Thursday, June 3, 2010

Steve Jobs at D8

As I mentioned before, I’m gonna share my thoughts on what Steve Jobs had said in the D: All things digital conference this year. I always find him to be an intriguing, insightful business & technology leader that only comes one in few decades. Well, I’m not gonna to talk about his legacy as he is still well and alive. Though he looks a bit fragile in the videos in the following link:

http://d8.allthingsd.com/20100601/steve-jobs-session/

All the following words are directly copied from the link above, my comments are in ( ). The reason why I present it this way is to let reader read exactly what were asked and his reply without too much 3rd party interpretation. Also, it would be easier for me to make comment at the right place. Anyway, here we go…

Much has happened since Apple CEO Steve Jobs last appeared on the D stage. At that time, in May 2007, the iPhone had not yet arrived at market, the app ecosystem it would usher in was still gestating and the iPad was simply a long-running rumor.

So the conversation onstage focused largely on the iPod, iTunes and Apple’s (AAPL) relationship with the music industry, and the forthcoming launch of the iPhone. A few months earlier, Jobs had penned a widely read open letter, “Thoughts on Music,” calling on the “big four” music companies to sell their music without digital rights management. iTunes was already the world’s largest online music distribution system, so his thoughts generated quite a bit of discussion–and a fair bit of controversy.

Today, the iPhone is nearly three years old. It has sold 50 million units worldwide, and the multitouch interface and app ecosystem it pioneered have arguably revolutionized the smartphone industry.

Today, the iPad is no longer a rumor. Launched just two months ago, it has already sold two million units and seems poised to revolutionize an industry or two of its own.

And today, Jobs is once again shaking up an industry with another open letter, “Thoughts on Flash,” a withering rumination on Adobe’s (ADBE) Flash platform and the future of online video.

Much has changed in three years. But one thing has remained constant: Apple, under Jobs, continues to drive innovation in every industry it touches.

Live Blog
A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as possible. It is not intended as a transcript and should not be interpreted as one.

5:54 pm: In a few moments, Steve Jobs will once again take the D stage for the opening session of D8.

6:21 pm: Following a welcome from News Corp. (NWS) CEO Rupert Murdoch and a few introductory remarks from Walt and Kara, the pair welcome Jobs to the stage.

6:22 pm: The first question is about Apple surpassing Microsoft in market valuation. Jobs says “It’s surreal, but it doesn’t really mean anything.” (I doubt market valuation is ever in Steve’s list of top 10 items, it is just plainly for people who concern wealth accumulation, not for Steve Jobs)

6:23 pm Walt references Jobs’s recent “Thoughts on Flash” essay. Even if everything you say is true, is it really fair to consumers to be so abrupt and cut them off, he asks? Jobs doesn’t seem to think it’s unfair. “Apple is a company that doesn’t have the most resources in the world, and they way we’ve succeeded is to bet the right technological horse, to look at technologies that have a future. We try to pick things that are in their springs. And if you choose wisely, you can be quite successful.” (that has shown the analyzed risk that Apple has been taking, really unlike many other manufacturers who try to cram as much features, old and new, into their products just because either they don’t know how to say no to anyone, or simply thinking in engineer’s or marketing’s modes. Apple is really one of the few companies that dare to make bold decision on choosing what to and not to add. I guess not supporting of Blu-ray on iMac and Macbook is probably another example that Apple simply doesn’t believe Blu-ray has much a future, considering wireless is the future.)

Apple has a history of doing that, Jobs says, noting that Apple was the first company to dump the floppy and later, to adopt USB. “Sometimes when we get rid of things, people call us crazy….But sometimes you just have to pick the things that are going to be the right horse to ride forward….And Flash has had it’s day…but HTML5 is starting emerge….The video looks better and it works better and you don’t need a plug-in to run it. And while 75 percent of the video on the Web may be available in Flash, a lot of it is available in HTML5 as well.”

6:29 pm: What about developers, asks Walt. How are they impacted? Jobs draws a quick parallel to Apple’s HyperCard. “HyperCard was huge in its day,” he says, going on to note that the thousands of apps on the iPhone OS platform are testament to developer involvement.

6:31 pm: Jobs: “We didn’t set out to have a war over Flash. We made a technical decision. And it wasn’t until the iPad that Adobe raised a stink. They came after us….That’s why I wrote “Thoughts on Flash.”…We were getting tired of being trashed by Adobe in the press.”

6:32 pm: Walt: What if people demand Flash. What if they say the iPad is crippled without Flash. “We’re just trying to make great products,” says Jobs again. “We don’t think Flash makes a great product, so we’re leaving it out. Instead, we’re going to focus on technologies that are in ascendancy. If we succeed, people will buy them and if we don’t they won’t….And, so far, I have to say, people seem to be liking the iPad. We are selling an iPad every 3 seconds.” (I guess Steve is not happy with the speed of HTML5 adoption here. When an industry leader with red-hot products making such push of certain standard, I think Flash will demise sooner than later. Cuz, iPad makes money for developers and companies, development trend will chase where money goes, Flash stuffs will still be around, but new stuff would be more on HTML5 if they want a piece of iPad commerce)


6:35 pm: Ah! The inevitable lost-iPhone question. Walt quickly recounts the history of the discovery of the iPhone prototype, its revelation on Gizmodo and the subsequent police investigation that involved the seizure of a blogger’s computers. Where do you come down on this, asks Walt. “To make a wireless product work well, you have to test it. And one of our employees was carrying one and there’s a debate about whether it was left in a bar or stolen….And the person who found it decided to sell it…and it turned out this person plugged it into his roommate’s computer and that roommate called the police.”

6:40 pm: Jobs continues, “And the police showed up and took this guy’s computers…and the DA is investigating it…and I don’t know where it will end up.” In other words, it’s a police matter. That said, Jobs is very clearly irked by the whole debacle. (Certainly, Steve is not happy with the whole debacle, cuz the leak of iPhone 4G stole the thunder that he supposed to enjoy when he supposes to pull that out of his pocket in WWDC this year. Well, I think he will have a more subtle product announcement this year than he wants that to be, stay tuned on June 7)

6:40 pm: Any comments on the Foxconn suicides which we’ve been hearing so much about, asks Kara. Apple is extraordinarily diligent and rigorous about vetting its manufacturing partners, Jobs answers. “Foxconn is not a sweatshop,” he adds. “They’ve got restaurants and swimming pools….For a factory, it’s a pretty nice factory.”

6:42 pm: Jobs notes that the recent suicides at Foxconn, which number 13 at last count, I think, are still below the national average in the U.S. “But this is very troubling to us,” he says. “So we send over our own people and some outside folks as well, to look into the issue.” (It is rumored that Apple will leave some bread crumb on the table for Foxconn to pay higher wages to its workers. With mere around 2-3% of margin of profit, Foxconn is on a tight string to raise wages, though they did it any by a 30% raise just announced in last two days, if Apple can help Foxconn, it does help itself in terms of strengthen its image of being a company with construe. Cuz, it is just not easy to replace a manufacturer indeed.)

6:44 pm: Walt: You spent a significant portion of your career involved in a platform war with Microsoft (MSFT). And you lost. But now there are new platforms out there and you’re doing quite well on them, as are others–Google (GOOG) and Facebook. So there’s a new platform war going on. Do you see it like that?

No, we don’t see ourselves in a platform war says Jobs. “We never saw ourselves in a platform war with Microsoft, either…Maybe that’s why we lost. … But we never thought of ourselves in a platform war; we just wanted to make good products.” (well, that’s interesting view from Steve which is quite true. Apple makes the whole product, both hardware and software. Most people view its lost in OS in the market share as a loss in platform, it is indeed taking out of context of what Apple is really making.)

And what about Google, asks Walt. The relationship has clearly changed there, hasn’t it? “Well, they’re competing with us,” says Jobs, referring to the mobile space. “We didn’t go into search.” (Well, many people said that when Steve job said Apple is not going into certain areas, it means they are working on it, see phone, tablet, etc. But, I think that Steve is honest in this case. Google is simple way ahead in search that it would be stupid for Apple to get into that in this late stage of the game. As Steve is so customer focus that I don’t think he won’t notice that unless Safari can offer a way different search experience than Google, going into search is simply a resource black hole that Apple would not create one for itself.)


6:47 pm: Kara: How do you look at Google as a competitor? Eric [Schmidt, Google CEO] was on your board.

Jobs: “They decided to compete with us and got more and more serious.” (Well, it is really true, cuz Android is really the only product that can compete with iPhone OS out there in the market. The battle is gonna be bloody long, it’ll continue to play out in the next decade or two to come. I don’t see Web OS, Symbian, RIM OS or Window Mobile 7 will have a chance to bit iPhone, but Android can.)

Walt circles back, asking if Jobs doesn’t feel betrayed by Google. Jobs, clearly not buying in to this line of questioning, parries: “My sex life is great, how’s yours” he says trying to end it. (well, business is war, but what comes around goes around, Steve just doesn’t rule out what new competition or cooperation between two companies will have down the road. He may hate Google now, but he is too matured to show that these days, at least not in public.)

6:50 pm: Kara asks if Apple might remove Google from the iPhone and iPad. Jobs says no. Again, he notes that Apple is simply trying to make the best products it can and that the market will decide whose is better. “Right now, we have the better product.”

6:52 pm: Walt wonders why Apple bought Siri, a search company. “I don’t know if I would describe Siri as a search company,” Jobs says. “They’re not in the search area…they’re in the AI area.” Then he adds, a bit vehemently: “We’re not going into search.”

6:53 pm: Walt asks about AT&T (T), whose network continues to face criticism. Jobs: They’re doing pretty good in some ways and in others they could do better. We meet with them once a quarter. Remember, they deal with way more data traffic than anyone else. And they’re having trouble. But they have the fastest 3G network and they’re improving. I wish they were improving faster….I’m convinced that any other network, had you put the iPhone on it, would have had the same problems. (I think that would be true, since he should have the inside knowledge of the capacity of each carrier before he picked AT&T 3 years ago.)


6:56 pm: Jobs continues: We found a way to sell the phone that we wanted to sell and to define it the way we wanted to define it. We were able to change the rules of the game, and that’s what got us excited about the phone business….AT&T took a big leap on us and decided they were going to trust us to do the right thing with the phone. And that’s worked out quite well for both of us.

6:59 pm: The conversation moves to talk of tablets. Walt asks if Apple knew it would build a tablet before it built the iPhone.

Jobs: “I’ll tell you a secret. It began with the tablet. I had this idea about having a glass display, a multitouch display you could type on with your fingers. I asked our people about it. And six months later, they came back with this amazing display. And I gave it to one of our really brilliant UI guys. He got [rubber band] scrolling working and some other things, and I thought, ‘my God, we can build a phone with this!’ So we put the tablet aside, and we went to work on the iPhone.” (Was he thinking about Newton 2.0 back then?)

7:01 pm: What does the iPad mean for the publishing industry, Kara asks. Is it the savior that some are touting it as?

“I don’t want us to see us descend into a nation of bloggers,” says Jobs. “I think we need editorial oversight now more than ever. Anything we can do to help newspapers find new ways of expression that will help them get paid, I am all for.” (why Steve think there is need for editorial oversight now more than ever? Is it because he is not comfortable with all the sniffing sites that spread Apple rumors every day? Or the Gizmodo thing? Or he just doesn’t like the volume of ‘noise’ in the web which is way larger than that of the ‘true’? I guess he still a guy who like to control. He controls Apple and he wants most other institutions have folks like him to control their fences.)


7:03 pm: Jobs adds that he believes people are willing to pay for content and that content providers are not pricing their offerings as aggressively as they should. (can’t agree more than that)

7:05 pm: When you did your presentation on the iPad, you described it as a new category of device, says Walt. But in order for it to succeed, people have to feel that it’s worth carrying around. Do you think the tablet will succeed the laptop, he asks.

Jobs seems to believe it will. “The transformation of PC to new form factors like the tablet is going to make some people uneasy because the PC has taken us a long ways,” he says. “The PC is brilliant…and we like to talk about the post-PC era, but it’s uncomfortable.” (Some days when we look back, this is gonna be view as the somewhat official start date of the post-PC era)

7:09 pm: What are your thoughts on content creation on the iPad, Walt asks, noting that some people believe tablets aren’t good devices for content creation.

“Well, why wouldn’t they be good for content creation,” asks Jobs. “It can’t be that the software isn’t powerful enough, because the software is improving….These devices over time are going to grow to do new things.”

What sorts of things, asks Kara.

Productivity apps…video-editing software, says Jobs. (so stay tune for iPad 2G, 3G…xG. Apple is not gonna give us everything, it is gonna mik our money incrementally each year and we will be willing to shelf our hard-earned cash for it ironically)

7:12 pm: Now a question about App Store rejections: Isn’t there a downside to Apple’s efforts to protect its customers from porn, malware, etc.

In reply, Jobs first notes that Apple, by supporting HTML5, supports a completely open platform. But it also supports a curated platform–iPhone OS. And that platform has rules. “We approve 95 percent of the apps that are submitted to the App Store every week and we approve them within in seven days.” (Porn is on iPhone/iPad already through Safari! So, Apple will try to stay clean with warnings, rules to put off porn officially, but porn is gonna find its way to be accessed through this products. Cuz, from Apple’s point of view, it just wants to show that it is a responsible company with social construe, but money is still money at the end of the day.)

So what happened with that political-cartoon app you declined to approve a few weeks ago, asks Walt.

“We have a rule that says you can’t defame people,” says Jobs, noting that political cartoonists by virtue of their profession sometimes defame people. The cartoon app was rejected on those grounds, he adds. “Then we changed the rules…and in the meantime, the cartoonist won a Pulitzer….But he never resubmitted his app. And then someone asked him, ‘Hey why don’t you have an iPhone app?’ He says we rejected it and suddenly, it’s a story in the press….Bottom line is, yes, we sometimes make mistakes…but we correct them….We are doing the best we can, changing the rules when it makes sense. What happens sometimes is that some people lie, we find it, and reject it, and they run to the press, and get their 15 minutes of fame and hope it will get us to change our minds. We take it on the chin, and we move on.” (just a roadkill, hiccup, minor incident that nobody is gonna remember next year)

7:20 pm: Kara: “What do you do all day?”

Jobs: “I have one of the best jobs in the world. I get to hang out with some of the most talented, committed people around and together we get to play in this sandbox and build these cool products….Apple is an incredibly collaborative company. You know how many committees we have at Apple? Zero. We’re structured like a start-up. We’re the biggest start-up on the planet. And we all meet once a week to discuss our business…and there’s tremendous teamwork at the top and that filters down to the other employees…and so what I do all day is meet with teams of people and work on ideas and new problems to come up with new products.” (it is great for now, I would be very interested to know if they can keep such hierarchy or structure in post-Steve era, if they can become part of their culture and identity like Google does, Apple will still have many good years in post-Steve era. If the whole thing starts with Steve, all about Steve, and it will probably end with Steve. That would be really sad! I’m sure many investors of AAPL should watch out this closely, cuz it would change the profit trend of the company definitely in the long run)

7:24 pm: Are people willing to tell you that you’re wrong, asks Walt.

Of course, Jobs answers. The best ideas have to win, no matter who has them. (this got to be true, Steve is great but no saint, he is a visionary, but he still needs a great team behind him to let him do what he is best at. I think every leader must remember this if they want their company to succeed.)

7:25 pm: What do you imagine the next 10 years of your life is going to be about?

Oddly Jobs replies with a comment about Gizmodo and the lost iPhone prototype. “When this whole thing with Gizmodo happened, I got a lot of advice from people who said you’ve got to just let it slide…you shouldn’t go after a journalist because they bought stolen property and tried to extort you….And I thought about that and I decided that Apple can’t afford to change its core values and simply let it slide….We have the same core values as when we started, and we come into work wanting to do the same thing today that we wanted to do five years ago.” (Steve is not answering the question, it is about what HE is gonna do, not HIS company gonna do. So, he is simply being private about his personal life as always, not sure if it is related to his health…)

7:27 pm: But you are going into new businesses, says Walt, trying to redirect Jobs back to the question at hand or at least get him to comment on any new markets that the company is eyeing. Advertising, for example, with its new iAds initiative.

Jobs concedes that Apple is pursuing new businesses like iAds. But he suggests the main reason it’s doing that is to “make its developers more money.” (He is so smart saying that. Apple will make money from Ads, not by charging more, but by volume! i.e. more apps! The surprising success of App store certified the approach of recuiting as many developers in the market as possible to work on appls for iPhone OS. As the number of apps is simply too mind-boddling that simply 70% cut won’t do much for most apps in the apps ocean of hundreds thousands. Ads is really the way to go to keep those developers from jumping to Android or simply keeping the apps store momentum for foreseeable future)

7:29 pm: “People are using apps way more than they are using search,” says Jobs. “So if you want to make developers more money, you’ve got to get the ads into apps. But the mobile ads we’ve got today rip you out of the app.”

That “sucks,” Jobs continues. So Apple has figured out a better way to do that.

7:31 pm: A question about privacy. Is privacy looked at differently in Silicon Valley than in the rest of the world?

No, says Jobs. “Silicon Valley is not monolithic….We take privacy very seriously….We do a lot of things to ensure that people understand how their data is being used. That’s why we curate the App Store….Privacy means people know what they’re signing up for–in plain English.” (I’ve read a separate article analyzing Steve’s words in D8, the most often used words in his speech is ‘People’, not tech, iPad, iPhone, etc. So, he is really a ‘people’ person in product-making decision. I guess he would simply ask what products people want, how people will use it, and people will like and don’t like. Just common sense questions. So, Apple will make products that can answer those questions brilliantly before going to the market. Rather than like Steve Ballmer who try to sell you second-tier products, like Window Mobile 6.5 and still shamelessly defend them. That really set Steve apart from the herd.)



Q&A
Q: Given the events of the past few years, what would you add to the Stanford graduation speech you gave a few years ago?

A: I’ve no idea. I’d probably just turn up the volume a little bit because the past few years have reminded me how precious life is. (God blesses him!)

Q: I’d like you to put your Disney hat on for a moment….How do you preserve the value of content?

A: The way that we market movies is undergoing a radical shift. It used to be that you spent a fortune on advertising on TV running your trailers. But now you can advertise on the Web….When we went to the music companies, we said “who is your customer?” And they said, “Best Buy, Tower”…their distribution partners. But that wasn’t their customer. They needed to recognize who their true customer was….So what changed in the music business was not the back end, but the front end. The way that you market to the consumer….The film industry needs to embrace that. And it needs to let people watch the content they want to watch, when they want to watch it and where they want to watch it.” (‘People’ again, nugh said!)


Q: A complaint about dropped calls on AT&T’s networks. Is someone from Apple working on that?

A: You can bet we’re doing everything we can do….I can tell you what I’m told by reliable people: To make things better, people reallocate spectrum and they do things like increasing backhaul and they put in more robust switches…and things in general, when they start to fix them, get worse before they get better…and if you believe that, things should be getting a lot better real soon.

Q: How is HDCP helping the antipiracy effort?

A: We didn’t invent the stuff. The problem is that Hollywood doesn’t want what happened to the music industry to happen to them. You can’t blame them. But content protection isn’t their business and they’re grasping at straws here. But we’ve got to deal with their restrictions….I feel your pain.

Q: What’s your vision of social gaming?

A: Clearly, iPhone and iPod touch have created a new class of gaming and it’s a subset of casual gaming, but it’s surprising how good the games are. Typical console games cost $40, but on the iPhone, they cost somewhere between free and $10, and gaming on the platform is taking off. We’re trying to do the right things to enable more gaming and social gaming. (I can see there will be a war between Apple’s app store games and games on Facebook in near future. PSP and NDS lost in the contest in view of the limitation of functionality of their respective devices.)

Q: Is it time to throw out the interface for TV? Does television need a new human interface.

A: The problem with innovation in the TV industry is the go-to-market strategy. The TV industry has a subsidized model that gives everyone a set top box for free. So no one wants to buy a box. Ask TiVo, ask Roku, ask us… ask Google in a few months. The television industry fundamentally has a subsidized business model that gives everyone a set-top box, and that pretty much undermines innovation in the sector. The only way this is going to change is if you start from scratch, tear up the box, redesign and get it to the consumer in a way that they want to buy it. But right now, there’s no way to do that….The TV is going to lose until there’s a viable go-to-market strategy. That’s the fundamental problem with the industry. It’s not a problem with the technology, it’s a problem with the go-to-market strategy….I’m sure smarter people than us will figure this out, but that’s why we say Apple TV is a hobby.
(TV industry is still a mess, comparing with music and publishing. When Steve said Apple TV is a hobby, it means that it is here to stay, but I’m sure Apple is closing watching and will make bold moves if necessary. Cuz, Apple certainly wants iTune to be the hub for all media and entertainment contents: books, music, movies, games, and TV won’t be left out.)

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