How Google reacted when Steve Jobs revealed the revolutionary iPhone

“In 2005, on Google’s sprawling, college-like campus, the most secret and ambitious of many, many teams was Google’s own smartphone effort—the Android project,” Fred Vogelstein reports for The Atlantic. “Tucked in a first-floor corner of Google’s Building 44, surrounded by Google ad reps, its four dozen engineers thought that they were on track to deliver a revolutionary device that would change the mobile phone industry forever.”

“By January 2007, they’d all worked sixty-to-eighty-hour weeks for fifteen months—some for more than two years—writing and testing code, negotiating soft­ware licenses, and flying all over the world to find the right parts, suppliers, and manufacturers,” Vogelstein reports. “They had been working with proto­types for six months and had planned a launch by the end of the year… until Jobs took the stage to unveil the iPhone.”

MacDailyNews Take: And a collective “FSCK!” was dispatched into the universe from Mountain View.

“Chris DeSalvo’s reaction to the iPhone was immediate and visceral. ‘As a consumer I was blown away. I wanted one immediately. But as a Google engineer, I thought ‘We’re going to have to start over,”” Vogelstein reports. “For most of Silicon Valley—including most of Google—the iPhone’s unveiling on January 9, 2007 was something to celebrate. Jobs had once again done the impossible… But for the Google Android team, the iPhone was a kick in the stomach. ‘What we had suddenly looked just so… nineties,’ DeSalvo said. ‘It’s just one of those things that are obvious when you see it.'”

“On the day Jobs announced the iPhone, the director of the Android team, Andy Rubin, was six hundred miles away in Las Vegas, on his way to a meeting with one of the myriad handset makers and carriers that descend on the city for the Consumer Electronics Show. He reacted exactly as DeSalvo predicted. Rubin was so astonished by what Jobs was unveiling that, on his way to a meeting, he had his driver pull over so that he could finish watching the webcast” Vogelstein reports. “‘Holy crap,’ he said to one of his colleagues in the car. ‘I guess we’re not going to ship that phone.’ …Within weeks the Android team had completely reconfigured its objectives. A phone with a touchscreen, code-named Dream, that had been in the early stages of development, became the focus.”

Much more in the full article here.

MacDailyNews Take: Here’s what Google’s Android looked like before and after Apple’s iPhone:

Google Android before and after Apple iPhone

Hence the thermonuclear war.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]


  1. Google has always done cool stuff, but some mostly in geeky ways. The fact that they were copying Blackberry before the iPhone shows they knew the next market, but had no understanding how to make a GOOD PRODUCT. Apple almost always leads the way in this.

      1. I’ve yet to see a compelling reason to use a non-Apple product. And Apple doesn’t revolutionize industries every year, a misconception brought on by anti-Apple idiots to prove Apple is losing ground.

        2010 is arguable, since the iPad is a larger iPhone, albeit with more screen space, allowing for a better user experience.

        So. Mac. iPod. iPhone.
        Try again, asshat, on how Apple doesn’t lead when it needs to.

        1. Price. The price alone is a compelling reason to use a non-apple product. If you have an iphone, I pretty much know you’re a sucker. And it’s not a rich/poor issue as I can afford whatever I want. I just don’t like overpaying for tech..

          1. Rubbish. Again, see my comment above; if price were an issue, why are the greater majority of people using Apple devices?
            Because they want something that feels solid, and exudes quality, not a piece of cheap, flimsy plastic junk that’s only marginally cheaper, and that has NO RESALE VALUE!
            Do you understand what that means?
            Do I have to explain it to you, why people buy a higher priced phone?
            That commands a high enough resale value that allows the owner to sell it and pay a large chunk of the cost upfront for an upgrade?
            I’m amazed that a mammal as slow as you can still possess respiratory functions!

            1. Curious isn’t it how all the marketshare data, much of it for “shipping”, come out of analytic houses such as Strategy Analytics and IDC, with no discussion of methodology or margin of error information. Even more curious that the supped market leader, Samsung, refuses to release audited unit sales numbers, unlike Apple. In sum, there is no verifiable way to ascertain market share data at present.

            2. Everyone I know who uses an iPhone resells their phone it’s time to upgrade, unless they’re giving it to someone. I’m on my 3rd iPhone and I re-sold the first two.

            3. I take good care of my iPhones and sell them at more than the subsidized price I paid. I sold my 3G for $250; my 4 for $300 and my 4S for $380.
              As for market share, try this one:
              Or this one, which states “In the US, Apple hit a market share of 52.8 percent in October.”

              Feeling silly yet??

            4. “who sells a phone?!?!”

              My father just passed away. He had an iPhone 4S. He had it for over two years. I listed it on eBay with what I thought was an outrageous “Buy It Now” price. In less than an hour it sold. The price I listed it at? $1 more than what he paid for it two years ago.

              That’s who sells a phone.

            5. “Re-selling your old phone to someone else just offsets your cost onto them.”

              Of course it does. They then use the phone and resell it or use it to the point of obsolescence, depreciating the cost along the way.

              It may not make sense to you if you have an Android or other phone where you can’t sell the phone for very much 1-2 years after it came out because there is little to no demand for it. But look at Craigslist or eBay and you’ll see a lot of demand for iPhones that are 2 years old (and even older).

              So wherever you are on the level of iPhone you want, this makes sense. I’m on the high end so I buy a new iPhone each year, and at the end of the year the used iPhone is worth about what I paid for it, sometimes a little more, due to the yearly subsidy. This makes buying a new iPhone each year relatively cheap.

              On the other hand, I know a lot of people with iPhones that are 2-4 years old and they’re perfectly happy with them. Whether they bought them new and held on to them, got them as hand me downs, or bought them used, the cost over the number of years works for them.

              The bottom line though, it’s better (for everyone) to have smart phones in use for many years than only a couple of years only to be garbaged/recycled.

            6. While I can agree with most of what you said..this idea still screws someone in the end..I mean, someone is paying a high price for the iphone and then watch the ROI go to zero.

            7. “While I can agree with most of what you said..this idea still screws someone in the end..”

              No, not at all.

              If history repeats as it has each year since 2007, you could buy an iPhone 5S for $399. However, $200 of that would be subsidized under contract, which leaves you paying $199.

              At the end of the year (or two), you sell it for $199. The person buying it doesn’t want a contract and forgoes the subsidy.

              The second owner either holds on to it for a year and sells it for $100, or owns it for a second year (or more).

              Even if the $400 phone deprecates to $0 over 4 years, that’s only $50 per year to own the phone (due to the subsidy), with the first person not paying anything if they do it under contract.

              However, we’re seeing that they aren’t deprecating to $0 over 4 years, but are still holding a lot of their original value. As I write this an iPhone 4 was sold on eBay for $222.50 for a base model (8GB AT&T).

              This means someone could’ve owned the phone for 3.5 years and sold it for a profit of $23.50 if they bought it under subsidy.

              Again, this explains my original point of “who the hell sells an iPhone” as well as explaining why I always buy on launch day.

              However, this person is likely to hold on to this iPhone for a couple of years and still sell it for around $50-$100 (going prices for an iPhone 3G).

              Look at the prices on eBay for auctions that have just ended. You’ll see the history of iPhone models where they retain their value up until the very end. Every owner stage along the way has advantages and disadvantages. If you’re like me, you buy on launch day, get a subsidy and the hot new iPhone, but put more upfront and are under contract. In the second stage, you don’t need a contract, get an almost new iPhone, and the next stage would be factory unlocked and finally one that isn’t locked, under contract or requires much of an investment. The good thing here is that the iPhones are in use for many, many years.

          2. Not to be feeding trolls, but research after research has concluded that Apple hardware has always had better ROI over ANY competitor.

            Only if you CANNOT afford an Apple product (ex. you want a laptop, but can’t spend even $800 for an Apple refurb), and desperately want a NEW computer (rather than used), then your only choice would be a non-Apple product. Dolar-for-dollar, Apple comes out as superior. But you knew that already, of course, and just wanted to have some fun trolling here…

            1. Right on!

              My iPhone 3GS worked exceptionally well until Nov. 2013 when I figured it was just time to move up and keep up with iOS 7 and all the things I now wanted to do that the 3GS was behind on.

              My mother-in-law in her 90s thinks the 3GS is state of the art.

          3. You said iPhones are overpriced. But the price of a product does not necessarily a good indicator of whether a product is overpriced or not. There is something people call ‘value’. After using my iPhone5 for over a year, I was able to sell it for $400 (and thats with a few scratches and a small ding since i dont use a case). Same with my previous iphones- sold at relatively high price. My coworkers who own android devices, dont feel like they can fetch anywhere near that for their phones

            1. Right. The iPhone could only be called “overpriced” if sales were slow. “Overpriced” is somewhat subjective, however, we can objectively look at numbers and measure the actual validity of that term. In the case of iPhone, the device is selling extremely well (most popular single model of a smartphone out there), so one could argue that it is underpriced (since there were even some supply shortages after initial release) — so many people are buying it because they believe the price is good. Furthermore, it represents excellent value, which we can measure by how well it holds resale value over time. And there, we can observe that not a single Android phone can ever retain nearly as much of its original value as ANY model of iPhone. The resale value of iPhones is usually at least 100% higher than a comparable Android device (i.e. a three-year old iPhone, originally paid $650, will fetch twice as much as a three-year old Android also paid $650 originally).

            2. clueless, clueless, ignorant, ignorant….. I made an effort, in order to see exactly WHAT is it that you read about the concept of cognitive dissonance.

              I have no time to go through lengthy explanations for the likes of you, but I’ll say that there are no Apple hardware owners who exhibit symptoms of cognitive dissonance (most significant one being discomfort from owning a product that is purportedly over-priced).

          4. you’re an idiot troll, callithowiseeit.

            iPhone 5s is the same price as high end Android phones.
            iPhone 4s is the same price as low end Android phones (plus it comes with the latest OS, whereas the low end Android phones may still come with 2.x).

            Therefore, your price argument for the iPhone completely shows how stupid you are and/or the agenda you have.

            1. Oops… Moto G…

              That’s the problem. Too many options. People don’t know what to look for… the Moto G with no contract is $179 and will have the latest Android Software before the end of the week and gives the iPhone 5 a run for it’s money as far as speed goes. IT’S Google’s fault for allowing companies to throw 2.x onto a phone just because it is open source doesn’t mean it should still be used today…

          5. I’m sorry callithowitrollit but you’d be waiting for the advances in the industry if it weren’t for Apple. You’d still be on an IBM mainframe if it weren’t for Apple.

          6. Please explain to me how you get more value out of an Android phone purchase vs an iPhone. Please be as detailed as possible so that I may systematically debunk every claim you make. 🙂

      2. Yeah? So how come virtually every smartphone I see people actually using in everyday situations are iPhones. An acquaintance of mine who now lives in the US, posted on Facebook last weekend, while waiting at O’Hare Airport that of the nine people sat near him, only two were using phones other than iPhones. I see exactly the same situation when I’m in London, the vast number of people who are using iPhones and iPads.
        Which makes your comment look ridiculous; if it were true, why are all those people using Apple products?
        Please explain, enquiring minds want to know…

    1. Title card/crawl: A long time ago in a galaxy far, far away…
      Title card/crawl: It is a period of technical war. Apple engineers, striking from a hidden base in Cupertino, have won their first victory against the evil Microsoft Empire. During the battle, Google spies managed to steal secret plans to the Apple’s ultimate weapon, the iPhone, a smart cell phone with enough power to destroy an entire cell phone industry. Pursued by the Apple’s patent lawyers, Eric Schmidt races home aboard his Lexus, custodian of the stolen plans that can save Google and restore profitability to the cell phone industry…

      Steve Jobs: “Mountain View?: You will never find a more wretched hive of scum and villainy. We must be cautious.”

      Samsung to Eric Schmidt: “Aren’t you a little short for a stormtrooper?”

      Eric Schmidt: Don’t try to frighten us with your sorcerer’s ways, Steve Jobs. Your sad devotion to that ancient Apple religion has not helped you gain market share, or given you enough clairvoyance to find the stolen iPhone prototype…
      [Jobs makes a pinching motion and Schmidt starts choking]
      Steve Jobs: I find your lack of faith disturbing.

      [Samsung gives Apple a rough shove and starts yelling at Apple in an alien language which Apple doesn’t understand]
      Eric Schmidt: [explaining] He doesn’t like you.
      Apple: Sorry.
      Eric Schmidt: [grabbing Apple] *I* don’t like you either. You just watch yourself. We’re crooks and thieves. I have patent suits on twelve systems.
      Apple: I’ll be careful.
      Eric Schmidt: You’ll be dead!
      Steve Jobs: [intervening] This little one’s not worth the effort. Come, let me get you something.
      [Eric Schmidt shoves Apple across the room and pulls out an iPhone clone]
      Bartender: No clones! No clones!
      [Steve Jobs ignites his lightsaber, killing Eric Schmidt and severing Samsung’s arm]

      Steve Jobs: I felt a great disturbance in the Force, as if millions of voices suddenly cried out “FSCK!” in terror and were suddenly silenced. I sense something terrible has happened to the cell phone industry; the iPhone.

    1. That reminds me….To quote Hunter S. Thompson commenting on Vice-President Spiro T. Agnew: “He had the morals of a weasel on speed.” I think the quote applies to Eric Schmidt as well.

    1. Considering how secretive and locked down AAPL is, I wouldn’t be surprised if Schmidt didn’t know until very late what it actually looked like.

      But it’s still hard to imagine the board was kept in the dark on a strategic initiative like that.

      1. Leading the way doesn’t just mean they’re working on it. It means taking risks and trying to change the world. I’m sure Microsoft was working on stuff, too, but they decided more Windows ShiT was the best route to take.

        Google though a BlackBerry ME2 was the way to go.

        Apple led the way.

      2. Yes, early stages.

        Which meant they hadn’t solved the problems with a touchscreen yet. They hadn’t envisioned how it would “just work.”

        Pinch to zoom, rubber banding, software designed to ignore unintended touches, tap to zoom, oh man the list goes on and on.

        No other company had to tackle these problems. They all just said, “That’s obvious.”

        It was only obvious because they didn’t have to agonize over it! A problem already solved isn’t a problem.

      3. Define ‘touchscreen’ phone. I had a touchscreen phone before the iPhone came out. It needed a stupid little stylus, but it was still, by any definition you care to use, a ‘touchscreen’ phone.
        And it was crap.

  2. There’s no denying the genius of Steve Jobs in bringing out a revolutionary product with a revolutionary interface with icons that look good enough to eat. I remember being blown away by the graphics of the iPhone in that it carved a path for itself never before ventured by a handheld device which was the beautiful glorious onscreen graphics. You felt drawn inwards towards the screen and your natural instinct was to touch it to see how the icons flowed beneath your fingers. It was indeed a magical device. I can see how millions fell in love with it a first sight. I know I did.

    But we seem to have travelled full circle to a pont back in time where rudimentary graphics ruled the day. I can say that today iOS 7 repels me from enjoying my iPhone. I wish Steve were still around to ensure that realistic high definition graphics were still a part of the iOS ecosystem but we seem to have abandoned that for flat icons that harken back to the bad old days of the Blackberry OS.

    1. I could not agree more with this comment. 1 million likes.

      iOS 7 is hidious to the point that I have lost my allegience to the OS. The switching cost is gone and I have found myself looking at other OSs and phones. Unfortunately, everything on the market is a pile of shit. There are simply no phones out there that just make sense.

      The app craze is out of control. Phones needn’t be anything more than a browser, a phone, and some simple utility apps. Games can remain apps, but I’d argue that most apps are glorified web sites anyhow. HTML5 should replace 90% of the app store.

      1. After four months of iOS 7, I can only say when I pick up my friend’s 4S on iOS6 that the old OS looks positively arcane. I honestly can’t imagine how and why anyone would PREFER to stay on such obsolete, retro visuals over iOS 7.

        I guess it is a matter of personal preferences, but my initial reaction when it came out was also of discomfort. The older we are, the more we’re creatures of habit, and the more difficult it becomes to get used to change, even if change is good…

        1. Same here. I have several apps on my phone that haven’t updated to the iOS 7 look and they just feel so… clunky. Especially the iOS 6 keyboard.

          Anyone want to predict an over/under on the number of weeks remaining until the iOS 6 whiners either shut up or go away? We get it, you don’t like the new look. You made that clear ages ago. But all the caterwauling in the world isn’t going to make iOS 6 come back, just like the old-school Mac fans weren’t able to whine OS X out of existence back in 2001.

          (Seriously, it sounded exactly the same. “OS X looks horrible! It’s not the Mac! It’s going to drive everyone to Windows 98!”)


    1. Months? It took them well into 2010 before Android could remotely compete with the iPhone on the software side.

      Google even flip flopped on pinch-to-zoom, which was immediately “turned on” as a feature in the United States market because Apple was so pissed off (and remember, at this point relations between the companies was pretty chummy).

      Just as Microsoft had done in the 1980s, Google in the late 2000s abused its cozy role as an initial third party developer (youtube app, Maps) and chose to compete rather than to complement.

      You want to know why Jobs was so angry? It’s because history had repeated itself.

      People sometimes complain that Apple keeps its partners too much at an arm’s length. There are reasons for that.

      1. It was months, not year… First release was crude because of the quick dirty copy of iPhone from Apple. Why can’t people just admit it. Google freaking copied the iPhone with the help of the MOLE BIG TIME!

        1. Let’s get the timeline straight. iPhone was announced on 9 January 2007 (MacWorld). The first touchscreen Android device (T-Mobile’s G1) was announced on 22 October 2008. That is almost two years (over 21 months, to be exact).

  3. I have a like/hate thing for iOS 7’s look.

    I hated it at first. Too minimalist (though I LOVE the removed green felt, linen, leather stitching, etc.).

    Now I like it. One might argue that I’ve simply become used to it, but when I see iOS 6 on my older phone, it looks TOO polished. The best comparison I can make is looking at 10.9 vs earlier versions. Earlier versions have much more glowing, aqua buttons and side bars. All these things have been made less so (and not even aqua anymore). As nice as aqua used to look, now it’s too much.

    That said, if the “button shape” thing is true for the upcoming iOS 7 update, I welcome it. Words don’t make great buttons and don’t always stick out as buttons.

    1. My only real complaint about iOS 7 is the art on some of the icons. Not the “flat” look — I like that — just the designs they chose for things like Music, Photos, and Game Center.


  4. Mr. Jobs should have never announce it in January. He should have waited until the WWDC and make it available immediately after. He gave Google 6 precious months of additional catch-up.

    1. I guess you were not paying attention on that day in January 2007 when Steve Jobs announced the iPhone. He very clearly explained that they were pre-announcing the phone because of the leadtimes required for FCC and other governmental approvals. It was better to control the circumstances of it’s revealing, than to have the word leak out from an FCC application.

      1. Not to mention that he effectively FROZE the “smartphone” market at the time for Nokia, LG, Samsung and others who were making Symbian and Palm devices. Anyone planning to buy such a phone decided to wait until June and stand in line, which built an enormous pent-up demand for that iPhone, once it finally went on sale.

  5. We, ah, we already had a touchscreen project just like the iPhone in development. It was called, um, we called it “Dream.” Yea, Dream, we already developed that.

  6. This article doesn’t compel me to buy Voglestein’s book. Not without the inclusion of input from upper-level management. Otherwise, what have we got, stories from the working class?

    The most salient takeaway has to be the way Apple totally marginalized Microsoft with the introduction of iPhone and Steve Ballmer’s utter lack of understanding of what had just transpired.

    Google was caught with their pants down; skating to where the puck is, as evidenced by their having to start over. Until iPhone they were developing software to run on myriad crappy Eurasian plastic phones. Moto was solid, as was BB. Google still needed a Trojan H0rse.

    Google saw the apple of Jobs’ eye; build your own phone. Until then Google was throwing everything they had into developing an OS for every brand and model on the market. How stupid is that?

    Where I have trouble reconciling Voglestein’s characterization of events is, Google’s alleged struggle to develop software for all phones, while Andy Rubin is working feverishly to construct a platform known as Dream cum Android.

    Andy Rubin, a coworker of Eric Schmidt’s at Sun developing Java together, would partner once more on familiar ground; Java, to produce a platform agnostic OS.

    Eric Schmidt was as much in the dark about iPhone hardware as Al Gore, who probably never saw iPhone until its release. However, I believe with his software background Schmidt could have struck up a conversation with any software engineer at Apple and maybe even probe them for choice tidbits about iOS, which would have been huge news.

    Armed with this corporate knowledge about iOS, it’s plausible Eric Schmidt was schooling Rubin, who was supposedly crafting Android with no particular phone in mind. Hence Voglestein’s notion that Rubin’s Dream was superior to iOS and the reality was, iPhone was real and Rubin’s proving ground was virtual hardware.

    Andy Rubin is to Bill Gates, what Scott Forestal is to Steve Jobs.

    Scott stood on some very tall shoulders. Whereas Andy will be looking over Eric’s as Eric looks over his own for Oracle’s Larry Ellison who hasn’t overlooked some misappropriated Java patents.

  7. “‘We knew that Apple was going to announce a phone. Everyone knew that. We just didn’t think it would be that good,’ said Ethan Beard, one of Android’s early business development executives.

    Within weeks the Android team had completely reconfigured its objectives. A phone with a touchscreen, code-named Dream, that had been in the early stages of development, became the focus.”

    I smell Bull Droppings.
    The above quote seems like a disingenuous attempt to plant the fictitious seed that Google actually WAS working on something similar to the iPhone before the iPhone was released. Keep this meme going and the Fandroids and Apple-haters will trot out this “fact” to defend Google and Android against charges of their wholesale copying of iOS.
    Of course, there is no evidence of this early-development “Dream” phone.
    I suspect this lately-fabricated story of Google’s Dream phone is nothing more than revisionist vapourware propaganda to try to stem the tide of the abandonment of Android.

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