Where iPhone 5 might be lost in Silicon Valley

By Therese Poletti, MarketWatch

WOODSIDE, Calif. (MarketWatch) — Martin Eberhard, a co-founder and former chief executive of Tesla Motors Inc., laughed when he heard the premise of this column: to feature some Silicon Valley watering holes and hangouts where we might be able to find the next lost iPhone.

By serendipitous coincidence, Eberhard — who was having lunch at the famous Buck’s in tony Woodside, Calif. — showed me his email signature on his iPhone, which reads: “Sent from my iPhone 5 prototype, which I found in a bar.” Just a little geek humor after the latest incident, I suppose.

No, Eberhard did not have that appended to outgoing messages after the news earlier this month that another Apple Inc. AAPL +1.92%  iPhone prototype — this time an iPhone 5, apparently — was left at a drinking establishment (this time at a tequila bar in San Francisco). Read CNET story on iPhone 5 found in a Mission district bar.

Therese Poletti/MarketWatch

From left: Matthew Neher, CEO of start-up Greentech Mining; Kevin Kanning, VP and COO of Greentech; and Dennis Di Ricco, an investor who lists Buck's address as one of his offices on his business card. On the wall is a shrink-wrapped box of Microsoft Windows 1.0.

He’s had that email signature since the top-secret prototype of the iPhone 4 was lost in March last year at Gourmet Haus Staudt, a German bar and beer garden in Redwood City, Calif. “I am beginning to think this is a marketing strategy of Apple,” he said, only half joking. “It might be a new way to test-market a product.” Read more on the first lost iPhone saga.

Eberhard, who won’t talk about what he has been working on since he left Palo Alto, Calif.-based Tesla TSLA +3.95% , is not the lone voice of that theory. But others say that the secretive Apple would never purposely want an employee to leave another iPhone prototype anywhere in public.

“They certainly don’t need the publicity,” argues analyst Ashok Kumar of Rodman & Renshaw. Also, “working at Apple is like working at the CIA.”

Besides, he added, the company certainly would not want to tip off rivals in the smartphone business as to what it will do next: “These products have a really short shelf life.”

Still, hopeful and inquiring minds wanted to know where else in Silicon Valley the next top-secret lost iPhone will turn up. See a slide show of bars and hangouts where you might find the next iPhone.

“We have seen a lot of stuff that is stamped confidential, but confidential to one person is another person’s garbage,” quipped Jamis MacNiven, the owner of Buck's, who’s also written a book, “Tales from the Pancake Guy.”

Eberhard pointed out that it might be hard to spot such a device in the clutter of Buck’s, a favorite haunt for venture capitalists and entrepreneurs. Every bit of wall space is taken up with MacNiven’s collectibles — from Cracker Jack prizes of the 1920s and 1930s and a shrink-wrapped box of Microsoft Corp ‘s. MSFT +0.48%  Windows 1.0 to a soapbox car, a relic from the Sand Hill Challenge derby of the dot-com boom.

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One could stay all day in Buck’s, but sadly it’s time to move on. Not far is Sand Hill Road, where the swish Rosewood Sand Hill resort has one of the most elegant bars seen on this Valley pub crawl, simply called the Bar. Power banker Frank Quattrone scurried away after a quick hi, avoiding annoying questions about lost gadgetry or deals he has in the works. After a divine $5 pomegranate mojito sans alcohol, it’s time to leave.

Next, Cupertino, Calif., seems like a good bet. The old Peppermill next door to Apple’s campus is now gone. It’s been replaced by BJ’s Restaurant and Brewhouse, where you can see the main One Infinite Loop building from the parking lot. One BJ’s worker admits he always looks at the phones Apple employees have to see if they are new, yet-to-be-released iPhones.

“Nothing top-secret has ever been left here,” said Treavor Morris, general manager of BJ’s Cupertino. “We’ve found a few iPads, but they come right over and pick them up.” Well, there’s always a first time.

Another likely candidate is a pub, the Duke of Edinburgh on North Wolfe Road, on the other side of the 280 freeway in Cupertino, where Apple’s new campus will be built. Hewlett-Packard Co. HPQ +1.12%  still has some people working there and Apple occupies some buildings nearby. The Duke, as it is called, has a charming, and likely little-used, red London phone booth outside, and its interior is said to have been made in England.

“They talk about doing business at the Duke,” said J.C. Deacha, one of the owners of the Duke, of the H-P employees and previously Tandem workers. But no, “we haven’t found anything like that,” he said when asked about ever seeing any clandestine prototype devices.

Alas, the Mexican cantina Pedro’s in Santa Clara, Calif., hasn’t had any shenanigans with drunken engineers leaving confidential products behind either. “I found an iPhone in the bathroom,” reported Dora Garcia, the manager. Its sobered-up owner claimed it the next day.

But Pedro’s — known as a watering hole for Intel Corp. INTC +2.00% employees, as well as those of EMC Corp. EMC +0.31%  and Qualcomm Inc. QCOM +0.45% — might be a place where a Johnny-come-lately in smartphones might want to “accidentally” leave a working device with chips (not of the tortilla variety) based on the microprocessor giant’s new partnership with Google Inc. GOOG +0.76% . Read more about Intel's deal with Google.

Heading north: So many bars, so little time. One stop is Fred’s Place on Old Middlefield Way in Mountain View, Calif., a local dive that’s something of an institution, having been a stone’s throw from the original Fairchild Semiconductor offices on Charleston Road. It’s not clear if Fred’s was also a big hangout of the early chip cowboys (like the now-demolished Wagon Wheel was, which stood at East Middlefield and Whisman Roads). But given Fred’s location and age, it’s pretty likely.

“Lots of companies have started here on a napkin,” said Paul Partti, who has co-owned the 51-year-old Fred’s for the last 11 years. He declined to be more specific, giving his bar a mysterious allure — visible by its magenta neon sign, complete with glowing martini glass and olive. The usual things have been forgotten, typically cell phones, but nothing top-secret or in development. “It’s funny that this happened to Apple twice,” he mused.

Torn between the chichi bar at the Four Seasons Hotel just off the 101 highway and downtown Palo Alto, I decided to continue exploring dives. “Most of the geeks I know go into bars on University Avenue or California in Palo Alto,” said Trip Chowdhry, a Global Equities Research analyst.

Antonio’s Nut House on California Avenue is a favorite of some Facebook Inc. and AOL Inc. AOL -2.91%  employees as well as Stanford students. Disappointed only to find peanut shells covering the floor, and nary an iPhone prototype hidden among them, it was time to call it a night.

Therese Poletti is a senior columnist for MarketWatch in San Francisco.