Steve Jobs has used a rare appearance at Apple’s quarterly financial results conference call to explain why he thinks the iPhone will prevail despite strong competition from rival smart phones, particularly those running Google’s Android OS.
The Apple chief executive normally leaves the call to his deputy, Tim Cook, and chief financial officer Peter Oppenheimer, a fact he acknowledged.
“As most of you know, I don’t usually participate in Apple’s earnings calls. But I just couldn’t help dropping by for our first $20 billion quarter,” he said, though it wasn’t money that was on his mind.
He began by talking about the iPhone and compared Apple’s record quarterly sales of 14.1 million with the returns for Apple’s principle rivals in the smartphone market.
“It handily beat RIM’s 12.1 million Blackberry’s sold in their most recent quarter … and I don’t seem them catching up with us in the foreseeable future. They must move beyond their area of strength and comfort into the unfamiliar territory of trying to become a software platform company,” he said, though he isn’t optimistic about their prospects.
“I think it’s going to be a challenge for them to create a competitive platform and to convince developers to create apps for yet a third software platform after iOS and Android. With 300,000 apps on Apple’s App Store, RIM has a high mountain ahead of them to climb.”
Then he turned to Google and its assertion that the “open” Android platform is inherently preferable to Apple’s “closed” model.
“Google loves to characterize Android as open, and iOS and iPhone as closed, we find this a bit disingenuous and clouding the real difference between our two approaches,” Jobs said. “The first thing most of us think about when we hear the work open is Windows [sic] which is available on a variety of devices. Unlike Windows, however, where most PCs have the same user interface and run the same app, Android is very fragmented. Many Android OEMs, including the two largest, HTC and Motorola install proprietary user interfaces to differentiate themselves from the commodity Android experience. The users will have to figure it all out. Compare this with iPhone, where every handset works the same.”
To illustrate his point, Jobs cited the experience of Twitter Deck, a recently released Twitter client for Android.
“They reported that they had to contend with more than 100 different versions of Android software on 244 different handsets. The multiple hardware and software iterations present developers with a daunting challenge. Many Android apps work only on selected Android handsets running selected Android versions. And this is for handsets that have been shipped less than 12 months ago. Compare this with iPhone, where there are two versions of the software, the current and the most recent predecessor to test against.”
Add to that the fact that there will be at least four app stores on Android, which customers must search among to find the app they want and developers will need to work with.
“This is going to be a mess for both users and developers. Contrast this with Apple’s integrated App Store, which offers users the easiest-to-use largest app store in the world, preloaded on every iPhone. Apple’s App Store has over three times as many apps as Google’s marketplace and offers developers’ one-stop shopping to get their apps to market easily and to get paid swiftly.”
That integrated model, he said, means that the user doesn’t have to to be the system administrator for their device.
“In reality, we think the open versus closed argument is just a smokescreen to try and hide the real issue, which is, what’s best for the customer, fragmented versus integrated. We think Android is very, very fragmented and becoming more fragmented by the day.
“We see tremendous value in having Apple rather than our users’ be the systems integrator. We think this is a huge strength of our approach compared to Google’s. When selling to users who want their devices to just work, we believe Integrated will triumph Fragmented every time. And we also think our developers can 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.”
All this means that Apple is committed to its “closed” model.
“We are confident that it will triumph over Google’s fragmented approach, no matter how many times Google tries to characterize it as open.”
