The Company That Invented the iPhone in 1990

nymag.com

10 points·connorcodes··5 comments

People like to point out how great the iPhone was, therefore, that's why it succeeded but the brilliance of the phone was the tie to the phone companies and the continued improvement by apple.

Magic's big problem was that it did not have a revenue model. Engineers like to point to great gadgets and products but if the products can't be monetized then don't expect them to be around for long.

Steves brilliance was that he was able to monetize a gadget from the start. The first iPhones were good but they would have failed had they not been paired with an affordable service. Had people had to pay for the phone first then the iPhone would have failed.

When the iPhone came out it was $600 for the phone, plus a 2 year contract, at&t only..

There was a loophole. Apple sold them at their stores with an (iTunes?) activation procedure. You could (and I did) buy the phone outright and never activated with AT&T. I just used a local GSM sim. Of course the visual voicemail never worked, but a small loss.

True but AT&T gave Apple a chunk of the service fees. If Apple had had to sell the phone alone the cost would have been much more expensive. Plus within a year they were selling the most expensive at about $399. A price that was competitive with the high-end phones at the time.

It was estimated that apple averaged about $450 payment from ATT per phone. So users were paying way more for the phone than they thought.

The iPhone was profitable from the start or very close to it. It really was a genius move by Steve.

Granted, Steve Jobs' genius helped give Apple the bargaining power to seal that deal, but...

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