The next step for the digital hub strategy was to
Steve Jobs by Walter Isaacson 504
make a portable music player. Jobs realized that Apple had the opportunity to design such a device in tandem with the iTunes software, allowing it to be simpler.
Complex tasks could be handled on the computer, easy ones on the device. Thus was born the iPod, the device that would begin the transformation of Apple from being a computer maker into being the world’s most valuable company.
Jobs had a special passion for the project because he loved music. The music players that were already on the market, he told his colleagues, “truly sucked.” Phil Schiller, Jon Rubinstein, and the rest of the team agreed. As they were building iTunes, they spent time with the Rio and other players while merrily trashing them. “We would sit around and say, ‘These things really stink,’” Schiller recalled. “They held about sixteen songs, and you couldn’t figure out how to use them.”
Jobs began pushing for a portable music player in the fall of 2000, but Rubinstein responded that the necessary components were not available yet. He asked Jobs to wait. After a few months Rubinstein was able to score a suitable small LCD screen and rechargeable lithium-polymer battery. The tougher challenge was finding a disk drive that was small enough but had ample memory to make a great music player. Then, in February 2001, he took one of his regular trips to Japan to visit Apple’s suppliers.
At the end of a routine meeting with Toshiba, the engineers mentioned a new product they had in the lab that would be ready by that June. It was a tiny, 1.8-inch drive (the size of a silver dollar) that would hold five gigabytes of storage (about a thousand songs), and they were not sure what to do with it. When the Toshiba engineers showed it to Rubinstein, he knew immediately what it could be used for. A thousand
Steve Jobs by Walter Isaacson 505
songs in his pocket! Perfect. But he kept a poker face.
Jobs was also in Japan, giving the keynote speech at the Tokyo Macworld conference. They met that night at the Hotel Okura, where Jobs was staying. “I know how to do it now,” Rubinstein told him. “All I need is a $10
million check.” Jobs immediately authorized it. So Rubinstein started negotiating with Toshiba to have exclusive rights to every one of the disks it could make, and he began to look around for someone who could lead the development team.
Tony Fadell was a brash entrepreneurial programmer with a cyberpunk look and an engaging smile who had started three companies while still at the University of Michigan. He had gone to work at the handheld device maker General Magic (where he met Apple refugees Andy Hertzfeld and Bill Atkinson), and then spent some awkward time at Philips Electronics, where he bucked the staid culture with his short bleached hair and rebellious style. He had come up with some ideas for creating a better digital music player, which he had shopped around unsuccessfully to RealNetworks, Sony, and Philips. One day he was in Colorado, skiing with an uncle, and his cell phone rang while he was riding on the chairlift. It was Rubinstein, who told him that Apple was looking for someone who could work on a “small electronic device.” Fadell, not lacking in confidence, boasted that he was a wizard at making such devices. Rubinstein invited him to Cupertino.
Fadell assumed that he was being hired to work on a personal digital assistant, some successor to the Newton. But when he met with Rubinstein, the topic quickly turned to iTunes, which had been out for three months. “We’ve been trying to hook up the existing MP3
players to iTunes and they’ve been horrible, absolutely horrible,” Rubinstein told him. “We think we should
Steve Jobs by Walter Isaacson 506
make our own version.”
Fadell was thrilled. “I was passionate about music.
I was trying to do some of that at RealNetworks, and I was pitching an MP3 player to Palm.” He agreed to come aboard, at least as a consultant. After a few weeks Rubinstein insisted that if he was to lead the team, he had to become a full-time Apple employee.
But Fadell resisted; he liked his freedom. Rubinstein was furious at what he considered Fadell’s whining.
“This is one of those life decisions,” he told Fadell.
“You’ll never regret it.”
He decided to force Fadell’s hand. He gathered a roomful of the twenty or so people who had been assigned to the project. When Fadell walked in, Rubinstein told him, “Tony, we’re not doing this project unless you sign on full-time. Are you in or out? You have to decide right now.”
Fadell looked Rubinstein in the eye, then turned to the audience and said, “Does this always happen at Apple, that people are put under duress to sign an offer?” He paused for a moment, said yes, and grudgingly shook Rubinstein’s hand. “It left some very unsettling feeling between Jon and me for many years,”
Fadell recalled. Rubinstein agreed: “I don’t think he ever forgave me for that.”
Fadell and Rubinstein were fated to clash because they both thought that they had fathered the iPod. As Rubinstein saw it, he had been given the mission by Jobs months earlier, found the Toshiba disk drive, and figured out the screen, battery, and other key elements. He had then brought in Fadell to put it together. He and others who resented Fadell’s visibility began to refer to him as “Tony Baloney.” But from Fadell’s perspective, before he came to Apple he had already come up with plans for a great MP3 player, and he had been shopping it around to other companies
Steve Jobs by Walter Isaacson 507
before he had agreed to come to Apple. The issue of who deserved the most credit for the iPod, or should get the title Podfather, would be fought over the years in interviews, articles, web pages, and even Wikipedia entries.
But for the next few months they were too busy to bicker. Jobs wanted the iPod out by Christmas, and this meant having it ready to unveil in October. They looked around for other companies that were designing MP3
players that could serve as the foundation for Apple’s work and settled on a small company named PortalPlayer. Fadell told the team there, “This is the project that’s going to remold Apple, and ten years from now, it’s going to be a music business, not a computer business.” He convinced them to sign an exclusive deal, and his group began to modify PortalPlayer’s deficiencies, such as its complex interfaces, short battery life, and inability to make a playlist longer than ten songs.
That’s It!
There are certain meetings that are memorable both because they mark a historic moment and because they illuminate the way a leader operates.
Such was the case with the gathering in Apple’s fourth-floor conference room in April 2001, where Jobs decided on the fundamentals of the iPod. There to hear Fadell present his proposals to Jobs were Rubinstein, Schiller, Ive, Jeff Robbin, and marketing director Stan Ng. Fadell didn’t know Jobs, and he was understandably intimidated. “When he walked into the conference room, I sat up and thought, ‘Whoa, there’s Steve!’ I was really on guard, because I’d heard how brutal he could be.”
The meeting started with a presentation of the potential market and what other companies were doing.
Jobs, as usual, had no patience. “He won’t pay
Steve Jobs by Walter Isaacson 508
attention to a slide deck for more than a minute,” Fadell said. When a slide showed other possible players in the market, he waved it away. “Don’t worry about Sony,” he said. “We know what we’re doing, and they don’t.” After that, they quit showing slides, and instead Jobs peppered the group with questions. Fadell took away a lesson: “Steve prefers to be in the moment, talking things through. He once told me, ‘If you need slides, it shows you don’t know what you’re talking about.’”
Instead Jobs liked to be shown physical objects that he could feel, inspect, and fondle. So Fadell brought three different models to the conference room; Rubinstein had coached him on how to reveal them sequentially so that his preferred choice would be the pièce de résistance. They hid the mockup of that option under a wooden bowl at the center of the table.
Fadell began his show-and-tell by taking the various parts they were using out of a box and spreading them on the table. There were the 1.8-inch drive, LCD screen, boards, and batteries, all labeled with their cost and weight. As he displayed them, they discussed how the prices or sizes might come down over the next year or so. Some of the pieces could be put together, like Lego blocks, to show the options.
Then Fadell began unveiling his models, which were made of Styrofoam with fishing leads inserted to give them the proper weight. The first had a slot for a removable memory card for music. Jobs dismissed it as complicated. The second had dynamic RAM memory, which was cheap but would lose all of the songs if the battery ran out. Jobs was not pleased. Next Fadell put a few of the pieces together to show what a device with the 1.8-inch hard drive would be like. Jobs seemed intrigued. The show climaxed with Fadell lifting the bowl and revealing a fully assembled model of that alternative. “I was hoping to be able to play more with
Steve Jobs by Walter Isaacson 509
