Apple CEO Steve Jobs used an Oct. 18 earnings call to discuss the ideas behind the iPad's size, cost and what he sees as its marketplace advantage.
Apple CEO Steve Jobs made an unexpected appearance during
his company's Oct. 18 earnings call, determined to sink his teeth into both
archrivals Google and Research In Motion. At the same time, Jobs' comments-at
times biting and ironic, at others more philosophical-provided a bit of insight
into the thinking behind the iPad, whose blockbuster sales have singlehandedly
invigorated the consumer-tablet space.
Before Jobs began speaking, Apple executives announced
revenues of $20.34 billion, with a net quarterly profit of $4.31 billion, for
the fiscal 2010 fourth quarter. Reported quarterly sales included 3.89 million
Macs, 14.1 million iPhones, 9.05 million iPods and 4.19 million iPads.
Those iPad numbers represented a marked increase from the
tablet's inaugural quarter, when some 3.27 million units sold. Nonetheless,
some Wall Street analysts were reportedly disappointed with the iPad's overall
sales and margins, and the stock dipped in trading Oct. 19.
Near the end of the earnings call, one analyst asked Jobs
about Apple's competitors-specifically, how those companies would attempt to
compete with the iPad in the consumer tablet market.
"I have a hard time imagining what those [competing] strategies
are. Tablets with far less functionality are having a hard time matching us in
price," Jobs told the assembled media and analysts. "Flash hasn't presented a
problem at all ... as you know, most of the video on the Web is available in
He added: "We think we have a very good product here that's
hard to match, and we're not done." The general expectation is that Apple will
unveil a new version of the iPad within the next few months.
Apple's competitors, including Samsung and Dell, are
currently readying tablets for rollout during that same time period. Many of
these tablets will run a variation of Google's Android operating system, and
feature a 7-inch touch-screen.
Jobs addressed that issue head-on, taking swipes at
competitors' hardware and software.
"Almost all [competing devices] use 7-inch screens as
opposed to the iPad's almost 10-inch screen," he said. "You would think a
7-inch screen would offer 70 percent of the benefit of a 10-inch screen." But
if you compare the diagonal lengths of a 7-inch and 10-inch screen," he
continued, you find the former is "only 45 percent as large."
RIM's upcoming Playbook, along with tablets reportedly under
development by Hewlett-Packard, will feature proprietary operating systems in
place of Android or Windows. Microsoft CEO Steve Ballmer has also announced his
company's intentions to enter the tablet market from the software side,
promising that tablets running Windows will appear in coming months.
All these companies have been reluctant to comment on the
possible price-point for their devices, although it's widely expected that
carriers will offer subsidies in exchange for customers signing a data plan.
However, Jobs emphasized that Apple's hardware choices for
the iPad had less to do with costs than what he perceived as customer benefit.
"The reason we don't make a 7-inch tablet isn't because we
don't think we can hit the price point," Jobs said. "We think it's too small."
Jobs also lobbed some heavy broadsides at Google Android.
"We think Android is very, very fragmented, and becoming
more fragmented by the day," he said. "We also think that our developers could
be more innovative if they can target a singular platform, rather than a
hundred variants. They can put their time into innovative new features, rather
than testing on hundreds of different handsets."
Despite a recent spate of rumors suggesting that Apple could have
multiple iPad sizes in development, Jobs seemed ready to hurl some invective in
the direction of manufacturers planning tablets in a variety of sizes.
"As a software-driven company, we think about software
strategies first, and we know that software developers aren't going to deal
real well with all these different-sized products," Jobs said. "It's not about
cost, it's about the value of the product when you factor in the software."
Unless Jobs' statements are part of a larger game of
misdirection, that would seem to undermine earlier scuttlebutt of a 7-inch iPad
in the works.