The iPhone originally happened because Steve Jobs hated a guy who worked at Microsoft (AAPL, MSFT)

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MOUNTAIN VIEW, CALIFORNIA — You might think a product as revolutionary as Apple's iPhone might have been born out of some unique insight or high-minded feeling. 

You would be wrong. 

According to Scott Forstall, the iPhone's co-inventor, the roots of Apple's smartphone project go back to founder Steve Jobs' disdain for Microsoft, and a grating social interaction with a particular employee of the software giant.

"Steve hated this guy at Microsoft," Forstall said on Tuesday night at an event event at the Computer History Museum here celebrating the 10th anniversary of the release of the first iPhone. 

'First thing is, they're idiots'

Jobs wasn't referring to Bill Gates, his sometime friend and longtime rival who founded Microsoft. The unnamed Microsoft employee in question was the spouse of a friend of Laurene Powell Jobs, Steve's wife, Forstall said. Because the two couples ran in the same social circles, they would often end up at the same parties and functions, much to Jobs' chagrin.

"Any time he had any kind of social interaction with that guy, he'd come back pissed off," Forstall said.

The breaking point came when the Microsoft employee told Jobs that the software giant had "solved computing" with its Tablet PC effort. Like the tablets that would come later, the Tablet PCs, which ran on a special version of Microsoft's Windows software, were smaller and lighter than laptop computers and included touch displays. The part about them Jobs found distasteful though — and what made the employee's comments so irritating to him — was that Tablet PCs would only work with a stylus.

Reuters That interaction between Jobs and the Microsoft employee took place on a weekend. When Jobs returned to the office the following Monday, he let out "a set of expletives," Forstall said. And then Jobs got Apple working to outdo Microsoft, developing a touchscreen device of its own that would rely on fingers not a stylus. 

"First thing is, they're idiots. You don't use a stylus," Jobs said, according to Forstall. People lose them, Jobs said, and they were counterintuitive anyway. "We're born with ten styluses!" 

Initially the development effort focused on building a tablet. Apple tapped to Forstall to lead software engineering for the project.

The coffee shop incident

That tablet project continued, with Apple's team making big strides in building prototype multitouch displays. Apple changed switched its focus from creating a tablet to making a phone around 2004, after Forstall and Jobs visited a coffee shop.

Jobs noticed that many of the people in the shop were using their cell phones, but none of them seemed really happy about it, Forstall said. To Jobs, that was an opportunity. He asked Forstall if that multitouch project could be shrunk down for a phone-sized display.

And thus was born "Project Purple," which would evolve into the iPhone. It was a "herculean" task to shrink the size of the device from the larger ones developed at the beginning of the research project to a phone-sized one, Forstall said. But when the project was complete, Forstall saw that Jobs was right. 

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"There was no question," Forstall thought. "This is how phones need to be made."

As a postscript, Microsoft's Tablet PC business never gained much traction in the market. It was only in 2010, when Apple introduced the iPad, that the tablet business became a mass market. When introducing the iPad, Jobs famously made his distaste for styluses known with a hearty "yuck."

But things have come full circle. Nowadays, Microsoft has its Surface line of devices, which focus heavily on stylus input. And Apple now offers its own stylus for its iPad Pro tablets, the Apple Pencil.

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