The iPhone at 10: Why Apple needs to heed its own warnings from history

9 Jan 2017

Steve Jobs reveals the first iPhone on 9 January 2007 at Macworld. Is Apple ripe to be disrupted? Image: Apple

10 years ago, Apple rewrote the history of computing with the unveiling of the iPhone. But Apple should remember that no disrupter is safe from displacement, warns John Kennedy.

The richest, most poignant and absolutely beautiful irony of the tech industry is that no disrupter is safe from being disrupted or displaced by a newer, more nimble and relevant newcomer. It’s called continuum and it will go on forever.

The fact that Apple wasn’t even a newcomer when it came along in 2007 and disrupted – or more likely destroyed – the cosy order of things dominated by Nokia, BlackBerry, Palm and Microsoft made the victory all the sweeter for the tech giant.

‘The tech world in 2017 is a strange, beguiling and confusing landscape that is ripe for disruption… or leadership’

That sweet victory, celebrated with pomp, circumstance and deserved pride, could be short-lived if Apple fails to take on board the savage and contradictory realities of its own existence.

9 January 2007 is being marked as the 10th anniversary of the iPhone. I watched the “and one more thing” moment from my desk via a live video feed after Steve Jobs ran through his customary Mac and OS X product line-up at Macworld in San Francisco.

He removed a shiny device from his pocket, demonstrating how easy it was to send a text message using the iPhone, and a new era in computing was born. The device wasn’t even any more sophisticated than others on the market, but it did something different – it made phones easy to use. Smart became simple.

The device did not come to market for almost nine months after that, but what followed was a revolution in operating system technology and it upended the entire software business model with the subsequent arrival of the App Store.

The core message was that ‘smart’ phones should really be simple and easy to use phones. Comparing an iPhone from 2007 with an iPhone from 2017 under the hood would be like comparing a Ford Fiesta with a Porsche 911, but from a usability perspective, the changes since then are subtle. It’s still pretty much the same phone, albeit with faster processors, bigger screens, better radios and more powerful cameras.

Some will say that this moment in 2007 was the moment that the modern Apple was born.


Back to the core: When Apple was really reborn

The iPhone at 10: why Apple should heed its own warnings from history

Then and now. The iPhone in 2007 and the iPhone in 2017. Image: Apple

The modern Apple was born almost 10 years earlier. I remember sitting at a computer at the Harvard library close to MIT during an idyllic summer holiday in Boston, scouring the web for news, when the unthinkable happened and I nearly fell out of my seat.

Apple’s nemesis, Microsoft, bailed out a near-bankrupt Apple with a $150m investment that saw the return of Steve Jobs to the fold. This, in my mind, is what kick-started a new chapter in computing industry history.

6 August 1997 will be forever engraved in my mind as the real moment Apple was reborn.

It also epitomises to me the constant struggle Apple has had to define itself. In a sense, this is why Apple has such a tight connection with artists, musicians and other creators. That sense of necessary, constant reinvention reaches a pinnacle of achievement every time.

Since the late 1970s, Apple was seen as the real disrupter in personal computing but got caught in a dogfight with Microsoft and IBM. Its machines were considered the best but just too expensive.

A ‘Wintel’ pact between Microsoft and Intel pretty much sealed the matter, resulting in cheaper machines for the masses. Microsoft was in the ascendancy by the late 1990s when Apple was close to the wall.

Jobs’s vision of a pure end-to-end computing experience from hardware to software was denied by his dramatic departure from Apple, and what followed was a slow and steady demise as a succession of CEOs – including John Sculley and Gil Amelio – fought without success to steady the ship. The darkest hours saw Apple almost succumb to licensing its OS for other OEM manufacturers to build Macs.

The return of Steve Jobs, albeit at first for a $1 salary and the use of a corporate jet, ignited a design culture that saw overlooked designers like Jony Ive and operations supremos like Tim Cook find their feet and flex their muscle.

The NeXT operating system developed by Jobs during his exile sowed the seeds of what we knew as OS X, or today as Mac OS.

Apple in the late 1990s must have been like Florence during the Renaissance

The first flourish of innovation – or swagger – from this reborn Apple came in 1998 with the iMac G3.

Until that time, all computers were either black or beige (mostly beige). With its 15in screen and multicolour luminescent shell, Apple redesigned the personal computer.

The iPhone at 10: why Apple should heed its own warnings from history

The timeline of iMac from 1998 to 2015, comparing it with the original Macintosh 128K (1984). A higher res version can be found here. Image: iMac/Wikipedia (CC BY-SA 4.0

It was a sign of things to come and the real feeling that computing could be an extension of your personality in terms of colour and appearance. Apple once again set the standard for breaking with convention.

This design ethos and sense of tearing up the rulebooks had caught hold.

The iPod wasn’t the world’s first MP3 player when it launched in 2001. Indeed in 1999, in an office on Harcourt Street in Dublin, the two founders of Movidius – David Moloney and Sean Mitchell – demonstrated to me what was later to become the guts of the iPod Shuffle in 2005. Moloney and Mitchell last year sold their company Movidius to Intel for a rumoured $300m.

With the iPod and the subsequent arrival of iTunes, Apple showed how it could reinvent itself and transform and, in doing so, became a music industry mogul but also one of the world’s biggest e-commerce repositories. Software, movies and books followed.

But what was coming with the iPhone would be the company’s biggest transformation yet.

The end of the phoney war: Why the mid-2000s were an awful time for phones

Before the iPhone came along, smartphones were in their infancy. But they were terrible to use.

The idea of a device that could surf the internet, send and receive email, or send data via Bluetooth or Wi-Fi wasn’t new in 2007.

I first hefted a Nokia Communicator machine in 1997 (a destroyer of the lining of many a jacket) and it could do most of these things.

While Nokia was in its heyday at the start of the 2000s, producing popular devices with seemingly never-ending battery lives, BlackBerry had the swagger of a disrupter.

At first, BlackBerry started with handy email/paging machines around 1999, but by 2005, devices like the BlackBerry Pearl were seen as state-of-the-art, as were some devices from Palm.

The problem by 2007 was that the machines – and the electronics inside them – were constantly evolving but the operating systems were not. Nokia’s N-series devices could do all kinds of amazing things, from multimedia audio and video playback to photos, video and mapping – but they were horrible to use.

To give you a sense of how bad things were getting, Microsoft had been championing its own version of Windows for mobile devices. This began with Windows CE before culminating with Windows Mobile 6.5, and was pretty much the same as putting an entire desktop version of Windows on a phone.

No one understood that for smartphones to be smart, they needed to be simple and elegant to use.

But Apple itself made some frightening mistakes. The old ‘design by committee’ tradition that nearly destroyed the company in the 1990s hadn’t entirely been eradicated and one of the spoiled fruits to emerge was the Motorola Rokr E1 in 2005, a candy bar device that came with iTunes and could – at best – store around 100 songs.

To me, the Rokr signalled the end of a glorious mobile phone design era at Motorola that was epitomised by the immortal and much-loved Razr.

Purple reign

But just as Motorola entered its own dark ages, a secret effort called Project Purple began at Apple in 2004.

Project Purple, which included Jobs and Ive, initially intended to produce a tablet computer that would ultimately become the iPad in 2010. However, a collaboration with AT&T’s (then mobile arm Cingular) steered this in the direction of a smartphone.

Before 9 January 2007, the notion of Apple producing its own smartphone was appealing and exotic but almost sinful in the spirit of Catholic guilt. No one could forget past failures like the Newton PDA, and while many suggested Apple could simply put a cellular radio into the iPod, it just seemed too fantastic.

Rumours of an Apple phone that were abound then were echoed in 2012, when Apple television rumours circulated wildly, and this hype continues now, with talk of Apple cars.

But until that moment when Steve Jobs said “one more thing”, it was believed by many to be an impossible dream.

At first Nokia, BlackBerry and Microsoft mocked the new phone. Then Microsoft CEO Steve Ballmer sneered that “it has only one button” while the leadership of BlackBerry, or RIM as it was known then, decided to firmly place their heads in the sand.

Nokia tested its swagger with the N96 and N97, BlackBerry destroyed its loyal base with the mediocre BlackBerry Storm and Microsoft acquired Nokia’s phone business – with disastrous consequences.

The core lesson of the iPhone in 2007 was that even though it didn’t have the same technical firepower or specifications as other rival devices, Steve Jobs correctly guessed that people just wanted a phone that would be easy to use.

The iOS operating system structure is pretty much the same today as it was 10 years ago.

That was the gap in the market. And now the iPhone is responsible for around two-thirds of Apple’s revenues. Products like the iPod and iPad aren’t selling as well as they used to and are rarely mentioned in the companies’ earnings.

But can the iPhone remain Apple’s primary cash cow for the next 10 years?

Who will disrupt the Apple cart?

The iPhone at 10: why Apple should heed its own warnings from history

Various iterations of the iPhone since 2007. Image: Apple

For the first time in almost a decade, 2016 saw Apple’s revenues from iPhone sales drop. Even though the iPhone continued to deliver for Apple in the fourth quarter, beating analyst estimates, the illusion or mask of immortality has begun to slip. And rivals scent blood.

Apple has an Achilles heel, but no one has found it yet, or is big enough to exploit the chinks in the armour.

Apple’s sheer scale has created many enemies, including the European Commission, which wants to exact a €13.9bn pound of flesh from the tech giant by alleging a sweetheart tax arrangement with Ireland.

Apple can either circle the wagons or innovate.

This is because the only weapon Apple has now is momentum.

Until it comes up with a new disruption – be it a car, a TV or a new phone – it is precisely in the besieged place that its rivals like Nokia, Microsoft and BlackBerry were in the short years after 9 January 2009.

The problem with the momentum that Apple needs is that smartphone sales are saturating.

The smartphones that Apple sells are comparatively expensive in the market and this is happening in a world that no one but the rich are getting richer, and confidence of ordinary people to spend will be eroded by the spectre of a Trump presidency.

Apple has incredible loyalty to its technology and has an instinctive grasp of its users’ preferences, as demonstrated with the iPhone SE last year, which had all the technology of an iPhone 6s crammed into the diminutive body of an iPhone 5s. This was clever and intuitive on Apple’s part, but how many ace cards does Apple still have up its sleeve?

The tech world order in 2017 is in a strange array.

Opportunities are possibly abound in areas like smart homes, smart cars and smart cites, all aided and abetted by the internet of things and cloud. But right now, could Amazon’s Alexa voice-based assistant really be the shape of things to come? I mean, really?

Microsoft, through Satya Nadella’s leadership, has found an alluring sense of zen. It is relaxed in its dominance of cloud and it is even cooperating with Apple in terms of iOS apps, actually accruing a new generation of loyal followers by imitating Apple’s hardware model with its Surface Book personal computer.

The VR revolution currently led by players like Oculus, Samsung, Sony and HTC is a slow burner, and as the AR potential – as espoused through Microsoft’s HoloLens – offers some opportunity to shake things up, Apple has yet to pounce on VR or AR.

The tech world in 2017 is a strange, beguiling and confusing landscape that is ripe for disruption… or leadership.

Could Apple mark 10 years of the iPhone with a game-changing device like a new smartphone? Could it simplify the confusing and troubled start to the VR age as only Apple can? Will it really create an Apple car?

Hints for me lie in the AirPod wireless earphone products, in terms of how Apple has created an invisible, intuitive interface that sets the standards for wearables through gestures and responsive hardware.

But as usual, only Apple knows. My instinct is that if the company really wants to survive, thrive and remain disruptive for the next 10 years, it needs to reach back to a point in time before 9 January 2007, when its back was to the wall and it was vulnerable.

Technology changes but spirit and heart don’t.

It needs to reach back to that spirit of innovation that was born anew in 1997. For that, it needs humility, a sense of vulnerability and the naïve quality of artistry that made computing simple and beautiful for the masses.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years