Here’s another Steve Jobs quote from the collection of Jobs’s appearances at the D conference, this time from the 2007 interview he gave together with Bill Gates.

Starting at minute 37:27, Walt Mossberg asks Jobs and Gates about rich vs. thin clients. Now that it seems that more and more tasks move to the browser, is there still a need for the PC as a rich client?

Walt Mossberg: [Y]ou’re the guys who represent the rich client, the personal computer, the big operating system and all that. And there is a certain school of thought […] that this is all migrating to the cloud and you’ll [only] need a fairly light piece of hardware […] Seriously, in five years, is the personal computer still gonna be the linchpin of all this stuff?

Steve Jobs: I’ll give you a concrete example. I love Google Maps, use it on my computer, in the browser. But when we were doing the iPhone, we thought, wouldn’t it be great to have maps on the iPhone. And so we called up Google and […] we ended up writing a client app for those [Google Maps] APIs and they [Google] would provide the backend service. And the app we were able to write […] blows away any Google Maps client. Just blows it away. [It’s the] same set of data, coming off the server, but the experience you have using it is unbelievable. It’s way better than the computer, and just in a completely different league than what they put on phones before. […]

And you can’t do that stuff in a browser. People are figuring out how to do more in a browser […], but it’s happening fairly slowly, and there’s still a lot you can do with a rich-client environment. At the same time, the hardware is progressing to where you can run a rich-client environment on lower and lower-cost devices. On lower and lower-power devices. And so there are some pretty cool things you can do with [rich] clients. […]

What I’m trying to say is, I think the marriage of some really great client apps with some really great cloud services is incredibly powerful and right now can be way more powerful than just having a browser on the client.

Remember, this was on May 30th, 2007, just before the first iPhone went on sale a month later (but after the introduction of the iPhone in January of that year). This was just a few days before Jobs would tell developers at WWDC that web apps would be the only way to do iPhone development. And here sits Steve Jobs and talks excitedly about a native app whose user experience could not be created in a browser.

We know from the Isaacson biography that Jobs was initially opposed to having third-party apps on the iPhone and that it was only once the device was available that Jobs relented. So at the time, Jobs still resisted the idea. Even though he was aware of the tradeoff Apple was making, his desire to control the experience was probably still greater and remained so until they came up with the App Store review process, as Art Levinson told the Guardian.

(Bill Gates agreed, by the way. You’re going to have rich local functionality. At least that’s our bet., he said.)