Steve Jobs Wanted To Drop Google Search From The Iphone

Interesting nugget from Brad Stone, Adam Satariano, and Peter Burrows at Bloomberg BusinessWeek:

At the time of his death, Jobs had come to loathe Google, which he felt was copying features of the iPhone while withholding a key feature of Google Maps that allows smartphones to dictate turn-by-turn directions aloud. Jobs also discussed pulling Google search from the iPhone, but figured that customers would reject that move, according to two former Appleexecutives.

Like all companies, Apple is not immune to bungling a new product, though its apologies havent always seemed heartfelt. After slashing the price of the first iPhone by $200 only a few months following its debut in 2007, Apple tried to placate enraged early adopters with a $100 rebate that they could only spend on Apple products. When the iPhone 4 was introduced with a flawed antenna design in 2010, it took 39 days of complaints for Steve Jobs to hold a press conferenceand to offer dissatisfied users a free rubber case.

Considering that history, the reaction of new Chief Executive Officer Tim Cook to the outcry over the balky Maps application on the new iPhone 5 was positively penitent. Only one week after customers got their hands on the highly anticipated device, Cook issued a press release acknowledging the mapping services obvious flawssuch as turning much of the east side of Portland, Ore., into a nature park. He also took the unusual step of pointing users to alternatives from rivals such as Microsoft and Google. We are extremely sorry for the frustration this has caused our customers, and we are doing everything we can to make Maps better, Cook said in a letter to customers posted on Sept. 28 on Apples website.

Since Jobss death one year ago, many Apple observers have predicted the company would suffer from the loss of his internal authority and intuition about product design and features. Apple is undoubtedly a different company under Tim Cook. It misses Jobss conspicuous creativity and entrepreneurial fervor, but its gaining in maturity, rationality, and, yes, value.

Over the past year, Cook has visited Apples Chinese manufacturing partner Foxconn to advocate for better pay and safer working conditions, reversed a decision to pull its products from an environmental certification program, and issued shareholders a dividend that Jobs stubbornly resisted for years. Less visibly, Cook has managed the inevitable internal strife as Apples executives tried to fill the leadership vacuum. And hes got the operations side of Apple working better than ever, lining up the companys suppliers to support the unprecedented scale of the iPhone 5 launch, which is on sale in nearly 30 countries and on track to be available in 100 by the end of 2012.

The results speak for themselves, says Avadis Tevanian, Apples former senior vice president of software engineering. Ive seen how the sausage factory works, and operationally its just phenomenal. Has there ever been a product anywhere that hit these kinds of volumes in so short a time?

Apple stock is up 75 percent since Jobss death, driving its market capitalization past $600 billion and making it the most valuable company on the planet. Revenue, earnings, and margins have all expanded as well, and the company continues to hit its product release dates with the consistency of a metronome. Much about the companys direction and even its products still reflects Jobss decisions and design preferencesthe iPhone 5 was the last model to receive detailed input from Jobs, say two people familiar with its development. The company has yet to release any product Jobs didnt personally bless. But Cook has executed Jobss plan even better than expected. Tim has seemingly pulled off what many people doubted he could, which is to sustain and add to Apples incredible momentum, says Michael Useem, director of the Center for Leadership and Change Management at the Wharton School.

Interviews with more than two dozen current and former Apple executives, employees, and partners reveal an internal mood largely characterized by a singular focus on proving to the world that Apple can still execute. Theres also more office politics and some concern that Jobss departure and the arrival of thousands of new employees will dilute the culture. Nevertheless, the company is happier and even somewhat more transparent than it was during Jobss tenure, these insiders say. There are fewer frantic calls at midnight, and theres less implicit pressure on engineers to cut short or cancel vacations in the heat of product development cycles.

No one would say the post-Steve Jobs Apple is better off. But to a surprising degree, its doing fine without him.

On the day Jobs died, employees numbly walked outside to watch an American flag lowered to half-mastand then returned to work. Partners who were in town to meet with the company were astonished to learn that appointments would take place as scheduled. Thats what Steve would have wanted, an Apple manager explained to Chuck Goldman, the founder of software developer Apperian, who was there that day. Two weeks later, Cook organized a memorial for employees on Apples Cupertino (Calif.) campus. Coldplay and Norah Jonesamong Jobss favorite artistsperformed before two-story-high banners portraying the founder. In a speech, Cook told employees that Jobss passing was the saddest moment in his life. He also said that Jobs had instructed the company not to be burdened worrying about how he would have handled particular decisions. That line has become almost a mantra inside Apple, according to several employees.

Cook was well-prepared for the succession. He had run manufacturing, logistics, customer support, and sales for years, and stepped in three times as interim CEO during Jobss medical leaves. Colleagues say the Alabama-bred Cook has a frank style and detailed knowledge of even minute operational details. Unlike Jobs, he prefers to withhold his opinion until the end of meetings so others can give him information to process. His leadership style is quite different, both internally and externally. Hes much more open, says Toni Sacconaghi, an analyst at Sanford C. Bernstein in New York. I think he believes he doesnt have all the answers, so hes willing to listen to other people. Im not so sure that was the case with Steve.

After Jobs died, observers wondered whether Cook could retain his accomplished management teammost of whom are fabulously wealthy and likely exhausted from years of tireless work. Cook has managed to keep everyone, at a price. Last November, he handed out an additional round of stock options, now worth about $100 million, to his senior team. Cook never professed to be a genius at envisioning products or crafting marketing campaigns, so hes leaned heavily on longtime colleagues such as Scott Forstall, senior vice president of iOS Software; Jony Ive, senior vice president of industrial design; and Phil Schiller, senior vice president of worldwide product marketing. Cooks deference to his colleagues was on display at the iPhone 5 launch. Apples CEO spoke for only 11 minutes at the nearly two-hour event before ceding the stage to a succession of his lieutenants.

Earlier this summer, Cook did lose one key member of his teamand then nearly witnessed an insurrection in one of Apples most prominent divisions. On June 28, Apple announced the retirement of Bob Mansfield, the senior vice president for hardware engineering, who for more than a decade oversaw the remarkable expansion of the Macintosh line before taking on the iPhone and iPad as well. According to three people familiar with the sequence of events, several senior engineers on Mansfields team vociferously complained to Cook about reporting to his replacement, Dan Riccio, who they felt was unprepared for the magnitude of the role. In response, Cook approached Mansfield and offered him an exorbitant package of cash and stock worth around $2 million a month to stay on at Apple as an adviser and help manage the hardware engineering team.

On Aug. 27 the company took the rare step of announcing that Mansfield would stay at Apple. Jobs had hired and fired several outside managers, including Mark Papermaster, an operations executive from IBM who later went to Cisco. But this kind of public reversal was new to Apple. Because of its size and a few key personalities, theres more organizational infighting than is healthy, says Brett Halle, a 21-year Apple veteran who left earlier this year. It needs to be brought into check.

Outside the company, the embarrassment over the iPhone 5 map app has prompted the obvious question: Would it have happened under Steve? Its possible that Jobs would have nixed the app before launch, but not certain. Siri, the iPhones maligned voice assistant, was introduced under Jobs, though it was branded beta. Apple insiders say Jobs himself initiated the mapping project, putting mobile software chief Forstall in charge. He installed a secret team on the third floor of Building 2 on Apples campus to replace Google Maps on the iPhone. At the time of his death, Jobs had come to loathe Google, which he felt was copying features of the iPhone while withholding a key feature of Google Maps that allows smartphones to dictate turn-by-turn directions aloud. Jobs also discussed pulling Google search from the iPhone, but figured that customers would reject that move, according to two former Apple executives.

Despite the overwhelmingly negative response to Maps, analysts acknowledge that the company was boxed in, because maps and navigation have become such an important source of customer data and potential revenue on mobile devices. I dont think Apple had any choice but to make a major break and say, We are going to just start from the beginning, says Tim Bajarin, an analyst with Creative Strategies. The best thing Apple could do was take the hit now.

The more important question is whether Cooks pragmatism will continue to serve Apple well over the long term. Under Jobs, much of Apples magic came from creating product categories before anyone else and then forcing industries to cede to Apple a significant cut of their sales. It did this with music, video games, publishing, and mobile phone service, but its not clear what new territory remains for Apple to conquer.

The most obvious target is television. A Jony Ive-designed HDTV, packing the functionality and elegance of the Apple TV set-top box, has the potential to allow couch potatoes to renounce crowded programming guides and ugly remote controls. Yet media, cable, and satellite companies are all doggedly refusing to let Apple remake their business. And Jobs, a blunderbuss negotiator, isnt around to break the logjam.

As the company searches for its next game-changing product, Cook has explored other ways to keep Apple growing. Hes focused on expanding the companys reach and influence into the supply chain of components that go into iPhones and iPads. Apple plans to spend $1 billion this year researching next-generation laser-cutting technologies that can create thinner, lighter devices, up from several hundred million dollars a few years ago. The company has also funneled its $117 billion bank balance into designing its own chips, which allows Apple to customize certain features and drive down variable costs. The new iPhone carries Apples newest custom-designed chip, the A6. Its likely the iPad Mini, to be introduced later this month, will run on an Apple-designed processor as well.

Apple has also deliberated over moving away from Intel chips in the Macintosh, say two people familiar with these discussions. Such a shift would be difficult and isnt imminent, but it would allow Apple to further distinguish its laptops and desktops from those of competitors that run Intels chips and Microsofts Windows software.

Cooks challenges will multiply. Hell have to keep Apple focused as its product lines inexorably expand. Jobs liked to say no to new product initiatives, and its not yet clear whether Cook possesses the same skilled editors pen. Cook will also have to placate employees whove benefited from the stocks helium-boosted price and could feel tempted to leave. Many rank-and-file employees say theyre watching closely to see whether Cook has a more generous approach to compensation than Jobs, who felt the glory of working at Apple should factor into their pay.
As long as Apple is regularly setting records in market capitalization, such tensions may remain safely contained. If Apple suffers a setbacksomething of greater magnitude than the navigational follies of the iPhone 5then Cooks mettle will truly be tested. Its been one year since Steve Jobs died, but in many ways, the Tim Cook era is only just getting started.

Jay Yarow

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