A Next Generation iPhone Walks Into A Bar…

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Stop me if you’ve heard this one before: a guy walks into a bar. No, a guy walks into a bar with an iPhone. No, a guy walks into a bar with a next-generation iPhone disguised as a current-generation iPhone. No, a guy walks into a bar with his next-generation iPhone disguised as a current-generation iPhone and leaves it there. Okay, we’ve never heard anything like this before.

Yes, it appears that the next hardware iteration of the iPhone (two common monikers are ‘iPhone 4G’ or the ‘iPhone HD’) has been outed. And while the apparent specs are sexy (higher rez screen, front-facing camera, bigger battery, etc), the story behind the leaked device seems even more interesting.

The Pictures

This weekend, Engadget ran pictures of the device, stating that they were taken by someone who found it on the floor of a San Jose bar (!). The pictures were a little blurry and didn’t show the device running, so naturally, many were skeptical. In fact, shortly after Engadget’s post, a number of sites, including MacRumors, were reporting that the images were actually of a cheap Asian knock-off of the iPhone.

Engadget came back with another post supposedly proving the device was real (noting the same device appeared to be in an early leaked picture of the iPad). Then Daring Fireball’s John Gruber talked to some of his sources and concluded that the device was, in fact, real (but wasn’t sure if it was a prototype unit or the real deal). MacRumors then came back and reported that the story about it being an Asian knock-off was itself fake.

Then things got really interesting.

The Hands-On

In Engadget’s initial post, they noted that the author of the pictures was offering to sell some hands-on time with the device for an unstated fee. For some unknown reason (perhaps so as not to tip off rivals), Engadget quickly removed this part from the post. But it didn’t matter, because it appears that rival gadget blog, Gizmodo, jumped on the opportunity to pay for access to the device. Only they didn’t just pay for face-time, they bought the whole thing.

After playing around with it for a few days, this morning, Gizmodo ran a full review of the device including several pictures and videos. Judging from this review, which includes a look inside the device, it does appear that this thing is very real.

The Skepticism

Still, that isn’t stopping others from continuing to claim that the hardware is fake. (They apparently believe that the insides of an iPhone 3G were simply ripped out and stuffed into this Asian rip-off case — a claim that seems highly unlikely, at best – and ludicrous, at worst.)

Others are suggesting this was a controlled leak by Apple. This also seems highly unlikely. It is believed that Apple does leak out information from time to time — notably to the Wall Street Journal — but it’s never hardware. Pulling a Nine Inch Nails and leaking USB drives with new songs in concert venue bathrooms is simply not the Apple way of doing things. They’re more subtle, and let journalists draw their own (sometimes wrong) conclusions.

The Legality

There are still a few oddities to all of this. First, assuming this is real, it is definitely the most high-profile leak of all time out of the super-secretive Apple. Hell, it may be the most high-profile hardware leak of all time from any company. If there has ever been anything that will draw the wrath of Apple’s legal team, this would seem to be it. And yet, if Gizmodo (or its parent, Gawker) have gotten a take-down notice, they haven’t let it be known yet.

It’s possible, and likely even probable, that Apple is taking this as something worthy of action much more serious than the fairly common takedown notices the company sends from time to time. As Gruber noted earlier today, according to his sources, Apple considers this device to be not lost, but stolen.

The Money

And that angle comes into play when you consider that Gawker did, in fact, pay for the device.

Also interesting is a tweet from Engadget writer (and former attorney) Nilay Patel, “Here’s an interesting fact: in California, the finder of a lost item is required to tell the police and turn it over to rightful owner.” It’s not clear if that’s why Engadget did not purchase the device after posting the pictures.

The price paid for the device is not known, though a $10,000 figure is being thrown around (others are saying $5,000 plus traffic bonuses). As you might imagine, the traffic for Gizmodo have been huge today, something above 3 million hits already. Some have tried to calculate out if this makes the $10,000 worth it (based on ad revenues). But, as Gawker’s Erin Pettigrew points out, “Ad demand only matches ad supply that way if using remnant networks/exchanges. We’re not, so no real rev gain in news spikes.”

The Power

Then there’s the whole issue of Gizmodo not being able to power on the device, despite having it. While it is possible to remote wipe iPhones, this wouldn’t completely kill the device, just remove all its data. But perhaps Apple built a special kill functionality into this prototype unit for situations exactly like this. The device does show a “Connect to iTunes” screen (which is how Gizmodo is able to judge the higher-resolution screen), but that is all.

The Pledge

Finally, you have to wonder how the hell Apple let someone out of the building with this device? Apple is known to lock employees in rooms (entered through several secure doors) in order to use new devices. It’s even believed that sometimes they make people working on the devices do so under black cloaks. Naturally, the people in these rooms are monitored at all times.

The Turn

So if someone left Apple with this product, you almost have to believe it was a high-level executive. But still, what on Earth are they doing bringing it to a bar? (Maybe one of their kids swiped it from home? Who knows.) Yes, Apple employees were spotted in the wild with the original iPhone before its launch, but that device had already been unveiled on stage by Steve Jobs months earlier. This is much, much different.

The Prestige

On the other hand, you almost have to believe that this device was meant to leave 1 Infinite Loop — that’s why it had the false iPhone 3G cover. Apple may have given a few of these devices out to trusted employees in this disguise to test in real-world situations. After all, if this thing does have a new type of back (glass, ceramic?), they’ll want to know how the wireless radio performs before it’s released to the public.

Yes, even in bars. (Let me make the first “more bars in more bars” joke.)

Update: Gizmodo has now outed the Apple employee who lost the phone. He’s apparently a software engineer working on iPhone baseband software (so you can actually make calls when AT&T is cooperating), and supposedly he left the phone at a bar in Redwood City on March 18. The fact that the phone is that old makes an earlier TwitPic leak make more sense, and means the device could very well be an early prototype that will change.

The Unprecedented

Often, the best tech stories have interesting backstories — and this certainly fits the bill. We’re likely two months away from the actual unveiling of the iPhone HD (we’ll go with that name for now, given the screen resolution), and yet, we’ve apparently already seen it. With Apple, given the lengths they go to to make sure something like this doesn’t happen, it’s unprecedented.

And while I’m sure Apple is beyond pissed off about this leak, it has the Apple base super-excited about the future today — even as the apparently best Android phone yet, the Droid Incredible, is set to launch. All anyone is talking about is the iPhone. As usual.

Of course, this means that when Steve Jobs takes the stage in June, he may actually need a “one more thing” moment. Without it, we may be bored by a presentation full of what we already know.

Update: And finally, here’s a note from Apple’s legal team requesting the device back. Gizmodo’s Brian Lam says he took a call from Apple today (no word on whether it was Jobs himself) and that he would give the phone back if Apple sent proof in writing that it was actually their equipment. They sent the note, now Gizmodo is giving it back. Thus ends the iPhone 4G saga. For now.

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