NEGOTIATIONS WITH TELEPHONE CARRIERS RELATED TO APPLE PHONE

1.       Steve’s impression of telephone carriers, much before Apple phone was conceptualized: Steve discussed “stupid phone carriers” with the author way back in 1997. He mentioned they were so bad that he will never do business with them.

But he was also aware that working with them was the only option to get phone handset in the market. And it was the market that could not be ignored. By 2004, worldwide unit sales of cellphone handsets were around 500 million units a year and growing – much more than PCs, iPods and PDAs combined.

2.       Alternative to dealing with carriers, considered and rejected: It was possible for Apple to operate its own carrier network by using “mobile virtual network operator”(mvno) technology. This could be done by integrating technology after leasing wholesale wireless capacity from telecom giants. When company called "Sprint", with expertise in this technology, approached Steve, he rejected the proposal however. Operating a network was a complex and transaction intensive business. Operating this kind of business was way outside Apple’s area of expertise. So finally Steve asked Eddy Cue (person responsible for Apple’s online businesses like iTunes) to start knocking on doors of carriers.

 

3.       Major obstacles in negotiating a successful deal with carriers: Steve wanted Apple to have complete control over handset. User experience for the mobile phone involved iPod functionality and Internet client functionality, all using multi-touch screen. Further, good internet client required that screen would take up entire front surface of phone.

 

 

These functionalities were utterly different than anything consumers had experienced before. Despite novelty, Steve thought this was doable [based on iPod experience and phone related prototypes]. However, since it would take few iterations before reaching perfection, so he wanted carriers to have their hands off the design process. This would give Apple freedom to experiment, without its engineers being second guessed. So in the nutshell, carrier had to commit to a deal without knowing all specifics of the kind of phone Apple would finally deliver.

 

4.       Failed negotiations with Verizon [iPhone was first sold through AT&T]: Apple knew Verizon through consulting they did with them, related to Motorola’s ROKR (though Verizon didn’t end up selling ROKR phone).

 

 

 

Verizon however was very tough, and considered cellular as their playground. And therefore wanted Apple to play by their rules. This completely eliminated the option for Apple to control phone’s UI.

 

5.       Overview of negotiations with AT&T: They weren’t as tough. Compared to Verizon they had more customers, but their network had spotty coverage. In their first discussion Jobs and Cue spent 4 hours with Ralph de la Vega and Glenn Lurie in AT&T. They liked them right away.

They were hungrier and wanted to show what they were capable of. And so the relationship was started that same day.

6.       Further details of iPhone related discussions with AT&T: Steve showed AT&T folks that iPhone would increase the consumption of wireless data bandwidth. Reason for spike was given as very good browsing interface being planned for iPhone. It would have made mobile do almost anything that could be done with Desktop browser. Touch screen making unmodified, full featured Internet websites usable anywhere.

 

 

Other possibilities included download and sharing of photos, email, editing and managing of documents like sales contacts, etc. Of course, they could purchase and download music from iTunes stores, send or receive text messages, make video calls, see videos and movies online etc. For last, reference of YouTube was used.

 

Plus, according to experience of Steve with technology, there can be possibilities that were not even being imagined right now [in retrospect Uber]. The possibility of huge spike in data led Steve to ask for cut from AT&T’s data revenue of iPhone. He wanted to be compensated for bringing extra business. Giving example of 30% being taken from music sales, this compensation plan was proposed.

 

7.       Analyzing the Apple-AT&T deal: Apple’s demands were very bold. And AT&T in return could boast of a phone from hottest gadget manufacturer in the world, something none of the other competitors could.

 

 

In retrospect, Steve got what he wanted, perhaps a little bit more than what he should have got.

-          Unprecedented freedom to produce, almost unseen till the very end.

-          Apple could set the prices of new phones, and AT&T could not change or discount.

-          10% of data carriage revenue, since iPhone will drive data usage. Revenue applicable till the duration of iPhone service contract.

For the first time here, handset maker could receive percentage of fees from carrier.

Later however the carrier plan was changed, and Apple got full price of phone, even though AT&T sold $200 below retail. But with this AT&T could keep all the data usage fees. Since the handset payments were spread over two years by accounting rules, Apple was able to buffer ups and downs of data usage and smoothen out its revenue streams.

Some analysts are of the opinion that this deal was even better than the original deal.

8.       Learnings from iTunes development, that were applied to AT&T negotiations: From iTunes negotiations [with music companies], Steve was able to understand the extent of power Apple commanded. .

 

 

Even though he could provide AT&T what no other handset maker could, he did not overreach. He gave them what they wanted, but in terms which made Apple very, very, rich.

 

 

Cue was handling day-to-day business of the relationship. To prevent Motorola like experience, he was in touch with AT&T’s Glenn Lurie on day-today basis.

 

 

This deal has worked so well for Apple that by estimates of some analysts Apple now pockets 80% of entire cellphone handset business.

 

 

 

ROLE OF WORK RELATIONSHIP BETWEEN STEVE JOBS AND JONATHAN IVE IN iPHONE DEVELOPMENT

 

 

 

9.       Priorities of Steve in the most productive period of his life (2004 - 2008):  Priorities included family, small group of friends, and people in work who could abet company’s mission. Most importantly, he pared down his life so that he could devote maximum time to specific aspects of his work. Steve was deeply focused during these years.

 

 

 

10.   Summary of the work relationship with Jonathan: Much of Steve’s work life in last decade was around his collaboration and deep friendship with Jony Ive. They were extremely productive, and got along even when they disagreed. And unlike previous work relations, this relationship was not roller coaster.

 

 

 

It was unlike anything the two had experienced before. Plus it weathered Steve’s illness and also transitions in company.

 

 

18.   Beginning part of relationship: First time they met in 1997. At that time when Steve walked in, Jony thought Steve had come to fire him. Later however, Steve told author that he immediately liked Jon for his taste, judgment, and ambition. Jony on the other hand remained intimidated during that first year. Reputation of Steve was that he fired employee for doing a single thing wrong.

Overall, Jony enjoyed working with Steve on very first iMac, but always felt self-conscious when describing design decisions to Steve. This mindset of Jony changed after their first visit to Pixar. In Pixar Steve introduced Jony to all Pixar employees. And from that introduction Jony realized that Steve and him were at same wavelength. Basically, Steve could articulate what Jony understood only at an emotional level.

19.   Elaborating on the commonality between Jony and Steve: Over a period of time, it became clear to Jony that Steve had even more sophisticated and intuitive sense of why unusual design made sense. And this too at a very early stage of product, before it was announced or shown to anyone outside Apple.

 

Jony on the other hand could feel design related things intuitively, but could not articulate that intuitive feeling. The fact that he did not have to explicitly justify his decisions to Steve, made it very easy for him to collaborate with Steve Jobs.

Steve would get Jony’s idea, which latter communicated in somewhat unclear terms, and then re-articulate same idea in a way Jony could not. While Jony got better at articulation, he thinks he never reached same league as Steve.

20.   Opportunities two had to collaborate on various products: Moore’s law made electronic components more and more capable. This created the need to redesign Personal Computers constantly. And this improved Apple’s metabolism, since Personal Computers were always work in progress. iPod accelerated that cycle.

 

 

Because of this rapid growth, Jony and Steve could never pause for long after shipping. Instead they constantly collaborated, and as a result their work relationship deepened. While they created a product, they learned many things in the process of creation. And new cycle gave them opportunity to apply these learnings for next release. Integrating and applying ideas into these faster cycles was deeply satisfying challenge for Jony.

 

 

They considered learnings even more valuable than the product. These learnings creating the need to demand more from yourself and others, and that in turn yielding amazing results.

 

 

21.   How this incremental product development impacted Steve: Ive believes each successive product development cycle fuelled Steve’s unquenchable restlessness. Due to the learning curve during development, each product somehow fell short. So Steve turned the incremental development into ongoing quest for perfection. What was left behind [in development] being used as a basis for next improved edition.

 

 

22.   Exploring causes of increased restlessness in Steve during the most productive period of his life: Ive, Tim Cook, and Steve’s wife Laurene believe that Steve came back from 2004 operation [of Pancreatic cancer], with “more focused that ever” outlook. There were discussions around seeing Reed [Steve’s son] graduate, and how the medical tests were. But Ive does not think illness can motivate a person to such an extent. His opinion is that iPhone created the prospect of selling hundreds of millions of units on a single product. And this prospect was a huge change for Apple, given its mostly turbulent past. He thinks that this prospect is what motivated Steve Jobs.

 

 

Ultimately though one factor of success was even greater than number of units sold, share price etc., because those factors were greater for Windows. Personally for Steve and Jony, it was the pride in designing and building great products that mattered.

 

 

 

23.   Facts that created pride Jony and Steve could cherish: It wasn’t about numbers of units or “I told you so” type validation. It was a sense of trust in humanity which success of iPhone and iPod created. Trust derived from the fact that when people were given choice, they are able to discern and value quality. And through this interpretation of their mass product market, they were able to feel connected to all of humanity.

 

So to summarize, illness was only a small part of motivation. Momentum that Apple had gained was the greater motivation for creativity and success.

 

24.   Their work relationship when design and development of iPhone was started: At the time Steve and Jony were closer than anyone they had worked with before. They became straightforward, and often did not articulate reasons as to why particular idea is valuable or terrible. They did not worry about each other’s feelings so much.

 

 

 

25.   Reaction of colleagues to the growing closeness between the two, and the truth: Some in the executive team thought that Jony had unwarranted sway over Steve. After Steve’s death there were more and more unaccredited stories like Jony was the one who decided who got fired or promoted.

 

 

 

Truth however was that Steve prioritized every aspect of his life ruthlessly. He made clear decisions about what mattered, and what did not. And for reasons already mentioned (23. Of Week1), friendship with Jony mattered. This relationship in retrospect proved to be as big as Steve’s ambition.

 

 

26.   Further elaboration of the close work relationship: Jony thinks it was more than just their shared views on design. They actually viewed objects in environment, people, and organizational structures in the same way. Beauty for them was not just symbolic, or even conceptual, it represented progress.

 

 

 

Only for design, Steve a CEO would not have spent so much time with Jony.

 

 

For Jony loveliest memories are talking at a very abstract level. Talking very philosophically about the aspects of designs. That is, in ways most people do not talk. With engineers who were otherwise brilliant, he could not talk in such philosophical terms, since this was not their focus. In fact, when they talked in such terms in front of other people, “there they go again” was the kind of reaction Jony saw in their eyes.

 

 

27.   Examples of their interactions on particulars of iPhone: When Jony showed his design of bracket [here meaning phone’s back casing], Steve would watch it very carefully by removing his glasses. Noticing even things like special screws. iPhone had flattened screws, and such hardware components made it almost like a piece of jewelry. 

 

 

Examples like these, make iPhone as the physical manifestation of friendship between Steve and Jony.

 

 

29.   Concluding on the impact Steve and Jony had on iPhone: The contributions to iPhone development ranged from people like Tony Fadell to Greg Christie to Foxconn workers in China. The inventions and engineering breakthroughs are also too numerous to count. But the fact is that it could not have been made or even imagined, without Steve and Jony working closely together.

Edited by RohinGupta

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Good morning, today week 4 begins. This is the last study week, we conclude next week.

THE EVENT WHERE iPHONE WAS FIRST INTRODUCED ON JANUARY 9, 2007

 

 

 

29.   The premature nature of product that was demoed: The handset was nowhere near ready to ship. This made demo a high wire act. It had serious software shortcomings, and hardware glitches. The individual components were connected using wringer [two rollers that compress object using high pressure]. It was hardly tested “in the wild”, that is in a way consumers would test – shifting back and forth from phone to music player to computer, quickly and indiscriminately.

 

 

 

30.   Reasons why Steve reluctantly pre-introduced iPhone: He never liked pre-introducing, because software or screen can start behaving wildly. And this also meant showing your cards too early in this competitive business.

 

 

 

Four good reasons that trumped above factors were as follows:

 

a.)    AT&T had to be shown something, because it had not seen anything since the contract with Apple was signed. Not even mockups or prototypes. For major delays it had a clause where it could pull out if certain development milestones failed. Though unlikely, it was possible.

b.)    Steve, like 19th century circus showman P.T. Barnum, liked to have element of surprise in his demos. While there was complete secrecy on iPhone till then, he was not sure he could continue with the cone of silence for next few months. [In iPhone demo introduction he mentioned that he was looking forward to do this demo for past two-and-a-half years.]

c.)     The iPhone was soon to be tested by Apple employees in real world. And it was possible that it would be spotted sooner or later. This would have diluted Steve’s message. But in MacWorld confab he would be able to showcase iPhone in his own terms.

d.)    The January announcement would upstage anything coming out of Consumer Electronics show in Las Vegas [at year end], where other handset makers showcased their product. The timing of iPhone demo was perfect to steal the headlines.

 

 

31.   Elaboration of 31b, which is why Steve was eager to show iPhone to the world: Steve and his team knew in their bones, that the iPhone was something truly special. For Eddy Cue it was the culmination of everything Steve had learned. And everything Eddy Cue himself learned. This made them very eager to showcase iPhone. In fact this was the only official Apple event Eddy Cue took his wife and kids. Everyone could feel this was huge, once in a lifetime kind of event.

 

 

 

32.   Actual demo, few of the features, and a worry: The demo went without any problem. Multi-touch user interface looked very “magical”, and the way Steve showed made it truly engaging. Scrolling through lists like liquid smoothness. Double tap on website column filling the screen. Google Maps application in fact turned out to be more useful and flexible than dedicated pocket sized GPS devices.

 

 

 

It was delightful presentation overall, except one worry. Why weren’t third party applications allowed in the [then] iPhone?

 

 

 

33.   Reasoning behind Apple not opening up third party integration right away: The author went with Fortune magazine’s Peter Lewis for the interview that was scheduled just after the demo. Steve was relieved that demo went well. However, he got a bit angry when Peter and author kept asking him about opening up iPhone software. Their reasoning was that YouTube and google maps, the non-Apple applications were working really well on iPhone. The look and feel of these being testimony to the fact that iPhone can be “opened up” to third party developers.

 

Steve’s response was that Apple collaborates with those companies to help them build on iPhone. So Apple had control on what went into those applications. For third party apps however, he was not sure how to vet them or police them. Viruses had to be prevented, their impact on network had to be checked etc. In short, he did not want a monster in iPhone. Plus he thought developers can build specialized websites for iPhone if they were interested in development. iPhone being like a terminal in this case.

34.   Discussion with prominent venture capitalist John Doerr on building App system for iPhone: Many people both inside and outside of Apple were talking to Steve about opening up App system. One of them was John Doerr, managing director of a prominent venture capital firm “Kleiner Perkins Caufield & Byers”.

 

 

 

Though Doerr never had direct business with Apple, he knew main players there, and was aware of many things going on in Silicon Valley. Steve knew him, and showed him iPhone several months before it was shipped. On getting the iPhone first time, he asked same question regarding third party applications. And at the end of conversation said that he would like to fund 3rd party application development, because he thought that this was a big opportunity. Steve promised to call him back if he changed his mind.

 

35.   Problems when iPhone was first released: iPhone was finally shipped on June 29, 2007.  AT&T’s spotty network rather than lack of applications was the main problem customers encountered. Steve sent two phones to prominent novelist Mike Slade, but he could not try it out due to bad network. He was able to try only when he traveled out of Seattle. Many of the techies living in San Francisco Bay area were early adopters. But here also AT&T’s network was weaker than Verizon’s. Also the area between San Jose and San Francisco, used for commute and by these techies had bad network coverage. So they faced hassles with voice coverage, and even more with Internet.

 

36.   Why Steve changed his mind about opening up system for 3rd party people: iPhone proved to be a tougher sell than imagined. It sold about 1.5 million units in the first quarter. Spotty network coverage and very few applications were the reason. People had expected video games, reference books, fancy calculators, word processors, and financial spreadsheets in the box .

 

 

In opinion of some industry watchers, “iPhone was crippled when it first came out”. So quickly but not gracefully, Steve changed his mind on opening up iPhone for applications. He called John Doerr to talk on the subject. After few negotiations “100 million dollars” were committed for the project and it was called iFund.

 

 

37.   Announcement on App development and response: Just four months after shipping, Apple announced iPhone SDK (software development Kit). This propped up Apple in the valley, and suddenly this was the thing most people were talking about in Silicon Valley and VC community.

 

After some time App store was announced, and iPhone 3G released on July 2008. The second version had better wireless [to reduce call dropping] and faster microprocessor. Though there was certainly scope for improvement, but the basic framework of iPhone was complete with this release.

iPHONE IN RETROSPECT

38.   Economic impact of iPhone: Eight years since January 2007 demo, Apple has sold more than half a billion units. This makes it most profitable consumer device ever by units sold, dollars of profit generated, number of its global carriers, and number of apps written for it. Even though Procter & Gamble sells few products on similar volume, but none of its products can boast of ownership cost being $1000, and volume of hundreds of millions of units.

 

 

 

39.   Smart phone market before and after iPhone: Before Apple smartphone market included Palm and RIM . These phones had keyboards and very small screens. They had very limited functionality like checking mails, messages, calendar, and contacts.

 

 

 

After iPhone, consumer expectations dramatically changed. Google understood this and developed Android OS, which was clearly lifted from iOS. Samsung, LG, HTC, and later Xiomi sold phones on Android. Android OS phones went on to outsell iPhones. But so far Android has not done to iPhone, what windows did to Macintosh.

 

 

40.   Impact of iPhone on technology market in general: Earlier, technological change was driven by wealthy entities like military and big corporations. Because these were the only consumers of leading edge components. But now its consumers like you and me who drive the change. This change is driven by volumes smart phone now commands, hundreds of millions that is.

 

 

 

Smart phone supply chain includes Corning’s Gorilla glass as screen, and especially the cellular microprocessor designed by ARM. The mobile phones are giving these technologies so much scale, that they have now become technologies of future.

 

 

41.   Impact of iPhone on computing power: Mac, iPhone, and iPad today have computing power that Cray XMP supercomputer had 20 years ago. But it costs just 600 dollars and can fit into your pocket.

[This analysis is attributed to Marc Andreesen, co-founder of Netscape and highly successful venture capitalist.]

Edited by RohinGupta

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CONCLUSION

Good Morning. Today, in this 5th week, I conclude.

Overall impact of iPhone was discussed last week. It included economic as well as technological impact. Couple of weeks back we also discussed how iPhone impacted people like Steve Jobs, Jonnathan Ive, and Eddy Cue personally. This week I will discuss about this study-group. How can the learnings of this study-group be leveraged?

iPhone being one of the most important and impactive innovations of recent times, studying its conceptualization, implementation, and development environment will help us to understand the mindset of innovation better. More specifically, what is needed to make innovation successful in bigger organizations.

The principles can be abstracted from this study, to build processes for enabling more useful innovations inside bigger organizations, with minimal risk. The overall adoption can sustain and build the environment of innovation further.

So to conclude, I am looking forward to further understand 3 things from the learnings of this study-group


1. Idea to product (I2P) principles.
2. Product to Market (P2M) principles.
3. Principles for facilitating useful innovation within organization.

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