Software is the key ingredient, and we believe that we are years ahead of our competitors. Having different screen sizes, different input methods, and different hardware makes things difficult for developers.

So making things easier for developers is more important than pleasing customers?

Were Windows Mobile programs better when developers only had to support 240×320 portrait QVGA screens? Yes, supporting the various resolutions makes software somewhat more difficult to write, but developers are smart people….

And, if an iPhone nano was basically just a shrunken iPhone, the developers wouldn’t have to do anything. They might want to lay out some items differently to make them more readable on a smaller screen, but allowing that to be configured by a user regardless of hardware is a good idea (for accessibility reasons).

Right now, from our point of view, the products in there are principally based on hardware that’s much less powerful than we think customers want, software technology that is not good, cramped keyboards, small displays.

Cramped keyboards and small displays like, um, [cough]the iPhone[cough]? Or is Apple saying there’s really no middle ground between a laptop and a phone?

I suspect doogald has the right idea….

Steve

As for the Netbook, Apple’s pooh-poohing sounds a lot like the pooh-poohing that they did for the three years that they were working on the iPhone. I am sure that they are working on something, but I agree with Apple – if they cannot get it priced competitively enough (i.e., less than $500), they may not do well in the category.

I thought another key quote was that Apple was interested in selling the best phone, not turning over the most units.