Sunday, September 16, 2012

Sometimes it is better to be lucky than to be good.

I was thinking about recent discussions and notes about Apple and iPhones. This discussion led me to research some more of the story and cell phone background that I was only vaguely aware of at the time.

Let me start with Decca. They were a British record label that was founded in 1929. They are famous for refusing to sign the Beatles. Instead they recorded “Brian Poole and the Tremeloes” and let Parlophone (now there’s a well known company — ha ha) capture the fab four.

So Decca in the sixties became known as the “company that missed the Beatles.” This really affected their corporate psyche and they were quick to sign new bands after that, although many of their choices including the Zombies and the Rolling Stones were good things for Decca, it never left their minds nor the negotiating table that they had let the “big one” get away. So this tale shows how corporations, even those that are supposed to be hip and “tuned in” can easily miss the next big thing. The old saying about hindsight and twenty-twenty vision is oh so true.

Now, in hindsight, certainly Verizon (or Sprint or you name them) probably wish they had signed up for the original iPhone. It has certainly been a big success for AT&T. But how did that all happen? What was going on back in 2007 when Apple was developing the iPhone and shopping it around to the cellular networks? Did Verizon or Sprint turn down Apple? Was AT&T glad to sign up with a sure winner? Hmmm, something to ponder.

What was happening around the turn of the century? (Isn’t that a quaint phrase? We can use it two ways now.) I was an early adopter of the Palm Pilot. I first bought the Palm Pilot Professional in 2002. The idea of how it would sync with my PC was almost magical. At that time I maintained a very large address book using Lotus Organizer. This address book had started out as a Borland Sidekick address book replacing my Day-Timer around 1986. By the new millennium I had converted to Lotus Organizer, and I had over 400 addresses, emails, and phone numbers from IBMers all around the world. The idea I could take the address book off my PC and put it in my pocket (this was before laptops) while traveling was amazing to me. What I used to do was print address pages from Organizer using tiny fonts and then cut them out and punch holes in them using my special Day-Timer hole punch so I could put them in my little Corinthian leather address book. I was a good Day-Timer customer.

All that ended with the Palm Pilot. Now I had the latest updated addresses and a whole lot more. Instead of spending an hour printing and cutting and hole punching, a simple sync and the address book in my shirt pocket matched my master PC database. It all seemed so cool at the time.

As the years went by I upgraded to a Sony Palm compatible with a color screen and advanced music player. I continued to grow my use of the portable device. I also had a cell phone, but it was primarily for my wife’s use as she drove to Ft. Collins daily for work and I wanted her to have a cell for safety reasons. We had one of those big old Motorola phones and I actually mounted it in the car as a “car phone” complete with roof antenna and a mount on a flexible tube like a mike stand goose neck. That way the battery was always charged. (At that time we were using Qwest cellular, which might have actually been AT&T, I don’t know for sure.) I later added a Motorola flip phone and we became a four phone number family. (I still had two land lines at home left over from the days of IBM and working from home on a 1200 baud modem. Back then IBM paid for your second phone line.)

After a while, I decided to combine the palm organizer and a cell and bought the Treo smart phone. That must have been around 2006. I was very happy with that phone and bought many applications for it, mostly card games. I had Hearts and Spades and even Bridge on the Treo. What I really liked were the mobile news apps which let me view the New York Times internet version. I could surf the web, but the graphics were very poor and so I gravitated to mobile applications more than raw web surfing. Later the Safari web browser on the iPhone would be the first thing that attracted me. Remember the iPhone ad with the NY Times on Safari and the "two finger" expand? I wanted that!

Meanwhile, Steve Jobs was busy developing a touch screen smart phone that would eliminate the need for the stylus used on the Palm and other smart phones of that era. Of course, after the failure of the Newton and the success of the iPod, Job’s company may not have been focused on these devices. In 2003 Steve stated that Apple didn’t think that PDAs (Personal Data Organizers — the generic name for the Newton, Palm Pilot, and related devices) were necessarily a product that Apple was interested in, but he did think cell phones were a wave of the future.

First Apple worked with Motorola to add iTunes to the new ROKR phone, but that was not what Steve envisioned. He wanted to add pictures and video and the iPhone began to take shape. He was frustrated that Motorola engineers were the primary designers and his input was limited. Soon hints appeared in iTunes that an Apple mobile phone was under development.

Around this time Apple must have been shopping the idea of the iPhone around to the cellular carriers, and possibly not having much luck. He finally inked a deal with Cingular Wireless; a company owned by a couple of the “baby bells” SBC and Bell South. But before the iPhone came out, AT&T had purchased Bell South and Cingular and rebranded it as “AT&T Wireless.”

I have tried every Google expression I can think of, but I wasn’t able to find out much about the early, pre-iPhone history. Did Steve shop the iPhone around to various carriers? I assume so. Did many of them turn him down? Maybe. Was AT&T happy with the Apple contract when they bought out Cingular in 2006? Probably not. Steve had a nice deal with Cingular requiring them to pay the majority of the cost of the expensive new iPhone (although it was still pretty pricy for the consumer, even with a two year service contract).

And was the iPhone’s success assured? Certainly not. Apple’s history contains both successes and failures. For every Apple II there is an Apple III. For every Mac there is a Lisa. For every iPod, there is a Newton. No, the iPhone was a gamble. At its announcement in 2007 about the only compelling feature it had besides a beautiful touch screen was the visual phone mail that meant you didn’t have to slog through seven other messages to get to the one you wanted. They were all displayed and you could play them in random order. That plus the Safari web browser and beautiful color touch screen were about all the iPhone offered. It wasn’t until the second generation of iPhones added the app store that the product really took off.

Today AT&T is the second largest cell phone carrier in the US behind Verizon, and they certainly owe a lot of that success to the popularity of the iPhone, now available in its fourth generation. The concept of the app store has been wildly successful and copied by Google with the android (several hundred thousand apps on iPhone with Android close behind) and by poor Palm’s new Pre and the Windows 7 (both with hundreds of apps!!) [Sarcasim Alert]

Meanwhile AT&T reports double digit (27% in Q2) earnings growth and billions in profits, much of that fueled by the success of the iPhone. And if copying is the most sincere form of flattery, just check out the crowded field of smart phones as we enter the second decade of the 21st century.

I would love to hear from anyone who has more knowledge of the early history of iPhones with cell phone carriers so I could confirm if there was a “Decca” amongst those companies the other Apple corporation approached and do they regret not signing “Stevie and the Saints.”

(P.S. Basit, do you recall the buzz in 2006 and 2007 regarding cell phone companies and apple?  Steve, note the plug for your old band.)

Originally written on Jan. 2, 2011.

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