Ellison’s home is actually more like a village, an elaborate compound of wooden houses modeled after Japanese imperial palaces. The 23-hectare estate took nearly a decade to design and build, including a lake and waterfall operated by an on-off switch. All buildings are constructed without nails and the mud plaster walls are designed to withstand a 7.3 Richter earthquake. In total, Ellison’s tribute to Japanese culture and history is worth about $70 million. The talk at the table that day was about the insane valuation of the internet in the stock market. But Masa and Jobs were more interested in what would happen after the dotcom bubble. “I told him I was focused on the internet—and he agreed that the internet was the future,” Masa said. Both men knew that a paradigm shift was coming. Movement in the Nasdaq is one thing; coming from the world of networks, in which Apple plays the main role as an innovator and SoftBank part of the investor and operator, quite another. products from Mac laptops to iPods. Like Masa, Jobs was paranoid about competitors stealing his ideas. No Apple project was more secret than the iPhone, the touchscreen smartphone that would sell billions and revolutionize personal communication. According to Masa’s account, during a visit to California, in the summer of 2005, he showed Jobs a sketch of a mobile- activated iPod that had a large display and used the Apple operating system. New devices, he predicted, would be able to process data and images. Jobs pooh-poohed the idea but couldn’t resist dropping hints about the iPhone. Jobs: “Masa, don’t give me a damn picture. I have my own.” Masa: “Well, I don’t need to give you dirty paper, but if you have your product, give it to Japan.” Jobs declined to reveal more details, but Masa did. spotted a flash of a smile on the face of Apple’s boss. After pressing him further, Masa wangled a follow-up meeting at Jobs’ Tudor-style country home in Palo Alto. At the meeting, Masa claimed, Jobs agreed in principle to give SoftBank exclusive rights to distribute the iPhone in Japan. “Well, Masa, you’re crazy,” Jobs said. “We haven’t talked to anyone yet, but you came first. Don’t give it.” Nothing is written. There is no negotiation on price or volume. Only a man’s agreement, based on the assumption that Masa will have money to build or acquire a mobile phone business. “It’s super secret. I never saw the product before it came to Japan [in 2008],” said Masa. “Steve never told me my name.” The tale has a mythic quality. This assumes Jobs delivered on his promise three years before Apple launched the iPhone in Japan. But the promise may have given Masa the confidence to buy Vodafone Japan, the British-owned “also-ran” that uses football icon David Beckham in its marketing campaigns. This is a highly leveraged deal—the largest to date in Asia—but Masa gambled that it had a game-changing product in the pipeline. Whatever the exact chronology, Masa pulled off the distribution deal of the century, which allowed him to build a profitable consumer business in Japan, greatly enhancing the SoftBank brand. On March 17, 2006, Masa secured a $17 billion deal to buy Japan’s Vodafone. Two weeks later, Jobs flew to Tokyo, where Masa challenged the Apple boss to complete the deal. “You didn’t give me anything in writing, but I made $17 billion inside based on words,” he said. “You better feel a little responsible.” Jobs laughed and said, “Masa, you are crazy. We will do what we discussed.
Masayoshi Son Bets Billions on iPhone—3 Years Before It Happened
