Dogfight: How Apple and Google Went to War and Started a Revolution (10 page)

In between these two incredibly tense drives, Borchers had been the conductor of how every iPhone looked and was displayed at Macworld. He’d been responsible for scheduling rehearsals, making sure the right people and equipment were always in place, and for making sure security was sufficient so that any pictures of the phone didn’t leak out. He was so busy he didn’t even get a chance to watch the keynote live. While Jobs was speaking, Borchers was installing iPhones in spinning Plexiglas display cases on the show floor, and making sure the demonstrators Apple had hired for the event had devices to demo.

Only the morning after returning home to Pleasanton did Borchers realize what a long six days it had been. He’d spent the night before the Tuesday keynote at a San Francisco hotel up the street from Moscone, but he’d forgotten to check out, and he’d left all his luggage in his room.

*   *   *

Getting the iPhone ready for sale wasn’t the only distraction Apple engineers had to contend with in early 2007. To get the iPhone built, Jobs had pitted two of his star executives against each other—Scott Forstall and Tony Fadell—to see who could come up with the best product. The fallout from that two-year fight was now rippling through the corporation. It had been an ugly war, full of accusations of sabotage and backstabbing, pitting friends against friends. It had left many people on both sides feeling that Apple no longer resembled the company they had joined. Instead of being the counterculture underdog, they worried it had been transformed into a soulless profit machine, a big company with IBM-style corporate politics. There is no virtue in being a struggling company, as Apple was for so many years, and the dwindling resources of a company nearing bankruptcy—as Apple was when Jobs returned in 1997—created its own brand of snake-pit politics. But most at Apple in 2007 hadn’t been there then. Apple may have been founded in 1976, but to most of its employees it was going through the growing pains of a ten-year-old company, not a thirty-year-old company. From 2002 to 2007 the number of employees at Apple had doubled to twenty thousand. While some believe tensions with Forstall prompted Fadell to resign three years later, Fadell compellingly rejects this. He says he and his wife, who ran HR, left to be with their young children, despite Jobs’s efforts to make them stay. They left millions of dollars in stocks behind. Either way, the iPhone took Apple’s business to new heights. In addition to becoming a cultural icon, the iPhone alone generates more revenue for Apple than the entire Microsoft Corporation does. Apple became the most valuable company in the world because of their work.

But Forstall had been so aggressive in his effort to beat Fadell that it scared people. Many wondered whether there was anything he wouldn’t do to get ahead. CEO Tim Cook would eventually push Forstall out of Apple in 2012. But back in 2007 it looked as if he were going to be there forever, and when he was put in charge of all iPhone software in 2007, a huge exodus of talent followed. Those who stayed got to watch Forstall’s naked ambition on full display. Even his fans admit that before he left, he had become a cliché of a difficult boss—someone who takes credit for underlings’ good work, but is swift to blame them for his own screwups. When Jobs was alive, Forstall drove colleagues mad with his sanctimonious “Steve wouldn’t like that” critique, and he made no secret of his seeing himself as the eventual Apple CEO. In 2011,
Bloomberg Businessweek
reported that chief designer Jony Ive and head of technology Bob Mansfield were so suspicious of Forstall they refused to meet with him unless CEO Tim Cook was present too. I’ve heard that was true for iTunes boss Eddy Cue as well.

It wasn’t shocking to see Jobs play two executives off against each other; he was well-known for his Machiavellian side. But what was surprising was that Jobs let the fight go on so long and affect so many people at Apple.

“It was incredibly destructive,” one executive said. “I think Steve would have been great during ancient Roman times, where you could watch people get thrown to the lions and be eaten. He played them [Fadell and Forstall] off each other. Tony was the golden boy for a while, then Forstall, then back to Tony, then back to Forstall. It became a circus. Remember ‘Spy vs. Spy’ [a 1960s comic strip that pitted a white spy (the United States) against a black one (the Soviet Union)] in
Mad
magazine? It was like that—comical—if it hadn’t wasted so much time.” Another executive, remarkably, made the same comparison. “The first time I saw [the movie]
Gladiator
[in 2007], I told my husband, ‘This feels familiar,’” she said. (Forstall would not be interviewed for this project. Fadell is not shy about his feelings, though. After Apple pushed Forstall out, Fadell told the BBC, “Scott got what he deserved.”)

In retrospect, many at Apple believe that it ultimately wasn’t a fair fight. Fadell’s expertise was hardware; Forstall’s was software. That gave Forstall a built-in advantage because many believed that Jobs was much more interested in the software and industrial design of Apple products than the innards. But while the fight was going on, it wasn’t at all clear how it was going to turn out.

Grignon knows firsthand how nasty the fight between Forstall and Fadell was. He wound up in the middle and ended up feeling pulled in opposite directions like a piece of warm taffy. Even before work on the iPhone started, Grignon discovered simmering tension between the two executives. In 2004 Forstall tried to block Grignon from taking a job in Fadell’s division. Grignon had worked for Forstall for three years building products called Dashboard and iChat. He thought they were decent work friends. They would go rock climbing together on the weekends. But when Fadell offered him a better opportunity inside Apple, Forstall went out of his way to block it. He told Grignon that he supported his decision to move. Then Forstall went behind Grignon’s back to Jobs himself to stop it. “And he made enough noise to Steve that Steve actually intervened on my transfer to Tony’s org. He sat Forstall [and some other executives] in a room and basically beat them all down saying, ‘Okay, you can have Andy and nobody else. Nobody else gets to transfer from software [under Forstall] to iPod [under Fadell].’ That’s when the animosity between them really started.”

The fight was like a religious war. When work on the iPhone began, Forstall constructed an elaborate secret organization to work on the project. It was so secret that it wasn’t clear for a while if Fadell even knew about it. From his office on the second floor of IL 2 on Apple’s campus, Forstall started pulling in some of the best engineers from around the company, creating lockdown areas all over the building as he went. “If you were working weekends, you’d see the construction crews come in all the time putting up walls, security doors … everything … so that by Monday there was a new lockdown area. I’ve never seen walls put up that fast. Looking back, it’s almost comical to think about,” said Shuvo Chatterjee. “As they reconfigured, some of us were moving almost once every two months. For a while, I just kept everything permanently in boxes because I knew if I unpacked, I’d have to pack up and move again right away.”

“It became a maze,” Nitin Ganatra said. “You’d open this door and the previous door would close behind you. It was Sarah Wincester-y in some ways.”

Officially the iPhone was being run by Fadell. Fadell ran the iPod division, and it seemed natural to build the iPhone by starting with an iPod and just improving it. Forstall had a different and vastly more risky idea: figure out a way to shrink the software that ran on Macs and make it run on a phone. “We had all assumed the iPhone would run a version of the software we had designed for P1 [a version of the iPod OS designed for the first prototype],” said one of Fadell’s iPhone engineers. “But totally in parallel, Forstall and his team were working on a version of OS X to run the phone. We didn’t know.”

Jobs wanted to run OS X on the iPhone. He just didn’t think it could be done. When Forstall’s team actually did it, Forstall won control of the iPhone project. “There is no hardware-software guy at Apple,” said another iPhone engineer. “This has been a point of contention for a lot of people in the history of Apple. Hardware guys think they know software. And software guys think they know hardware. But Steve wouldn’t have it [be drawn into that debate among his executives]. So when Scott said, ‘Hey, Steve, there is this kick-ass software team in Tony’s org, and I want it,’ Steve is like, ‘Well, of course. You’re the software guy. They’re doing software, they should be on your team.’ By the time the iPhone went on sale in mid-2007, Forstall controlled many of its software engineers. And when Apple launched the iPod Touch a few months later, Forstall controlled that too.

*   *   *

Fadell has gone on to start Nest, a company that makes the first good-looking, powerful, and easy-to-use home thermostat. Not surprisingly, it has all the design and software flourishes of an Apple product. It is one of the most talked about new ventures in Silicon Valley. But allies and enemies alike still talk about his fight with Forstall as if it were yesterday.

Fadell was truly Apple’s first golden boy of Jobs’s second stint at the company. At thirty-two he’d come to work at Apple only knowing that he was to work on some secret project he was told he was suited for. Four years later, as the line executive in charge of iPod, he was one of the most powerful people at Apple. By the fall of 2006, iPods represented 40 percent of Apple’s $19 billion in revenue. And its market share, at more than 70 percent, seemed unassailable. Apple was selling more Macs too, but those sales represented less than 10 percent of all personal computers. The iPod’s success, meanwhile, had turned Jobs into a business icon once again.

Fadell had been exactly what Apple needed in 2001. He was young, brash, and smart, having been part of cutting-edge portable-hardware engineering in the Valley for fifteen years. He once told a reporter that he would have ended up in jail had he not discovered computers. He occasionally showed up for work with bleached hair. He was not good at holding his tongue when faced with substandard work or ideas. His first job out of college was at General Magic, a company Bill Atkinson and Andy Hertzfeld spun out of Apple in the early 1990s in the hope of developing some of the first software ever written exclusively for mobile devices. The project failed and Fadell found himself at Philips, the giant Dutch conglomerate, where he quickly became the company’s youngest executive. He ran the company’s new mobile-computing group, where he developed some early PDAs (the Velo and Nino), which sold decently. They also introduced him to the power of digital music on portable devices.

Fadell was getting ready to start his own company when Apple’s head of hardware, Jon Rubinstein, called, trying to recruit Fadell for a job that, astonishingly, he was not allowed to disclose. According to Steven Levy’s book
The Perfect Thing
, Fadell took the call on a ski slope in Colorado in January and expressed interest on the spot. He had idolized Apple since he was twelve, according to Levy. That was when he’d spent the summer of ’81 caddying to save up enough money to buy an Apple II. Weeks after Rubinstein’s call, Fadell joined Apple, only discovering then that he was being hired as a consultant to help build the first iPod.

Grignon and others have said that Fadell’s rise never sat well with Forstall. Up until Fadell joined Apple, Jobs’s inner circle was composed of people he’d worked closely with at least from the beginning of his return in 1997, and in some cases from his days running NeXT, the computer company he’d founded after getting fired from Apple in 1985. Forstall had worked longer with Jobs than almost any other executive. He’d joined NeXT when he’d graduated from Stanford in 1992. Yet he wasn’t part of Jobs’s inner circle for a long time, and Fadell was. And Fadell, who was the same age as Forstall, was rising much faster in the corporation than Forstall. Fadell ran the iPod division, which generated 40 percent of Apple’s revenue. Forstall was in charge of the application software that came with a Mac—things such as Address Book, Mail, Safari, and Photo Booth.

But then Forstall and Jobs bonded. It was in 2003–4, and colleagues believe it was because Forstall developed a severe stomach ailment around the time that Jobs was first diagnosed with pancreatic cancer. Jobs, who at first tried to treat his own cancer with diet, developed a regimen for Forstall that appeared to cure him. After that, said Grignon, Forstall began coming to more and more of Jobs’s Monday senior-staff meetings. Ordinarily Forstall would not even have known about the iPhone project; he wasn’t senior enough. “So as soon as he found out through those inner-circle discussions that Jobs wanted to build a phone, that’s when he started to wedge himself in,” Grignon said.

Forstall couldn’t have been more different from Fadell. Forstall was smooth, engaging, and had Jobs’s flair for the dramatic gesture, having acted in high school plays in addition to studying computer science. Even then, say classmates, it was clear how ambitious and determined he was. As
Bloomberg Businessweek
put it in 2011, “In many ways, Forstall is a mini-Steve. He’s a hard-driving manager who obsesses over every detail. He has Jobs’s knack for translating technical, feature-set jargon into plain English. He’s known to have a taste for the Mercedes-Benz SL55 AMG, in silver, the same car Jobs drove, and even has a signature on-stage costume: black shoes, jeans, and a black zippered sweater.”

For two years Forstall and Fadell fought about everything, often forcing Jobs to mediate disagreements over the smallest matters. Nitin Ganatra, who worked for Forstall, recalls one moment in 2006 when Jobs had to decide which group’s boot loader would run on the iPhone. It sounds like engineering minutia, and it is. The boot loader is the first piece of software that runs on a computer. It tells the processor to look for and start the disk that has the machine’s software on it. “We were like, ‘Why does Steve have to come in and make a decision about something this small? Can’t Scott and Tony figure it out on their own?’”

Another engineer, who reported to Fadell, expresses his frustration with the fight more bluntly: “For two years I worked Thanksgiving, Christmas, and New Year’s—insane hours—and it was hard to have to deal with this other political bullshit too.”