The iPhone at 5: From uncertainty to runaway hit

If Steve Jobs was spoiling for a chance to cross up his critics, the keynote at 2007's Macworld conference could not have been a better venue.

After months of speculation, Apple's chief executive used the annual confab to introduce theiPhone, a product that Apple's loyalists -- they called it "the Jesus phone" -- were sure to embrace.

It was sleek, it was simple. It had Apple written all over it. There was just one problem. It was expensive, and it wasn't launching for another six months. More importantly, for the iPhone to live up to Jobs' -- and investor -- expectations, Apple would have to attract a wide audience for this, its first entry into the phone business.

With the benefit of five years' worth of hindsight -- the iPhone hit the market running five years ago tomorrow -- those reservations now seem laughable. But it wasn't so clear at the time.

In fact, some believed that Apple had reached too far. At $599, they pointed out that the iPhone was a relative luxury good and far more expensive than most smartphones in the market. What's more, the device lacked a physical keyboard, required a computer with Apple's iTunes to even get it up and running, and had a special indented headphone jack that required many owners to purchase after-market adapters. There was also no speedy 3G wireless or a battery that could be removed -- both of which were considered crucial if Apple wanted to lure in corporate users.

It was also available only on certain carriers, though mainly just AT&T in the U.S. More than anything, there were simply concerns whether Apple could navigate successfully into new and potentially treacherous new territory without getting tossed onto the shoals.Then there was the software, which was entirely new and unproven. Based on Apple's OS X software for desktops, what would later become the iOS was missing any way for users to install additional applications -- something rivals had offered for years. Critics also took aim at the iPhone's inability to handle some basic things, like send MMS, copy and paste text, or multitask.

The skepticism was, perhaps, best summed up by Microsoft CEO Steve Ballmer in an interviewwith USA Today just two months before the iPhone went on sale:

For most other companies, you might have assumed this would have been the proverbial kiss of death. This wasn't most other companies. Apple has since gone on to sell more than 218 million iPhones, while raking in an estimated $150 billion in revenues.

Almost overnight, the iPhone transformed Apple's corporate image. It helped turn a company known primarily as computer maker with a popular portable music player and digital media service into a dominant player in the cellphone business. The arrival of the iPhone also turned out to be bad news in bells for rivals with years more experience, including the likes of Microsoft, Palm, Nokia, and Research In Motion, who appeared hopelessly out of touch and lead-footed as shoppers voted with their pocketbooks for Apple's iPhone.

cnet.com