History of iPhone

The genesis of the iPhone was Jobs' direction that Apple engineers investigate touch-screens. At the time he had been considering having Apple work on tablet PCs. Many have noted the device's similarities to Apple's previous touch-screen portable device, the Newton MessagePad. Like the Newton, the iPhone is nearly all screen. Its form factor is credited to Apple's head of design, Jonathan Ive. Comments made by Jobs in April 2003 at the "D: All Things Digital" executive conference expressed his belief that tablet PCs and traditional PDAs were not good choices as high-demand markets for Apple to enter, despite many requests made to him that Apple create another PDA. He did believe that cell phones were going to become important devices for portable information access, and that what cell phones needed to have was excellent synchronization software. At the time, instead of focusing on a follow-up to their Newton PDA, Jobs had Apple put its energies into the iPod, and the iTunes software (which can be used to synchronize content with iPod devices), released January 2001. On September 7, 2005, Apple and Motorola released the ROKR E1, the first mobile phone to use iTunes. Jobs was unhappy with the ROKR, feeling that having to compromise with a non-Apple designer (Motorola) prevented Apple from designing the phone they wanted to make. In September 2006, Apple discontinued support for the ROKR and released a version of iTunes that included references to an as-yet unknown mobile phone that could display pictures and video. On January 9, 2007, Jobs announced the iPhone at the Macworld convention, receiving substantial media attention, and on June 11, 2007 announced at the Apple's Worldwide Developer's Conference that the iPhone would support third-party applications using the Safari engine on the device. Third-parties would create the Web 2.0 applications and users would access them via the internet. Such applications appeared even before the release of the iPhone; the first being "OneTrip", a program meant to keep track of the user's shopping list. On June 29, 2007, Apple released version 7.3 of iTunes to coincide with the release of the iPhone. This release contains support for iPhone service activation and syncing.

According to The Wall Street Journal, the iPhone is manufactured on contract in the Shenzhen factory of the Taiwanese company Hon Hai.

Advertising

The first advertisement for iPhone, titled "Hello," aired during the 79th Academy Awards on February 25, 2007 on ABC. The ad features clips from several notable films and television shows over the last seventy years, showing iconic characters answering telephones and saying "hello" or a similar greeting. The iPhone is shown at the end with the caption "Hello. Coming in June."

The commercial was created by TBWA\Chiat\Day, Apple's ad agency since CEO Steve Jobs' return to the company in 1997. TBWA's Media Arts Lab will continue to handle all upcoming advertising for iPhone, much as it has for iPod.

On June 3, 2007, Apple released four advertisements that announce a June 29, 2007 release date, and which concluded, "Use requires minimum new 2 year activation plan."; the footnote has since been removed from all four of the ads. A fifth ad featuring YouTube was released on June 21, 2007. All five advertisements feature a voice over describing various iPhone features, demonstrated on-screen. The song "Perfect Timing (This Morning)" by Orba Squara plays in the background.

U.S. Release

On June 28, 2007, during an address to Apple employees, Steve Jobs announced that all full-time Apple employees and those part-time employees that have been with the company at least one year would receive a free iPhone. Employees received their phones in July after the initial demand subsided.

On June 29, 2007, Apple closed its stores during the hours between 2:00 and 6:00 PM local time to prepare for the iPhone launch. Meanwhile, hundreds of customers lined up at stores nationwide until each stores re-opened their doors to sell the first devices.

There were some concerns with service and plans provided by AT&T. The iPhone is only available for those who subscribe to a two-year AT&T service plan unless they have poor credit, in which case they can use a pre-paid plan. There is no way to opt out of the data plan and thus people who do not want to use the iPhone's web capability may find the fee superfluous. The iPhone cannot be added to an AT&T Business account, and any existing business account discounts cannot be applied to an iPhone AT&T account. One report stated that the iPhone could not be added to an existing AT&T consumer account if it had been ported from Cingular at the time of the BellSouth-AT&T merger. This has since been corrected.

The AP reported also that some users were unable to activate their phones due to what AT&T reported was "high volume of activation requests were taxing the company's computer servers."

Early estimates by technology analysts estimated sales of between 250,000 to 700,000 units in the first weekend alone, with strong sales continuing after the initial weekend. As part of their quarterly earnings announcement, AT&T reported that 146,000 iPhones were activated in the first weekend. Though this figure does not include units that were purchased for resale on eBay or otherwise not activated until after the opening weekend, it is still less than most initial estimates. It is also estimated that 95% of the units sold are the 8 GB model.

Sales

Apple announced in their 2007 Q3 sales report and conference call that they sold 270,000 iPhones in the first 30 hours on launch weekend. AT&T reported 146,000 iPhones activated in the same time period. Apple anticipated selling their millionth iPhone in the first full quarter of availability, and 10 million by the end of fiscal 2008. On September 10, 2007, Apple announced sales of 1 million iPhones.

Price drop controversy

On September 5, 2007, the 4 GB model was discontinued, and the 8 GB model price reduced to US$399. Those who had purchased an iPhone in the 14-day period before the September 5, 2007 announcement were eligible for a US$200 "price protection" rebate from Apple or AT&T. However, it was widely reported that some who bought between the June 29, 2007 launch and the August 22, 2007 price protection kick-in date complained that this was a larger-than-normal price drop for such a relatively short period and accused Apple of unfair pricing. In response to the controversy, on September 6, 2007, Apple CEO Steve Jobs wrote in an open letter to iPhone customers that everyone who purchased an iPhone at the higher price "and who is not receiving a rebate or other consideration", would receive a US$100 credit to be redeemed towards the purchase of any product sold in Apple's retail or online stores.

On September 24, 2007, one disgruntled customer filed a lawsuit against Apple, Steve Jobs, and AT&T over the price cut, citing price discrimination, underselling, discrimination in rebates, deceptive actions, and other wrongdoings.

Domain name

On July 1, 2007, it was reported that Apple paid at least US$1 million to Michael Kovatch for the transfer of the iphone.com domain name. Kovatch registered the domain in 1995. That URL now redirects to Apple's iPhone page.

Activation and SIM lock bypassing

The iPhone normally prevents access to its media player and web features unless it has also been activated as a phone through AT&T. On July 3, 2007, Jon Lech Johansen reported on his blog that he had successfully bypassed this requirement and unlocked the iPhone's other features with a combination of custom software and modification of the iTunes binary. He published the software and offsets for others to use.

On August 14, 2007, Gizmodo reported verification of a method to bypass the iPhone's SIM lock, allowing the phone to work freely with carriers other than AT&T. This method requires a Turbo SIM card costing approximately US$80 and essentially tricks the iPhone into believing that it is operating on the AT&T network even when it is connected natively (not in roaming mode) to another carrier. Australian Personal Computer later published a 10 step guide to unlocking the iPhone using the Turbo SIM method.

In mid-August, UniquePhones announced an unlocking service for the iPhone, only to retract this service the following week after receiving a phone call from a lawyer representing AT&T.

On August 24, 2007, George Hotz, a 17 year old hacker from Glen Rock, New Jersey, broke the lock that ties Apple's iPhone to AT&T's Wireless Network. He confirmed that he unlocked the phone and was using it on T-Mobile's Network. The hack opens up a realm of possibilities for overseas customers because the iPhone is only sold in the U.S. By unlocking it, Hotz opened up the phone to all kinds of phone networks across the world. Hotz posted the hack on his blog. The process is complicated and requires both disassembling the iPhone and executing software commands on a personal computer. Hotz, along with four others across the world, reportedly spent about 500 hours to unlock the phone.

Also, on August 24, 2007, Engadget reported, by way of photos and a video clip, that they were called by the "iPhoneSimFree" team to view a demonstration of unlocking the iPhone using a software only solution. Unlike Hotz's hardware hack, the code in this hack has not been made available to the general public. Sales of the unlock started on September 11, by way of several resellers who were able to order "keys" from iPhoneSimFree which are then passed onto the customer to use the software.

After only one full day of sales, early on September 12 the iPhoneDevTeam announced that they had also created a working "software unlock", and released it to the public for free. Utilizing the existing unlock requires some technical knowledge, although a GUI-based version was under construction.

On 24 September 2007 Apple issued a warning that future updates could render unlocked iPhones unusable. On 27 September 2007, owners of unlocked iPhones who took advantage of the version 1.1.1 update through iTunes reported that the update rendered the device virtually inoperable. There have also been reports that the update even affected some iPhones that were not unlocked. There are no current hacks to unlock iPhones using v1.1.1.

Custom application development

Development efforts towards using AJAX and Web 2.0 frameworks to create web applications have been discussed on Google's iPhoneWebDev group site, and developer knowledge published at the iPhone Developers' Wiki.

On July 20, 2007, the first simple independent native application was run on the iPhone. Since then, many third-party native applications have appeared. Efforts in the vein of Cocoa application development and unlocking the frameworks and low-level device access have been mostly centralized at FiveForty.net.

Disputes

Apple has filed more than 200 patents related to the technology behind the iPhone.

LG Electronics claimed the iPhone's design was copied from the LG Prada. Woo-Young Kwak, head of LG Mobile Handset R&D Center, said at a press conference, “We consider that Apple copied Prada phone after the design was unveiled when it was presented in the iF Design Award and won the prize in September 2006.”

Trademark

On September 3, 1993, Infogear filed for the U.S. trademark "I PHONE" and on March 20, 1996 applied for the trademark "IPhone". "I Phone" was registered in March 1998, and "IPhone" was registered in 1999. Since then, the I PHONE mark was abandoned. Infogear's trademarks cover "communications terminals comprising computer hardware and software providing integrated telephone, data communications and personal computer functions" (1993 filing), and "computer hardware and software for providing integrated telephone communication with computerized global information networks" (1996 filing). Infogear released a telephone with an integrated web browser under the name iPhone in 1998. In 2000, Infogear won an infringement claim against the owners of the iphones.com domain name. In June 2000, Cisco Systems acquired Infogear, including the iPhone trademark. On December 18, 2006 they released a range of re-branded Voice over IP (VoIP) sets under the name iPhone.

In October 2002, Apple applied for the "iPhone" trademark in the United Kingdom, Australia, Singapore, and the European Union. A Canadian application followed in October 2004 and a New Zealand application in September 2006. As of October 2006 only the Singapore and Australian applications had been granted. In September 2006, a company called Ocean Telecom Services applied for an "iPhone" trademark in the United States, United Kingdom and Hong Kong, following a filing in Trinidad and Tobago. As the Ocean Telecom trademark applications use exactly the same wording as Apple's New Zealand application, it is assumed that Ocean Telecom is applying on behalf of Apple. The Canadian application was opposed in August 2005 by a Canadian company called Comwave who themselves applied for the trademark three months later. Comwave have been selling VoIP devices called iPhone since 2004.

Shortly after Steve Jobs' January 9, 2007 announcement that Apple would be selling a product called iPhone in June 2007, Cisco issued a statement that it had been negotiating trademark licensing with Apple and expected Apple to agree to the final documents that had been submitted the night before. On January 10, 2007 Cisco announced it had filed a lawsuit against Apple over the infringement of the trademark iPhone, seeking an injunction in federal court to prohibit Apple from using the name. More recently, Cisco claimed that the trademark lawsuit was a "minor skirmish" that was not about money, but about interoperability.

On February 2, 2007, Apple and Cisco announced that they had agreed to temporarily suspend litigation while they hold settlement talks, and subsequently announced on February 20, 2007 that they had reached an agreement. Both companies will be allowed to use the "iPhone" name in exchange for "exploring interoperability" between Apple's products and Cisco's iPhone.