You Can't Do That, Steve

Those might be the five most terrifying words any Apple employee could ever say. And yet:

The second iPhone prototype in early 2006 was much closer to what Jobs would ultimately introduce. It incorporated a touch-screen and OS X, but it was made entirely of brushed aluminum. Jobs and Jonathan Ive, Apple’s design chief, were exceedingly proud of it. But because neither of them was an expert in the physics of radio waves, they didn’t realize they created a beautiful brick. Radio waves don’t travel through metal well. “I and Rubén Caballero” — Apple’s antenna expert — “had to go up to the boardroom and explain to Steve and Ive that you cannot put radio waves through metal,” says Phil Kearney, an engineer who left Apple in 2008. “And it was not an easy explanation. Most of the designers are artists. The last science class they took was in eighth grade. But they have a lot of power at Apple. So they ask, ‘Why can’t we just make a little seam for the radio waves to escape through?’ And you have to explain to them why you just can’t.”

That’s the kind of meeting where, when it’s over, you grab your knees and breathe deeply for a few minutes. And then try not to slip and fall in the puddle of sweat on the floor.

That story is from an in-depth New York Times report on the history of the creation of the iPhone, and it’s excellent reading if you’re at all interested. Another detail that caught my eye was that the original iPhone took 2.5 years and $150 million dollars to produce. That might seem like small change, especially now that Apple has something like $150 billion-with-a-b in the bank.

But consider this.

In 2005, when development began in earnest, Apple had only around $5 billion in cash, and wasn’t nearly the revenue-generating machine it has since become. At the time, Macs were selling OK, but 2/3rds of the company’s profits were being generated by iPod sales, which the iPhone threatened to undercut. Then think of the opportunity cost of all that human talent, had the iPhone been a flop or had it never come to market. It’s a huge loss to have so many of your best people working so long on vaporware.

Instead of course, Apple redefined the smartphone industry, branched off that technology to redefine and recreate the virtually non-existent tablet market, and go on to become the most valuable company in the world.

Not a bad return on their $150 million investment.