"Who needs a stylus? Yuck!" - Steve Jobs, 2007
“I’m not convinced people want to watch movies on a tiny little screen. To paraphrase Bill Clinton, ‘It’s the music, stupid, it’s the music!’ Music’s been around for a long time, will continue to be, it’s huge.” - Steve Jobs, 2003
And then the 5th Gen in 2005 had video.
"It doesn’t matter how good or bad the product is, the fact is that people don’t read anymore." - Steve Jobs, 2008
And then we see iBooks in 2009.
"There are no plans to make a tablet. It turns out people want keyboards…. We look at the tablet, and we think it is going to fail." - Steve Jobs, 2003
Again, 2009 with the iPad.
"Given that all tablet users will already have a smartphone in their pockets, giving up precious display area to fit a tablet in our pockets is clearly the wrong tradeoff. The seven-inch tablets are tweeners, too big to compete with a smartphone and too small to compete with an iPad." - Steve Jobs, 2010
And then the iPad Mini in 2012.
Never treat Jobs' words as gospel. Especially in the 2000s and later, he seemed perfectly willing to change his tune if there was a reason compelling enough to do so. Those of us clamoring for the Pencil on the Air are doing so for the precise reason that fingers suck as writing input devices. And the iPad's size makes it ideal for many for writing input, and all the existing styluses on the market for writing input are compromises at best. The demand has been there for quite a while.