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Lesson Five
Steve Jobs
Walter Isaacson
Chapter Thirty-six
The iPhone
Three Revolutionary Products in One
An iPod That Makes Calls
By 2005 iPod sales were skyrocketing. An astonishing twenty million were sold that year, quadruple the number of the year before. The product was becoming more important to the company’s bottom line, accounting for 45% of the revenue that year, and it was also burnishing the hipness of the company’s image in a way that drove sales of Macs.
That is why Jobs was worried. “He was always obsessing about what could mess us up,” board member Art Levinson recalled. The conclusion he had come to: “The device that can eat our lunch is the cell phone.” As he explained to the board, the digital camera market was being decimated now that phones were equipped with cameras. The same could happen to the iPod, if phone manufacturers started to build music players into them. “Everyone carries a phone, so that could render the iPod unnecessary.”
His first strategy was to do something that he had admitted in front of Bill Gates was not in his DNA: to partner with another company. He began talking to Ed Zander, the new CEO of Motorola, about making a companion to Motorola’s popular RAZR, which was a cell phone and digital camera, that would have an iPod built in. Thus was born the ROKR. It ended up having neither the enticing minimalism of an iPod nor the convenient slimness of a RAZR. Ugly, difficult to load, and with an arbitrary hundred-song limit, it had all the hallmarks of a product that had been negotiated by a committee, which was counter to the way Jobs liked to work. Instead of hardware, software, and content all being controlled by one company, they were cobbled together by Motorola, Apple and the wireless carrier Cingular. “You call this the phone of the future?” Wired scoffed on its November 2005 cover.
Jobs was furious. “I’m sick of dealing with these stupid companies like Motorola,” he told Tony Fadell and others at one of the iPod product re
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