Steve Jobs thoughts on the App Store, mobile strategy revealed in newly-released 2008 interview

The Wall Street Journal and The Information have jointly published a previously unreleased interview with Steve Jobs from August 7, 2008, discussing the advent of the App Store and the future of mobile technology. In the interview, Jobs expressed his surprise over how big the App Store had grown in even the one month since it’s debut, with 60 million applications downloaded in the first 30 days — or about a third as much volume as iTunes song downloads — noting that Apple hadn’t expected it to “be this big” and adding that neither the mobile industry or even the computer industry had never seen anything like it.

Steve Jobs thoughts on the App Store, mobile strategy revealed in newly-released 2008 interview

It says the App Store is much larger than we ever imagined, iTunes has been out for over five years. In 30 days, users downloaded 30% as many apps as everybody in the world downloaded songs from iTunes.

Jobs also expressed delight that the majority of apps being downloaded were still free, adding that “We love free apps” since “Our purpose in the App Store is to add value to the iPhone.” Discussing revenue, however, Jobs disclosed that the App Store made $30 million in the first 30 days, with 70 percent of that — $21 million — going to developers, and $9 million of that going to the top ten developers.

While Jobs predicted that it would “crest to half a billion soon” he hedged more about it becoming a billion dollar marketplace, saying “that doesn’t happen very often [that] a whole new billion dollar market opens up” but added that he had “never seen anything like this in my career for software.”

Jobs explained that the App Store was originally envisioned to bring the iPod strategy to the iPhone, “standing on the shoulders of iTunes” both in terms of strategy and infrastructure, and discussed Apple’s longer-term plan to take iTunes out of the mix and wirelessly deliver apps right onto devices. Jobs went on to say that the App Store was critical to Apple’s strategy, presciently stating that “going forward, the phone of the future will be differentiated by software” rather than hardware specs like “radios and antennas and things like that.” Jobs added that Apple’s goal was to build a software-focused experience, and then create a development environment and distribution service that would allow third-party developers to easily write more good software for the platform, and easily get it out to end users.

In the interview, Jobs also went on to highlight the importance of games to the ecosystem, adding that right from the beginning, games made up the single largest category of apps on the App Store, and that the 2008 holiday season had expectations of 20 million handheld gaming players expecting to be sold devices, and adding that he viewed the iPhone as a contender against the Nintendo DS and Sony PSP, since “it costs zero if you have it as a phone” and costs nothing more to use as a game player, and that the street level price of iPhone game titles was already significantly less than the average price of games for Nintendo and Sony devices, and Apple had the advantage of instant delivery right onto a user’s device.

I actually think the iPhone and the iPod touch may emerge as really viable devices in this mobile gaming market this holiday season.

Jobs conceded that Apple wasn’t yet doing anything to market these capabilities, and when asked if he should look for advertising that message, his response was a candid, “I don’t know.

I just find it very interesting” adding that Apple doesn’t have a lot of experience with gaming, but that it “sure delivered a lot of games in the last 30 days.” Still, Jobs noted that Apple itself had no intention of directly getting involved in the games market, nor did he even expect games to be such a large driving factor on the App Store.

When asked about the iPod and standalone MP3 players, Jobs was a bit less prescient, suggesting that there would always be room for “just the pure evolved music device” that people would want primarily for music, with possibly some support for music video and occasional movie playback, perhaps explaining Apple’s continued strategy with the traditional iPod models and even the iPod touch.

I would not trust any of our predictions because reality has so far exceeded them by such a great degree that we’ve been reduced to spectators just like you, watching this amazing phenomenon and just doing our best to try to help everybody get their apps done and get them on the store.

However, ultimately, even Steve Jobs admitted that Apple ultimately had no idea where this was going, other than that he strongly believed that mobile was going to continue to get quite serious because of its flexibility and portability, as well as the services such as location that can be provided on a portable device that would never be practical on a desktop or laptop. “They can be mighty useful and we’re just at the tip of that.