Apple's iPhone

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Why is Apple able to do things most other companies can't? Partly by charging for it: The iPhone will cost $499 for a 4GB model, $599 for 8GB, which makes it expensive, but not a luxury item. And partly because the company has highly diverse talent who are good at hardware, software, industrial design and Internet services. Most companies just do one or two things well.

Unlike most competitors, Apple also places an inordinate emphasis on interface design. It sweats the cosmetic details that don't seem very important until you really sweat them. "I actually have a photographer's loupe that I use to look to make sure every pixel is right," says Scott Forstall, Apple's vice-president of Platform Experience (whatever that is). "We will argue over literally a single pixel." As a result, when you swipe your finger across the screen to unlock the iPhone, you're not just accessing a system of nested menus, you're entering a tiny universe, where data exist as bouncy, gemlike, animated objects that behave according to consistent rules of virtual physics. Because there's no intermediary input device—like a mouse or a keyboard—there's a powerful illusion that you're physically handling data with your fingers. You can pinch an image with two fingers and make it smaller.

To witness the iPhone launch from behind the curtain (or under the towel) is to see the controlling hand of Steve Jobs, for whom this is an almost mystically significant year. He's 52 years old. It's been 30 years since he founded Apple (with Stephen Wozniak), and 10 since he returned there after having been fired. In that decade Apple's stock has gone up more than 1,000%. Neither age nor success (nor cancer surgery in 2004) have significantly mellowed him, though some of the silver in his beard is creeping into his hair. All technologists believe their products are better than other people's, or at least they say they do, but Jobs believes it a little more than most.

Jobs's zealousness about product development— and enforcing his personal vision—remains as relentless as ever. He keeps Apple's management structure unusually flat for a 20,000-person company, so he can see what's happening at ground level. There is just one committee in the whole of Apple, to establish prices. I can't think of a comparable company that does no—zero—market research with its customers before releasing a product. Ironically, Jobs's personal style could not be more at odds with the brand he has created. If the motto for Apple's consumers is "think different," the motto for Apple employees is "think like Steve."

The same goes for Apple's partners. The last time Apple experimented with a phone, the largely unsuccessful ROKR, Jobs let Motorola make it, an unsatisfying experiment. "What we learned was that we wouldn't be satisfied with glomming iTunes onto a regular phone," Jobs says. "We realized through that experience that for us to be happy, for us to be proud, we were going to have to do it all."

Apple's arrogance can inspire resentment, which is one reason for some of the glee over Jobs's stock options woes: taking pleasure in seeing a special person knocked down a peg is a great American pastime. (Jobs declines to talk about the options issue.) But there's no point in pretending that Jobs isn't special. A college dropout, whose biological parents gave him up for adoption, Jobs has presided over four major game-changing product launches: the Apple II, the Macintosh, the iPod, and the iPhone; five if you count the release of Pixar's Toy Story, which I'm inclined to. He's like Willy Wonka and Harry Potter rolled up into one.

That doesn't mean Apple can operate beyond the boundaries of the Securities and Exchange Commission, but the iPhone wouldn't have happened without Apple's "we're special" attitude. One reason there's limited innovation in cell phones generally is that the cell carriers have stiff guidelines that the manufacturers have to follow. They demand that all their handsets work the same way. "A lot of times, to be honest, there's some hubris, where they think they know better," Jobs says. "They dictate what's on the phone. That just wouldn't work for us, because we want to innovate. Unless we could do that, it wasn't worth doing." Jobs demanded special treatment from his phone service partner, Cingular, and he got it. He even forced Cingular to re-engineer its infrastructure to handle the iPhone's unique voicemail scheme. "They broke all their typical process rules to make it happen," says Tony Fadell, who heads Apple's iPod division. "They were infected by this product, and they were like, we've gotta do this!"

Now that the precedent has been set, it'll be interesting to see if other cell phone makers start demanding Apple-style treatment from wireless carriers. It'll also be worth watching to see how successful they'll be in knocking off the iPhone's all-screen form factor, which will be very difficult without Apple's touchscreen technology. Apple has filed for around 200 patents associated with the iPhone, building an imposing legal wall. Considering the size of the market, the stakes are high. The phone market is, of course, divided into armed camps by carrier, and so far the iPhone is exclusive with Cingular. Apple has sold 100 million iPods worldwide, but Cingular has only 58 million customers. Apple expects to launch the iPhone abroad in the fourth quarter of this year.

It's not quite right to call the iPhone revolutionary. It won't create a new market, or change the entertainment industry, the way the iPod did. When you get right down to it, the device doesn't even have that many new features—it's not like Jobs invented voicemail, or text messaging, or conference calling, or mobile Web browsing. He just noticed that they were broken, and he fixed them.

But that's important. When our tools don't work, we tend to blame ourselves, for being too stupid or not reading the manual or having too-fat fingers. "I think there's almost a belligerence—people are frustrated with their manufactured environment," says Ive. "We tend to assume the problem is with us, and not with the products we're trying to use." In other words, when our tools are broken, we feel broken. And when somebody fixes one, we feel a tiny bit more whole.