8:57 PM
Kakrona Chan
Following Apple reporting its first-ever $20 billion quarter, CEO Steve Jobs made a surprise appearance on the company’s earnings call to not only field questions from analysts, but to also give his thoughts on Apple’s competitors in the smartphone and tablet market.
Steve Jobs rarely makes appearances on these conference calls, allowing Tim Cook and Peter Oppenheimer to hold court. When he does show up however, listeners are usually in for a treat. Unlike some CEOs, Steve Jobs doesn’t shy away from tough questions and isn’t one to mince words.
The call, which will be available for replay on Apple’s site for approximately two weeks (beginning at 5:00pm PDT) and in iTunes as a podcast, shed lots of light on how Apple views its business and the overall technology market at large.
Before jumping into questions, Jobs read a prepared statement, summarizing Apple’s thoughts on its competitors — including RIM and Google — in the smartphone space, as well as the future of the tablet space.
In the context of RIM and the BlackBerry — which Apple and iPhone outsold in the last quarter — Jobs said, “I think it’s going to be a challenge for them to create a competitive marketplace.” He went on to discuss the difficulties he saw the company having with enticing competitors, while also noting that Apple has made major inroads in the corporate world with both the iPhone and the iPad.
When it came to Google, Jobs didn’t mince words. It’s clear he sees Android as a big competitor and admits that there’s a chance more Android-based units shipped than iOS units in the September quarter. Still, he notes that counting the iPhone, iPad and iPod touch, Apple activates 275,000 devices per day, as compared to the 200,000 activations per day data that Google has suggested for Android.
He also notes that he wishes that manufacturers would start reporting the number of Android phones shipped each quarter, so that keeping track of these figures wasn’t up to groups like Gartner or NPD.
“Open Systems Don’t Always Win”
During the Google section of his statement, Jobs discussed how “Google loves to characterize its platform as open and Apple as closed.” While taking some shots at how “open” Google really is, Jobs conceded that even if Google is right in that Google is open and Apple is closed, “Open systems don’t always win,” he said, citing Microsoft’s open strategy for music players and PlaySure as an example.
Moreover, Jobs went on to say, “We think the open versus closed argument is just a smokescreen for what is best for the customer. Fragmented versus integrated.”
Frankly, we think he has a point. Ideology of open versus closed systems aside, when it comes down to the overall customer experience, there are ways when an integrated and “closed” approach can end up being more enjoyable. Obviously the trick is to find a balance of being open enough to allow third-party applications and accessories without being Opennmoko.
7″ Tablets: You’re Doing it Wrong
When discussing the upcoming onslaught of tablet competitors, Jobs classified the competition as merely “a handful of credible entrants, not exactly an avalanche.” Then Jobs moved in to discuss — and dis — the choice of many of the tablet competitors to use a 7″ screen as opposed to the 9.6″ size found with the iPad.
Jobs broke down exactly why he sees 7-inch screens as missing the mark. This should seriously throw cold water on the rumors of a 7-inch iPad. Jobs notes that if you are to split the iPad’s screen in half when it is in portrait mode horizontally, you get about the same screen size as the 7-inch tablets.
Jobs also notes that Apple sees 10-inch (or 9.6-inch, if we’re being technical) is as small as Apple thinks you can go to have a good touch screen experience on a tablet. Going smaller means making elements and objects too close together and less easy to target.
Jobs also blasted 7-inch tablets as “tweeners” — too big to compete with a smartphone, too small to compete with an iPad. By positing that most tablet owners will also be smartphone owners, Jobs sees the idea of having a tablet that can almost fit in your pocket as nonsensical.
Apple TV and Other Hobbies
Apple never breaks out Apple TV sales numbers, but Jobs did note in response to an analyst question that the new Apple TV has sold more than 250,000 units. The device seems to be off to a faster start than the old model, though we still think Apple didn’t go far enough with its connectivity options.
Apple’s Vision vs. Everyone Else
One of the more interesting aspects of the call was when an analyst tried to get Jobs to say that if the choice came between losing marketshare or selling a low-end product Apple didn’t have confidence he could execute on effectively, Jobs/Apple would choose to lower marketshare.
Not one to be pigeonholed, Jobs spoke about how Apple’s approach as a software-driven company differs from many of its competitors, which are hardware-driven. It’s a pretty fundamental difference; Apple’s focus, to quote Jobs, is about “making the best product at aggressive prices.” Because Apple looks at things from a software-driven standpoint first and then works to iterate and make the product better while keeping the price the same (or lowering the price), as it did with the iPod, the company doesn’t look at its line and make decisions based on features in order to lower the price, expecting the software to magically perform.
This was a really interesting discussion because it very clearly showcased how Apple’s strategy is different from most of its competitors. Although there are exceptions, you almost never see Apple remove features from a product. Instead the company iterates over and over again, working to lower its prices, get is manufacturing process better and offer more features and better performance.
This strategy clearly paid off in the MP3 player market, where Apple still has 70% marketshare and is probably cannibalizing itself with iPod touch and iPhone sales. It’s still to be determined if this sort of strategy will prevail in the long run with smartphones or tablets.
Transparency: Yeah, We Got It
As a company, Apple isn’t really known for being transparent and open. The company keeps it product plans shrouded and carefully plans its launches and campaigns. Apple has improved some of its transparency with developers, but the company is not usually very open about its strategies or surface plans.
What was interesting about today’s call was that Apple and Jobs were very transparent and very open about how the company sees itself and what strategies it wants to invest in.
No, we didn’t walk away from the call knowing if the iPhone is coming to Verizon in January or what Apple will announce on Wednesday, but listeners got a very clear vision of how the company sees itself and its position in the tech world.
[via mashable]
Posted in: Apple
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