Masayoshi bet billions on the Last iPhone – 3 years before it even existed

Ellison’s home was actually more like a village, a complex of intricately designed wooden houses modeled after a Japanese emperor’s palace. It took almost a decade to design and build the 23-hectare site, including a lake and waterfall controlled by an on-off switch. All buildings were built without nails and had mud walls designed to withstand a 7.3 magnitude earthquake. In total, Ellison’s tribute to Japanese culture and history was worth an estimated $70 million.

The talk around the table that day was about crazy internet valuations in the stock market. But Masa and Jobs were more interested in what would happen after the dotcom bubble. “I said I was focused on the Internet, and he agreed that the Internet was the future,” says Masa. Both men realized that a paradigm shift was imminent. Actions on the Nasdaq were one thing; The advent of the networked world, with Apple playing the leading role as innovator and SoftBank as investor and operator, was quite different.

Apple was by then one of the most valuable companies in the world, with its best-selling products from Mac laptops to the iPod. Like Masa, Jobs was paranoid about competitors stealing his ideas. No Apple project was more secretive than the iPhone, the touchscreen smartphone that would make billions in sales and revolutionize personal communications.

According to Masa, during a trip to California in the summer of 2005, he showed Jobs his sketch of a portable iPod with a large display and using Apple’s operating system. According to his prediction, the new device will be able to process data and images. Jobs was intrigued by the idea, but couldn’t resist dropping hints about the iPhone.

Jobs: “Masa, don’t give me your ugly picture. I have myself.”

Masa: “Well, I have to give you my dirty paper, but once you have the product, give it to me for Japan.”

Jobs declined to elaborate, but Masa saw a smile on the Apple chief’s face. After pressing him further, Masa attended a follow-up meeting at Jobs’s Tudor country home in Palo Alto. At that meeting, Masa claims, 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, but you came to see me first. I will give it to you.”

Nothing is written. There was no discussion of price or volume. Just a gentleman’s agreement based on the assumption that the table will have the funding to build or acquire a cell phone business. “It was top secret. I had never seen the product before I came to Japan (in 2008),” claims Masa. “Steve never told me his name.”

The tale has a mythical quality. Jobs is believed to have made his promise three years before Apple introduced the iPhone in Japan. Still, that promise may have given Masa the confidence to buy Vodafone Japan, a British-owned “also controlled” company that used soccer icon David Beckham in its marketing campaign. It was the biggest deal to date in Asia, but Masa believed he had a game-changing product under his belt. Regardless of the exact chronology, Masa canceled the distributor deal of the century that allowed him to build a profitable consumer business in Japan, massively expanding the SoftBank brand.

On March 17, 2006, Masa signed a $17 billion deal to acquire Vodafone Japan. Two weeks later, Jobs flew to Tokyo, where Masa urged the Apple boss to support ending the contract. “You didn’t give me anything in writing, but I bet $17 billion on your word,” he said. “You better feel a little responsible.” Jobs laughed and said, “Masa, you are a crazy person. We will do what we discussed.”