I've just finished 'Dogfight' by Fred Vogelstein. It's an interesting book, and I primarily purchased it in order to get some insight into the creation of the original iPhone and the early development of Android. The first few chapters focus on this and then tails off into a description of events that is fairly irrelevant to anyone who follows the tech press.
Here's a quote from an Apple employee about the iPhone's development:
"He [Jobs] loved to setup a division. But it was a big fuck you to the people who couldn't get in. Everyone knows who the rockstars are in the company".
It really harkens back to the original Macintosh days. What's so interesting about this approach is that it goes against a lot of the public messaging that Apple puts out. Apple is meant to be a cohesive firm that works towards a common goal with a single bottom line. But instead Apple decided to seclude them from the rest of the organisation in the name of secrecy.
Likewise, the software and hardware development for the phone was split. Each group couldn't see the other's work. Would the iPhone have been a better product if the software and hardware teams had worked closer together? On the face of it, probably yes -- it's called synergy.
But of course, operations is only one part of the organisational triangle, marketing and finance has a lot to say. Keeping the product secret is massively important for Apple in order to generate the necessary buzz. This leads to one of the key issues with projects within organisations:
How do you balance the needs of the project with the organisational goals?
Apple's reasoning seems pretty clear. You want the best people in the company, so we'll take them, and then we don't want any information leaking out to spoil the surprise, so we'll separate the project in two. You could definitely argue at the time that this is putting the needs of the project before the organisation.
Today though, you could argue that the iPhone project helped define the organisational goals for the next decade. In other words; Apple took a gamble and it paid off. The Mac didn't loose out because of the talent migration and the iPod only declined because they cannibalised it so successfully with iOS devices.