Steve Jobs on the iPhone: Apple’s leapfrog device

Well, first off, can you just show me this thing? I mean, do you really think that this beats all other products out there? And you say that it was born out of frustration with existing products that you and the rest of us use. Tell me about that. Well, you know, our business, we make desktop computers, but increasingly we make laptops, notebooks, mobile computers. And almost half of our business now is iPods, which are clearly mobile devices. It's very clear to us that the world's going mobile. And we really believe that a device like this, which is, you know, an order of magnitude more powerful than any mobile device or any cell phone that's ever been created, and yet vastly easier to use, is the future. And so that's why we spent the last two and a half years inventing iPhone.

And it's just a leapfrog product ahead of, you know, five years ahead of anything else out there. How much of this is your own unique innovation versus the competition of just being the giant killer to knock everybody's socks off? I mean, they're shaking in their boots at Nokia and Motorola and Verizon, who didn't get a piece of this as of now, and these other companies that now, the people who made the iPod and knocked out, or is knocking out, much of the MP3 industry is now entering the cell phone world. Well, you know, we don't think of it that way. We're a product company. We love great products. So one of the big motivating factors for us is just creating something that we all want ourselves, too. And so that's what we've tried to do with iPhone. You know, we've been working really hard on it for a few years, and not to beat anybody else, but because nobody else was making something that really we thought was the right product. And so we've come out with our contribution, and people will vote with their money, and they'll buy it or they won't. And we think a lot of people are going to love it. So we'll find out soon.

I thought it was interesting that you announced the change from Apple Computer to Apple Inc. today, because I was wanting to ask you, you know, is Apple a computer company anymore? Is it an entertainment company, a media company? How do you describe Apple? Apple's Apple. You know, it used to be just a computer company, but with the advent of – but always on the real creative side. You know, I think Apple's always been the most creative technology company, because it's always been involved in graphics and graphic arts and film editing, video editing. And so it's always dealt with content creators. You know, most films are edited using Macs. Most records are made using Macs. And so we've always had a role in content creation. And with the iPod, we got even closer to music and now video as well. And so Apple's just been blossoming as this company that makes really great devices, but also helps people get great content on those devices. And that's what we do.

How is it that Apple seems to be cornering the market on what is cool? Are you cool? Who is it who continues to have the ideas that seem to capture the public's imagination? There are a lot of smart people at all these other companies coming up with other devices, and yet people are just waiting with bated breath for the next I anything. Well I think there's a lot of people doing good work out there. We certainly don't have an exclusive on that. I mean, look at Google. Look at the work they're doing. Yahoo is doing some great work. You know, sometimes you just have to look in different places. And what's great about Apple, though, is that we combine all the disciplines under one roof. We own the second highest volume operating system in the world and what many consider to be the best operating system. We write lots of applications. We know how to write great application software. We know how to write great software that goes in devices. We have great industrial design and we know how to make great devices. And so, you know, we know how to do the devices, the software on the personal computer, and with iTunes Store, the services that can sell you that content. And we have all of that under one roof, the hardware and all those different kinds of software and services. And there's not another company in the world that has all that, that has all that, period. And we figured out a way to work together so that we don't have all these silos in the company, but rather we work together towards one end.

What do you think this is going to do to the cell phone industry? I think it's going to take the cell phone industry to the next level. That's what I think. And what then is the next cool product? No one bets a thousand. You've been called the Babe Ruth of Silicon Valley. Are you worried that you reach a point where there isn't another killer piece of hardware to come out with to wow the world? You know, again, we don't worry about stuff like that. We just try to build products that we think are really wonderful and that people might want. And sometimes we're right and sometimes we're wrong. But I think we're going to hit a grand slam with this. What can you say to reassure the public and investors that the option backdating scandal won't get in the way of your work and won't take you away from the helm of Apple?

Sure. Well, as you know, we did an internal investigation and then the board hired a former federal prosecutor, who's highly regarded, to do an independent investigation. And they looked at the better part of a million documents and emails and spent months. And they wrote a report and they said many things. And one of the things was that none of the current management was involved in any misconduct. And we've given all of this information to the SEC and I think things are going to be just fine. Steve Jobs, thanks very much.