The iPhone that never was

Imagine a technology company so visionary that it can take a idea public. A “concept IPO,” they called it.

Imagine the three founders, all former Apple employees, two of whom — software engineers Andy Hertzfeld and Bill Atkinson — were already Silicon Valley legends for their work creating the Apple Macintosh. Atkinson’s prolific inventions included the double-click and the drop-down menu. The third founder, Marc Porat, had a gift for seeing the future.

For his PhD dissertation at Stanford in 1976, Porat analyzed (in painstaking detail) a century of transition in the American workforce and predicted a sea change in work. An economy based primarily on the transformation of matter and energy – via agriculture and industry – has given way to one based on the transformation of information. Computers and telecommunications, he saw, were reshaping every industry. “We are entering a different phase in economic history,” Porat wrote. On the first page of the first chapter of his dissertation, Porat coined a term that would become famous: “information economics.”

Porat followed this up by hosting an excellent PBS documentary, The Information Societyin 1980. In it he positioned information technology as disruptive on a scale matched only by the plow and the steam engine. Delving at length into the power of new technology, as well as burgeoning problems with privacy, information overload, misinformation and rising inequality, he showed that most Americans had no idea the ground was shifting beneath them.

In 1988, Porat joined Apple’s Advanced Technology Group, where he was able to apply his prodigious foresight to the team’s task of figuring out what would be the next big thing after personal computers. One day, Porat took a Sharp Wizard—a new electronic organizer with a calendar and phone book—and stuck it on a Motorola analog cell phone. He had his concept. Before long, he was making plaster models of a combination phone and digital assistant. In 1989, in a large networking notebook, he drew a visionary product that would fit with eerie precision the future he envisioned. I called it the Pocket Crystal. You don’t need to have seen the sketch before to instantly recognize it.

The Pocket Crystal scheme depicted a thin glass rectangle with no protruding buttons – just a touch screen. It would be a computer that combined a telephone and fax machine; you’ll use it to send text messages, watch movies, play video games, buy plane tickets, and download new apps. It will fit in your pocket, and it will be beautiful. Following the sketch, Porat wrote in his red book: “It must offer the kind of personal satisfaction that a fine jewel brings. It will have a perceived value even when not worn. It must offer the comfort of a touchstone, the tactile satisfaction of a seashell, the enchantment of a crystal.”

Only in 1989 15 percent of American households even had a computer, which didn’t fit in someone’s pocket; zero percent browsed the web because it didn’t exist. And yet there was Marc Porat essentially sketching the iPhone.

The project was greenlit, but with a caveat: it was too big, even for Apple.

Early adopters only talked on their brick-like cell phones. The Pocket Crystal will not only require unprecedented hardware and software, but networks that can connect the world and new digital communication standards.

In 1990, Porat and Apple CEO John Sculley agreed that Apple would invest and take a board seat, but the project would spin off as a separate company and start making partners. For this new venture, the founders chose a name that evoked both the nation’s most respected companies and the saying of science fiction writer Arthur C. Clarke that “any sufficiently advanced technology is indistinguishable from magic.” Thus General Magic was born.

Sculley introduced the founding trio to Sony. They made their pitch, and within days Sony was on board, with an interest and a licensing agreement. Next came Motorola, and then AT&T. In quick succession, the world’s telecommunications and consumer electronics giants were convinced to join what became known as “the Alliance.” Philips was next, and then Sony’s bitter rival Panasonic (then known as Matsushita). Then NTT (Japan’s largest telecom), then Toshiba, then France Telecom, and on and on, each investing millions of dollars. General Magic’s partners controlled so much of the world’s communications industry that Alliance meetings had to begin with an antitrust lawyer listing all the topics they were forbidden to discuss. It was, as General Magic’s general counsel put it, the largest consortium of global companies ever to exist in American business.