In the iPhone’s Wake

     It didn’t take long for the word to spread among the technorati that Jobs got it right. At another event, I was in a press mob around Andy Bechtolshiem, the smart but nerdy chief engineer and co-founder of Sun Microsystems, known for wearing socks and sandals even when giving a keynote address. Bechtolshiem pulled an iPhone out of his pocket and went on an extended rant about how great it was.

“Finally,” Bechtolsheim proclaimed, “someone has delivered a cell phone with a compelling experience of the Web.”

As was often the case, Bechtolsheim was right. I had owned three cell phones that offered Internet access, but after what felt like a dozen clicks to get to text feeds of CNN news on their tiny screens, I had given up on mobile surfing. In those days, every device linked to what we called a “walled garden” of services on a private network maintained by the carrier, and they all sucked.

Jobs had insisted the iPhone would connect to the open internet. No walled garden for his handheld. He was right.

Just as it did earlier in personal computing, Apple took ideas pioneered elsewhere and brought them alive in the iPhone in a way no one had to date, using unassuming off-the-shelf hardware and a stunningly simple and fun user interface. And once again, Apple created a marketing firestorm that captured the imagination of the public as well as astute tech watchers like Bechtolsheim.

A young engineer I knew echoed his words at a private party. “I went to Santa Cruz the other day and used my iPhone to find a restaurant and book a table. It was amazing!”

Though the difference between the iPhone and other devices was like night and day, the market shift came gradually. The incumbent, Nokia, had shipped an estimated 437 million phones in 2007 and was expanding its partnerships. Even Microsoft folks were still upbeat about their chances.

Indeed, it was still early days for what we were just starting to call smartphones. Market watchers at International Data Corp. were estimating only 10 percent of the nearly 1.2 billion handsets that would ship in 2008 would be Web-ready phones, a slice it said would grow to 30 percent by 2011.

Clearly, this time around Steve Jobs was extending Apple’s reach beyond defining the software and the system (as with the Mac); he wanted to own the services, too.  What’s more, a The New York Times story said Jobs planned to make the chips the device runs on, tapping the low-power processor expertise he acquired with a high-flying startup.

Will Strauss, another market watcher we often quoted, said Apple could easily become one of the top 10 handset makers within a year, a distinction that required sales of only 10 million units annually. I was still skeptical, in part, I suppose, because I was frustrated to think we might never get any good stories on the Apple chips.

Apple’s secrecy inspired a handful of analysts to buy iPhones, open them up and publish what they found. These teardowns became some of the hottest stories in mobile computing. I lacked the expertise to do that work, so I interviewed those who did, but the resulting stories felt thin and secondary to the detailed technical teardown reports themselves.

The iPhone’s success created a whole new class of teardown analysts. More importantly, its contract manufacturers, especially Taiwan’s Foxconn, became huge. They had to build factories where the millions of devices where laboriously assembled, much of the work done by hand. And eventually those factories and their conditions grabbed the attention of the mainstream business press.

Mobile computing became a beat for big publications with the resources to cover big, closed corporations. As Wallace had found with the Wintel PC, things in mobile computing got less interesting for tech journalists like us at EE Times.

Next: Live in SanJose: Apple v. Samsung