Jobs wanted to break with the then norm in the cell phone industry by making the service providers – carriers such as AT&T and Verizon – charge customers the full price for the iPhone.
- Normally, these carriers prepaid manufacturers such as Apple for some of the device costs, reducing the price for the customer as they make their profits through longer-term monthly payments by their users. Jobs wanted to give up that grant to claim a portion of the carrier’s monthly earnings, which Apple did for the first iPhone.
Cook, by contrast, it preferred the approach Apple eventually switched to: let Apple take the first grant and waive the option for a cut in a user’s monthly phone bill.
It was a debate that took many years, Cook noted, speaking on a panel at Code Conference on Jobs’s legacy, alongside longtime designer Jony Ive and Jobs’s widow, Laurene Powell Jobs.
Why it matters: The iPhone has changed the phone business forever in many ways, reducing carriers’ role in deciding what phones looked like and what apps they carried. But the iPhone’s growth really took off when the company switched to Cook’s preferred approach, the industry’s dominant model.