But Forstall had been so aggressive in his effort to beat Fadell that it scared people. Many wondered whether there was anything he wouldn’t do to get ahead. CEO Tim Cook would eventually push Forstall out of Apple in 2012. But back in 2007 it looked as if he were going to be there forever, and when he was put in charge of all iPhone software in 2007, a huge exodus of talent followed. Those who stayed got to watch Forstall’s naked ambition on full display. Even his fans admit that before he left, he had become a cliché of a difficult boss—someone who takes credit for underlings’ good work, but is swift to blame them for his own screwups. When Jobs was alive, Forstall drove colleagues mad with his sanctimonious “Steve wouldn’t like that” critique, and he made no secret of his seeing himself as the eventual Apple CEO. In 2011, Bloomberg Businessweek reported that chief designer Jony Ive and head of technology Bob Mansfield were so suspicious of Forstall they refused to meet with him unless CEO Tim Cook was present too. I’ve heard that was true for iTunes boss Eddy Cue as well.
It wasn’t shocking to see Jobs play two executives off against each other; he was well-known for his Machiavellian side. But what was surprising was that Jobs let the fight go on so long and affect so many people at Apple.
“It was incredibly destructive,” one executive said. “I think Steve would have been great during ancient Roman times, where you could watch people get thrown to the lions and be eaten. He played them [Fadell and Forstall] off each other. Tony was the golden boy for a while, then Forstall, then back to Tony, then back to Forstall. It became a circus. Remember ‘Spy vs. Spy’ [a 1960s comic strip that pitted a white spy (the United States) against a black one (the Soviet Union)] in Mad magazine? It was like that—comical—if it hadn’t wasted so much time.” Another executive, remarkably, made the same comparison. “The first time I saw [the movie] Gladiator [in 2007], I told my husband, ‘This feels familiar,’” she said. (Forstall would not be interviewed for this project. Fadell is not shy about his feelings, though. After Apple pushed Forstall out, Fadell told the BBC, “Scott got what he deserved.”)
In retrospect, many at Apple believe that it ultimately wasn’t a fair fight. Fadell’s expertise was hardware; Forstall’s was software. That gave Forstall a built-in advantage because many believed that Jobs was much more interested in the software and industrial design of Apple products than the innards. But while the fight was going on, it wasn’t at all clear how it was going to turn out.
Grignon knows firsthand how nasty the fight between Forstall and Fadell was. He wound up in the middle and ended up feeling pulled in opposite directions like a piece of warm taffy. Even before work on the iPhone started, Grignon discovered simmering tension between the two executives. In 2004 Forstall tried to block Grignon from taking a job in Fadell’s division. Grignon had worked for Forstall for three years building products called Dashboard and iChat. He thought they were decent work friends. They would go rock climbing together on the weekends. But when Fadell offered him a better opportunity inside Apple, Forstall went out of his way to block it. He told Grignon that he supported his decision to move. Then Forstall went behind Grignon’s back to Jobs himself to stop it. “And he made enough noise to Steve that Steve actually intervened on my transfer to Tony’s org. He sat Forstall [and some other executives] in a room and basically beat them all down saying, ‘Okay, you can have Andy and nobody else. Nobody else gets to transfer from software [under Forstall] to iPod [under Fadell].’ That’s when the animosity between them really started.”
The fight was like a religious war. When work on the iPhone began, Forstall constructed an elaborate secret organization to work on the project. It was so secret that it wasn’t clear for a while if Fadell even knew about it. From his office on the second floor of IL 2 on Apple’s campus, Forstall started pulling in some of the best engineers from around the company, creating lockdown areas all over the building as he went. “If you were working weekends, you’d see the construction crews come in all the time putting up walls, security doors … everything … so that by Monday there was a new lockdown area. I’ve never seen walls put up that fast. Looking back, it’s almost comical to think about,” said Shuvo Chatterjee. “As they reconfigured, some of us were moving almost once every two months. For a while, I just kept everything permanently in boxes because I knew if I unpacked, I’d have to pack up and move again right away.”
“It became a maze,” Nitin Ganatra said. “You’d open this door and the previous door would close behind you. It was Sarah Wincester-y in some ways.”
Officially the iPhone was being run by Fadell. Fadell ran the iPod division, and it seemed natural to build the iPhone by starting with an iPod and just improving it. Forstall had a different and vastly more risky idea: figure out a way to shrink the software that ran on Macs and make it run on a phone. “We had all assumed the iPhone would run a version of the software we had designed for P1 [a version of the iPod OS designed for the first prototype],” said one of Fadell’s iPhone engineers. “But totally in parallel, Forstall and his team were working on a version of OS X to run the phone. We didn’t know.”
Jobs wanted to run OS X on the iPhone. He just didn’t think it could be done. When Forstall’s team actually did it, Forstall won control of the iPhone project. “There is no hardware-software guy at Apple,” said another iPhone engineer. “This has been a point of contention for a lot of people in the history of Apple. Hardware guys think they know software. And software guys think they know hardware. But Steve wouldn’t have it [be drawn into that debate among his executives]. So when Scott said, ‘Hey, Steve, there is this kick-ass software team in Tony’s org, and I want it,’ Steve is like, ‘Well, of course. You’re the software guy. They’re doing software, they should be on your team.’ By the time the iPhone went on sale in mid-2007, Forstall controlled many of its software engineers. And when Apple launched the iPod Touch a few months later, Forstall controlled that too.
* * *
Fadell has gone on to start Nest, a company that makes the first good-looking, powerful, and easy-to-use home thermostat. Not surprisingly, it has all the design and software flourishes of an Apple product. It is one of the most talked about new ventures in Silicon Valley. But allies and enemies alike still talk about his fight with Forstall as if it were yesterday.
Fadell was truly Apple’s first golden boy of Jobs’s second stint at the company. At thirty-two he’d come to work at Apple only knowing that he was to work on some secret project he was told he was suited for. Four years later, as the line executive in charge of iPod, he was one of the most powerful people at Apple. By the fall of 2006, iPods represented 40 percent of Apple’s $19 billion in revenue. And its market share, at more than 70 percent, seemed unassailable. Apple was selling more Macs too, but those sales represented less than 10 percent of all personal computers. The iPod’s success, meanwhile, had turned Jobs into a business icon once again.
Fadell had been exactly what Apple needed in 2001. He was young, brash, and smart, having been part of cutting-edge portable-hardware engineering in the Valley for fifteen years. He once told a reporter that he would have ended up in jail had he not discovered computers. He occasionally showed up for work with bleached hair. He was not good at holding his tongue when faced with substandard work or ideas. His first job out of college was at General Magic, a company Bill Atkinson and Andy Hertzfeld spun out of Apple in the early 1990s in the hope of developing some of the first software ever written exclusively for mobile devices. The project failed and Fadell found himself at Philips, the giant Dutch conglomerate, where he quickly became the company’s youngest executive. He ran the company’s new mobile-computing group, where he developed some early PDAs (the Velo and Nino), which sold decently. They also introduced him to the power of digital music on portable devices.
Fadell was getting ready to start his own company when Apple’s head of hardware, Jon Rubinstein, called, trying to recruit Fadell for a job that, astonishingly, he was not allowed to disclose. According t
o Steven Levy’s book The Perfect Thing, Fadell took the call on a ski slope in Colorado in January and expressed interest on the spot. He had idolized Apple since he was twelve, according to Levy. That was when he’d spent the summer of ’81 caddying to save up enough money to buy an Apple II. Weeks after Rubinstein’s call, Fadell joined Apple, only discovering then that he was being hired as a consultant to help build the first iPod.
Grignon and others have said that Fadell’s rise never sat well with Forstall. Up until Fadell joined Apple, Jobs’s inner circle was composed of people he’d worked closely with at least from the beginning of his return in 1997, and in some cases from his days running NeXT, the computer company he’d founded after getting fired from Apple in 1985. Forstall had worked longer with Jobs than almost any other executive. He’d joined NeXT when he’d graduated from Stanford in 1992. Yet he wasn’t part of Jobs’s inner circle for a long time, and Fadell was. And Fadell, who was the same age as Forstall, was rising much faster in the corporation than Forstall. Fadell ran the iPod division, which generated 40 percent of Apple’s revenue. Forstall was in charge of the application software that came with a Mac—things such as Address Book, Mail, Safari, and Photo Booth.
But then Forstall and Jobs bonded. It was in 2003–4, and colleagues believe it was because Forstall developed a severe stomach ailment around the time that Jobs was first diagnosed with pancreatic cancer. Jobs, who at first tried to treat his own cancer with diet, developed a regimen for Forstall that appeared to cure him. After that, said Grignon, Forstall began coming to more and more of Jobs’s Monday senior-staff meetings. Ordinarily Forstall would not even have known about the iPhone project; he wasn’t senior enough. “So as soon as he found out through those inner-circle discussions that Jobs wanted to build a phone, that’s when he started to wedge himself in,” Grignon said.
Forstall couldn’t have been more different from Fadell. Forstall was smooth, engaging, and had Jobs’s flair for the dramatic gesture, having acted in high school plays in addition to studying computer science. Even then, say classmates, it was clear how ambitious and determined he was. As Bloomberg Businessweek put it in 2011, “In many ways, Forstall is a mini-Steve. He’s a hard-driving manager who obsesses over every detail. He has Jobs’s knack for translating technical, feature-set jargon into plain English. He’s known to have a taste for the Mercedes-Benz SL55 AMG, in silver, the same car Jobs drove, and even has a signature on-stage costume: black shoes, jeans, and a black zippered sweater.”
For two years Forstall and Fadell fought about everything, often forcing Jobs to mediate disagreements over the smallest matters. Nitin Ganatra, who worked for Forstall, recalls one moment in 2006 when Jobs had to decide which group’s boot loader would run on the iPhone. It sounds like engineering minutia, and it is. The boot loader is the first piece of software that runs on a computer. It tells the processor to look for and start the disk that has the machine’s software on it. “We were like, ‘Why does Steve have to come in and make a decision about something this small? Can’t Scott and Tony figure it out on their own?’”
Another engineer, who reported to Fadell, expresses his frustration with the fight more bluntly: “For two years I worked Thanksgiving, Christmas, and New Year’s—insane hours—and it was hard to have to deal with this other political bullshit too.”
* * *
Despite the feuding and relentless deadline pressure, the iPhone—remarkably—stayed on schedule for its June 29 launch. When it finally went on sale, the last Friday of the month, the event was covered by the global news media as if Elvis Presley or John Lennon had risen from the dead. News crews camped out at Apple stores across the country to witness the pandemonium as eager customers waited on line for hours. During one live shot on FOX News in front of the New York City Apple store at Fifty-Ninth Street and Fifth Avenue, someone eager for attention stepped in front of the camera and grabbed reporter Laura Ingle’s microphone out of her hand while she was in midsentence. It almost seemed planned—though it was in not—because she was in the middle of interviewing Newsweek’s Steven Levy, who was one of the four journalists in the world to have gotten a review model ahead of the general public. Before the man grabbed the microphone, Ingle had given her audience a buildup, saying, in a hushed voice, “I don’t want to create a mob scene, but he’s got one … We’re going to need some security around here probably, but show us what you’ve got.”
Levy wrote about it months later in a Newsweek column: “Shaken but undaunted, we restarted. It got even scarier. People pressed in close, fingers stretching toward the device, Michelangelo style. Afterward, a production assistant warned me that I should have a bodyguard with me until the sale began at 6 p.m. I made it through the day without extra muscle, but I still marvel at the phenomenon. For two weeks a gizmo took its place among Iraq and Paris Hilton as a dominant news event.”
Apple sold 270,000 iPhones in the first two days they were available. In the next six months Apple sold another 3.4 million iPhones, driving many to conclude that it had changed the cell phone industry forever.
Looking back, the iPhone launch feels like an even more remarkable accomplishment than it did at the time. For all the iPhone’s revolutionary design and features, a lot was wrong with it too. At $499 for the base model, it was too expensive. Virtually every other smartphone sold for closer to half that price. Consumers got the freedom to switch cell carriers or cancel their cell service anytime they wanted in return for paying so much more for the iPhone. Other, cheaper phones required customers to keep service up and running with one carrier for two years. But was that added flexibility worth $250 or more? Most thought it was not.
The iPhone ran on the slower 2G cell network when most high-end phones were running on the newer and much faster 3G network. The iPhone had taken so long to build that the chips enabling 3G reception weren’t useable when the phone was designed. Most other phones had GPS. The iPhone did not. Most phones had removable batteries and expandable memories. The iPhone had neither. The iPhone didn’t run video made with Adobe’s Flash technology, which at the time seemed to be every video but those on YouTube. YouTube used Flash to stream videos to desktop and laptop computers but a different technology that used less bandwidth to stream to mobile devices. Most companies didn’t have the money or the technological prowess of Google to do likewise then.
Seemingly obvious features such as the ability to search your address book or to copy and paste text or to use the camera to record video were missing from the first iPhone too. Critics pointed out these flaws as if Apple had not thought of them. The problem was much more straightforward: Apple just hadn’t had time to put them all in. “There were moments where we said, ‘Well, this is really embarrassing,’” said Grignon. “But then we’d have to say, ‘Okay. It’s going to be embarrassing. But we have to ship. Even though it is a stupid, small, easy thing to fix, we have to prioritize and fix only the things that are the worst.”
There was no app store, or plans to launch one. The iTunes app store, which Apple didn’t unveil until 2008, has been as important to the iPhone’s success as the device itself. It generates $4.5 billion in revenue a year for mobile-software developers and another $1.9 billion a year for Apple. It has been one of the engines driving Silicon Valley’s boom. But Jobs, like the rest of Apple, was so focused on getting the device ready for sale that he didn’t see the potential at first. “I remember asking Steve what he wanted to accomplish with the iPhone,” Bob Borchers said. “He said he wanted to build a phone people could fall in love with. It wasn’t ‘Let’s revolutionize XYZ.’ It was ‘Let’s think about how to build something cool. If they fall in love with it, then we can figure out what they want to do with it.’ When we launched the iPhone, we called it a revolutionary phone, the best iPod ever created, and an Internet communications device. But we had no idea what an Internet communications device even was.”
Jobs understood why consumers would see the iPhone as a Macintosh for your pocket. It ran OS
X after all. But he also hated the idea that consumers would see the iPhone this way. Computers are things that run software from developers all over the world—outside Apple. He didn’t want the iPhone to become that at all. After the unveiling, when software developers began clamoring for permission to make programs for the iPhone, Jobs said no publicly and emphatically. “You don’t want your phone to be like a PC,” he told John Markoff of The New York Times right after the announcement. “The last thing you want is to have loaded three apps on your phone and then you go to make a call and it doesn’t work anymore. These are more like iPods than they are like computers.”
But the iPhone had so many other cool new features that consumers overlooked its flaws. It wasn’t just that the iPhone had a new kind of touchscreen, or ran the most sophisticated software ever put in a phone, or had an Internet browser that wasn’t crippled, or had voice mail that could be listened to in any order, or ran Google Maps and YouTube, or was a music and movie player and a camera. It’s that it appeared to do all those things well and beautifully at the same time. Strangers would accost you in places and ask if they could touch it—as if you had just bought the most beautiful sports car in the world. Its touchscreen worked so well that devices long taken for granted as integral parts of the computing experience—the mouse, the trackpad, and the stylus—suddenly seemed like kluges. They seemed like bad substitutes for what we should have been able to do all along—point and click with our digits instead of a mechanical substitute. All of this captivated not just consumers but investors. A year after Jobs had unveiled the iPhone, Apple’s stock price had doubled.
Dogfight: How Apple and Google Went to War and Started a Revolution Page 8