At The Wall Street Journal’s D8 All Things Digital event yesterday, Walt Mossberg and Kara Swisher interviewed none other than Steve Jobs — right on the heels of his company dealing with major handset leaks, a rash of suicides at Apple’s iPhone manufacturing vendor in China, and the rising tide of multi-carrier gossip.

Few people could get away with asking Jobs these questions without being hit with tight-lipped answers and even some aggravation. (At the Q&A after the iPhone OS 4 preview, for example, the CEO seemed irritated, almost nasty, about being asked these questions yet again.) But there are few tech journos in the world who have the gravitas and respect that Mossberg commands.

Steve-o sat in the spotlight for more than an hour this time, talking about some of the industry’s most buzzed about Apple topics, including his beef with Adobe Flash, the war with Google, AT&T — and the advantages of multiple carriers. Below, I’ll go into some of the highlights, but for the full transcript courtesy of Engadget, hit the source link at the bottom.

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First and foremost: The second-carrier question

There has been a lot of buzz about one particular aspect of the interview — when Jobs was asked about the struggling AT&T network and the possible advantages of a second carrier for the iPhone:

Mossberg: “How are they doing on that network [AT&T]?”
Jobs: “Pretty good actually. Remember, they’re handling WAY MORE data traffic than all of their other competitors combined… [And] well, they have issues…”
Swisher: “What about going to another carrier?”
Mossberg: “Would there be advantages to having two in the US?”
Jobs: “There might be.”
Mossberg: “In the near future?”
Jobs: “You know I can’t comment on that.”

Now that’s interesting. In other parts of the interview, Jobs is very clear on where he stands on various topics. But here with Mossberg, he seems pretty reticent to discuss the carrier question. In fact, he goes vague mode and ends with “no comment.”

Verizon iPhone rumors have been boiling over lately, and it seems every tech site has tipsters sharing stories about a friend, brother, relative or in-law who works at Big Red, alleging that the iPhone’s coming to this carrier. But any sort of real confirmation has been extremely elusive — whether for this or for any of the gossip about T-Mobile or Sprint — so when Steve hesitates before vaguely remarking about it, naturally a frenzy of speculation ensues.

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Other highlights from the interview:

(1) Being “on top of the technology heap”…
The news broke last week that Apple — which was on the verge of bankruptcy a decade ago — has now topped Microsoft as the world’s most valuable tech company. (Last week, Wall Street pegged Apple’s value at $222.12 billion and Microsoft’s at $219.18 billion. Outside of the tech sector, the only U.S. company worth more is Exxon Mobil, at $278.64 billion.) This stunning turnaround is attributed to the enormous success of the iPhone, iPad and iPod Touch, which confirms to many industry watchers that the future has indeed shifted from desktop computers to mobiles.

Mossberg asked how it felt to be “on top of the technology heap.”
Jobs: “…it is surreal. But [it’s] not what’s important. It is not why any of our customers buy our products. I think it is good for us to keep that in mind. But it is a little surreal.”

(2) The exclusion of Adobe Flash:
Mossberg points to the “holes” that users see when they navigate to sites with Flash. Is it really the best thing to do without it?
Jobs: “We were one of the first to get rid of [3 ½ floppy, serial and parallel ports, and optical drives]. And when we do this, sometimes people call us crazy… But HTML5 is starting to emerge… Those holes are getting plugged. Those holes are mostly ads… If the market tells us we’re making bad choices, we’ll make changes. We’re just trying to make great products. We don’t think this is great and we’re going to leave it out. We’re going to take the heat because we want to make the best product in the world for customers. If we succeed, they’ll buy them. If we don’t, we won’t sell any. ”

(3) The police investigation into the prototype leaks:
Mossberg: “…there’s a lot of stuff, at least with my computer I wouldn’t want anyone to have, and they grab this journalists assets…”
Jobs: “Well a guy… who can say if he’s a journalist.” (yowza) “To make a product 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. The person who found it tried to sell it, they called Engadget, they called Gizmodo… So 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 (laughter)… the whole thing is very colorful. The DA is looking into it, and to my knowledge they have someone making sure they only see stuff that relates to this case. I don’t know how it will end up.”

(Later)
Jobs: “You know, when this whole thing with Gizmodo happened, I got advice from people who said ‘you gotta just let it slide, you shouldn’t go after a journalist just 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.”

(4) The rash of suicides at Foxconn (the Chinese plant that manufactures the iPhone):
Jobs: “We are on top of this. We look at everything at these companies. I can tell you a few things that we know. And we are all over this. Foxconn is not a sweatshop… We’re over there trying to understand this. It’s a difficult situation.”

(5) Relationship with Google:
Swisher: “How do you look at Google as a competitor, and how do you feel about them?”
Jobs: “Well they decided to compete with us. We didn’t go into the search business…”
Swisher: “…Are you going to remove them from the iPhone?”
Jobs: “No… Just because we’re competing with someone doesn’t mean we have to be rude.”

(6) The iPad was… conceived before the iPhone?
Mossberg: “So when you built this OS, you did it in a phone. Why? Why not a tablet first.”
Jobs: “…Actually. 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 [the display, and a UI guy 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…”

(7) Tethering and Wireless Sync:
Jobs: “I think we need to do better on that.”
Mossberg: “Anytime soon?”
Jobs: “We’re working on it.”

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Conclusion

There you have it. If you believe Jobs, Google is not leaving the iPhone OS. And the iPad is not a big iPhone after all, but in fact, the iPhone is actually a really small iPad that makes calls. (It’s like the chicken and the egg — which one came first? In this case, the egg.) As for Adobe Flash, Jobs indicates that the market has validated Apple’s decision to exclude this technology. So until people stop using iPhones, he’s not likely to reassess the omission.

The rest of the remarks aren’t particularly surprising, though it’s kind of refreshing to see Jobs being fairly candid — that is, except for that pesky second carrier question.

Steve Jobs seems like a no-nonsense person (maybe a little too much, considering the snark he unleashes to some of his email correspondents). And when he is able to talk freely about something, he doesn’t mince words. He was very clear about Google remaining on the iPhone, and he didn’t foster false hope about Apple supporting Flash anytime soon. So when he got evasive about the iPhone appearing on a second carrier, it was pretty noteworthy.

These days, the world is wondering if Apple has anything left to announce at the WWDC keynote on Monday — anything that hasn’t already been leaked, that is. And news of a second carrier would certainly wow a lot of people. But could it really be announced just five days from now?

Sadly, when it comes to reading minds, we don’t have an app for that. So we’ll have to wait to see. Stay tuned to the site, where we’ll be covering the keynote here on Today’s iPhone.

Via: Engadget