[bgribble]

I worked for an Intel spinoff whose CEO was a former high-level Intel exec from the 1990-2010 era. Internal goss attributed much of Intel's decision to stay out of the iPhone to him... there was a supposed quote that went something like "we make chips for computers, not g*d** telephones!"

As the tale went, he was sent out to this doomed-from-birth spinoff as a "sunset cruise" to basically force him into retirement (for this bad decision) without the bad publicity of a public head-chopping.

[bschmidt1]

When I think back to that time period (serving tables, T9 texting in my apron on my Blackberry Pearl lol) I remember the touch screen being a tough learning curve for the majority of people.

The first iPhone was also gigantic, hideous, couldn't send pictures - something even a cheap $20 Samsung from the carrier could do - and it also didn't sell very well. People were more into "The Google phone", the Sidekiq, or the latest Razr. Think it wasn't til the 3GS came out with a ton of marketing push that it started to gain popularity, and it ended up having more to do with the App Store than the hardware - people did not like those touch screens for the first several years of smartphones. They came out at the height of texting and ringtone era, and we were pretty set in our ways, and it took years to change that behavior.

I think the App Store resonated a lot more with people back then rather than the iPhone as a device. MySpace was still around, the Bush-era recession had everyone looking for a side hustle. Most young/ambitious people I was around in "tech" (which was effectively HTML-based SEO and WordPress design) had a Blackberry and a side business. This kid I worked with became "rich" from an iPhone app that just combined other iPhone apps haha. Loved that time period. Graffitio!

Would have been very hard to predict the success of the iPhone, even as I was already entering orders for customers on a fully touch screen Aloha point-of-sale long before iPhone.

[vlovich123]

You’re right. The first iPhone was so bad that “the Google phone” was delayed by many months as they scrambled to completely redesigned their launch phone to be multitouch instead of keyboard.

The razr2 sold 5M units and the sidekick sold 3M to iPhone 1’s 6.1M.

The n95 did outsell the iPhone with 10M units but Nokia had a massively more mature sales pipeline whereas Apple had to build out carrier relations. It also shipped before the iPhone was even announced which gave it time to accumulate sales.

Everyone in the space though recognized how big it was because carriers were going out of their way to try to get it on their network (since at the time Apple was doing 1 carrier per country). Apple got lucky that AT&T bought Singular which made the iPhone accessible to many many more people.

3GS’s 37 million units was because Apple had 2 years to build up manufacturing capacity and carrier sales channels to match demand for what had become clearly a smartphone revolution.

[foobarian]

The big things I remember from that era is that the iPhone was the first phone with an unlimited data plan which Apple/Jobs beat AT&T into submission to get. Until then you had to worry about every last byte you used on the dinky carrier-grade apps and the lousy WAP websites.

This worry removed, and the fact you actually had a real browser that could open real websites were the two main features that to me seemed like a huge leap forward.

[theatrus2]

Its also clear that the carrier wasn't ready for it. People with the original iPhone would get entire boxes mailed to them for their Cingular statement, itemizing every data transaction, but then all flat rate charged.

[S_A_P]

I had an original iPhone and did not get such statements. As I recall while Cingular was indeed not ready to handle unlimited data for customers, it wasn’t really a problem for the first iPhone since it wasn’t 3g. Once the 3g dropped , it was a problem since people were actually able to consume a large amount of data.

[goosedragons]

It very famously happened to iJustine:

https://www.youtube.com/watch?v=UdULhkh6yeA

[saghm]

> The n95 did outsell the iPhone with 10M units but Nokia had a massively more mature sales pipeline whereas Apple had to build out carrier relations.

Am I remembering correctly that originally the iPhone only supported AT&T? My family all was on a shared Verizon plan at the time, and I have a vague recollection of the fact that it wasn't an option for us, but I'm not positive I remember correctly. Nowadays, the idea of a phone not being possible to purchase for a given network seems silly, but I feel like it was a thing at the time.

[mperham]

> Am I remembering correctly that originally the iPhone only supported AT&T?

Yes, for the first few years. Within a year or two, the writing was on the wall and the other providers were dying to get it.

[MBCook]

Which is partly why the Motorola(?) Droid phones got so popular.

Verizon couldn’t have the iPhone, so they pushed that as their equivalent with a huge marketing campaign. Always felt to me like that single-handedly pushed Android into the public consciousness.

Like without that maybe Android would be huge, but we updated have gotten the name recognition. Or at least not so fast, and instead would have been more of an implementation detail in most people’s minds.

Sprint tried to compete with the Palm Pre which was neat but had issues. Then Verizon got the Pre and Sprint’s last shot at relevance died.

[bschmidt1]

Yeah it was only available on AT&T and you couldn't even send pictures (MMS). Hindsight is 20/20 - the people in this thread are overly glamorizing Apple and smartphones in general now because it's easy after something was already successful (the number of influencers on this post is vomit-inducing). In reality smartphones were a tough sell at first, people didn't like the touchscreen at first, it took a ton of marketing push to get people used to them that took years. I was 21 years old when iPhone came out and remember it perfectly clear - also just google sales data. iPhone was selling single digit millions in the first years, nowhere near the 100+ million Razrs sold, or the amount Nokia or RIM were selling.

"But they were new to the space!" "It was still a good start!" is peripheral

[jjtheblunt]

keyboard and scroll ball integrated beneath it on the proto google phone...we had one at qualcomm

[duskwuff]

The scroll ball showed up on some early production devices, like the HTC Dream. Directional keypads lasted even longer.

[jjtheblunt]

i'd forgotten the directional keypads!

[qwytw]

> The first iPhone was so bad that “the Google phone”

It was prototype though. A lot of people could see the potential but the device itself was pretty bad.

[bschmidt1]

According to a quick search the 2006 Razr sold 50 million units (130 million total) but the first iPhone only sold 1.4 million when it released in 2007. iPhone was nowhere near Razr sales. Your comment is a bit disingenuous because that was the less popular Razr after flip phones were on the way out.

Nokia and Blackberry were selling a lot more than both brands at the time. Blackberry alone had 20%+ market share when the Pearl was released. Nokia sold the most phones by far.

[vlovich123]

You’re comparing unrelated things and completely discounting that Apple was a completely new entrant into the space vs entrenched players that had already established sales channels and carrier relations and were selling globally vs US-only to start for Apple.

Apple sold over 6M units of the first iPhone unless you’re saying 1.4M in the first quarter after launch since it launched in September. I was comparing it to phones released at a similar time and claiming that sidekick was somehow more successful is straight up laughable regardless of how you look at it.

The first iPhone defined what the smartphone category should be. Google took heed which saved Android. Nokia and blackberry did not and you can tell where they’re at now.

[bschmidt1]

> Apple was a completely new entrant into the space vs entrenched players that had already established sales channels

So? If anything it supports the point that iPhone wasn't an immediate success. It wasn't as successful as the Razr flip phone was before it, not for a while. The original point was just that it would have been difficult to predict the success of iPhone even after it released, because it didn't do that well at first.

[vlovich123]

https://en.m.wikipedia.org/wiki/IPhone_(1st_generation)

> In its first week, Apple had sold 270,000 iPhones domestically.[47] Apple sold the one millionth iPhone 74 days after the release.[48] Apple reported in January 2008 that four million were sold.[49] As of Q4 2007, strong iPhone sales put Apple no. 2 in U.S. smartphone vendors, behind Research In Motion and ahead of all Windows Mobile vendors.[50]

> As of October 2007, the iPhone was the fourth best-selling handset in the U.S., trailing the Motorola RAZR V3, the LG Chocolate, and the LG VX8300.[51]

I’d say being the #2 smartphone vendor on your first model and beating all Windows Mobile would be a fantastic first step and a clear indicator it would be extremely successful in addition to being #4 across all us handsets. 4M were sold in the first 6 months. You’re just simply misremembering how big it was and how well it sold.

The 3G version the next year sold 4x as many units (25M) . You could say it’s because 3G was such a huge upgrade our other software things like mms and App Store, but the first iPhone was in 6 countries while 3G was in 22 and got to 70. The 3GS did outdo the growth of that since it shipped 5M more units than would be explained just by being available in more countries (80 vs 70).

Could you predict it would end up dominating the smartphone market even as that market ate up more of the legacy feature phone market? Maybe that’s harder but the iPhone’s success wasn’t all that hard. The lack of any competition that could really keep up was another indicator. Android was a pretty big failure for a few years until enough of the feature set became parity and table stakes that people felt comfortable using it (or because Android was available in a lower price segment Apple wasn’t competing in).

[Analemma_]

To be honest, I think you're badly misremembering that era. People were calling the iPhone "the Jesus Phone" after the original keynote announcement, the lines on launch day were around the block, and upon release, there were definitely tons of flame wars around physical vs. touchscreen keyboards but there was a widespread consensus that the iPhone's predictive typing correction was pretty good and that the touchscreen was miles ahead of any similar-equipped phone (many of which were still resistive, ugh!).

It definitely didn't get mainstream popularity until the 3GS/4 and the App Store, but people were definitely interested from day 1. Don't forget that early builds of Android looked much more like a Blackberry clone until the iPhone was announced, and then Google immediately scrapped everything and rewrote it from the ground up to be iPhone-like.

[xenadu02]

It just proves that no matter what you make and how innovative a product it is someone will come along a decade later and claim it was nothing but marketing fluff.

[dagmx]

Gruber said it best (to paraphrase): Apple does things that are derided at launch, and then eventually becomes so commonplace that people think it was obvious.

The iPhone is that. I used to deride it at launch when I had my Sony P1, but it was truly a revolution. Anyone denying its success looking back,even as a v1, is living in a bubble.

[bschmidt1]

Didn't claim that at all, and have used iPhone for years.

[xenadu02]

> I remember the touch screen being a tough learning curve for the majority of people. people did not like those touch screens for the first several years of smartphones. They came out at the height of texting and ringtone era, and we were pretty set in our ways, and it took years to change that behavior.

Touch is probably the single most intuitive and easy to use interface ever created for computing. It is so obvious even a 5 year old child understands it without being taught (as both my kids did). Very very very few people found touch to be a significant learning curve at all so I'm not sure where that idea comes from.

There was definitely a whisper campaign from the tech talking heads that people wanted keyboards and touch screens were not the future... but that was mostly from people who never used it or competitors who had nothing to compete with.

> The first iPhone was also gigantic, hideous, couldn't send pictures - something even a cheap $20 Samsung from the carrier could do

It wasn't much larger than competing "smart" phones at the same and the large size was in fact a huge selling point: a bigger screen to see more content in apps and on websites.

MMS support was missing for sure but was also rolled out as a software update to all existing customers for free. The first time AFAIK that ever happened in the cell phone game. Prior to that (and still in Android land) updates require carrier cooperation and manufacturers did not hand out free features - buy a new phone for that.

> and it also didn't sell very well. People were more into "The Google phone", the Sidekiq, or the latest Razr.

I would say it sold quite well and exceeded expectations. In the iPhone announcement Apple said they'd like to sell 10 million of them by 2008 and sold 13 million. Sales roughly doubled the next year (2009). And the next (2010). And the next (2011). And the next (2012).

> I think the App Store resonated a lot more with people back then rather than the iPhone as a device.

I don't agree it resonated more than the device at that time but it was certainly an extremely important milestone. Apps, especially games, definitely drove a lot of adoption.

[bschmidt1]

> It definitely didn't get mainstream popularity until the 3GS/4 and the App Store

Yeah that's all I was saying. I've used iPhone exclusively for 15 years and am not anti-Apple, but people cannot handle nuance in online forums, so they they come out swinging if you share any experience that doesn't 1:1 reflect the brand marketing of the company.

[michaelt]

> They came out at the height of texting and ringtone era, and we were pretty set in our ways, and it took years to change that behavior.

Nah. The only reason the iphone didn't take off faster was that, for its time, it was extremely expensive.

$600 upfront plus a 24-month, $60/month contract [1]. That's $2000 back in 2007, or $3000 today.

[1] https://www.theregister.com/2007/06/26/iphone_contract_price...

[valley_guy_12]

Second reason it didn't take off faster was that iPhone was typically a carrier exclusive, and in most markets, the iPhone carrier was typically one of the smaller carriers. So iPhone wasn't available to most mobile phone users in a given market, unless they went to the trouble of switching carriers.

[MBCook]

Plus the App Store was a massive driver of demand, but wasn’t there until year 2 and the release of the 3G.

[bschmidt1]

If you were around when the first decent iPhone released (2008) you'd remember that everyone had one for $99 on AT&T, where non smartphones were still like ~$300, so I'd say you have it backwards.

Maybe you weren't old enough, or are from another country. Everybody remembers this, it was a great idea on their part as it got everyone using iPhones.

[goosedragons]

That wasn't release though...

Prices for the 2G iPhone really were that high and Apple even cut the price after a few months because it wasn't moving like expected.

[bschmidt1]

Ah yeah true, re-reading not even sure why I replied like that

[tambourine_man]

I think your memory is a bit hazy. Jaws dropped during the keynote. People disassembled it on day one doubting it was real.

[MBCook]

RIM famously thought they faked the keynote and what they showed was impossible.

[tambourine_man]

I was trying to remember if it was RIM or Nokia

[MBCook]

It was RIM.

I don’t know what Nokia’s reaction was. I don’t think I’ve ever heard.

As the smartphone king at the time in the US RIM is always the one people talked about.

[phire]

> I think the App Store resonated a lot more with people back then rather than the iPhone as a device

You are forgetting, there was no App Store when the iPhone launched. Apple was originally against the idea of Apps. The App Store launched a year later, with the iPhone3G. Yet the iPhone was wildly popular not just from the day it launched, but from the day Apple first demoed it.

I think what caught people's attention with the iPhone is that it's one of the first phones where you could easily browse websites from your phone in a way that didn't feel like a gimmick.

Other phones had web browsers, but they only really worked on special mobile versions of websites. They were also slow and painful to use even on those mobile optimised websites.

Then iPhone came along, and Apple had someone managed to squash a full desktop web browser on it. It did a half decent job of reformatting desktop-only websites to fit on the screen. When pages didn't reformat, the new touched-based panning and pinch-to-zoom gestures allowed you to still experience them with ease.

And Apple managed to make the whole OS feel responsive, despite using the exact same hardware as their competitors.

[bigcat12345678]

A living proof that there is always someone who can find the wrong of the thing that everyone else loves

[lotsofpulp]

> Think it wasn't til the 3GS came out with a ton of marketing push that it started to gain popularity, and it ended up having more to do with the App Store than the hardware - people did not like those touch screens for the first several years of smartphones. They came out at the height of texting and ringtone era, and we were pretty set in our ways, and it took years to change that behavior.

This was not true per my memory. Literally everyone I knew in their 20s and 30s in NYC was switching to the iPhone 3G as of summer 2008. You had to wait in line to buy it for months.

Unlimited 3G + GPS + touchscreen browser was what made it explode. Broadband internet, in your pocket, with mapping capabilities. It felt like the possibilities were limitless, with new apps and functionality being discovered and released daily.

[WheatMillington]

This is a giant bit of revisionist history. The first iPhone was an immediate success and a massive seller.

[MrBuddyCasino]

I still don’t understand why people make such a big deal out of „missing the iPhone“.

There was no money in mobile SoCs, and there still isn’t. Apple makes their own chips anyway!

Intel was right to focus on the x86.

[jorvi]

> There was no money in mobile SoCs, and there still isn’t

Qualcomm market cap: $193 billion

TSMC market cap: $888 billion

Seems designing and fabbing SoCs is plenty valuable

[adventured]

> TSMC market cap: $25 billion

Taiwan Semi's market cap is $888 billion. They're - remarkably - now worth 10x what Intel is.

[jorvi]

Huh, you are right. I already had a feeling it was suspiciously low. I'll correct it, thanks!

[m_mueller]

I think TSMC, ASML and ARM are making quite good money on the iPhone. And so did Samsung for a while before the Apple A4 came out.

[xt00]

Yea it definitely felt like at the time Intel was in a tough spot.. while the article is stating that the narrative about the margins being narrow for arm chips so Intel was nervous about the area, one thing I can attest to is that even if that narrative was false when it comes to Apple, competitors of Apple at the time definitely would be assuming that if Intel went into that space that they gave Apple a good price, so just the perception of them selling a good chip to Apple could have hurt Intel's fat profit margins. Like Apple was selling phones for the same price Intel was selling chips for -- so maybe the higher cost could be justified by Apple who knows, but the perception of Intel's profit margin they are willing to live with impacts their negotiations with other customers dramatically as well.

[sholladay]

Apple designs their own chips, but they don’t make them.

In any other context, that might be splitting hairs but it’s a meaningful distinction in this conversation.

[GeekyBear]

Apple designs their own chips now. but the original iPhone, used a Samsung chip.

Intel didn't just miss out on business as a fab, Apple would have used their chip design as well.

Which leads you to wonder if Apple still would have begun designing chips themselves, if Intel had put some real effort into designing mobile chips.

[unsignedchar]

The acquisition of PA Semi was announced in April 2008, so it is possible discussions were already in progress by the time of the first iPhone launch

[GeekyBear]

Sure, but Apple had gone public with the iPhone announcement over a year before the PA Semi acquisition.

I think it's safe to say that they had already selected an off the shelf Samsung CPU before they did the public demo of the device.

[pests]

I think it's still splitting hairs.

Even though I sent my prints out to be printed by shapeways or whatever, I still tell people "I made" those parts.

[zamfi]

The point here is that there is tons of money to be made in manufacturing those chips that Intel lost out on by ignoring mobile. That “Apple makes their own chips” does not alone mean Intel could not have profited from this — as indeed TSMC, ASML, and ARM are.

[kaibee]

This analysis misses kinda a major point. The nice thing about making mobile SOCs is that the yields are more forgiving. If you have 1000mm^2 of silicon that you're slicing into 10mm^2 dies, each defect (of which there will be many on early leading nodes), will only cost you a 10mm^2 chip, instead of a 50mm^2 chip. And because you're making them in volume, you get many many cycles to improve your process before you try to make bigger chips with it, ie: CPUs/GPUs. And because Apple wanted the increased performance/battery life, they reserved capacity from TSMC on these leading nodes in advance, helping to finance their development while providing a garunteed customer that was going to buy in volume. This gave TSMC a huuuge advantage over Intel that materialzied around ~2018.

[klelatti]

Apple doesn't make their own chips TSMC does and TSMC generated net income of US$26 billion in 2023.

[MrBuddyCasino]

That is actually a good point - the fab process would turn out to become another weak point (besides the missing moat of ARM) of Intel. There is no way Apple would watch TSMCs leadership year after year and still stick with Intel fabs.

[rsynnott]

Definitely not; at one point the iPhone chip was actually dual-sourced!

https://www.anandtech.com/show/9708/analyzing-apple-statemen...

[MBCook]

Apple hates being beholden to one company. It’s bitten them many times in the past.

I suspect if anyone else could keep up with TSMC Apple would still dual source.

But between their lead and the benefits of being such a big customer they get first crack at the cutting edge stuff, single sourcing manufacturing probably makes the most sense.

And their interests are aligned, unlike their dependencies on MS/Adobe/Motorola/IBM/Intel.

[PopePompus]

Well volume is an issue. Even a low margin part which has very high volume sales can help you afford to build leading edge Fabs, and keep process technology leadership.

[dagmx]

Apple designs their own chips now. They didn’t for a good many years.

Intel could have moved big volumes during that period. At the very least they could have been a fab.

They also largely switched to their own chips because vendors weren’t meeting their needs.

Again, Intel could have staved it off on both computers and phones if they didn’t mess up so badly on delivery over the last several years.

[razakel]

But it proved ARM had a mature ecosystem with lots of developers...

[aa-jv]

>"Apple makes their own chips anyway!"

Apple can only do that now, because of the billions they have made on the iPhone, plain and simple.

And - more importantly - they were well geared to do that, since the beginning of computing.

There being no money in SoC's, is because they're all being made across the other side of the planet, mostly, from the intended final users.

If Intel were really 'leading edge', they'd have made desk-side custom fabrication a thing in the makerspace already. Such that I can, as a computer user, print 10 or 20 or X little chips, for my own specific purposes, non-mass-market.

This would be a truly revolutionary adventure from a 'grandfather of computing' style company.

Alas, the x86 is, indeed, everywhere. Grandfather Intel has a massive garden.

If only the SoC battles were truly localized, and a real computing revolution can happen (before its too late).

You should have a locally-built device in your hand.