Becoming an iPhone Believer

So what if iPhone isn't your idea of the perfect cell phone? Early iterations of the iPod weren't ideal music players either—and look what they've become

by Arik Hesseldahl

I used to be an iPhone skeptic. Then I cleaned out my bedroom closet. Let me explain. In the two hours or so I spent sorting the detritus of the last six years of my life, I came across my first iPod, the first-generation, Mac-only version that Apple (AAPL) unveiled in late 2001 to a world that initially didn't seem to understand the significance of what was coming. It was then that I was reminded of the introduction of a good but imperfect product that would be tinkered with and improved on by the Apple machine, all the while ushering in nothing less than a revolution in consumer electronics. History may soon repeat itself.

IPod's Rocky Intro

Think back to what a history it has been. That first iPod was introduced weeks after September 11, and its early days coincided with the economic malaise that followed, especially concerning all things connected to technology. Much of the air had been let out of the Internet bubble, and gadgets came to seem frivolous items that the newly laid-off couldn't afford anyway.

When I went to Comdex, the once-huge computer industry trade show in Las Vegas that November; the slowdown in the tech economy was palpable and advanced. The formerly bacchanalian festival of the digital set was a downright sullen affair. But it was at a Comdex press conference that I saw a glimmer of hope for better things to come: I saw the iPod up close for the very first time in the hands of a friend.

I was intrigued. The simple genius of adapting a product that until then had held only marginal appeal was apparent. The first iPod loaded music faster than other players on the market. Anyone could understand its fabulously easy wheel-and-button interface in seconds.

Try, Try Again

I knew right then it would be a hit—but one of limited impact. There were, indeed, a lot of things wrong with the first iPod. It didn't work with computers running the Microsoft (MSFT) Windows operating system, which severely limited its overall appeal. The $400 device held only 5GB of music, good enough for 1,000 songs; cheaper players could already store four times as much. The battery proved to have a short life span. Those complaints topped a long list.

But we now know that the first iPod was just that: the first. Apple learned from what worked and what didn't and made adjustments. Soon the wheel was gone, replaced by a solid-state wheel that responded to touch. Hard-drive capacity increased within two years to about 40GB. Eventually a cold day in hell did arrive, and the iPod supported Windows users, turning the iPod trickle into a torrent. And after a few lawsuits and bad publicity, the batteries got better.

Six days before the iPod was unveiled, Apple reported that it finished fiscal 2001 with a $25 million loss on sales of $5.4 billion. Five years later it ended 2006 with a $2 billion profit on revenue just shy of $20 billion. You know the rest.

IPhone Gripes

This in mind, I'm not all that concerned about the many criticisms that have been flung at the iPhone since it was introduced this month.

Take the complaint that the phone is available only from Cingular, the wireless unit of AT&T (T) that will soon be rebranded as AT&T Wireless. Cingular has a spotty record for quality of service, but I can't think of a single U.S.-based wireless carrier whose quality isn't spotty.

And having the iPhone in its stable gives Cingular two things. First, the carrier gets a shot at attracting customers away from rivals Verizon Wireless, the joint venture of Verizon (VZ) and Vodafone (VOD); Deutsche Telekom's (DT) T-Mobile; and Sprint Nextel (S).