In 2002, shortly after the first iPod was released, Jobs started thinking about developing a phone. Consumers would prefer just one device instead of mobile phone, player and Palm. To protect his new product line, Jobs knew he would eventually need to venture into the wireless world.

In 2003, consumers had flocked to the Palm Treo 600, which merged a phone, PDA, and BlackBerry into one slick package. That proved there was demand for a so-called convergence device, but it also raised the bar for Apple’s engineers.

By 2004 Apple’s iPod business had become more important, and more vulnerable, than ever. The iPod accounted for 16 percent of company revenue, but with 3G phones gaining popularity, Wi-Fi phones coming soon, the price of storage plummeting, and rival music stores proliferating, its long-term position as the dominant music device seemed at risk.

Summer 2004, while Jobs publicly denied he would build an Apple phone, in an effort to bypass the carriers, he approached Motorola. When the first prototypes showed up at the end of 2004, there was a major problem: The gadget itself was ugly.

February 2005, Even as the ROKR went into production, Jobs got together with Cingular executives to discuss a Motorola-free partnership. Jobs delivered a three-part message to Cingular: Apple had the technology to build something truly revolutionary, “light-years ahead of anything else.” Apple was prepared to consider an exclusive arrangement to get that deal done.

September 2005, Jobs unveiled the ROKR, describing it as “an iPod shuffle on your phone.” Consumers hated it.

Around Thanksgiving of 2005, eight months before a final agreement with Cingular was signed, Jobs tasked about 200 of Apple’s top engineers with creating the iPhone. Internally, the project was known as P2, short for Purple 2 (the abandoned iPod phone was called Purple 1).

Fall of 2006 — Prototype is still a disaster. It is not just buggy, it does not work. The phone drops calls constantly, the battery stops charging before it is full, data and applications routinely become corrupted and unusable. The list of problems seems endless. Steve Jobs is upset: “We don’t have a product yet.”

After a year and a half of secret meetings, Jobs negotiated terms with the wireless division of AT&T (Cingular at the time) to be the iPhone’s carrier. In return for five years of exclusivity, roughly 10 percent of iPhone sales in AT&T stores, and a thin slice of Apple’s iTunes revenue, AT&T had granted Jobs unprecedented power. Unique revenue-sharing arrangement was put in place with Apple share of $10 a month from every iPhone customer’s AT&T bill. Apple retained complete control over the design, manufacturing, and marketing of the iPhone.

Mid-December 2006, Jobs met Cingular boss Stan Sigman in Las Vegas. He showed off the iPhone’s brilliant screen, its powerful Web browser, its engaging user interface. Sigman, called the iPhone “the best device I have ever seen.”

January 2007, Jobs announced the iPhone at Macworld.

June 29, 2007, the iPhone went on sale. It is arguably Apple’s most profitable device. The company nets an estimated $80 for every $399 iPhone it sells, and that’s not counting the $240 it makes from every two-year AT&T contract an iPhone customer signs. Meanwhile, about 40 percent of iPhone buyers are new customers of AT&T’s.

According to analysts Apple spent roughly $150 million building the iPhone.

Jan 2008, According to Apple it is sold 3.71 million iPhones in 2007.

February 2008, iPhone SDK released to developers starting a new era of mobile applications.

July 2008, iPhone 3G is launched, but what is most important Apple AppStore opened its download resources to the consumers, turning instantly mobile applications industry from multi-million dollar to multi-billion dollar industry.

Jan 2009, 13.7 million of iPhones sold in 2008 beating Apple estimates by 3.7 million.

Mar 2009, Apple sold a total of 17 millions of iPhones since launch. Apple developer programm boasts 50,000 members, while the number of applications available via the company’s App Store now exceeds 25,000. There have been 800 million total downloads on the App Store so far, Apple said and 2009 AppStore revenue estimate is close to $1 billion.

June 2009, iPhone 3Gs launched with video recording support and many more other updates. Faster, better, still the same form-factor. More than 1 million iPhone 3G S smartphones have sold in the three days since the new model hit the stores

There was a huge iPhone impact on the structure of the mobile phone industry. Carriers are learning that the right phone — even a pricey one — can win customers and bring in revenue. In the pursuit of an Apple-like contract, every manufacturer is racing to create a phone that consumers will love, instead of one that the carriers approve of.

The iPhone cracked open the carrier-centric structure of the wireless industry and unlocked a host of benefits for consumers, developers, manufacturers — and potentially the carriers themselves. Consumers get an easy-to-use handheld computer.

Application developers gained new opportunities as the wireless carriers begin to abandon their walled-garden approach to snaring consumers.

iPhone story does not end here. To be continued…

This article was published by iphoneapplicationlist.com