Last week, Apple CEO Steve Jobs sat down with the Wall Street Journal’s Walter S. Mossberg for a rare onstage conversation at the second annual D: All Things Digital conference in Carlsbad, Calif. Excerpts from The Wall Street Journal:
Walt Mossberg: You’ve been the leader in legal music downloading. Where does it stand today?
Steve Jobs: We have about 70% market share of the legal downloads, which is great. But if you look at everybody together — 100% of the legal download market — we’ve gone from pretty much zero a year ago to about 2% of the legally sold music in the U.S. That’s not a giant number, but if you look at it and say it’s been accomplished in a year and you look at the trajectory, it’s not inconceivable to see it breaking through 5% in the next 24 months as an example, maybe sooner.
WM: Is Apple’s future going to continue to be as a company that primarily creates and sells computers? Are we seeing the beginning of a change in the nature of the company?
SJ: Well, clearly we’re doing some new stuff. I mean, the iPod grew from nothing to a billion-dollar-a-year business by year two. However, if you look at the core of Apple, what Apple is great at is figuring out how to invent cool technology but making it wonderfully easy to use. That’s what we have always done. That’s what the Mac was. That’s what a lot of things we do are.
WM: What’s your favorite thing you’ve not done?
SJ: A PDA. We got enormous pressure to do a PDA and we looked at it and we said, “Wait a minute, 90% of the people that use these things just want to get information out of them, they don’t necessarily want to put information into them on a regular basis and cellphones are going to do that.” So getting into the PDA market means getting into the cellphone market. And you know, we’re not so good at selling to the enterprise where you’ve got, in the Fortune 500, five hundred orifices called CIOs. In the cellphone market you’ve got five. And so we figured we’re not going to be very good at that.
WM: Is there any prospect for a significant increase in Mac market share?
SJ: You know, we’ve got 25 million customers. We’ve got a retail store business that’s now over a billion dollars and bringing in a lot of new customers. Over half the customers that we’re selling CPUs to in our retail stores are new to Mac. So I think we’ve got a very healthy customer base and we love them and we love to delight them with new products, and that’s a very healthy business; it’s growing.
WM: A lot of music is likely to be available in formats I can’t play on my iPod today… Like [Microsoft Corp.’s] Windows Media Format. Why should I as a consumer have to have a limitation on my device because you have a religious war with [Microsoft Chairman] Bill Gates? Are you against consumer choice?
[MacDailyNews: Nice question, Walt. Could you be any more vicious with the phrasing next time? Thanks in advance.]
SJ: No. Right now we’ve got a choice to make ourselves, which is should we spend our energy enhancing the music store and enhancing the iPod in the format that has 70% of the business or should we take some of that energy and stop innovating and go back and try to play Windows Media, which has 30% or less of the market. And we’ve chosen right now to go with the 70% format. We really believe that we can innovate much more if we control that technology.
WM: The needle on Mac market share has not moved in any significant way up. It’s under 5%. But I’ve seen you say that, with the iPod, it’s refreshing to not be in single-digit market share.
SJ: It is.
Full Q&A, with much more, here.
MacDailyNews Take: “That’s what the Mac was?” WAS?! Be careful, Steve. That’s what the Mac still is. The Mac still is cool technology that is wonderfully easy to use and it’s getting better all the time. Do we actually need to remind Apple’s CEO of this? Probably not, but sometimes we think Steve has more than a touch of “iPod-on-the-brain” and sits in his office all day using his Quad 5GHz Power Mac G5 just to calculate iPod units sold. We are worried that you’re are forgetting all about the Mac, Steve. So are many of our readers. Reassure us, okay? You can use the WWDC keynote on the 28th.