You've Got to Hide Your iPhone Away

A little more than two years ago, Glenn Lurie's new bosses at Cingular Wireless put the Portland, Ore., native in charge of a super-secret project: Negotiating the rights to be the exclusive wireless carrier for Apple's (Nasdaq: AAPL) long-awaited iPhone.
Lurie, a onetime soccer standout at Wilson High School, played professionally in Cleveland, Atlanta and Portland before launching his cellular career in 1993 selling phones at a store in Mall 205. He worked his way into the management ranks, then weathered a succession of mergers in the cell phone industry. He's now a top executive in the wireless division of AT&T (NYSE: T) -- whose name Cingular took after its latest merger.
Meeting behind-the-scenes with Apple chief executive Steve Jobs and other tech heavyweights, Lurie won the deal for Cingular and took part in the unveiling in January at the MacWorld conference. Lurie, who now lives in Atlanta, stands at the center of a frenzy of anticipation as techies await the product's formal launch next month.

Yes, He Has One
The iPhone is a cell phone, address book, Web browser, music player and TV rolled into one. It's the most eagerly awaited tech product in years, and Lurie, in Portland this weekend to watch his son in a soccer tournament, is one of the few people in the world with his own iPhone.
He won't show it to you, though, or tell you much about it, Jobs or the negotiations. Mystery, he's learned from Apple, is an extremely valuable commodity.
"Steve was very clear on what he thought the benefits of us doing it that way," Lurie said during a conversation last week.
"The buzz has exceeded all of our expectations," he said. "That's probably the biggest benefit out of this."
(Comments have been edited for brevity and clarity.)
Question: Have your kids seen your iPhone?
Answer: My oldest is 13. I went to MacWorld, and I'd been working on it for, gosh, almost two years, and we announce at MacWorld and I got home and he was not happy with me because he didn't know about it. I didn't tell my family. I said, "Look, this is a project I really can't talk about." And [they] respected that. One of the things that was really important to me is I wanted to earn [Apple's] trust. As a lead guy, I had to take that to the Nth degree to earn their trust and respect.
Q: So you're not passing it around your house, even now?
A: No. It'll be a very, very cool day when we launch this thing. For lack of a better term, it's like giving birth. We're hiding it, hiding it, hiding it. We're all very excited about it and what it can be. But bottom line is no, we're not showing it around and are being very secretive with it.
Q: Your son, college students, these people love it. But who can afford a (US)$600 cell phone? (Apple plans to charge $499 and $599 for two models of iPhone.)
A: One-hundred million iPods have been sold. Obviously, those people are all target customers. We have 62 million subscribers. So there are 180 million people out there who aren't AT&T Mobility customers, who might want one of these, too. So that's the target, it's everybody.
I'll tell the story about my CES (Consumer Electronics Show) press conference (in January). I asked everybody in the room, I said, 'How many of you carry a wireless phone?' And literally 100 percent had a phone. Then I asked how many are carrying a smart phone -- RIM, Blackberry, whatever. Eighty percent had (one of those). Then I asked a third question: How many had an iPod. And it was 100 percent. If you just do the math of those, a 4 gig (iPod) Nano is, what 200 bucks? A Blackberry, if you get a great price on those let's just call it 200 bucks. And if you've got a decent handheld (phone) you pay 50 bucks. You have all these other things this (iPhone) does. It's a widescreen iPod. Right now, there isn't a widescreen iPod. So I am really not concerned at all about the price that Apple has set for the device.
We're not doing any pre-orders. But we put on our Web site: If you want more information, just give us your name and e-mail address and we'll be glad to let you know. And we just crested 1.1 million people who have given us their names. That completely eclipses everything that we would have imagined.
Q: What are you guys going to be charging?
A: Service pricing we're not talking about. But I would say that the pricing is going to be similar to what you see today (from AT&T).
Q: This is not a 3G product at this point. (The iPhone uses Cingular's slower, second-generation EDGE rather than its new, faster, third-generation technology.) Is that frustrating as you use it?
A: Not at all. We have the largest high-speed data network, and that's EDGE. We're very excited about what we're building on our 3G network. But for the applications, the majority on the device, they work wonderfully in the EDGE environment. On the browsing side, I'll tell you the experience is very, very good in EDGE. Now, let's not forget: The device also has WiFi in it. You can tell the device to see that, and it automatically connects over when it sees that. We see those working hand-in-hand with our network.
Q: What did you think when they (Cingular) pulled you in and put you in charge? You were pretty new to that organization (He'd joined four months earlier, when Cingular bought AT&T Wireless).
A: I was pleased that they had that confidence in me. They gave me an opportunity to go out and prove what I could do for the business, and it's worked out terrific. I took it on as a challenge. I'm obviously a pretty competitive guy.
There were high times in this project, and also low times when you think, "Gosh, we've got to get through this issue." The great thing is everybody saw the potential that this could have for the company's success.
Q: So during those low times -- can you tell me what any of those were?
A: No.
Q: But there was a commitment by you, and the people you were working with, that we're going to see this through?
A: We went to the board and got the board to approve this deal without ever seeing a phone. They never saw a device. We never knew exactly what we were getting. And you know why we did that? Because we made a bet on people. We made a bet on Apple's people. You know what? It was a great bet.