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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 HTML5.”
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.