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Steve Jobs Takes on Android, BlackBerry, in Apple Earnings Call


The Apple CEO discusses Android, tablet computers, fragmentation, and what it means to be "open."


For its fourth quarter earnings call yesterday, Apple (AAPL) had much to celebrate.

The company posted record revenue of $20.34 billion and net quarterly profit of $4.31 billion, or $4.64 per diluted share. Compared to the quarter a year ago, that's an increase of $8.13 billion, or 67%, in revenue and a boost in net quarterly profit by $1.78 billion, or 70%. Gross margin hit 36.9% -- compared to 41.8% from last year. And international sales accounted for 57% of this quarter's revenue.

With the continued popularity of Apple's mobile devices, sales are holding strong. The iPhone is a powerhouse seller, adding up to 14.1 million sales for the quarter -- an increase of 91% from last year's quarter. The iPad saw 4.19 million sales -- proving that Apple's tablet device has become a mainstay in mobile computing. Mac computers reached another best with 3.89 million sales -- up 27% from last year. And even without the backing of CBS (CBS), NBC (GE), or Warner Bros. (TWX), the just-launched Apple TV raked in a quarter million sales.

The iPod business, however, shrank 11% from last year to just over nine million sales -- an indication that the public wasn't bowled over by the recent revamp.

But record earnings weren't the highlight of the call. CEO Steve Jobs sat in and spoke at length about Apple's standing in the smartphone and tablet computer wars.

In a break from routine, BlackBerry (RIMM) was the first in Jobs' sights. "[iPhone sales] handily beat RIM's 12.1 million BlackBerries sold in their last quarter. We've now passed RIM. I don't see them catching up with us in the foreseeable future. It will be a challenge for them to create a mobile software platform and convince developers to support a third platform."

Indeed, Research in Motion is fighting a seemingly unwinnable battle against both iPhone and Android (GOOG) devices. Sales remain strong for RIM, yes, but the innovation is sorely lacking and the Torch didn't save the line like the company hoped. With Windows Phone 7 (MSFT) about to add another flashy option to smartphone customers, RIM may soon become another Palm (HPQ).

It didn't take long for Jobs to address Android during the call and pull out a ruler to measure daily activations and app store girth.

"What about Google? Eric Schmidt said they're activating 200,000 devices per day and have 90,000 apps in their store. Apple is activating 275,000 iOS devices a day on average for the last 30 days with a peak of 300,000 per day on some of those. There's 300,000 apps in the App Store."

Despite the requisite digs, Jobs does consider Android a formidable opponent and a giant in the smartphone game. Speaking of earning the trust of app developers and the customers' mindshare, Jobs said, "Right now, the iPhone and Android are winning that battle."

But the praise was fleeting as the Apple chief decried Google's assertion that being "open" is better. AppleInsider provided the transcript:

Google loves to characterize Android as open and iPhone as closed. We see this as disingenuous and clouding the difference.

The first thing we think of when we hear open is Windows, which is available on a lot of devices. Unlike Windows, where PCs have the same interface, Android is very fragmented. HTC and Motorola install proprietary user interfaces to differentiate themselves. The user is left to figure it out.

Compare this to the iPhone where every handset works the same. Twitter client TwitterDeck [sic] recently launched their Android app, and had to contend with 100 different versions of the software on 244 different handsets. That's a daunting challenge.

Many Android apps work only on selected handsets, or selected Android versions. This is for handsets that shipped 12 months ago. Compare that with the iPhone, where there are two versions to test against, the current and most recent predecessor.

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