Development of the iPhone began with Apple CEO Steve Jobs' direction that Apple engineers investigate touchscreens. Apple created the device during a secretive and unprecedented collaboration with AT&T Mobility—Cingular Wireless at the time—at an estimated development cost of US$150 million over thirty months. Apple rejected the "design by committee" approach that had yielded the Motorola ROKR E1, a largely unsuccessful collaboration with Motorola. Instead, Cingular gave Apple the liberty to develop the iPhone's hardware and software in-house.



Jobs unveiled the iPhone to the public on January 9, 2007 in a keynote address. Apple was required to file for operating permits with the FCC, but since such filings are made available to the public, the announcement came months before the iPhone had received approval. The iPhone went on sale in the United States on June 29, 2007, at 6:00 pm local time, while hundreds of customers lined up outside the stores nationwide. The original iPhone was made available in the UK, France, and Germany in November 2007, and Ireland and Austria in the spring of 2008.



On July 11, 2008, Apple released the iPhone 3G in twenty-two countries, including the original six. Apple has since released the iPhone 3G in upwards of eighty countries and territories. Apple announced the iPhone 3GS on June 8, 2009, along with plans to release it later in June, July, and August, starting with the U.S., Canada and major European countries on June 19. Many would-be users have objected to the iPhone's cost, and 40 percent of users have household incomes over 100,000 USD. In an attempt to gain a wider market, Apple has retained the 8 GB iPhone 3G at a lower price point. This is the latest of several price reductions since the iPhone's release in 2007; it now sells for one-sixth of the price of the original 8 GB iPhone when it first became available. In the U.S., it now costs $99, down from $599, although it requires a two-year contract and a SIM lock.



Apple sold 6.1 million original iPhone units over five quarters. The company sold 3.8 million iPhone 3G units in the second quarter of fiscal 2009, ending March 2009, and 12.6 million 3G and 3GS combined, totaling 33.75 million iPhones sold to date (Q4 2009). Sales in Q4 2008 surpassed temporarily those of RIM's BlackBerry sales of 5.2 million units, which made Apple briefly the third largest mobile phone manufacturer by revenue, after Nokia and Samsung. Approximately 6.4 million iPhones are active in the U.S. alone. While iPhone sales constitute a significant portion of Apple's revenue, some of this income is deferred.



The back of the original iPhone was made of aluminum with a black plastic accent. The iPhone 3G and 3GS feature a full plastic back to increase the strength of the GSM signal. The iPhone 3G is available in black with 8 GB of space, and the discontinued 16 GB model was sold in either black or white. The iPhone 3GS is available in both colors, regardless of storage capacity.



The iPhone has garnered positive reviews from critics like David Pogue and Walter Mossberg. The iPhone attracts users of all ages

 

Fourth generation prototypes



On April 19, 2010, gadget website Gizmodo reported that they had purchased a fourth generation iPhone prototype for $5000 that had been lost by an Apple software engineer and had conducted a teardown of the device. Gizmodo noted that, compared to the iPhone 3GS, the prototype includes a new front-facing camera (presumably for video calls), a larger lens and a flash for the usual camera at the rear of the phone, a micro-SIM instead of a standard SIM, a higher resolution display, and a secondary microphone for noise cancellation. The unit had a flat rear panel that was constructed of a clear material which was speculated to be either glass or plastic, and it featured a decorative aluminum strip that completely surrounded the edge of the phone. It had separate buttons for increasing and decreasing volume, instead of a single long button. Gizmodo also noted that the device's screen appeared to be slightly smaller than that of the iPhone 3GS, but apparently of higher resolution. They also found that its battery was about 15 percent larger than that of the iPhone 3GS and that the phone's internal components appeared to have been reduced in size from the iPhone 3GS to accommodate the larger battery.



Shortly after Gizmodo published its information, Apple's legal associates formally asked for the phone to be returned, and Gizmodo responded with the intent to cooperate. On April 22, officers from the R.E.A.C.T joint State and Federal computer crimes task force broke down the door and raided the home of the Gizmodo editor responsible for reviewing the prototype, seizing all computers and electronic media in the house. The Electronic Frontier Foundation criticized the raid as violating journalist source protection laws that forbid the seizure of journalist computers as well as the suspicion that Apple had used its influence as a member of the steering committee which is charged with direction and oversight of the California police task force to push police into action in a way that would not normally be conducted for this type of incident. Apple had already received the iPhone prototype prior to the raid when it was returned by Gizmodo. The DA has said the investigation has come to a pause, and discontinued searching through the Gizmodo editors belongings as they determine whether the shield laws are applicable, and cautioned that no charges have been issued at this point.



A second prototype surfaced on a Vietnamese website on May 12, 2010. It was almost identical to the first, and used an A4 chip manufactured in-house by Apple, similar to those found on the iPad. DigiTimes reported that screen resolution of the new phone is 960x640, DVGA.