RANCHO PALOS VERDES, Calif. — Apple Chief Executive Steve Jobs may look frail nowadays but he showed plenty of fight – and humor – in a wide-ranging discussion Tuesday night at the All Things Digital conference hosted by the Wall Street Journal.
For nearly two hours, Jobs jousted with hosts Walt Mossberg and Kara Swisher, who pressed the Apple co-founder on his company’s strained relationship with Google and Adobe, competition with Microsoft and Apple’s push into the ad business.
Even at a conference full of celebrity chief executives, Jobs received rock star treatment. A crowd was waiting behind velvet ropes outside the ballroom at the Terranea Resort and surged when the doors opened at 5:45, jockeying for the best seats.
Swisher jumped right into the interview with Jobs, asking for his thoughts on Apple surpassing Microsoft’s market capitalization last week.
“For those of us who have been in the industry a long time it’s surreal,” Jobs said. “But it doesn’t matter very much, it’s not what’s important … it’s not why any of our customers buy our products. So I think it’s good for us to keep that in mind.”
Walt Mossberg kept up the pressure, asking Jobs about his controversial decision not to support Adobe’s Flash technology on mobile devicies and how it’s affecting consumers and developers.
Jobs said Apple’s makes technical decisions to support what it sees as emerging technologies such as its early decision to support the 3.5-inch computer disc over the 5-inch floppy disc and to drop serial ports on the Mac. He said Apple believes Flash is on the “wane” and HTML5 is in its spring phase.
“Sometimes when we get rid of things like the floppy disc drive in the first iMac people call us crazy,” Jobs said.
“Or at least premature,” Walt said.
“No they call us crazy,” Jobs said.
Mossberg said consumers may not agree it was the best choice when their iPads show Web sites with holes where Flash items should be displayed.
“What if people say the iPad is crippled in this respect,” he asked, drawing a heated reaction from Jobs.
“Things are packages of emphasis,” Jobs said. “Some things are emphasized in a products, some things are not done as well in a product … so different poeple make different choices.”
Jobs said Apple has “the courage of our convictions.”
“We’re going to take the heat because we want to make the best product for customers. …. they’re paying us to make those choices. That’s what a lot of customers pay us to do – to try to make the best products we can. If we succeed, they’ll but them. If we don’t, they won’t. I…. so far I have to say that people seem to be liking iPads. We’ve sold one every three seconds since launching it.”
Swisher and Mossberg also pressed Jobs to discuss the more tense relationship Apple now has with Google. They also tried to pin him down on whether Apple will replace Google as the search service on its mobile devices – some have speculated Microsoft’s Bing may take its place – but Jobs sidestepped the question.
What changed in the relationship between Apple and Google?
“They decided to compete with us and so they are,” Jobs said.
How about PC operating systems with Google’s Chrome O.S.?
“Chrome is not really baked yet so we’ll see,” Jobs said.
Asked about Apple’s long platform war with Microsoft, Jobs said he never thought about the competition that way.
“We never saw ourselves in a platform war with Microsoft,” Jobs said. “Maybe that’s why we lost – we saw ourselves buiding the best computers we could build.”
Jobs also drew laughs talking about why he prefers the consumer market over the business enterprise market.
“What I love about the consumer market and I always hated about the enterprise market is we come up with a product, we try to tell everybody about it and every person votes for it themselves. They vote yes or no,” Jobs said.
“The enterprise market, it’s not so simple – the people that use the product don’t decide for themselves. The people that make those decisions sometimes are confused.”
Their conversion elicited an interesting story about the genesis of the iPad. Jobs said he’d asked his team to develop some kind of display he could type on early in the decade and they produced an amazing touchscreeen system. Scrolling and other features made him think, “my god, we can build a phone out of this.”
Phones were a more important market so the tablet was shelved while the iPhone was created.
“When we got our wind back and thought we could take on something next, (we) pulled the tablet off the shelf, took everything we learned from the phone and went to work on the tablet.”
Jobs predicted that PCs going to be used less and less as new computing devices emerge. PCs – including Macs and Windows systems – “are going to be like trucks but they’re going to be used by one out of x people.”
What the dominant computing device will be is unclear.
“Is it the iPad? Who knows. Will it happen five years or seven years from now, who knows?” Jobs said. “But I think we’re headed that direction.”
Swisher asked Jobs about future plans for the iPad and how it could help the struggling news industry. Jobs said he hopes that he’s helping newspapers “find new ways of expression so they can afford to get paid, so they can keep their news gathering organizations intact.”
“Even more than magazines, some of these newspapers – the news gathering and editorial organizations are really important,” Jobs said. “I don’t want to see us descend into a nation of bloggers myself. I think we need editorial more than ever right now.”
Apple’s also going to enter the advertising business itself, but Jobs said the company won’t make a lot of money with the new venture. He said the objective is to help developers make money so they can keep providing free or low-cost apps.
“We’re not going to make much money in the ad business,” he said. “We’re doing it for our developers.”
During questions from the audience, Jobs told an iPhone owner frustrated by poor network service in Houston that improvements are on the way. Jobs said he’s been told that the network is being upgraded with faster connections and switches and improvements should be there by the end of summer.
Jobs said he’s been told that “things – when they start to fix them – get worse before they get better. If you believe that, things should be getting a lot better soon.”
News Corp. Chief Executive Rupert Murdoch opened the event, recalling how Steve Jobs appeared at the first D conference eight years ago. Jobs talked then about misunderstandings between technology and content creators, a gap that Murdoch believes has since narrowed.
The worlds of technology and content have moved much closer since our first gathering,” Murdoch said. “In fact sometimes the line between them has been completely erased.”
Content is also key to technology products such as music players and e-readers, Murdoch said.
“You need content too – after all, what is an iPod without music?”
Murdoch used his introduction to assert the need for content to be paid for online, and noted that the Wall Street Journal is growing circulation despite it’s subscription approach. He also noted that the paper already has more than 10,000 iPad subscribers.
“We need a fair price for our content,” he said. “There’s no great secret here. In response to skeptics who say technology is killing the news business, I believe technology is ushering in a new golden age for those willing to embrace it.”