Apple 2.0

Covering the business that Steve Jobs built

A must read: The iPhone's 'Untold Story'

January 10, 2008: 9:07 AM ET

picture-6.jpgLots of freshly reported detail in Fred Vogelstein's 3,336 word "Untold Story" of Apple's (AAPL) iPhone in Wired -- better than the 9 to 1 chaff-to-wheat ratio suggested by Valleywag, which boils the piece down to 378 words. Among the highlights:

  • An iPhone demo a few months before Macworld that goes so badly that Steve Jobs affixes the staff with a stare and says "We don't have a product yet"—his silence reportedly even more terrifying than his trademark tantrums.
  • A scene in which a frustrated iPhone product manager slams her door so hard she locks herself in and has to be freed with a well-aimed whack with an aluminum bat.
  • An estimate that the iPhone has tripled the volume of AT&T's data traffic in New York and San Francisco.
  • An insider's claim that that the iPhone's development cost Apple $150 million.
  • The assertion that Apple gets roughly $10 from AT&T for every iPhone sold and $10 off the top of every subscriber's monthly bill. (A detail that doesn't quite jibe with estimates that put Apple's monthly cut as high as $18.)
  • A claim that when Jobs finally unveiled the iPhone at Macworld, only 30 or so of the most senior people had seen it.

Vogelstein's main point is that as important as the iPhone is for Apple and AT&T, its real significance lies in how it has upended the structure of the $11 billion U.S. mobile phone industry. Not an earth-shatteringly new thesis, but a must-read nonetheless. Click here.

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Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for

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