Gizmodo-iPhone Saga: Court Docs Reveal Fascinating Details

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If you've been following the strange tale of how tech blog Gizmodo came upon an unreleased iPhone prototype, wrote about it, and raised the ire of Apple and law enforcement officials, you probably know the basics by now.

In short, A

pple engineer Robert "Gray" Powell accidentally left his fourth-generation iPhone in a Redwood City, California restaurant. One Brian Hogan gained possession of the phone and began shopping it around to several tech publishers, supposedly including PCWorld (although a hasty newsroom poll revealed no e-mail or other contact from Hogan). Gizmodo bit, paying the 21-year-old Hogan $5000 (and perhaps more) for the phone. It then published a detailed preview of the device, garnering millions of page views in the process.

Then all hell broke loose.

  • During an April 20 meeting between Apple representatives and San Mateo law enforcement, Apple claimed that Gizmodo's April 19 story exposing the next-gen iPhone was "immensely damaging" to the company. It said the article would hurt sales of current Apple products because potential customers would shun the current iPhone and wait for the new model.
  • Apple attorney George Riley couldn't provide an estimated loss, but estimated it would be "huge," according to an affidavit by San Mateo County Sheriff's detective Matthew Broad.
  • Immediately after the iPhone story hit, Apple CEO Steve Jobs contacted Gizmodo editor Brian Lam and asked for the phone back. Lam responded via -email that he would, provided Apple sent him a letter stating the handset did in fact belong to the company.
  • Now, what's interesting here is Lam's e-mail to Jobs, which attempted to draw parallels between Gizmodo and Apple. Lam asked Apple's co-founder to recall what it was like to be a scrappy startup. In a particularly ballsy (if ill-timed) move, Lam pitched for better communication between his blog and the privacy-obsessed Apple: "When we get a chance to break a story, we have to go with it, or we perish. I know you like walt and pogue, and like working with them, but I think Gizmodo has more in common with old Apple than those guys do."
  • "Walt" is Wall Street Journal tech columnist Walt Mossberg, and "pogue" is David Pogue, tech writer for the New York Times. Both writers are Apple favorites, typically getting review units of Cupertino's latest tech marvels (along with USA Today's Ed Baig) before other reviewers. Lam went on to defend Gizmodo's actions: "Right now, we have nothing to lose. The thing is, Apple PR has been cold to us lately. It affected my job right at iPad launch. So we had to go outside and find our stories like this one, very aggressively." Well, that warmed my heart. Apple PR is cold to me too. At least I'm not alone.
  • When Apple got its iPhone back, the device was dead as a doorstop. If you've watched Gizmodo's detailed autopsy of the handset, this shouldn't come as a surprise. Anyway, here's a breakdown of the damage: 1) a broken ribbon cable; 2) a screw inserted into the wrong location caused an electrical short; 3) broken back plate snaps; 4) stripped screws.
  • Gizmodo editor Jason Chen originally offered Hogan $10,000 for the iPhone prototype, according to Hogan's roommate Katherine Martinson. At one point Hogan showed Martinson a camera box containing $5000 in $100 U.S. treasury notes (isn't that cop-talk for cash?) and told her he had received $8500 for the sale of the phone. Martinson wasn't sure where the additional money was from, however.
  • Hogan also told Martinson he would receive a cash bonus from Gizmodo in July if Apple announced a new iPhone at that time.
  • Hogan comes off like a major dirtbag in the court documents. Example: Martinson and her friends tried to talk him out of selling the iPhone. Doing so, they argued, would ruin the career of Apple engineer Powell. Hogan allegedly replied: "Sucks for him. He lost his phone. Shouldn't have lost his phone."
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