Well...
I will try to reply to Steve's words. Subjectively.

> He began by noting that Apple had now passed
> Research In Motion (RIM) in smartphone sales.
Quantity isn't quality.

> He predicted that the Canadian manufacturer,
> which plans to switch at some point from its BlackBerry OS
> to the QNX platform, would not regain a lead over Apple.
Arrogance. Maybe, true, but it's not interesting.

> According to Gartner, Android out-shipped the iPhone in June,
> during the run-up to the release of the iPhone 4.
> Steve Jobs pointed out that Google activates
> 200,000 Android devices a day, compared with
> 275,000 for Apple iOS-devices.
Are you comparing Android with iPhone or with the whole bunch of iPhone, iPad, iPod? Still, quantity isn't quality. Arid figures.

> He also noted that there are only 90,000 items
> in the Android app portfolio, compared with Apple's
> 300,000-strong App Store.
Quantity isn't quality. The more apps you have the lower is the quality of each one of them separately. Besides, Android apps are difficult to count due to large number of stores. Boring. You should compare features given by the apps, not number of the apps. Many of the apps in Apple store are just e-books, for instance. Quantity isn't quality.

> Steve then attacked Google's characterisation of Android as open.
It was already mentioned several times in many places that Android is more closed than Linux... But it's a questionable topic. iOS is still closed in all senses of the word, in order to make sure that the customer cannot get malware or brick the device even if he wants to.

> "The first thing most of us think about when we hear the word 'open'
> is Windows, which is available on a variety of devices,"
Laughing... Of course, Windows does run on a variety of devices, somebody managed to run Windows even on Nokia N900. But the first word which comes to mind when we hear 'open' isn't Windows. It may be: GPL, GNU, Linux, Minix, Maemo, MeeGo, OpenOffice.org, Firefox - but not Windows! Though, Windows is more open than iOS, isn't it? Maybe, for Apple users Windows is the first word that comes to mind when they hear 'open', I don't know.

> Unlike Windows, however, where most PCs have the same
> user interface and run the same app
Compare user interfaces of Windows 2000, Windows XP and Windows Vista - they don't look the same.
Compare Wordpad, Office 2003 and Office 2007 - they are different, aren't they?
Windows is fragmented, don't deny it!

> Many Android [manufacturers] ... install proprietary user interfaces
> to differentiate themselves from the commodity Android experience.
Nothing surprising. HTC adds TouchFLO interface to Windows Mobile OS. Every manufacturer wants to demonstrate to consumers that his device has not only good hardware, but comfortable interface as well. Nothing bad with it.

> Every iPhone works the same.
Apple happens to be the manufacturer of both the device and the OS, that's why all iPhones have the same User Experience.

> The multiple hardware and software iterations present developers
> with a daunting challenge.
The challenge is less daunting than with Linux. And still, there is a large variety of applications giving all sorts of functionality for all kinds of Linux-running devices.

> Android application stores that are specific
> to certain manufacturers and operators also came under fire,
> with Jobs predicting this scenario would result in a "mess"
> for both users and developers.
Yes, I don't like application stores. I'm not using Ovi store at all; I take all the applications from maemo.org, where source code is open, and the developer can be contacted, and the deb can be downloaded through PC and saved at the device as backup. I don't like the cloud.

> ...we believe integrated will triumph fragmented every time.
Let us see!

> The Apple boss was less scathing about Nokia.
He doesn't perceive Nokia as a threat, as a competitor... yet.

> We admire them for being able to ship the number of handsets
> that they do. But we don't aspire to be like them. They are good
> at being like them. We want to be like us.
Translate: Nokia isn't competing with us.

> and we want to make the best ones. Nokia makes $50 handsets.
Translate: Nokia makes such a large number of cheap phones, that Steve Jobs cannot notice the smart-phones, the internet tablets ... or tries to make consumers to forget about them.

> and we don't know how to make a great smartphone for $50.
Hype! If you are talking about smart-phones, compare with $200-$2000 models, not with $50 models.

> We're not smart enough to figure that one out yet, but believe me,
> I'll let you know when we do.
Irony! No, you will not make $50 devices; if you see some way to make something cheaper, you put more features into a device for the same unwavering price. You want to make high-end devices, don't you?

> Steve criticised the majority of upcoming tablets for using Android
> and 7-inch screens, rather than a 10-inch screen as seen in the iPad.
Some people want the device to fit into a coat pocket.

> A 7-inch screen ... 45 percent of the space ... on a 10-inch screen
Depends on dimensions. With the same dimensions, 7-inches screen gives 49% of the area of 10-inch screen (0.7*0.7=0.49).

> Jobs said the smaller size "isn't sufficient to create great tablet apps".
Then these devices aren't tablets. Can you come up with different names for devices with 5-6-7-8-9-10 inches screens? And don't forget different dimensions.

> The 7-inch tablets are tweeners, too big to compete with a smartphone
> and too small to compete with an iPad," he added.
Then they take up separate niche - and this niche might be large, too.

> Almost all of these new tablets use Android software
Because it's already known to consumers and workable on different screen sizes and having many apps on the market.

> Google is telling ... not to use ... Froyo for tablets,
> and to wait for a special tablet release next year
Google wants tablet users to get better experience; cellphone OS isn't that well suited to tablet.

> What does it mean when your software supplier says
> not to use their software in your tablet? And what does it mean
> when you ignore them and use it anyway?
That the tablet will get upgrade to Froyo when it's released, and that the manufacturers are hurrying to get market share.

> Apple's quarterly iPad sales fell below analyst expectations
> Jobs sang the tablet's praises
> we've got a tiger by the tail here...
Putting good face on things... iPad is the first Apple product in the niche between small mobile handheld devices, weak and mostly for communication (and, maybe, entertainment) (like cellphones/iPhones), and large table-requiring devices, mostly for work, typing, reading (like laptops/desktops). And the niche is going to expand with time. There will be devices of all sizes, shapes, functions, operating systems. The market will necessarily be fragmented.

> Jobs also suggested that Apple's refusal to accommodate Flash ...
> "hasn't presented any problem at all". "As you know, most of the video
> on the web is now available in HTML 5," he added.
I would be glad if it was the truth... Unfortunately, it's not ... yet.

P.S. I would like to hear how Steve Jobs reacts at first MeeGo devices.