Apple had never built anything so complex. But he was at a crossroads. “We thought, people are just going to carry one device. They’re going to have a cell phone with music, or they’re going to have an Apple product with music and communications,” said Tony Fadell, a former Apple executive who co-created the iPod and helped lead the early development of the iPhone. “And it was like, ‘Okay, what are we going to create?’
Fadell and other Apple executives watched as Motorola and Samsung released new cell phones with built-in MP3 players. They questioned whether the iPod’s days were numbered.
The iPod was Apple’s biggest product at the time.
By April 2004, the iPod was outselling the Mac and growing more than 900% compared to the previous year.
So Apple started working to make its biggest hit obsolete. To this day – on the company’s 50th anniversary – Apple has never made a more consequential decision.
An iPod phone
Apple had never made a product as complicated as the iPhone, which meant figuring out how to make components work together in ways they had never worked before, Fadell said.
Rubén Caballero, Apple’s vice president of engineering from 2005 until 2019, remembers working long nights and weekends in the roughly two and a half years leading up to the launch of the first iPhone. “I often slept under my desk,” he said.
Among the biggest uncertainties was the interface. Although touchscreens existed long before the iPhone, Apple refined the technology and built software that ran smoothly enough to convince consumers it was worth ditching physical buttons. This required hundreds of people inside Apple working on technical details like screen lamination and moisture rejection, according to a former Apple engineering leader.
The first iteration looked like an iPod that could make phone calls, according to Fadell, Caballero and Andy Grignon, a former Apple senior manager who worked on the first iPhone. It even had the iPod click wheel. “So we tried to make iPods out of phones, and those were failures,” Fadell said.
“Because the click wheel wouldn’t allow us to send text messages, it wouldn’t allow us to dial a phone number.” But hardware was only one side of the story.
“Every application had to be rewritten from scratch,” Grignon said. “You had introduced a new way of interacting with these apps with your fingers. Nothing was stable from the ground up, so when it crashed, you thought, ‘What, how?'” he added.
“Relentless work”
The success of the iPod initiated the company’s shift to portable consumer electronics in the early 2000s. Before the iPod, much of the company’s product line consisted of laptops and desktops.
This transition required Apple to virtually start from scratch, working with new suppliers and manufacturers while building new teams. The company simply didn’t have the technology to build a device like the , Fadell recalls.
The success of the iPod taught Apple a thing or two about staying ahead of the competition – a vital lesson in the highly competitive smartphone race to come.
Fadell said he pushed for a new iPod release in time for Christmas every year, which helped set the tone for the iPhone release cycle.
The former senior member of Apple’s engineering team described the “relentless work” of launching iPods.
Surprising success
The popularity of devices like the T-Mobile Sidekick and BlackBerry 5810 in the early 2000s signaled that consumers wanted their phones to do more than just make calls, send texts and take photos. They wanted to take their lives online with them.
But breaking into the phone market was a daunting task at the time, even for Apple. Nokia and Motorola dominated the market. Operators maintained tight control over marketing and distribution. And at $500, the first iPhone was significantly more expensive than a feature phone.
“If you talk to just about anyone, you’ll find a common theme: ‘Did you know the phone was going to be as important as it is?’ And the answer is that none of us did,” said Grignon, who said the phone was expected to be a “high-end luxury product.”
The former senior engineering manager described those within Apple as being “quite surprised” by the market’s reaction to the first model.
What’s next
Today, the iPhone is among the most popular in the world, and there are more than 2.5 billion Apple devices in use globally. It has fundamentally reshaped the culture, as CNN’s Bill Weir explores in “50 Years of Apple,” a special report for The Whole Story with Anderson Cooper premiering April 4.
Even Grignon is surprised by how ubiquitous the iPhone has become. “My son, who is about to graduate from high school, can’t complete his morning routine without his phone,” he said. This success has spawned an entire ecosystem of products like the Apple Watch and AirPods, all riding on the popularity of the iPhone. It’s the device that will likely define Apple’s legacy in the long term, says Caballero.
“It’s that moment in history that people remember,” he said. The fact that the iPhone hasn’t changed substantially over its nearly 20 years of existence is testament to its success, says Fadell.
But he also believes the industry is in another “existential moment” because of AI, and Apple’s future may depend on how it adapts. Apple has been seen as lagging behind companies like Google and OpenAI – with which it has partnered – in AI.
“Apple needs to think differently than it has (in the last) 10 to 15 years,” Fadell said. “She needs to think about revolutionizing again.”
