Apple Gets Back Its No-Longer-a-Secret Secret iPhone

In a unprecedented breach of security at the Fort Knox of technology, an Apple employee took a prototype iPhone out on a drinking binge…and left it at the bar.

Now Apple has demanded and received back its next-generation phone, but not before the technology enthusiast website Gizmodo (the site's motto for years was "So much in love with shiny new toys it's unnatural") managed to gain possession of the device -- and plastered its site with dozens of photos and a detailed review of the unannounced device.

Pictures and even reviews of unreleased gizmos frequently leak onto the Internet. But that sort of security breach doesn't happen at Apple, which controls the flow of information surrounding its products so tightly that some have compared the company to the FBI.

"Devices leak all the time. Devices get stolen all the time. But not Apple devices," explained's lead mobile analyst Sascha Segan. "Apple has the best device control in all of the industry. It blows my mind that they let this thing go travelling on a road trip."

"Apple prototypes are generally under lock and key in secure locations, not out drinking with their friends on a sunny day," he added.

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The tight-lipped lawyers and public relations staff at Apple refused to comment on the device, other than issuing a letter requesting its return, adding another layer of mystery to an already unusual story.

What Happened

According to Gizmodo, Apple software engineer Gray Powell took a prototype of the phone out to a birthday party at a Redwood City, Calif., beer garden on March 18.

"I underestimated how good German beer is," Powell reportedly typed into the next-generation iPhone he was testing in the field, which was cleverly disguised as an iPhone 3GS. It was his last Facebook update from the secret iPhone, reports Gizmodo, and the last time he saw the iPhone before leaving it on a bar stool and stumbling home.

Another patron of the bar found the device, realized what it was and tried unsuccessfully to return it to Apple. Then he turned it over to Gizmodo.

"The guy contacted us and offered us a chance to access and play with it," explained Gizmodo editor Jason Chen. "Then we offered him $5,000 for the chance to play with it and take it apart."

The site, well known for publishing unofficial information and unauthorized gadget news, promptly photographed the phone inside and out, wrote a lengthy review, and in general made as completely public as possible that which Apple clearly wanted to keep  secret.

Does this leave the company open for lawsuits? "Probably not," Chen said. "The only reason they would press charges is to deter people from doing this in the future. Besides, right now, the cat's out of the bag, so there's no point to sue us."

As for Powell, Chen thinks firing him seems vindictive, even for Apple. "I think they'll just let it go. As far as I know they didn't fire him yet, and it was lost about a month ago," he said.

In typical fashion, Apple has refused to comment on the phone or Powell, though the company has issued a carefully worded letter to Gizmodo editorial director Brian Lam asking for the return of the device.

"Dear Mr. Lam, it has come to our attention that Gizmodo is currently in possession of a device that belongs to Apple," wrote Bruce Sewell, Apple's senior vice president and general counsel. "This letter constitutes a formal request that you return the device to Apple. Please let me know where to pick up the unit."

Gizmodo takes the letter as confirmation that the phone is real. Lam wrote on Gizmodo, "we have now both extinguished any doubts of its origin but also we get to give the phone back." Lam joked that this leaves him with "warm, fuzzy, huggy feelings of legal compliance."

Next-Generation Features

Gizmodo took advantage of the surprising find to catalog numerous changes to the iPhone: a front-facing video chat camera, an improved back-of-phone camera with flash, a larger battery, an improved display, buttons for volume, and more.

There's also a MicroSIM card, as in the iPad -- fairly concrete evidence that the device in question is designed for AT&T's GSM network, and not Verizon's CMDA network, despite widespread speculation that Verizon would release its own version of the iPhone at a widely anticipated event in June.

"I don't believe there will be a Verizon iPhone this year." Segan flatly stated.

In an extensive review on Gizmodo, Jesus Diaz wrote that the screen was of a notably higher quality than that in previous models, though it was impossible to tell for sure due to the remote device lock. But Diaz noted that an icon of a "USB cable on that screen was so high quality that it was impossible to discern individual pixels. We can't tell you the exact resolution of this next-generation iPhone, but it's much higher than the current iPhone 3GS."'s Segan agrees. "It seems like Apple is putting even more focus on video -- video recording, video communication, probably video playback. So I wouldn't be surprised to see full-scale video editing on here," he wrote. "And perhaps Apple has decided that now is the time for Americans to really start communicating with video on the move -- something we really haven't done before."

Mobile video chatting has existed for more than a decade around the world, but it has never taken off successfully. Videos are hard to upload, networks have been shoddy, and phones with the capabilities were never widespread.

"Apple doesn't just like just leading the market, they want to set the agenda," Segan explained. While many phones have high-def video, no one's really made it a widespread, easily useable experience. And based on previous successes transforming existing mobile technologies -- as it did for the MP3 player and the the smartphone -- we may see a video communicator come June.

Of course, we may see something wild and completely different. Apple could pull out some new surprises for its next roll out.

"This has only whetted people's appetite for the new iPhone," Segan explained. "And Apple always likes to hold something back."