William Shakespeare’s famous quote, “What’s in the name?” has been bearing his name for centuries. Therefore, everything is in the name as the name carries the legacy for centuries. Interestingly, the iPhone, a name that carries the legacy of Apple Inc., was not coined by Steve Jobs or Apple but was used by InfoGear first. The world’s first iPhone was created in 1998, nearly a decade ago before the debut of Apple’s iPhone in 2007. InfoGear was later acquired by Cisco on March 17, 2000. The name is the prime reason for the stiff between the 2 giants: Cisco and Apple, which ended up in lawsuits as Cisco sued Apple for using its product’s name (iPhone).
The world’s first iPhone by Cisco debuted in the basic telephone era, so the resemblance with a smartphone is out of context. The device housed a touchscreen in a basic phone model. In an article dated November 2, 1998, CNN addressed the iPhone as a ‘fairly large desktop telephone with the usual handset, speaker, and phone keyboard.’ The iPhone boasted a 640×480 touch display resolution, a QWERTY keyboard, stylus housed in a usual phone material.
The first iPhone housed 2 MB of RAM under the hood, which is enough to store 200 email addresses. Though the device may be considered a device of the future in that era, it didn’t get momentum because of its exorbitant price, around $499, and the requirement of separate internet access, which used to cost around $19.95 for unlimited internet access.
So, where were Apple and Steve Jobs then? In 1998, Steve Jobs was guiding the sinking ship of Apple, and the company mostly focused on its Macintosh devices. The pathetic state of the company was quenched when Apple registered $45 million in net income in Q1 1998 after two straight years of losses. Earlier in 1997, Apple was in a dire state registering a $120 million net loss in fiscal Q1 1997 and suffering a $2 billion cumulative loss in the last two years.
It’s not the first time when Apple’s flagship device has been in controversy. Recently, Nancy Pelosi, Democratic Leader, of the US House of Representatives claimed that Steve Jobs didn’t invent the iPhone as the technology was available to US Federal Government much before the development of the iPhone in 2007. A source later added on behalf of Nancy that Jobs just designed the ‘federally backed innovations’ in a way that it may be housed in a single device which today is known as iPhone.
In another funny moment, Tim Cook, CEO of Apple, on seeing a picture in the museum in which a man is holding a letter that vastly resembles the iPhone, laughed out and said that iPhone was invented 350 years back, not in 2007.
Why did the Real iPhone fail?
The technology incorporated in InfoGear’s iPhone aka the world’s first iPhone was ‘way ahead of its time’. There were multiple factors that didn’t allow the futuristic phone to take off as expected.
According to Robert R. Ackerman, Founder and Managing Director Allegis Capital, the idea of the touch screen phone cum computers wandered around the Infotech’s engineers as traditional computers were costly, around the $1000 to $4000 price range. Therefore, delivering a compact internet-savvy telephone device to consumers at an affordable price was the real deal behind the development of InfoGear’s iPhone. During that period, only 10% of the houses in the US had internet access. This was touted as the first mistake by InfoGear as the market lacked internet users, and the connection was costly.
Secondly, the Bill of Materials (BoM) that the company expected around $100 shot up to $210 and thus, the iPhone, which was slated to be launched at around $250 to $300 price range, was tagged with a $499. The price was too high considering the device being housed inside a telephone; buying a telephone tagged with $499 was out of context for many consumers in that era. Thus, mere 2,600 devices were shipped within the first quarter of its launch in 1998.
As a result, the debut of the world’s first iPhone by InfoGear was nothing but disappointing. In July 1998, the company declared that it was no more profitable. Later in 2022, the company and its trademark of the iPhone name were acquired by Cisco, after the constant struggle of revamping the iPhone failed.
Why Apple’s iPhone was a success?
On the other hand, in 2007, when Apple’s first iPhone was revealed, it was considered a benchmark in the mobile industry as the phone housed cutting-edge features which were the need of the hour.
The iPhone by Apple was perceived as a combination of three devices: a revolutionary mobile phone, a widescreen iPod and internet access at your fingertips. The timing of any state-of-the-art product writes its fate in the market, and the market was well mature to absolve iPhone. Consequently, the debut iPhone recorded 270,000 unit sales in the first 30 hours alone, and within a year, 1,389,000 units were sold. But more than the success of the Apple iPhone, it was the birth of a new era of Smartphones.