Steve Jobs Part 28

Jobs also met privately with Arthur Sulzberger Jr. "He's a nice guy, and he's really proud of his new building, as he should be," Jobs said later. "I talked to him about what I thought he ought to do, but then nothing happened." I t took a year, but in April 2011 the Times started charging for its digital edition and selling some subscriptions through Apple, abiding by the policies that Jobs established. I t did, however, decide to charge approximately four times the $5 monthly charge that Jobs had suggested.

At the Time-Life Building, Time's editor Rick Stengel played host. Jobs liked Stengel, who had a.s.signed a talented team led by Josh Quittner to make a robust iPad version of the magazine each week. But he was upset to see Andy Serwer of Fortune there. T earing up, he told Serwer how angry he still was about Fortune's story two years earlier revealing details of his health and the stock options problems. "You kicked me when I was down," he said.

The bigger problem at Time Inc. was the same as the one at the Times: The magazine company did not want Apple to own its subscribers and prevent it from having a direct billing relations.h.i.+p. Time Inc. wanted to create apps that would direct readers to its own website in order to buy a subscription. Apple refused. When Time and other magazines submitted apps that did this, they were denied the right to be in the App Store.

Jobs tried to negotiate personally with the CEO of Time Warner, Jeff Bewkes, a savvy pragmatist with a no-bulls.h.i.+t charm to him. They had dealtwith each other a few years earlier over video rights for the iPod T ouch; even though Jobs had not been able to convince him to do a deal involving HBO's exclusive rights to show movies soon after their release, he admired Bewkes's straight and decisive style. For his part, Bewkes respected Jobs's ability to be both a strategic thinker and a master of the tiniest details. "Steve can go readily from the overarching princ.i.p.als into the details,"

he said.

When Jobs called Bewkes about making a deal for Time Inc. magazines on the iPad, he started off by warning that the print business "sucks,"

that "n.o.body really wants your magazines," and that Apple was offering a great opportunity to sell digital subscriptions, but "your guys don't get it."

Bewkes didn't agree with any of those premises. He said he was happy for Apple to sell digital subscriptions for Time Inc. Apple's 30% take was not the problem. "I 'm telling you right now, if you sell a sub for us, you can have 30%," Bewkes told him.

"Well, that's more progress than I 've made with anybody," Jobs replied.

"I have only one question," Bewkes continued. "I f you sell a subscription to my magazine, and I give you the 30%, who has the subscription-you or me?"

"I can't give away all the subscriber info because of Apple's privacy policy," Jobs replied.

"Well, then, we have to figure something else out, because I don't want my whole subscription base to become subscribers of yours, for you to then aggregate at the Apple store," said Bewkes. "And the next thing you'll do, once you have a monopoly, is come back and tell me that my magazine shouldn't be $4 a copy but instead should be $1. I f someone subscribes to our magazine, we need to know who it is, we need to be able to create online communities of those people, and we need the right to pitch them directly about renewing."

Jobs had an easier time with Rupert Murdoch, whose News Corp. owned the Wall Street Journal, New York Post, newspapers around the world, Fox Studios, and the Fox News Channel. When Jobs met with Murdoch and his team, they also pressed the case that they should share owners.h.i.+p of the subscribers that came in through the App Store. But when Jobs refused, something interesting happened. Murdoch is not known as a pushover, but he knew that he did not have the leverage on this issue, so he accepted Jobs's terms. "We would prefer to own the subscribers, and we pushed for that," recalled Murdoch. "But Steve wouldn't do a deal on those terms, so I said, 'Okay, let's get on with it.' We didn't see any reason to mess around. He wasn't going to bend-and I wouldn't have bent if I were in his position-so I just said yes."

Murdoch even launched a digital-only daily newspaper, The Daily, tailored specifically for the iPad. I t would be sold in the App Store, on the terms dictated by Jobs, at 99 cents a week. Murdoch himself took a team to Cupertino to show the proposed design. Not surprisingly, Jobs hated it. "Would you allow our designers to help?" he asked. Murdoch accepted. "The Apple designers had a crack at it," Murdoch recalled, "and our folks went back and had another crack, and ten days later we went back and showed them both, and he actually liked our team's version better. I t stunned us."

The Daily, which was neither tabloidy nor serious, but instead a rather midmarket product like USA Today, was not very successful. But it did help create an odd-couple bonding between Jobs and Murdoch. When Murdoch asked him to speak at his June 2010 News Corp. annual management retreat, Jobs made an exception to his rule of never doing such appearances. James Murdoch led him in an after-dinner interview that lasted almost two hours. "He was very blunt and critical of what newspapers were doing in technology," Murdoch recalled. "He told us we were going to find it hard to get things right, because you're in New York, and anyone who's any good at tech works in Silicon Valley." This did not go down very well with the president of the Wall Street Journal Digital Network, Gordon McLeod, who pushed back a bit. At the end, McLeod came up to Jobs and said, "Thanks, it was a wonderful evening, but you probably just cost me my job." Murdoch chuckled a bit when he described the scene to me. "I t ended up being true," he said. McLeod was out within three months.

In return for speaking at the retreat, Jobs got Murdoch to hear him out on Fox News, which he believed was destructive, harmful to the nation, and a blot on Murdoch's reputation. "You're blowing it with Fox News," Jobs told him over dinner. "The axis today is not liberal and conservative, the axis is constructive-destructive, and you've cast your lot with the destructive people. Fox has become an incredibly destructive force in our society. You can be better, and this is going to be your legacy if you're not careful." Jobs said he thought Murdoch did not really like how far Fox had gone.

"Rupert's a builder, not a tearer-downer," he said. "I 've had some meetings with James, and I think he agrees with me. I can just tell."

Murdoch later said he was used to people like Jobs complaining about Fox. "He's got sort of a left-wing view on this," he said. Jobs asked him to have his folks make a reel of a week of Sean Hannity and Glenn Beck shows-he thought that they were more destructive than Bill O'Reilly-and Murdoch agreed to do so. Jobs later told me that he was going to ask Jon Stewart's team to put together a similar reel for Murdoch to watch. "I 'd be happy to see it," Murdoch said, "but he hasn't sent it to me."

Murdoch and Jobs. .h.i.t it off well enough that Murdoch went to his Palo Alto house for dinner twice more during the next year. Jobs joked that he had to hide the dinner knives on such occasions, because he was afraid that his liberal wife was going to eviscerate Murdoch when he walked in.

For his part, Murdoch was reported to have uttered a great line about the organic vegan dishes typically served: "Eating dinner at Steve's is a great experience, as long as you get out before the local restaurants close." Alas, when I asked Murdoch if he had ever said that, he didn't recall it.

One visit came early in 2011. Murdoch was due to pa.s.s through Palo Alto on February 24, and he texted Jobs to tell him so. He didn't know it was Jobs's fifty-sixth birthday, and Jobs didn't mention it when he texted back inviting him to dinner. "I t was my way of making sure Laurene didn't veto the plan," Jobs joked. "I t was my birthday, so she had to let me have Rupert over." Erin and Eve were there, and Reed jogged over from Stanford near the end of the dinner. Jobs showed off the designs for his planned boat, which Murdoch thought looked beautiful on the inside but "a bit plain" on the outside. "I t certainly shows great optimism about his health that he was talking so much about building it," Murdoch later said.

At dinner they talked about the importance of infusing an entrepreneurial and nimble culture into a company. Sony failed to do that, Murdoch said.

Jobs agreed. "I used to believe that a really big company couldn't have a clear corporate culture," Jobs said. "But I now believe it can be done.

Murdoch's done it. I think I 've done it at Apple."

Most of the dinner conversation was about education. Murdoch had just hired Joel Klein, the former chancellor of the New York City Department of Education, to start a digital curriculum division. Murdoch recalled that Jobs was somewhat dismissive of the idea that technology could transform education. But Jobs agreed with Murdoch that the paper textbook business would be blown away by digital learning materials.

In fact Jobs had his sights set on textbooks as the next business he wanted to transform. He believed it was an $8 billion a year industry ripe for digital destruction. He was also struck by the fact that many schools, for security reasons, don't have lockers, so kids have to lug a heavy backpack around. "The iPad would solve that," he said. His idea was to hire great textbook writers to create digital versions, and make them a feature of the iPad. In addition, he held meetings with the major publishers, such as Pearson Education, about partnering with Apple. "The process by which states certify textbooks is corrupt," he said. "But if we can make the textbooks free, and they come with the iPad, then they don't have to be certified. The c.r.a.ppy economy at the state level will last for a decade, and we can give them an opportunity to circ.u.mvent that whole process and save money."

CHAPTER THIRTY-NINE.

NEW BATTLES.

And Echoes of Old Ones.

Google: Open versus Closed.

A few days after he unveiled the iPad in January 2010, Jobs held a "town hall" meeting with employees at Apple's campus. Instead of exulting about their transformative new product, however, he went into a rant against Google for producing the rival Android operating system. Jobs was furious that Google had decided to compete with Apple in the phone business. "We did not enter the search business," he said. "They entered the phone business. Make no mistake. They want to kill the iPhone. We won't let them." A few minutes later, after the meeting moved on to another topic, Jobs returned to his tirade to attack Google's famous values slogan. "I want to go back to that other question first and say one more thing. This 'Don't be evil' mantra, it's bulls.h.i.+t."

Jobs felt personally betrayed. Google's CEO Eric Schmidt had been on the Apple board during the development of the iPhone and iPad, and Google's founders, Larry Page and Sergey Brin, had treated him as a mentor. He felt ripped off. Android's touchscreen interface was adopting more and more of the features-multi-touch, swiping, a grid of app icons-that Apple had created.

Jobs had tried to dissuade Google from developing Android. He had gone to Google's headquarters near Palo Alto in 2008 and gotten into a shouting match with Page, Brin, and the head of the Android development team, Andy Rubin. (Because Schmidt was then on the Apple board, he recused himself from discussions involving the iPhone.) "I said we would, if we had good relations, guarantee Google access to the iPhone and guarantee it one or two icons on the home screen," he recalled. But he also threatened that if Google continued to develop Android and used any iPhone features, such as multi-touch, he would sue. At first Google avoided copying certain features, but in January 2010 HTC introduced an Android phone that boasted multi-touch and many other aspects of the iPhone's look and feel. That was the context for Jobs's p.r.o.nouncement that Google's "Don't be evil" slogan was "bulls.h.i.+t."

So Apple filed suit against HTC (and, by extension, Android), alleging infringement of twenty of its patents. Among them were patents covering various multi-touch gestures, swipe to open, double-tap to zoom, pinch and expand, and the sensors that determined how a device was being held.

As he sat in his house in Palo Alto the week the lawsuit was filed, he became angrier than I had ever seen him: Our lawsuit is saying, "Google, you f.u.c.king ripped off the iPhone, wholesale ripped us off." Grand theft. I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong. I 'm going to destroy Android, because it's a stolen product. I 'm willing to go to thermonuclear war on this. They are scared to death, because they know they are guilty. Outside of Search, Google's products-Android, Google Docs-are s.h.i.+t.

A few days after this rant, Jobs got a call from Schmidt, who had resigned from the Apple board the previous summer. He suggested they get together for coffee, and they met at a cafe in a Palo Alto shopping center. "We spent half the time talking about personal matters, then half the time on his perception that Google had stolen Apple's user interface designs," recalled Schmidt. When it came to the latter subject, Jobs did most of the talking. Google had ripped him off, he said in colorful language. "We've got you red-handed," he told Schmidt. "I 'm not interested in settling. I don't want your money. I f you offer me $5 billion, I won't want it. I 've got plenty of money. I want you to stop using our ideas in Android, that's all I want."

They resolved nothing.

Underlying the dispute was an even more fundamental issue, one that had unnerving historical resonance. Google presented Android as an "open" platform; its open-source code was freely available for multiple hardware makers to use on whatever phones or tablets they built. Jobs, of course, had a dogmatic belief that Apple should closely integrate its operating systems with its hardware. In the 1980s Apple had not licensed out its Macintosh operating system, and Microsoft eventually gained dominant market share by licensing its system to multiple hardware makers and, in Jobs's mind, ripping off Apple's interface.

The comparison between what Microsoft wrought in the 1980s and what Google was trying to do in 2010 was not exact, but it was close enough to be unsettling-and infuriating. I t exemplified the great debate of the digital age: closed versus open, or as Jobs framed it, integrated versus fragmented. Was it better, as Apple believed and as Jobs's own controlling perfectionism almost compelled, to tie the hardware and software and content handling into one tidy system that a.s.sured a simple user experience? Or was it better to give users and manufacturers more choice and free up avenues for more innovation, by creating software systems that could be modified and used on different devices? "Steve has a particular way that he wants to run Apple, and it's the same as it was twenty years ago, which is that Apple is a brilliant innovator of closed systems," Schmidt later told me. "They don't want people to be on their platform without permission. The benefits of a closed platform is control. But Google has a specific belief that open is the better approach, because it leads to more options and compet.i.tion and consumer choice."

So what did Bill Gates think as he watched Jobs, with his closed strategy, go into battle against Google, as he had done against Microsoft twenty-five years earlier? "There are some benefits to being more closed, in terms of how much you control the experience, and certainly at times he's had the benefit of that," Gates told me. But refusing to license the Apple iOS, he added, gave compet.i.tors like Android the chance to gain greater volume. In addition, he argued, compet.i.tion among a variety of devices and manufacturers leads to greater consumer choice and more innovation. "These companies are not all building pyramids next to Central Park," he said, poking fun at Apple's Fifth Avenue store, "but they are coming up with innovations based on competing for consumers." Most of the improvements in PCs, Gates pointed out, came because consumers had a lot of choices, and that would someday be the case in the world of mobile devices. "Eventually, I think, open will succeed, but that's where I come from. In the long run, the coherence thing, you can't stay with that."

Jobs believed in "the coherence thing." His faith in a controlled and closed environment remained unwavering, even as Android gained market share. "Google says we exert more control than they do, that we are closed and they are open," he railed when I told him what Schmidt had said.

"Well, look at the results-Android's a mess. I t has different screen sizes and versions, over a hundred permutations." Even if Google's approach might eventually win in the marketplace, Jobs found it repellent. "I like being responsible for the whole user experience. We do it not to make money. We do it because we want to make great products, not c.r.a.p like Android."

Flash, the App Store, and Control.

Jobs's insistence on end-to-end control was manifested in other battles as well. At the town hall meeting where he attacked Google, he also a.s.sailed Adobe's multimedia platform for websites, Flash, as a "buggy" battery hog made by "lazy" people. The iPod and iPhone, he said, would never run Flash. "Flash is a spaghetti-ball piece of technology that has lousy performance and really bad security problems," he said to me later that week.

He even banned apps that made use of a compiler created by Adobe that translated Flash code so that it would be compatible with Apple's iOS.

Jobs disdained the use of compilers that allowed developers to write their products once and have them ported to multiple operating systems.

"Allowing Flash to be ported across platforms means things get dumbed down to the lowest common denominator," he said. "We spend lots of effort to make our platform better, and the developer doesn't get any benefit if Adobe only works with functions that every platform has. So we said that we want developers to take advantage of our better features, so that their apps work better on our platform than they work on anybody else's."

On that he was right. Losing the ability to differentiate Apple's platforms-allowing them to become commoditized like HP and Dell machines- would have meant death for the company.

There was, in addition, a more personal reason. Apple had invested in Adobe in 1985, and together the two companies had launched the desktop publis.h.i.+ng revolution. "I helped put Adobe on the map," Jobs claimed. In 1999, after he returned to Apple, he had asked Adobe to start making its video editing software and other products for the iMac and its new operating system, but Adobe refused. I t focused on making its products for Windows. Soon after, its founder, John Warnock, retired. "The soul of Adobe disappeared when Warnock left," Jobs said. "He was the inventor, the person I related to. I t's been a bunch of suits since then, and the company has turned out c.r.a.p."

When Adobe evangelists and various Flash supporters in the blogosphere attacked Jobs for being too controlling, he decided to write and post an open letter. Bill Campbell, his friend and board member, came by his house to go over it. "Does it sound like I 'm just trying to stick it to Adobe?"

he asked Campbell. "No, it's facts, just put it out there," the coach said. Most of the letter focused on the technical drawbacks of Flash. But despite Campbell's coaching, Jobs couldn't resist venting at the end about the problematic history between the two companies. "Adobe was the last major third party developer to fully adopt Mac OS X," he noted.

Apple ended up lifting some of its restrictions on cross-platform compilers later in the year, and Adobe was able to come out with a Flash authoring tool that took advantage of the key features of Apple's iOS. I t was a bitter war, but one in which Jobs had the better argument. In the end it pushed Adobe and other developers of compilers to make better use of the iPhone and iPad interface and its special features.

Jobs had a tougher time navigating the controversies over Apple's desire to keep tight control over which apps could be downloaded onto the iPhone and iPad. Guarding against apps that contained viruses or violated the user's privacy made sense; preventing apps that took users to other websites to buy subscriptions, rather than doing it through the iTunes Store, at least had a business rationale. But Jobs and his team went further: They decided to ban any app that defamed people, might be politically explosive, or was deemed by Apple's censors to be p.o.r.nographic.

The problem of playing nanny became apparent when Apple rejected an app featuring the animated political cartoons of Mark Fiore, on the rationale that his attacks on the Bush administration's policy on torture violated the restriction against defamation. I ts decision became public, and was subjected to ridicule, when Fiore won the 2010 Pulitzer Prize for editorial cartooning in April. Apple had to reverse itself, and Jobs made a public apology. "We're guilty of making mistakes," he said. "We're doing the best we can, we're learning as fast as we can-but we thought this rule made sense."

I t was more than a mistake. I t raised the specter of Apple's controlling what apps we got to see and read, at least if we wanted to use an iPad or iPhone. Jobs seemed in danger of becoming the Orwellian Big Brother he had gleefully destroyed in Apple's "1984" Macintosh ad. He took the issue seriously. One day he called the New York Times columnist T om Friedman to discuss how to draw lines without looking like a censor. He asked Friedman to head an advisory group to help come up with guidelines, but the columnist's publisher said it would be a conflict of interest, and no such committee was formed.

The p.o.r.nography ban also caused problems. "We believe we have a moral responsibility to keep p.o.r.n off the iPhone," Jobs declared in an email to a customer. "Folks who want p.o.r.n can buy an Android."

This prompted an email exchange with Ryan T ate, the editor of the tech gossip site Valleywag. Sipping a stinger c.o.c.ktail one evening, T ate shot off an email to Jobs decrying Apple's heavy-handed control over which apps pa.s.sed muster. "I f Dylan was 20 today, how would he feel about your company?" Tate asked. "Would he think the iPad had the faintest thing to do with 'revolution'? Revolutions are about freedom."

T o T ate's surprise, Jobs responded a few hours later, after midnight. "Yep," he said, "freedom from programs that steal your private data.

Freedom from programs that trash your battery. Freedom from p.o.r.n. Yep, freedom. The times they are a changin', and some traditional PC folks feel like their world is slipping away. I t is."

In his reply, T ate offered some thoughts on Flash and other topics, then returned to the censors.h.i.+p issue. "And you know what? I don't want 'freedom from p.o.r.n.' p.o.r.n is just fine! And I think my wife would agree."

"You might care more about p.o.r.n when you have kids," replied Jobs. "I t's not about freedom, it's about Apple trying to do the right thing for its users." At the end he added a zinger: "By the way, what have you done that's so great? Do you create anything, or just criticize others' work and belittle their motivations?"

T ate admitted to being impressed. "Rare is the CEO who will spar one-on-one with customers and bloggers like this," he wrote. "Jobs deserves big credit for breaking the mold of the typical American executive, and not just because his company makes such hugely superior products: Jobs not only built and then rebuilt his company around some very strong opinions about digital life, but he's willing to defend them in public. Vigorously.

Bluntly. At two in the morning on a weekend." Many in the blogosphere agreed, and they sent Jobs emails praising his feistiness. Jobs was proud as well; he forwarded his exchange with Tate and some of the kudos to me.

Still, there was something unnerving about Apple's decreeing that those who bought their products shouldn't look at controversial political cartoons or, for that matter, p.o.r.n. The humor site eSarcasm.com launched a "Yes, Steve, I want p.o.r.n" web campaign. "We are dirty, s.e.x-obsessed miscreants who need access to s.m.u.t 24 hours a day," the site declared. "Either that, or we just enjoy the idea of an uncensored, open society where a techno-dictator doesn't decide what we can and cannot see."

At the time Jobs and Apple were engaged in a battle with Valleywag's affiliated website, Gizmodo, which had gotten hold of a test version of the unreleased iPhone 4 that a hapless Apple engineer had left in a bar. When the police, responding to Apple's complaint, raided the house of the reporter, it raised the question of whether control freakiness had combined with arrogance.

Jon Stewart was a friend of Jobs and an Apple fan. Jobs had visited him privately in February when he took his trip to New York to meet with media executives. But that didn't stop Stewart from going after him on The Daily Show . "I t wasn't supposed to be this way! Microsoft wa.s.supposed to be the evil one!" Stewart said, only half-jokingly. Behind him, the word "appholes" appeared on the screen. "You guys were the rebels, man, the underdogs. But now, are you becoming The Man? Remember back in 1984, you had those awesome ads about overthrowing Big Brother? Look in the mirror, man!"

By late spring the issue was being discussed among board members. "There is an arrogance," Art Levinson told me over lunch just after he had raised it at a meeting. "I t ties into Steve's personality. He can react viscerally and lay out his convictions in a forceful manner." Such arrogance was fine when Apple was the feisty underdog. But now Apple was dominant in the mobile market. "We need to make the transition to being a big company and dealing with the hubris issue," said Levinson. Al Gore also talked about the problem at board meetings. "The context for Apple is changing dramatically," he recounted. "I t's not hammer-thrower against Big Brother. Now Apple's big, and people see it as arrogant." Jobs became defensive when the topic was raised. "He's still adjusting to it," said Gore. "He's better at being the underdog than being a humble giant."

Jobs had little patience for such talk. The reason Apple was being criticized, he told me then, was that "companies like Google and Adobe are lying about us and trying to tear us down." What did he think of the suggestion that Apple sometimes acted arrogantly? "I 'm not worried about that,"

he said, "because we're not arrogant."

Antennagate: Design versus Engineering.

In many consumer product companies, there's tension between the designers, who want to make a product look beautiful, and the engineers, who need to make sure it fulfills its functional requirements. At Apple, where Jobs pushed both design and engineering to the edge, that tension was even greater.

When he and design director Jony Ive became creative coconspirators back in 1997, they tended to view the qualms expressed by engineers as evidence of a can't-do att.i.tude that needed to be overcome. Their faith that awesome design could force superhuman feats of engineering was reinforced by the success of the iMac and iPod. When engineers said something couldn't be done, Ive and Jobs pushed them to try, and usually they succeeded. There were occasional small problems. The iPod Nano, for example, was p.r.o.ne to getting scratched because Ive believed that a clear coating would lessen the purity of his design. But that was not a crisis.

When it came to designing the iPhone, Ive's design desires b.u.mped into a fundamental law of physics that could not be changed even by a reality distortion field. Metal is not a great material to put near an antenna. As Michael Faraday showed, electromagnetic waves flow around the surface of metal, not through it. So a metal enclosure around a phone can create what is known as a Faraday cage, diminis.h.i.+ng the signals that get in or out. The original iPhone started with a plastic band at the bottom, but Ive thought that would wreck the design integrity and asked that there be an aluminum rim all around. After that ended up working out, Ive designed the iPhone 4 with a steel rim. The steel would be the structural support, look really sleek, and serve as part of the phone's antenna.

There were significant challenges. In order to serve as an antenna, the steel rim had to have a tiny gap. But if a person covered that gap with a finger or sweaty palm, there could be some signal loss. The engineers suggested a clear coating over the metal to help prevent this, but again Ive felt that this would detract from the brushed-metal look. The issue was presented to Jobs at various meetings, but he thought the engineers were crying wolf. You can make this work, he said. And so they did.

And it worked, almost perfectly. But not totally perfectly. When the iPhone 4 was released in June 2010, it looked awesome, but a problem soon became evident: I f you held the phone a certain way, especially using your left hand so your palm covered the tiny gap, you could lose your connection. I t occurred with perhaps one in a hundred calls. Because Jobs insisted on keeping his unreleased products secret (even the phone that Gizmodo scored in a bar had a fake case around it), the iPhone 4 did not go through the live testing that most electronic devices get. So the flaw was not caught before the ma.s.sive rush to buy it began. "The question is whether the twin policies of putting design in front of engineering and having a policy of supersecrecy surrounding unreleased products helped Apple," Tony Fadell said later. "On the whole, yes, but unchecked power is a bad thing, and that's what happened."

Had it not been the Apple iPhone 4, a product that had everyone transfixed, the issue of a few extra dropped calls would not have made news.

But it became known as "Antennagate," and it boiled to a head in early July, when Consumer Reports did some rigorous tests and said that it could not recommend the iPhone 4 because of the antenna problem.

Jobs was in Kona Village, Hawaii, with his family when the issue arose. At first he was defensive. Art Levinson was in constant contact by phone, and Jobs insisted that the problem stemmed from Google and Motorola making mischief. "They want to shoot Apple down," he said.

Levinson urged a little humility. "Let's try to figure out if there's something wrong," he said. When he again mentioned the perception that Apple was arrogant, Jobs didn't like it. I t went against his black-white, right-wrong way of viewing the world. Apple was a company of principle, he felt. I f others failed to see that, it was their fault, not a reason for Apple to play humble.

Jobs's second reaction was to be hurt. He took the criticism personally and became emotionally anguished. "At his core, he doesn't do things that he thinks are blatantly wrong, like some pure pragmatists in our business," Levinson said. "So if he feels he's right, he will just charge ahead rather than question himself." Levinson urged him not to get depressed. But Jobs did. "f.u.c.k this, it's not worth it," he told Levinson. Finally Tim Cook was able to shake him out of his lethargy. He quoted someone as saying that Apple was becoming the new Microsoft, complacent and arrogant. The next day Jobs changed his att.i.tude. "Let's get to the bottom of this," he said.

When the data about dropped calls were a.s.sembled from AT&T , Jobs realized there was a problem, even if it was more minor than people were making it seem. So he flew back from Hawaii. But before he left, he made some phone calls. I t was time to gather a couple of trusted old hands, wise men who had been with him during the original Macintosh days thirty years earlier.

His first call was to Regis McKenna, the public relations guru. "I 'm coming back from Hawaii to deal with this antenna thing, and I need to bounce some stuff off of you," Jobs told him. They agreed to meet at the Cupertino boardroom at 1:30 the next afternoon. The second call was to the adman Lee Clow. He had tried to retire from the Apple account, but Jobs liked having him around. His colleague James Vincent was summoned as well.

Jobs also decided to bring his son Reed, then a high school senior, back with him from Hawaii. "I 'm going to be in meetings 24/7 for probably two days and I want you to be in every single one because you'll learn more in those two days than you would in two years at business school," he told him. "You're going to be in the room with the best people in the world making really tough decisions and get to see how the sausage is made."

Jobs got a little misty-eyed when he recalled the experience. "I would go through that all again just for that opportunity to have him see me at work,"

he said. "He got to see what his dad does."

They were joined by Katie Cotton, the steady public relations chief at Apple, and seven other top executives. The meeting lasted all afternoon. "I t was one of the greatest meetings of my life," Jobs later said. He began by laying out all the data they had gathered. "Here are the facts. So what should we do about it?"

McKenna was the most calm and straightforward. "Just lay out the truth, the data," he said. "Don't appear arrogant, but appear firm and confident." Others, including Vincent, pushed Jobs to be more apologetic, but McKenna said no. "Don't go into the press conference with your tailbetween your legs," he advised. "You should just say: 'Phones aren't perfect, and we're not perfect. We're human and doing the best we can, and here's the data.'" That became the strategy. When the topic turned to the perception of arrogance, McKenna urged him not to worry too much. "I don't think it would work to try to make Steve look humble," McKenna explained later. "As Steve says about himself, 'What you see is what you get.'"

At the press event that Friday, held in Apple's auditorium, Jobs followed McKenna's advice. He did not grovel or apologize, yet he was able to defuse the problem by showing that Apple understood it and would try to make it right. Then he changed the framework of the discussion, saying that all cell phones had some problems. Later he told me that he had sounded a bit "too annoyed" at the event, but in fact he was able to strike a tone that was unemotional and straightforward. He captured it in four short, declarative sentences: "We're not perfect. Phones are not perfect. We all know that. But we want to make our users happy."

I f anyone was unhappy, he said, they could return the phone (the return rate turned out to be 1.7%, less than a third of the return rate for the iPhone 3GS or most other phones) or get a free b.u.mper case from Apple. He went on to report data showing that other mobile phones had similar problems. That was not totally true. Apple's antenna design made it slightly worse than most other phones, including earlier versions of the iPhone.