Apple's New Calling: The iPhone

If you've ever wondered how it works, this is how it works: I don't call Steve, Steve calls me. Or more accurately, someone in Steve Jobs's office calls someone in my office—someone at a much higher pay grade —to say that he has something cool. I then fly to the metastasized strip mall called Cupertino, Calif., where Apple lives, sign some legal confidentiality stuff and am escorted to a conference room that contains Jobs, some associates, and some lumps concealed under some black towels. I stare at what was under the towels. Everybody else stares at me.

This is how Apple, and nobody else, introduces new products to the press. It can be awkward, because Jobs is high-strung and he expects you to be impressed. I was, fortunately, and with good reason. Apple's new iPhone could do to the cell phone market what the iPod did to the portable music player market: crush it pitilessly beneath the weight of its own superiority. This is unfortunate for anybody else who makes cell phones, but it's good news for those of us who use them.

It's also good news for Jobs. Apple has had some explaining to do lately about backdated stock options it issued to Jobs and some other senior Apple executives. An internal investigation has cleared Jobs, but a federal investigation and a shareholder lawsuit are still going forward.

Sure, backdating options is common in Silicon Valley, but the essence of Apple's identity is that it's an uncorporate corporation: a glossy white iPod-colored company, the kind that doesn't get mixed up in this kind of thing. When Jobs calls the iPhone "the most important product Apple has ever announced, with the possible exception of the Apple II and the Macintosh," he means, technologically. But now is not a terrible time to be hitting a home run.

The iPhone developed the way a lot of cool things do: with a false start. A few years ago Jobs noticed how many development dollars were being spent—particularly in the greater Seattle metropolitan area—on what are called tablet PCs: flat, portable computers that work with a touchscreen instead of a mouse and keyboard. Jobs, being Jobs, figured he could do better, so he had Apple engineers noodle around with a tablet PC. When they showed him the touchscreen they came up with, he got excited. So excited he forgot all about tablet computers.

Jobs had just led Apple on a triumphant rampage through a new market sector, portable music players, and he was looking around for more technology to conquer. Cell phones are perfect because even Grandma has one: consumers bought nearly a billion of them last year. Break off just 1% of that and you can buy yourself a lot of black turtlenecks. Cell phones do all kinds of stuff—calling, text messaging, Web browsing, contact management, music playback, photos and video—but they do it very badly, by forcing you to press lots of tiny buttons, navigate diverse heterogeneous interfaces and squint at a tiny screen. "Everybody hates their phone," Jobs says, "and that's not a good thing. And there's an opportunity there." To Jobs's perfectionist eyes, phones are broken. Jobs likes things that are broken. It means he can make something that isn't and sell it to you for a premium price.

That was why, two and a half years ago, Jobs sicced his wrecking crew of designers and engineers on the cell phone as we know and hate it. They began by melting the face off a video iPod. No clickwheel, no keypad. They sheared off the entire front and replaced it with a huge, bright, vivid screen—that touchscreen Jobs got so excited about a few paragraphs ago. When you need to dial, it shows you a keypad; when you need other buttons, the screen serves them up. When you want to watch a video, the buttons disappear. Suddenly, the interface isn't fixed and rigid, it's fluid and molten. Software replaces hardware.

Into that iPod they stuffed a working version of Apple's operating system, OS X, so the phone could handle real, non-toy applications like Web browsers and e-mail clients. They put in a cell antenna, plus two more antennas for WiFi and Bluetooth; plus a bunch of sensors, so the phone knows how bright its screen should be, and whether it should display vertically or horizontally, and when it should turn off the touchscreen so you don't accidentally operate it with your ear.