Steve Jobs holds court at D8 conference

Apple CEO Steve Jobs answered some questions, dodged a few others, and gave some interesting glimpses into his thought process Tuesday night during a 100-minute-long question-and-answer session in southern California.

Jobs appeared as a guest on the opening night of the annual D Conference hosted by The Wall Street Journal’s digital duo, Walt Mossberg and Kara Swisher.

You can read a liveblog transcript of the event at Engadget or All Things D or CNET, and a video clip is now available. Read on for the highlights:

The missing iPhone: Jobs acknowledged that the next-generation iPhone photographed by Gizmodo was circulating as a part of the normal testing of wireless products. “To make a wireless product work well you need to test it. You have to carry them outside. One of our employees was carrying one. There’s a debate about whether he left it in a bar, or it was stolen out of his bag,” he said. “This is a story that’s amazing — it’s got theft, it’s got buying stolen property, it’s got extortion, I’m sure there’s some sex in there… the whole thing is very colorful. Somebody should make a movie out of this.”

Jobs said that although he was advised to lay off Gizmodo in the aftermath of the story’s publication, he decided to pursue the matter out of principle. “When this whole thing with Gizmodo happened, I got a lot of advice from people that 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 deeply about this, and I concluded the worst thing that could happen is if we change our core values and let it slide. I can’t do that. I’d rather quit.”

Thoughts on Flash: When prompted to discuss Apple’s reluctance to embrace Flash on the iPhone OS, Jobs likened the decision to Apple’s prior approach to other technologies the company viewed as being on the downswing. “We choose what tech horses to ride, we look for tech that has a future and is headed up. Different pieces of tech go in cycles… they have summer and then they go to the grave. If you choose wisely, you save yourself an enormous amount of work. We have a history of doing this…. We got rid of the floppy altogether in the first iMac. We got rid of serial and parallel ports. You saw USB first in iMacs. We were one of the first to get rid of optical drives, with the MacBook Air…. Sometimes you have to pick the right horses. Flash looks like it had its day but it’s waning, and HTML5 looks like it’s coming up… We told Adobe to show us something better, and they never did.”

PCs are like trucks: While talking about the iPad and whether tablet devices are bound to replace the laptop, Jobs resorted to an analogy involving motor vehicles. “PCs are going to be like trucks. Less people will need them… This transformation is going to make some people uneasy. The PC has taken us a long way.”

App Store issues: Jobs described the iPhone OS has supporting two platforms, the “open and uncontrolled” HTML5, and the curated App Store. “We have a few rules: the app has to do what it’s advertised to do, it has to not crash, and it can’t use private APIs… But we approve 95 percent of all the apps that are submitted every week.”

Jobs said that Apple thought the App Store rule against defaming people in apps was a good idea until they realized that political cartoons did just that. “We didn’t think of that,” he said. “So, we are guilty of making mistakes. We’re doing the best we can, we’re learning as fast as we can.”

But Jobs also complained that some developers who complain about their apps being rejected don’t tell the whole story. “What happens is, some people lie. They use undocumented APIs or try to do something different than as advertised and they run to the press. They get their 15 minutes of fame…. It’s unfortunate, but we take it in the chin. We don’t run to the press and say, this guy is a son-of-a-bitch liar!”

How Apple works: Jobs said that Apple is “incredibly collaborative,” a company with no committees and an organization like a startup. “What I do all day is meet with teams of people,” he said. When Mossberg asked Jobs if people were willing to tell him he was wrong, Jobs said they were, and that he didn’t always win them. “We have wonderful arguments,” he said. “The best ideas have to win, otherwise you don’t have good people who stay.”

On Microsoft and platform wars: “We never saw ourselves in a platform war with Microsoft,” Jobs said. “Maybe that’s why we lost. We just wanted to make the best thing—we just thought about, ‘How can we build a better product?’”

AT&T and other cell carriers: When Mossberg asked Jobs how AT&T was doing on its digital cellular network, Jobs defended the carrier—to a point. “[They’re doing] pretty good actually,” he said. “Remember, they’re handling way more data traffic than all of their other competitors combined.” Left unsaid by Jobs is the fact that the heavy traffic on AT&T’s network is a result of the popularity of the iPhone. Mossberg then asked if there would be advantages to having two different carriers in the U.S. “There might be,” Jobs said.

On building the iPad: Jobs said the key difference in building the iPad versus what Microsoft tried to do with Tablet PCs was by believing that the device couldn’t use an inefficient stylus-driven interface. “The minute you throw a stylus out, you have the precision of a finger, you can’t use a PC OS. You have to create it from scratch,” he said.

And Jobs admitted that the iPhone itself originated from an early Apple tablet prototype. “It started on a tablet first. I had this idea about having a glass display, a multitouch display you could type on. 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 then got inertial scrolling working and some other things, and I thought, ‘My god, we can build a phone with this,’ and we put the tablet aside, and we went to work on the phone.”

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