The PayWall Street Journal throws their ‘people familiar with the matter’ on the Papermaster departure:

The Apple Inc. executive in charge of the iPhone has left the company following a string of stumbles with the device, and what people familiar with the situation said was a falling out with Chief Executive Steve Jobs….Mr. Papermaster had lost the confidence of Mr. Jobs months ago and hasn’t been part of the decision-making process for some time, these people said. They added that Mr. Papermaster didn’t appear to have the type of creative thinking expected at Apple and wasn’t used to Apple’s corporate culture, where even senior executives are expected to keep on top of the smallest details of their areas of responsibility and often have to handle many tasks directly, as opposed to delegating them…

It was Mr. Jobs, rather than Mr. Papermaster, who decided to move forward with the development of the phone even though the company was aware of the risks of the antenna design as much as a year ago, according to people familiar with the matter…

Mr. Papermaster started his position while Mr. Jobs was on sick leave to receive a liver transplant during the first half of 2009. At the time, executives had more autonomy to make decisions, so Mr. Papermaster was likely ill-prepared when Mr. Jobs, who is known for his hands-on management style, returned, said the people familiar with the situation.

You don’t have a falling out with Jobs and survive. I think the ongoing white iPhone manufacturing issues are a bigger concern than the antenna and the straw that broke the camel’s back.  Apple is making as many iPhones as it can (and not meeting demand) and still losing out to Android.  That couldn’t have been the plan.

 

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