Thursday, March 13, 2014

How Steve Jobs Got the iPhone Into Japan

Bloomberg writes:

The iPhone, it's safe to say, is big in Japan. Toward the end of last year, three out of every four smartphones sold in Japan were iPhones, according to market researcher Kantar Worldpanel ComTech. Tim Cook said during Apple's most recent earnings call that its phone sales in the country shot up 40 percent after it signed a deal with NTT Docomo.

Breaking into Japan was no cheap trick. To get there, Steve Jobs took a chance on a self-made Japanese billionaire who had a crude drawing of an iPod phone and no mobile carrier to speak of. SoftBank CEO Masayoshi Son recounted how he scored the deal to become the iPhone's exclusive carrier in Japan in a television interview with Charlie Rose that aired this week.

Two years before Apple had officially acknowledged the iPhone's existence, Son called Jobs and arranged for a meeting. Son showed up with a rough sketch of what he thought an Apple phone should look like.

"I brought my little drawing of an iPod with mobile capabilities. I gave him my drawing, and Steve says, 'Masa, don't give me your drawing. I have my own,'" Son recalled during the "Charlie Rose" interview. "I said, 'Well, I don't need to give you my dirty paper, but once you have your own product, give me for Japan.' And he said, 'Masa, you are crazy.'"

The Apple co-founder had reason to be skeptical. Sure, Son had established himself as a savvy technology entrepreneur, selling two companies by the age of 19 that netted him more than $3 million. He's also a successful investor, with a lucrative stake in Yahoo! Japan. But at the time of the meeting with Jobs, Son didn't even control a mobile-phone company.

According to Son, Jobs said, "We have not talked to anybody, but you came to see me as the first guy. I'll give it to you." The negotiation continued, as Son asked that Jobs put in writing that Apple would give him exclusivity for the Japanese market. Jobs's reply? "'No! Masa, I'm not going to sign for you because you don't even own a mobile carrier yet!' And I said, 'Well, look, Steve, you promised me. You gave me your word. I bring a carrier for Japan.'"

And he did. SoftBank spent more than $15 billion to buy Vodafone Group's Japanese unit in 2006. Sure enough, SoftBank Mobile, then a distant third in the market, announced a deal with Apple in 2008 to carry the iPhone. It was a major coup for the company, and it started eating away market share from Docomo until it got the iPhone last September...

As for Jobs, he was still thinking about the iPhone until the day he died. In a separate interview about a week after Jobs died in 2011, Son recalled meeting with Cook on the day the iPhone 4S was unveiled. Cook said he had to cut the meeting short because Jobs wanted to talk about an unannounced product, Son said. Jobs died the next day.

The Charlie Rose interview is here.

1 comment:

  1. The idea of "taking a chance on a self-made billionaire" seems hilarious to me. I'd think the safest bet in the world would be the self-made billionaire!