Compared to the iPhone’s unveiling, the launch, held in a catering facility under the Queensboro Bridge, was amateurish, according to Levy’s account and videos. There were no live demos, only demos on video. Too much time was taken up with boring, self-congratulatory remarks by Rubin, and executives from HTC and T-Mobile. The only sign that this project had backing from the very top of Google came when, toward the end, Brin and Page made an unrehearsed appearance together on Rollerblades. But while their presence added star power, their answers to questions did not. In response to a question about what was the coolest G1 application, Brin said he’d written an app himself that used the phone’s accelerometer to automatically time how long his phone stayed in the air when he tossed it. Then he threw the demo phone in the air to illustrate, creating looks of panic on his colleagues’ and partners’ faces. There were few other phones then, and they couldn’t afford to have one break because Brin dropped it.
Juxtaposing the G1 and iPhone launches makes you wonder how Brin, Page, and Schmidt ever had more than just a business relationship with Jobs. Their outlook on the world was entirely different. Apple had prospered because of Jobs’s meticulous, disciplined search for the best device—the perfect blend of form and function. Google had prospered on the backs of Brin’s and Page’s zaniness and embrace of chaos. As entrepreneurs the three shared a willingness to reject anything with a whiff of convention and to make big bets when those around them said they were reckless. But that’s where the similarities ended.
Brin and Page wound up in front of the media in Rollerblades because they had been at an event with New York’s Governor David Paterson at Grand Central Terminal in the morning and thought blading would be a fun and faster way to bypass New York City’s gridlock. It didn’t matter to them that a car was waiting, that their security detail had planned for traffic, or that they ended up at the G1 launch looking grimy and sweaty. Brian O’Shaughnessy, Android’s top public relations aide at the time, says he remembers having to keep his own emotions in check when they arrived. It was his job to make sure the G1 got the widest and most positive media attention possible, and he wondered how to explain to his billionaire founders that they were putting everything at risk. “I was waiting for them backstage when they got to the launch, and I said, ‘Guys, don’t you want to take your Rollerblades off? You’re going out there with the CEO of HTC and T-Mobile executives,’ and they said, ‘No. No. It’s going to be fine.’ And they just rollerbladed onto the stage.” Can you imagine Steve Jobs ever doing that?
* * *
The way Jobs was handling Google should have made everyone at Apple feel better about the tension between the two companies. Instead, it made many of them feel worse. A handful of executives and engineers had been warning Jobs about Google’s ambitions with Android for two years, and they still believed Jobs was underestimating Google’s resolve. Why had the great Steve Jobs allowed himself to be duped by Google in the first place, and why did it then take him another eighteen months—until early 2010—to respond publicly? One of them put it to me like this: “I kept telling him, ‘Steve, we should be paying more attention to those guys. They’re hiring like crazy and I know all the guys they are hiring.’ But Steve was like, ‘I’m going to have my walk [with Larry or Sergey or Eric] and I’ll get to the bottom of this.’ Then he’d have his meetings with them and come back and say they told him not to worry. ‘It’s not really serious. It was an interesting idea, but it’s not going anywhere,’ they’d tell him. Even when Android shipped in 2008, they told him, ‘Well, it’s not really stable. It’s not great. We don’t know if we are going to continue it.’ And I was just like, ‘I don’t believe this is happening.’”
Another recalled his and his colleagues’ panic in 2007 when Google’s Schmidt and the rest of the Apple board got iPhones to carry around months before they went on sale: “You have to know that there were a lot of people at Apple working on the iPhone going, ‘What the fuck? They are handing our phone to a guy in charge of a company that we’re competing with. They’ll take the phone, tear it apart, and steal all our ideas.’”
Some at Apple have speculated that Jobs’s blindness could simply have been because of what he considered his great friendship with Brin and Page. It is human nature to believe we are good judges of character. Successful founders and CEOs such as Jobs think they are particularly good at it. Being able to find and hire the most talented, reliable, and trustworthy people is, after all, a critical part of building and running a successful company. But others also wonder if Jobs’s cancer had started to become a factor by then too. By the middle of 2008 Jobs was obviously not well. Most of the time his voice was strong and his energy was good—but he looked emaciated, as if he had lost fifty pounds in six months. At times he was also obviously in pain. “I’d see him double over in meetings. I’d see him get in a corner and just sit there with his knees pressed against his chest. We’re all in the executive boardroom. It was terrifying to watch,” an executive said.
No one asked if Jobs was sick, even though his appearance had become the elephant in the room in most meetings with him by 2008. “We never wanted to admit it. We just didn’t go there. You just don’t do that to somebody. You wouldn’t want it done to you. And he would always say, ‘Don’t worry. I just got cleared by the doctors’ or ‘I’m fine,’” one executive said. But no one knew then what everyone knows now—that Jobs was not only sick but terminally ill. His pancreatic cancer had spread to his liver, and he needed a transplant, which he got when he was near death in early 2009, according to Walter Isaacson’s 2011 biography of Jobs. Now some who were in those meetings with him back then wonder if his illness wasn’t starting to take the fight out of him. “Put yourself in Steve’s shoes,” said one. “You’re sick, and some days you’re just irritable, but on others you say, ‘I give up. I’ve heard what I need to hear. Let’s move on.’”
Another Jobs confidant thinks Jobs was simply blinded by overconfidence. “I just don’t know that anybody really focused on the fact that there was going to be a full-fledged licensed operating system that they [Google] were going to provide to manufacturers. There were a lot of rumors about a phone and about how they were going to do a phone OS; but I don’t think Apple gave two shits about that because I think they felt that they were so good and so far ahead of everyone else that it didn’t matter. So if they [Google] were going to do a Nokia-like OS or something like that, nobody was going to worry. [Even in 2008] I don’t think anybody focused on that fact—that this was going to be a knock-down, drag-out Apple competitor.”
This person initially rejected Jobs’s health as being part of the problem. Upon further questioning, however, he reconsidered and said, “Look, I think you’re right. Would he have been more combative during that period [if he hadn’t been sick]? Probably, yes.”
* * *
As in any divorce, Googlers and Appleites may never agree on how the two started fighting, at what point Apple began cutting business ties with Google and why it is now spending hundreds of millions of dollars suing members of the Android community around the world. Was Jobs truly betrayed by allies who shamelessly copied his work, as Apple still alleges years after Jobs’s death? Or is Apple just perpetuating a cover story to hide the fact that illness and/or personal relationships, and/or overconfidence, had allowed him to miss signs that his relationship with Google was changing? Was Google sucked into fighting with Jobs when all it really wanted was to find a way to get along? Or was its behavior more premeditated and nefarious?
What is clear is that after Jobs forced Google to capitulate to him in the summer of 2008, Google privately began dropping all pretense of friendship too, and with single-minded ferocity it focused its energies on competing with Apple. Throughout the winter of 2008 and spring of 2009, as Jobs took a six-month leave from Apple for a liver transplant, Google didn’t just invest heavily to build a second Android phone—the Droid—but started working on a third Android phone it would design, market, and
sell itself. More immediately, Gundotra geared up his mobile-software team to build an iPhone app that Google might use as a Trojan horse.
Gundotra’s falling-out with Jobs earlier in 2008 had, by the end of the year, made him a staunch Android ally, and he focused his team on not only building basic Google apps for the iPhone—such as search, Maps, and YouTube—but on developing a mobile version of software called Google Voice. Like Android, Google Voice grew out of the acquisition of a start-up in August 2007. The company, GrandCentral Communications, seemed like a weird purchase at first. It was like Skype. It made software to enable telephone calls that traveled over the Internet instead of via a telephone company. But to many Google engineers that was like owning a fancier buggy whip. Telephone conversations were something their parents did. To them it was old, increasingly obsolete technology. When Google had moved to its current office complex, Brin and Page had looked into not installing telephones at all—until they were told that would be a violation of the fire code.
GrandCentral’s internal sponsor at Google, Wesley Chan, saw its potential differently: Google Voice was like Gmail. It was yet another application that made Google the center of users’ world, another application that gave Google information about those users’ interests, another application that could help Google sell more advertising. According to Levy’s book, Page liked the disruptive potential lurking within GrandCentral’s software. It could run on Android, and the carriers were not innovative enough to offer it to their customers. It offered the possibility of making Google a stealth phone company.
Google started rolling GrandCentral out to new users in 2008 under the new name Google Voice. The premise was powerful: Consolidate the various telephone numbers and email addresses we use into one communcations hub that anyone could set up. Google issued you a single phone number. You then linked that to all your other phones. When someone dialed your Google Voice number, the software automatically forwarded the call to all of your other phone numbers (or as many as you said it should) for free. It kept track of all those numbers and synced them with names in your Gmail contact list. It transcribed voice mails—albeit badly—and emailed them to you. It stored your cell phone’s text messages. It offered free conference calling that anyone could set up. Phone companies offered some of these services too, but they often cost money and were harder to set up. Gundotra believed that Google Voice would be particularly useful as an iPhone application. Not only would it add features that the iPhone did not yet offer, but it would essentially wrest the most important functions of the iPhone—calls, contacts, and email—away from Apple and, instead, connect them to Google’s servers. Hostile takeover is Wall Street terminology. It is hardly ever used in Silicon Valley. But when you cut through all the engineering subtleties, that is exactly what Google was doing.
What made Gundotra’s strategy so brilliant was that Google couldn’t lose. By then the Apple app store was a year old and an enormous hit. It not only was generating billions of dollars in new revenue, it was creating platform lock-in similar to the way Microsoft had done with Windows in the 1990s. The more software you bought for your iPhone, the more costly it became to replace those apps on another platform, and the more locked into buying another iPhone you would be. But Gundotra also understood that all that power came with an enormous responsibility: How would Apple decide which applications were allowed into the app store and which would be rejected? Deciding what music, movies, and TV shows to sell on iTunes was easy. If consumers didn’t like Apple’s selection, they could typically get that content in many other ways. But the app store was the only outlet for the new industry of software developers the iPhone created. Developers who spent money and time developing an application for the iPhone had little recourse if Apple rejected it. Apps that were obviously political, pornographic, or violent were easy calls. But dozens fell in gray areas and had already become an nettlesome public relations problem for Jobs and Apple. An app that allowed users to read classic books was rejected because it included the Kama Sutra. The political cartoonist Mark Fiore won the 2010 Pulitzer Prize for his work, but his app of cartoons was rejected because it made fun of political figures. If Apple rejected Google Voice—if it felt that it could reject the app of a big company and business partner—it would confirm Silicon Valley’s worst fears about Apple’s growing power in the mobile-phone business.
Nothing goes exactly as planned in business, but Gundotra’s Google Voice gambit worked pretty close to the way he hoped. On July 28, 2009, two weeks after announcing Google Voice for all mobile phones excluding the iPhone, but assuring the world that the iPhone app would soon be available, Google announced that Apple had completely rejected Google Voice. Days later, Apple announced that Schmidt was leaving its board of directors because of his conflicts of interest, and the FCC leaked word that it was looking into the whole affair.
Almost all the media coverage focused on Apple’s unreasonable and possibly unlawful control over its app store, portraying Jobs as a power-mad despot. In an effort not to look despotic, Apple tried to lead journalists into concluding that AT&T, not Apple, was behind all the rejections. But that made things even worse. It made the FCC wonder if Apple and AT&T were in some kind of improper collusion.
Two months later, in response to Freedom of Information Act requests by the media, the FCC released its correspondence with the three companies. It did not make Apple look good. Google’s letter said, “Apple representatives informed Google that Google Voice was rejected because Apple believed the application duplicated the core dialer functionality of the iPhone. The Apple representatives indicated that the company did not want applications that could potentially replace such functionality.” Meanwhile, Apple’s letter stated, “Contrary to published reports, Apple has not rejected the Google Voice application, and continues to study it. The application has not been approved because, as submitted for review, it appears to alter the iPhone’s distinctive user experience by replacing the iPhone’s core mobile telephone functionality and Apple user interface with its own user interface for telephone calls, text messaging and voicemail.”
Apple later allowed Google Voice and other voice applications into the app store. But executives at both Apple and Google said that everyone at the top of the two companies knew that Jobs himself had demanded Google Voice be rejected. “By 2009 people were already screaming that we were being censors,” one Apple executive said. “So [which apps we approved] was important for Apple’s image to get right. No one wanted to make these tough calls, so it wound up being up to Steve to do it.”
* * *
The Google Voice skirmish generated a lot of media coverage and gave Silicon Valley its first true glimpse into something it had been speculating about for more than a year: that the Apple-Google partnership to protect the world from Microsoft was unraveling—that they were a lot more angry at and scared of each other than either of them were of Microsoft. But the Google Voice fight would quickly have become insignificant if Android didn’t prove to be the threat that Jobs and Apple feared—if Rubin and the Android team didn’t produce a phone consumers wanted to buy. That threat seemed far-fetched by year-end 2008 after the G1 had been out three months. The G1 was such a flop with consumers that it seemed that it would make building the next phone harder, not easier.
But the opposite happened. Instead, the stumbling start of the G1 galvanized manufacturers and carriers to help Android succeed. The iPhone revolution didn’t just have Google and Android scrambling, it had the entire mobile industry figuring out how to compete with Apple. Motorola and Verizon, two partners that had been unavailable or uninterested in Android the year before, were suddenly and particularly intrigued.
Sanjay Jha had just taken over as Motorola CEO in August 2008. The company had made so many mistakes before and after the iPhone was released that many believed it was headed for bankruptcy protection without a Hail Mary pass. So Jha, who had a long relationship with Rubin dating from Jha’s days as a top executive at chip ma
ker Qualcomm, took the immediate and controversial step of declaring that Android would be the only operating system to ship with Motorola phones. Before that Motorola had roughly half a dozen operating-system teams. Thousands lost their jobs.
Meanwhile, Verizon, which at the end of 2007 had made clear that it hated Google, was now beginning to realize that maybe it needed Google more than it hated it. Verizon executives had wanted to believe that AT&T’s deal with Apple—which gave Apple all design, manufacturing, and marketing rights—was an aberration. They spent $65 million marketing the LG Voyager in 2007 and another roughly $75 million marketing the BlackBerry Storm in 2008 in hopes of proving that point. But both were critical and commercial disappointments, and by the end of 2008, Verizon COO John Stratton was starting to worry about AT&T and the iPhone’s taking his best customers. “We needed to get in the game,” Stratton said. “And we realized that if we were going to compete with the iPhone, we couldn’t do it ourselves.”
The shared need—even desperation—of all three companies to come up with a response to the iPhone allowed all manner of fresh thinking by their top executives and engineers. Schmidt, who had viewed carriers as evil incarnate, was taken by Verizon’s seemingly sincere commitment to opening up its network so that others besides Verizon could use its bandwidth to fuel new ideas. Stratton was impressed by Schmidt’s reasonable attitude in person; he was nothing like the bomb thrower he seemed to be in his public statements. Jha was desperate to work with both companies to save his own.
Meanwhile, it wasn’t just Jha’s engineers who had come to understand and respect Android, Verizon’s engineers had come to the same conclusion. They had been poring over every smartphone operating system on the market—and even tried building their own—and had concluded that Android was one of the best. This was a big statement from a carrier such as Verizon, notorious for wanting to control everything on its phones. In 2005 Verizon had been so convinced of its dominance in the wireless business that it had turned down Jobs’s offer of a partnership to build the iPhone. AT&T had been Apple’s second choice. What Verizon engineers liked was that Android was written with the future in mind. Most smartphone software—including the iPhone’s—was designed to require regular connections to a PC. But from the beginning, Android was written with the assumption that one day this would not be necessary—that everyone would use their smartphone as their primary Internet and computing device.
Dogfight: How Apple and Google Went to War and Started a Revolution Page 12
