Fadell

"The decision risked throwing Zadesky, who managed all the mechanical parts for the iPhone project, into a tailspin. He and Tang Tan, another iPod veteran, had to quickly put together a touchscreen supply chain, as glass and plastic function in totally different ways. Fadell likens this “crazy” phase to landing “a fleet of 200 jets on an aircraft carrier, all within minutes of each other. And all the jets were running out of fuel.” Apple needed to find manufacturers that were highly competent, but with enough capacity to free up their top talent."

"“It flipped so, so quickly,” Fadell recalls. “Because China was subsidizing so, so, so much. Giving people free land, free everything… They made it so attractive to the outside world. It was, like, you’d be dumb [not to move to China]. And once one person moved, they all had to move, because of the cheaper labor.”"

"Steve Jobs held a comparatively low-key event for the launch. The live audience didn’t seem to get it, and Apple got blasted for the $499 price point. More effective was a seven-minute marketing video set to pop music and featuring artists Seal, Moby, and Smash Mouth lusting after the device. “I might have to steal your prototype,” says Moby. “I don’t know who your product’s designers are, but boy, you’re not paying them enough.” In the holiday quarter Apple shipped 125,000 devices, a solid start. But a few months into 2002, sales petered out to just 20,000 a month. Cupertino worried the device was a bit of a dud. “The business was on the teetering edge,” says an engineer who worked on several generations of the iPod. “We had a few months’ sales where it was like, ‘Oh my god, should we even continue this business?’ And ‘Will this survive?’ ” Fadell, exhausted and frustrated, even tried to quit. Jobs persuaded him to stay, elevating his position to overseeing both hardware and software for the iPod. But there were conversations at a high level that if sales didn’t improve, the device wouldn’t be renewed. “We just kept our heads down and kept working on making the product better, better, better,” an iPod engineer says. “We were pretty worried about [the low sales] from an overall business standpoint.” The second-generation iPod came out in August 2002, just nine months after the original. But that unit didn’t sell in impressive numbers either. The underwhelming figures contributed to that year’s profit warning, its third in just four years."

"Tupman had no honeymoon period, no welcome, no introduction to Apple systems. But Fadell sent him schematics for the circuit board before he departed from Heathrow. During the twelve-hour flight, he made his mark spotting problems with the circuit diagrams—how the chips connect together and the resistors pass through the printed circuit layout. He knew this flight from his five years at Psion, which had also partnered with Inventec. The engineers did a double take when he walked in. They all knew him, and together, they got to work immediately on the problems he’d spotted. Then he got to hold a prototype iPod for the first time and immediately knew he’d made the right choice to join Apple. “It was like, ‘This is so cool!’ ” he says."

"Tupman had another wedding to attend in two days and would need several weeks to get an H1B visa to work in the United States. No wedding and no time, Fadell explained. They didn’t have a production-build prototype yet, but Steve Jobs would be unveiling it in just four weeks. Fadell had already taken the liberty of getting Tupman hired on a temporary basis with Inventec, the iPod’s contract manufacturer, so he could begin work straightaway and work out his US visa issues—and his move to California—later. *Crikey,* Tupman thought. “Oh, and one more thing,” said Fadell: “I bought you a ticket for tomorrow morning. It leaves at eleven a.m. You’re flying to Taipei, so pack for two months and get going.”"

"In a Silicon Valley culture captured by book titles such as *Only* *the Paranoid Survive,* Fadell began to worry about the sustainability of these sales. “You hear these heavy, stomping footsteps of the mobile phone industry. *Boom!*” he later told an interviewer. “And it’s the feature phones at that time. They are adding cameras, they are adding color displays. And they are seeing the success of the iPod and going, ‘That’s just music. We have some storage. We can load music onto our phone, and we can do what the iPod does, plus more.’ *Boom!*… *Boom!*”"

"Gou even deployed a clever tactic to rotate his workers on Apple projects, to maximize the learning. “We trained all of them. Then one day we’d be like, ‘Where’d those engineers go?’ ” says Fadell. He’d learn that they’d gone to work on other projects, using their new skills in areas that were more lucrative. Then Apple would be forced to teach a new cohort of people, as if a new semester had started."