Jobs Calls Android a Commodity, Not Software
What could be a greater insult to a software maker than its OS being compared to a commodity by a rival?
Comparing Android’s free software to downmarket commodities, Apple CEO Steve Jobs emphasized that it had little value when compared to Apple’s integrated OS that Google calls "closed." Jobs was possibly responding to Google’s Eric Schmidt, who said in a recent WSJ interview, that Apple smartphone software was 'closed' and hence limited.
Jobs was understandably piqued at Schmidt for repeatedly trying to negate the fact that Apple today is a serious contender for the top slot in the IT industry with cross media offerings that could pale rivals Microsoft, Google, Facebook and Nokia.
Schmidt had even gone as far as saying that Google considered lowly placed Bing as its chief threat and not Apple or Facebook. This, despite the fact that Apple’s turnover is 3 times bigger than Google, and it is the only company that has a full range of offerings and a dominant presence in both software and hardware.
Announcing its second quarter results over a conference call, Steve Jobs declared that the iPhone sales had surpassed Wall Street estimates of 11 million units. Apple had sold 14.1 million handsets, a 91% jump over the last quarter and had long waiting lists in all 89 nations.
Similarly, Mac sales also surpassed expectations, surging by 27% to 3.9 million units. The 9.7” tablet PC iPad sold 4.1 million units against an estimate of 4.5 million sets largely due to supply bottlenecks. Jobs admitted that demand could not be met in the iPad segment, where Apple in all probability had a tiger by its tail.
Wall Street, however, drove down Apple shares by 7.9% from a peak of $318 as the gross margins were lower than expected at 36.9% against forecasts of 38.2%. This, despite the fact that quarterly turnover at $23 billion had surpassed expectations of $22.3 billion by analysts. Unfazed, Jobs said that Apple had a cash and investment surplus of $25.6 billion that the company would use prudently to buy back shares, should the market provide that opportunity, by driving down stocks further. He also evinced interest in acquisitions, including buying the Cambridge-based Akamai Technologies that makes technologies for distributing content to the web.Continued on the next page