The iPhone That Never Was

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

Picture 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 labor force and predicted a sea change in work. An economy based primarily on transforming matter and energy—via agriculture and industry—had been giving way to one based on transforming information. Computers and telecommunications, he saw, were reshaping every industry. “We are entering another 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 economy.”

Porat followed that up by hosting a primetime PBS documentary, The Information Society, in 1980. In it, he positioned information technology as disruptive on a scale matched only by the plow and the steam engine. He delved at length into the power of new technology, as well as emerging problems with privacy, information overload, misinformation, and increasing inequality, and showed that most Americans had no idea that the ground was shifting beneath them.

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

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

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

The project was green‑lit, but with a caveat: It was too big, even for Apple.

Early adopters were only just talking on their brick‑like mobile phones. The Pocket Crystal would require not only unprecedented hardware and software but networks that could link 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 out as a separate company and start courting partners. For this new enterprise, the founders chose a name that evoked both the country’s most revered companies and the adage from 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 a stake and a licensing deal. Next came Motorola, and then AT&T. In quick succession, the world’s telecom titans 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 one 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 prohibited from discussing. It was, as General Magic’s general counsel put it, the biggest consortium of global companies that had ever existed in American business.