Five years ago I accidentally became an iPhone user.
I had watched the iPhone announcement several months earlier, and thought it looked like an incredible phone. But I wasn't planning to get one because I was a Palm user, and had been a Palm user since my Palm IIIxe. I had a ton of software, and I was heavily into the whole Palm "experience."
At the time I was carrying a Treo 650 (which has replaced my Treo 600, which had replaced my Treo 300) and I was fairly happy with it. Sure, it locked up a couple times a day and I had to remove the battery pack to reboot it, but so what? Yes, occasionally (and by "occasionally" I mean "regularly" as in "almost daily") I had to unscrew the top of my stylus to get to the little piece of plastic that I could use to press the reset button. Sure, I carried 2 extra batteries around with me because if it was a busy day I knew I'd need them.
But the Treo had all that software...
When the iPhone first came out, it had no third-party software. I couldn't imagine giving up all of my software. I had a lot of money invested in Palm software, how could I even consider throwing it all away?
Then something unexpected happened: my Treo stopped working.
Actually, I shouldn't say that it was unexpected. While it was frustrating, it certainly shouldn't have been unexpected. My Treo 300 had worn out because it wasn't made very well, which is why I bought the Treo 600. I think I went through 2 or 3 Treo 600s before I finally convinced Sprint to replace it with a 650. And now the 650 was starting to act up. The 'e' and the 'w' keys were starting not to respond unless they were pressed really hard, and the touchscreen had to be "recalibrated" every day, or else stylus taps were inaccurate.
I finally got fed up and asked Sprint when my contract was going to expire. Answer: July 3rd.
I was very excited, not because I could get an iPhone, but because I thought I would be able to get a good price on a new Treo 755p. Sprint was advertising it all over their website for "only" $280 with a 2 year contract. There was just one flaw in my plan: because I was existing customer, I couldn't get the Treo 755p for $280. I could get it for $429. I went around and around with them, trying to get them to see that it was insane to suggest that after 4 years of being a smartphone customer, I was worth less than a new customer. But they refused to budge.
I decided to leave Sprint and switch to AT&T/Cingular, but I still wasn't planning to get the iPhone. I was planning to get a "free" Treo 680, but before I did that I did my homework and asked one question which ended up changing everything: Which is more expensive: a free Treo 680 or an iPhone?
If it sounds like a trick question, that's because it is. The first trick was that the Treo was only free "after rebate." Still, "free after rebate" sounds a lot cheaper than cheapest iPhone, which sold for $500. But there's another trick: the contract. Both the Treo and the iPhone required a two-year contract. The Treo rebate stipulated that you had to sign up for a contract with unlimited data which cost $40/month for Treo users. However, due to what must have been some amazing negotiations between Apple and AT&T before the deal was announced, unlimited data for the iPhone was only $20/month (the Treo didn't do 3G either, so these were comparable plans).
I don't remember that detail getting a lot of attention at the time, but I've always thought that the data plan was one of Apple's greatest accomplishments in bringing the iPhone to the market. It needed unlimited data so you weren't thinking about data usage. And $20 was literally half of what it cost if you were using a different smartphone on the same network (AT&T increased the cost to $30/month when 3G arrived a year later, and took away the 200 included text messages).
Now armed with the facts for both the initial cost and the contract costs, it was easy to make a comparison between the iPhone and the Treo. AT&T's lowest voice plan was $40/month for 450 minutes, and that was the same for Treo or iPhone. Add another $40/month for data and the "free after rebate" Treo would have cost a total of $80 per month for 24 months = $1,920. A iPhone would cost $60 per month for 24 months = $1,440. Add $500 for the iPhone itself: $1,940.
Not to mention that the iPhone had onboard storage (which, at the time, was really only useful for music, but still, you were also getting a great iPod as part of the iPhone), and the Treo had almost none, so you would need an SD card, which cost about $60 at the time. Over the course of two years, the 8 GB iPhone would cost about $2,040 versus about $2,000 for the Treo.
For an extra $1.67 per month, I could get an 8GB iPhone.
So I bought an iPhone.
I actually bought the iPhone right after launch but then had to leave it in the box for about a week while I waited for my contract to expire with Sprint!
Apple dropped the price of the iPhone shortly after launch and gave $100 Apple Store gift cards to early adopters, which made it an even better deal. A friend of mine sent me his $100 Apple Store gift card and said "I'm a Windows guy, I'll never shop at the Apple Store, so I thought you might be able to use this." So I paid $400 for my 8 GB iPhone.
Sprint lost me as a customer due to their terrible customer retention policies, but Palm also lost me because my experience with the Treo hardware had also been terrible. They were poorly made of cheap plastic, and did not stand up to use over time. When Apple showed the iPhone without a hardware keyboard, my first reaction was "No keys to stop working!" but the real difference could be felt just by holding the two devices. The Treo felt like a fragile piece of electronics wrapped in plastic. The iPhone felt like something NASA would have built.
How long did it take me to realize I had made the right decision?
The first time I loaded a web page in "Mobile Safari" and saw how much better it was than the awful web browser on the Treo, I never looked back. Even with no third-party software and extremely limited multitasking, the iPhone was always on a different level than the Treo.
"We've learned and struggled for a few years here figuring out how to make a decent phone," he said. "PC guys are not going to just figure this out. They're not going to just walk in."
While Palm struggled to figure out how to make a "decent" phone, Apple had no interest in making anything less than a revolutionary phone. I'm guessing Apple could have released a decent iPhone in 2006, maybe even 2005. But a "decent" phone wasn't enough. So they kept working at it. While Palm released the "decent" Treo 300 and then annual "decent" upgrades, Apple kept working on making the iPhone better and better, until it was ready.
Colligan was right, of course, when he said that Apple would not "just walk in."
Apple didn't walk in.
They stepped over.