The context of this story

Year: 2007
Products: iPhone

iPhone 3G

Apple began working on the new version of the iPhone immediately after releasing the first generation iPhone, later referred to as iPhone 2G, in the summer of 2007. The 2G refers to the second generation of mobile networks it supports, namely GSM. The main task is to integrate two important technologies: 3G and GPS. The reason for integrating fast data is clear, but why GPS? At that time, there were still few phones equipped with GPS, but it was becoming clear that this was a trend. In January 2008, one of the iPhone updates brought the ability to recognize location in the network by triangulating base stations. Although this is an approximate location, which is further refined by recognizing nearby WiFi networks, in the city it is accurate to within hundreds, sometimes tens, of meters. Just press the Location icon in the Maps app and the maps will focus on your current location. This is a groundbreaking feature that captivates users.

However, Apple did not dismiss it and incorporated it as a basic feature into the operating system. Any application can use it as a standard call, with the system deciding whether and how to update the location, for example, depending on whether the battery is dead or how likely it is that the location has changed. It also leaves open the simple option of supplementing location detection with the GPS satellite system, and later, with the iPhone 4S, even the Russian Glonass system will be added. Importantly, it is the operating system that decides how to determine the location, not the program itself. This has a positive effect on battery life and program response quality, eliminating the long minutes during which the map software has no idea “where it is[.”]{dir=”rtl”} First, it determines the location using triangulation in the network, which is the fastest and least battery-intensive method. If this is not sufficient, or if it is clear that the location has changed since the last time, it refines it using GPS so that the application can “zoom in” on the correct location. And if multiple applications request the location within a short period of time, there is no need to determine it again. Compared to applications in Symbian, which also supports GPS, this is an important change: poorly programmed location calls cannot drain the battery unnecessarily, and location determination does not take as long. However, it must be said that the use of GPS will continue to put a heavy strain on the battery.

Image: apple-iphone-3g

Triangulation in a mobile network uses the fact that a mobile phone itself keeps information about how far it is from individual base stations. It uses this information to decide when to start preparing to switch to another closer base station. However, since the distance from the transmitter is known to within a few dozen meters and the phone usually sees more – five to eight – base stations, this localization is quite accurate and fast, provided that the location of the base stations themselves is known. However, there are companies that offer such a database, originating from who knows what sources. Apple, like Google, is initially leasing this database, but in later years it will replace it with its own database, to which it will add a WiFi network database, so that it will be able to refine the location based on the surrounding WiFi networks it sees.

However, smart location tracking algorithms do not only bring advantages. If parts of them leak out and the whole thing is poorly handled from a PR perspective, it can damage the company’s reputation. In the spring of 2011, information emerged that Apple stores the locations visited by users of iPhones and iPads and apparently sends them to its servers on an ad hoc basis. This immediately gave rise to a number of more or less fantastical theories about why Apple might want to track its users, ranging from data collection for location-based advertising to government-mandated espionage. True to form, Apple did not comment on the issue for a long time, until it became uncomfortable because users still did not know why and how their iPhones and iPads were spying on them. In the end, Apple responded in typical Apple fashion—without any grand proclamations, it published Questions and Answers about the location service and began referring journalists to this document. The document states that the real reason for “tracking users” is to evaluate the user’s location and thus send and cache data for location evaluation in order to minimize the use of data connections. Simply put, a smart algorithm sent this data based on where you were at the right moment (when connected to WiFi) and received a data package in return for evaluating your location in the places you visit. Apple did nothing more with this data, but for conspiracy theorists, it was the end of the road for Apple. And Apple’s secretive PR department had only itself to blame.

The development of the new iPhone is intended to iron out all the weaknesses that could not be fixed during the rushed completion of the original iPhone, as well as those that emerged as new requirements during a year of sales. On June 9, 2008, Steve Jobs unveiled the new iPhone at the WWDC conference, which was given the nickname 3G – meaning it supports third-generation networks. It is two grams lighter, but otherwise identical to the original iPhone. It had the same poor camera, and the dimensions had only increased in thickness, so the impression of slimness was achieved by redesigning the curvature of the back. It had the same technical equipment, except for the addition of A-GPS, support for 3G networks and fast HSDPA data (up to 3.6 Mb/s), and an acceleration sensor.

Eight and sixteen gigabyte versions are coming to market, again without the option of expanding memory via a memory slot. In fact, any possibility of expansion is precluded in advance with the iPhone, as with other Apple products. Even the battery cannot be replaced without laboriously dismantling the cover. As with the original iPhone, this will have its supporters and detractors, who like the fact that the battery does not fly out when the phone is dropped, or who hate the fact that they cannot carry a second charged battery with them. Perhaps only the back cover has changed material. Instead of anodized aluminum, the cover is plastic, which was required by the redesign of the antennas for 3G networks and GPS, which would no longer fit under the tiny piece of plastic reserved for antennas in the original iPhone. However, Apple will have problems with antennas in the long run, with the real trouble coming later with the iPhone 4 model.

The iPhone 3G is no surprise; it is no longer a revolutionary model that no one expected. On the contrary, it is the most predictable thing anyone could have hoped for: it eliminates all the weaknesses of the original iPhone and retains all its strengths. This is appreciated by reviewers, users, and investors alike: enthusiastic reviews and user orders are piling up, and the stock price is skyrocketing.

Changes to the iPhone operating system itself are also promising. Its second version, which is set to hit the market with the iPhone 3G, will deliver what users have been hoping and waiting for. An experiment in making a unified mobile application sales platform available, independent of mobile operators. The App Store. The only channel through which iPhone applications can be purchased. Nokia did not dare to be so bold, even though it experimented with a mobile application sales outlet and tried to impose it on operators as their service, rather than directly on customers.

By the launch date of the App Store, Apple and its partner developers had prepared a nice selection of 500 applications for purchase or download.

The iPhone 3G hits the market on July 11, 2008, a month after Jobs unveiled the phone. This is also part of Apple’s strategy. The phone is to be announced as little in advance as possible, just enough so that users don’t have time to change their minds and competitors don’t have time to react, while at the same time allowing Apple to keep it secret and have enough time for distribution. Along with the release of the new model, a new version of the iPhone OS 2.0 operating system is also being released as an update and is available for the original iPhone.

Support for third-party applications is probably the biggest, but certainly not the only new feature of iPhone OS 2.0. To everyone’s surprise, Apple has licensed Microsoft’s ActiveSync technology, enabling convenient data synchronization with Exchange servers, which handle a huge amount of corporate communications. The implementation is even significantly better than that of Microsoft’s Windows Mobile operating system, and while the iPhone was not particularly suitable for corporate environments until now, it has suddenly become an attractive option. Apple further increases its appeal by releasing a tool for managing and distributing settings for corporate iPhone phones, as well as the ability to remotely erase data from a stolen phone. Access to the corporate network via Cisco IPSec VPN is also supported. What more could a corporate network administrator want in 2008?

However, even for ordinary users, the new version offered corporate solution capabilities with push synchronization of calendars, email, and contacts. Apple introduced a new version of its online services package, which it had previously called .Mac in reference to Microsoft’s .Net. The package was renamed MobileMe and, in addition to extensively revamped email, calendar, and contacts, it offered real-time synchronization with the iPhone and Mac computers. Every email delivered to MobileMe arrived immediately on the iPhone. There was no need to connect the iPhone to a computer and iTunes to synchronize data; everything was done over the air, via a mobile network or WiFi, but at a considerable annual fee (approximately $75). In theory, it was a very interesting package of applications, but once again, it confirmed that Apple has problems with the development of web services. The MobileMe application did not win the hearts of customers, and many users used similar services from Google, not so much because of the price, but because of the features and convenience that MobileMe did not offer, despite its considerable price. Two years later, when Steve Jobs announced the launch of iCloud, he described MobileMe as one of the worst services Apple had ever offered. And he was right.

Among the minor issues that annoyed users, the new version’s ability to delete multiple emails at once is worth mentioning; it’s almost unbelievable that the first version of the email client couldn’t do this. Similarly, the contact search feature, which was missing in the first version, has now been added, and Apple has incorporated it in a very fundamental way as a search of the entire contents of the phone, similar to how Spotlight works on a “grown-up Mac” – that is, as a continuously updated and current index of all the device’s content. Entering a search string will find not only contacts, but also appointments, emails, and, of course, applications. For many people, this easily accessible search has replaced launching applications, as it is more convenient.

And what was important for the phone’s international success: Apple added sixteen additional languages and national keyboards, including Chinese recognition, but for us it was more important that Czech was also supported. This ended the era of unofficial Czech translations and dictionaries for a “symbolic thousand crowns.”

How did the market receive the iPhone 3G? It’s fair to say that people were clamoring for it, literally going crazy for it. Although Apple had anticipated considerable interest, it had serious problems supplying sufficient quantities of phones and so decided pragmatically to give preference to key markets, particularly the US and Western European countries. Very limited quantities of phones were initially available in the Czech Republic, as in other less important markets – but even in key markets, there were waiting lists for the phone. The interest and waiting lists were then reflected in the sales results, with almost seven million units sold in the last quarter of the 2008 pre-Christmas market, surpassing the sales of all original iPhones during their entire time on the market.

The App Store was not a new concept, but it was a breakthrough

The App Store met with equally enthusiastic reception. The market was simply ready for such a distribution model and eagerly embraced it. Within three days of the App Store’s launch, over ten million applications (of which there were already 800 in total) had been downloaded. On September 9, 2008, Apple announced 55 million downloaded applications and 3,000 available applications. By January 2009, users had downloaded half a billion apps, reaching one billion in April, by which time there were over 35,000 apps of all kinds, types, and price levels on offer.

Apple did not come up with a fundamentally new concept for selling mobile software in the case of the App Store. At that time, there were already a number of places where mobile software could be purchased for individual platforms, such as Handango, but these were websites that did not allow for an integrated process. You had to pay for the app separately, download it separately, and install it separately on your mobile phone. It was tedious and inconvenient. In addition, users had to want to do this and had to know about such sites and search for them.

The App Store was an app right on the iPhone’s home screen that allowed users to browse interesting software on the go at any time. And because Apple opted for frequent updates and manual screening of app rankings, users gradually began to use it to pass the time and see what was new or interesting. And because the app could be purchased immediately with a single click—the credit card number was already entered when the phone was activated and did not need to be searched for again—it directly encouraged impulse purchases. Even high-quality games usually cost less than ten dollars, hardly the price of a cheap lunch, and there was a range of quality software available for free or for one or two dollars. This was a significant change, as until then, mobile software had not been very cheap, and even mobile games tended to cost several hundred crowns in the case of high-quality titles. The typical price of 70-100 CZK only applied to Java games, which were not very extensive or very playable. The iPhone offered a gaming experience comparable to mobile versions of game consoles, but at prices that were about a third of the cost.

Steve Jobs’ charisma and intuition were behind this approach. He personally visited leading game developers and enticed them to develop games for the iPhone. He understood and accepted that the Mac would never become an attractive platform for games, and he didn’t mind that, but he saw extensive game titles as part of the iPhone’s success. And cheap ones. He believed that if premium game titles had their iPhone versions priced at ten to twenty dollars maximum, it would attract the younger generation eager for entertainment to the phone and at the same time sell enough units to richly reward developers for their development efforts, plus a thirty percent commission for Apple. He wasn’t wrong about that either. The iPhone became a hub not only for casual players, but also for hardcore gamers who didn’t want to trade it for a Nintendo DS or portable Playstation, but since it was already in their pocket anyway, well…

Today, developing games for the iPhone is a natural part of business for many gaming companies. Support versions of major titles are being prepared for it, which serve more as demos to entice players to buy the full console version, but there are also special games that take advantage of the capabilities offered by the iPhone’s mobile gaming platform, including GPS, tilt sensors, and a permanent online connection. This is a lucrative market with several hundred million devices sold, to which the “premium size” of the iPad has been added, and where it is no longer easy to succeed and attract attention, although there is still room for original concepts with attractive designs.

The App Store was not viewed entirely positively. It had its weakness, which was Apple’s total control over the content that could be offered through it. Although Apple tried to set fairly liberal conditions, it was impossible to overlook the numerous restrictions and prohibitions with which the company sought to exclude potential competitors from its marketplace. Not only did all applications undergo a lengthy approval process before being released, This could be understood as a certain guarantee of quality, an effort to prevent fraud and the spread of malware. However, Apple also decided which types of apps were not allowed to be offered. And it was not very consistent in this regard. Although the App Store terms and conditions explicitly prohibited offering apps that replaced the official apps supplied by Apple, it was mainly a matter of conflict of interest. While there were a number of calculators in the App Store and Apple didn’t mind that users could use them instead of the company calculator, it did not allow the alternative Opera internet browser to be listed in the App Store for a long time. While it had no problem with weather forecast services and allowed them to be offered in the App Store, it did not allow other email clients or multimedia players to be offered there. It took a long time to break these bans. Apple was very persistent in coming up with reasons why an app could not be admitted to the App Store, but in the case of the Opera browser, it finally realized that an alternative offering was not harmful. Users did not automatically prefer alternative programs, but after careful consideration and thanks to features that Apple could quickly incorporate into its products, which in turn helped it gain an edge over other mobile systems. It was a development pushed from all sides.

However, it should be noted that controversies regarding the content that Apple allows or disallows on its mobile platform as native applications still arise from time to time, even though most of the rules have been fine-tuned through trial and error to the satisfaction, or rather understanding, of all parties involved. This includes a strict ban on [”]{dir=”rtl”}adult [content,”]{dir=”rtl”} i.e., pornography. Such applications may no longer be sold through the App Store, but that does not mean that there are not a number of websites offering “mobile porn” for the iPhone.

The developers’ final comment on the App Store was purely commercial. Apple demanded a commission for participation in the paid sales channel, which it set at a flat rate of 30%. It argued that this amount covered the cost of distribution servers and paying people to check that developers were not misusing the program and further developing the platform. Many developers did not like this, especially given that Apple did not allow software to be distributed directly to the iPhone without paying a commission to Apple. It was not possible to download software from the developer’s website and install it on the iPhone, as was possible with Symbian, from whose developers most of the critics were recruited. The paradox was that at that time, the largest sales channel, the Handango web store co-invested by Microsoft, demanded a commission of up to 65%, but of course did not have exclusivity on sales, and quite a few developers simply offered their software through it at a higher price than directly through their own websites.

While Apple claimed that this was to prevent intrusions into the platform and thus ensure its security and integrity, opponents argued that it was mainly about the 30 percent. Most likely, it was both: Apple wanted to make its platform as secure as possible and also wanted to protect its profits, combining business with pleasure.

The future showed who was right. Developers who accepted Apple’s terms and had something to offer in the App Store made good money, while those who ignored the iPhone simply missed the boat.

When Nokia and Google opened up their platforms for the sale of mobile content, Apple’s thesis that such a platform must be highly integrated, convenient, and very strictly controlled was fully confirmed. Nokia had long been very liberal towards developers and failed to compel them to produce sufficiently high-quality software that would not irritate users, and the software purchasing process on the Ovi Store was not very well managed. For example, it was not until 2011 that Nokia centralized update management. Until then, there was an unwritten rule that each application would occasionally check for updates and, if available, handle them on its own. This was something that Apple handled centrally and directly from the outset, just as it did not allow developers to release semi-functional versions that clearly and frequently crashed or did not clean up properly from memory, thus slowing down the system. The result was a good user experience with the iPhone platform, plenty of high-quality applications, and a growing market.

Table of contents