In reality, Ellison's home is more like a village, a complex of intricately styled wooden houses modeled after the palaces of the Japanese emperor. The 23-acre property took nearly a decade to design and build, and includes a lake and a waterfall operated by a toggle switch. All buildings are built without nails and have mud-plastered walls designed to withstand a magnitude 7.3 earthquake. In total, Ellison's homage to Japanese culture and history is worth about $70 million.
The conversation around the table that day revolved around crazy valuations in the Internet stock market. But Masa and Jobs were more concerned with what would happen after the dotcom bubble. “I said I was focusing on the Internet and he agreed that the Internet was the future,” Masa said. Both men understood that a paradigm shift was coming. The fluctuations in Nasdaq are one thing; The advent of the networked world, in which Apple takes the lead as an innovator and SoftBank as an investor and operator, is quite different.
At the time, Apple was one of the world's most valuable companies with a series of hit products from Mac laptops to iPods. Like Masa, Jobs was paranoid about competitors stealing his ideas. No Apple project was more top-secret than the iPhone, the touchscreen smartphone that would sell billions of dollars and revolutionize personal communication.
According to Masa, during a visit to California, around the summer of 2005, he showed Jobs his own sketch of a portable iPod with a large screen and using the Apple operating system. He predicts the new device will be able to process data and images. Jobs rejected the idea but couldn't resist dropping hints about the iPhone.
Jobs: “Masa, don't give me your crappy drawing. I have my own.”
Masa: “Well, I don't need to give you my dirty piece of paper, but when you have your product, give it to me for Japan's sake.”
Jobs refused to reveal any more details, but Masa noticed a smile flicker on the Apple boss's face. After pressing him further, Masa set up a follow-up meeting at Jobs' Tudor-style country house in Palo Alto. Masa claims that at that meeting, Jobs agreed in principle to give SoftBank exclusive rights to distribute the iPhone in Japan. “Oh, Masa, you're crazy,” Jobs said. “We haven't talked to anyone yet, but you came to see me first. I will give it to you.”
Nothing is written down. There was no discussion of price or volume. Just a gentleman's agreement, based on the assumption that Masa would have the financial resources to build or acquire the mobile phone business. “It's extremely secret. I had never seen this product before it came to Japan (in 2008),” Masa affirmed. “Steve never even told me that name.”
The story is mythical in nature. It is assumed that Jobs made the promise three years ago when Apple launched the iPhone in Japan. However, it was that promise that may have given Masa the confidence to buy Vodafone Japan, the “also British-owned” company that has used football icon David Beckham in its marketing campaign. It's a highly leveraged deal – the largest to date in Asia – but Masa is betting he has a game-changing product on the horizon. Whatever the exact chronology, Masa landed the distribution deal of the century, allowing him to build a profitable consumer business in Japan, massively enhancing the SoftBank brand.
On March 17, 2006, Masa won a $17 billion deal to buy Vodafone Japan. Two weeks later, Jobs flew to Tokyo, where Masa challenged the Apple boss to keep his end of the bargain. “You didn't give me anything in writing, but I bet $17 billion based on your words,” he said. “You better feel a little responsible.” Jobs laughed and said: “Masa, you're a crazy guy. We will do what we discussed.”