D: All Things Digital (WSJ Transcript)

Discussion in 'iPhone' started by macaddicted, Jun 18, 2007.

  1. macaddicted macrumors regular


    Jul 23, 2002
    Down on Copperline...
    This was in today's Wall Street Journal (WSJ). It touches on many areas, so I don't know if it belongs here or elsewhere. For those who don't subscribe to the WSJ (for shame) here is the article copied in its entirety . I'll leave it up to the admin to move or delete it at their discretion.

    Remember that this interview took place at the end of May, 2007, almost three weeks ago.

    iPod, iPhone, iTunes, Apple TV:
    Where Steve Jobs Sees Them All Heading

    © 2007 Dow Jones & Company. All Rights Reserved


    All Things Digital
    iPod, iPhone, iTunes, Apple TV:
    Where Steve Jobs Sees Them All Heading
    June 18, 2007; Page R4
    Steve Jobs, the chief executive officer of Apple Inc., was one of the pioneers of the personal computer, but lately he and his company have gotten more attention for head-turning consumer electronics, such as the iPod and the soon-to-be-released iPhone. He talked with Walt Moss-berg about the iPhone, iTunes and Apple TV -- and the computer business.

    Here are edited excerpts from that conversation:

    WALT MOSSBERG: What businesses is Apple in?

    STEVE JOBS: Apple's in two businesses today and a hobby. We're about to add a third business. The businesses are: one, our Mac business, which we love and is growing really well. The second is our music business. Each of those two is about a $10 billion business for us. And the third business we're about to get in is the phone business, handsets.

    The hobby is Apple TV. I call it a hobby because a lot of people have tried and failed to make that a business -- everybody from TiVo to Microsoft. It's a hard problem. It's a business that's hundreds of thousands of units a year, but it hasn't really crested to be millions of units per year. If we work on it and improve things over the next year, 18 months, we can crack that.

    MR. MOSSBERG: When you changed your name to Apple Inc., and announced that you're doing the iPhone in addition to the iPod and Apple TV, people said, "This is your gradual exit out of the personal-computer business." Do you remain committed to the personal-computer business?

    MR. JOBS: Totally. We're rolling out the next generation of our operating system, Leopard, which we'll ship in October.

    MR. MOSSBERG: You're a lot nicer to cellphone companies than you were last time you were on stage here.

    MR. JOBS: We've gotten to know some of the players, and we haven't sold a phone yet, but Cingular has been really great with us.

    MR. MOSSBERG: By leaving you alone?

    MR. JOBS: No. Actually, not by leaving us alone. We did a different kind of a deal than they've ever done before, and it bent or broke a lot of their rules. They've never done anything like this, and they did it with us without ever seeing the phone. We wouldn't show it to them. They took a gamble on us. And likewise, we took a gamble on them, and so I will never forget that.

    MR. MOSSBERG: Why do you think they did it?

    MR. JOBS: I think they did it for two reasons. Music on phones hasn't been so successful so far, and they really wanted to do something good with music on phones. They knew with the iPod built into the phone we could do that.

    The second reason is that they have spent or are spending a fortune to build these 3G networks. And so far, there ain't a lot to do with them. People have not voted with their pocketbooks to sign up for video on their phones. So they have a lot of bandwidth, but [existing] phones are not capable of taking advantage of it, because their Internet experience is so poor. They have lousy browsers. You don't get the Internet, you get the baby Internet, or the mobile Internet, or something bizarre. And what people want is the real Internet on their phone, and they believe that we could deliver that. We're going to be able to take advantage of some of the investments they're making in this bandwidth, in an entirely new way.

    No Copy Protection

    MR. MOSSBERG: You put out a press release this morning [May 30] that you have begun to sell these non-copy-protected songs on the iTunes store from EMI.

    MR. JOBS: Right now it is just EMI, but there are zillions of independents that are also jumping on the bandwagon. As fast as we can get their stuff encoded, you'll see more and more on there. I think over half the songs we offer on iTunes will be offered in what we call iTunes Plus, which is our DRM [digital rights management]-free, higher-quality audio versions, by the end of this calendar year.

    MR. MOSSBERG: Any other movement on the record labels coming?

    MR. JOBS: We're working with them. The music companies ship 90% of their music DRM-free today, because all CDs are DRM-free. We've gone to them and said, "Look, you're shipping 90% of your music DRM-free. Customers are willing to pay a little bit more to get their downloaded music DRM-free, and why don't we do this?" We were successful in persuading EMI, and hopefully over the rest of this year will be successful in persuading most or all of the rest of the labels.

    MR. MOSSBERG: Is the iPhone a wireless iPod, or is it a phone that has an iPod in it?

    MR. JOBS: It's three things. It's the best iPod we've ever made, [and] it's an incredibly great cellphone. If it was nothing but a cellphone, it would be really successful. And then the third thing is, it's the Internet in your pocket, for the first time.

    Key Decisions

    MR. MOSSBERG: How much debate was there [within Apple] about the decision not to have a physical keyboard on the iPhone?

    MR. JOBS: None.

    MR. MOSSBERG: Really? Why not?

    MR. JOBS: Once you actually use a touch display like this, there's no going back. We actually think we got a better keyboard, and it takes a few days of getting used to it. But I'll bet you dinner that after using it for a week, you will think it's really great.

    The other nice thing about it is that we can use that physical space for other things when you don't need a keyboard. You can keep changing user interfaces, you come up with new ideas, new applications. It provides incredible flexibility to create great user interfaces for different applications. In addition to that, once you learn how to trust the keyboard, it's a better keyboard.

    MR. MOSSBERG: How much time do you think you have before people copy the overall form factor of the thing?

    MR. JOBS: Why does the iPod exist, why is Apple successful in this business? [The answer is that] the Japanese consumer-electronics companies who were the pre-eminent hardware makers of consumer electronics until recently couldn't do software as well as it needed to be done.

    If you look at the iPod, it's a software product, and beautiful hardware. The Japanese consumer-electronics companies couldn't make the leap to create that kind of software. That's why Apple enjoys the success it does with the iPod. If you look at handsets, it looks very similar. The handset manufacturers have got their hardware down, but they haven't been able to make the leap to software.

    The usual suspects will try to copy the hardware, and it will take them some time. But the software is at least five years ahead of anything we've seen out there. And it's really hard to do it.

    Apple TV: Just a Hobby?

    MR. MOSSBERG: Why do you describe [Apple TV] as a hobby? [Apple TV is a new device that allows consumers to take movies and other media from their personal computers to their television screens.] Why isn't it dead simple to imagine people wanting to buy that in large numbers?

    MR. JOBS: What everybody has tried -- and the place where we've come from, too -- is getting content from your PC on your widescreen TV, and I'm not so sure that's really what most consumers want. It's great to show your photos; it's great to play your music. But we tend to think of that as the entree and the more we think about this, the more we think that might just be the peas on the side. And that the entree might be things that you really get directly from the Internet.

    Singing iTunes' Praises

    MR. MOSSBERG: How many copies of iTunes are out there? Is it 50% more than the number of iPods?

    MR. JOBS: Several times more.

    MR. MOSSBERG: You've announced a figure of iPod sales as 100 million. You're saying this could be 300 million copies of iTunes?

    MR. JOBS: Or more.

    MR. MOSSBERG: That makes it one of the most ubiquitous pieces of software out there. And almost all of them are on Windows computers?

    MR. JOBS: We've got cards and letters from lots of people that say that iTunes is their favorite app on Windows. It's like giving a glass of ice water to somebody in hell.

    MR. MOSSBERG: Do you think video on portable devices is a success? I remember when you were here at one point, and you said that you didn't think people want to watch video on small devices.

    MR. JOBS: I was definitely more skeptical than the customers. They proved us wrong. Video has been the No. 1 or 2 reason they bought the product. And they use a lot. We've sold the better part of 100 million television shows.

    MR. MOSSBERG: The iPhone can play video, but you don't have a video service that allows people to download videos on the iPhone. Why not?

    MR. JOBS: People have tried it with music so far and it's failed. Part of the reason is that a phone isn't necessarily the best place for discovering or browsing through large catalogs of music. When you download it to the phone, it costs more money, because the airwaves cost more than the terrestrial Internet. Then when you get it on the phone, you have to sync it back to your PC anyway, because if you lose your phone, or trade in your phone, you don't want to lose a few hundred dollars worth of music.

    So you can either buy on your phone for more money, in a less good environment, and sync it back to your PC. Or you can buy on your PC, [which has] a much bigger screen, and then sync it to your phone. We have 100 million iPods that people know how to sync to their PCs. They know how to buy music on iTunes.

    MR. MOSSBERG: So you have no plans at the moment to put any version of the iTunes store either for music or video on the iPhone itself, despite the fact that you have a big screen and you have this non-baby operating system?

    MR. JOBS: We certainly have nothing to announce today.
  2. FreeState macrumors 68000


    Jun 24, 2004
    San Diego, CA
    Well that is an odd comment to make seeing the iPhone is not even G3... :confused:
  3. kdarling macrumors P6


    Jun 9, 2007
    First university coding class = 47 years ago
    1) His "we don't have the baby internet" comments are misleading. There are dozens of browsers out there on mobile devices, including some that show pages just like his does. And the upshot is: the "real" internet is a pain to use on anything with a small screen. Period. Zooming and scrolling help, but it's still a pain. With or without flash, btw.

    Drop your browser window right now down to a small rectangle. Go ahead. Now try to navigate, read or reply in this forum... or Apple's. It's a very frustrating experience.

    2) "Five years ahead." No comment needed. Is he so far removed from programming these days that he believes that?

    Ah well, life is fun!
  4. cmschmidt macrumors 6502

    Jun 15, 2007
    its not 3G either
  5. darwen macrumors 6502a


    Apr 12, 2005
    California, US
    HaHa. Nice catch... I missed that.
  6. FreeState macrumors 68000


    Jun 24, 2004
    San Diego, CA
    LOL, thanks! You know you have been thinking about Apple to much when you do that;)
  7. applehero macrumors 6502

    Jun 12, 2007
    29º 25' 26"N, 95º 29' 36"W
    Obviously it's in the works. We'll just have to wait and see.

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