During his anti-Google diatribe this afternoon, Steve Jobs said the Google-versus-Apple, open-versus-closed debate is a smokescreen. It makes no sense to say Apple is closed while Google is open when the real issue is fragmentation versus integration.

Jobs said Google’s Android platform is fragmented. There are too many different versions of the operating system and too many devices, making it a headache for consumers and developers. Apple’s iOS devices on the other hand aren’t fragmented, because they are “vertically integrated.” Apple closely integrates the software with the hardware, and they “just work.”

But what does he mean exactly by “vertical integration?” And why is it so important?

I wrote about this at length in my book, Inside Steve’s Brain. In fact, I think it’s critical to understanding why Jobs and Apple are killing it in consumer electronics right now.

So here’s Chapter Eight — “Total Control: The Whole Widget,” — in its entirety.

Here’s a full transcript of my interview with John Sculley on the subject of Steve Jobs.

It’s long but worth reading because there are some awesome insights into how Jobs does things.

It’s also one of the frankest CEO interviews you’ll ever read. Sculley talks openly about Jobs and Apple. He also admits it was a mistake to hire him to run the company (and that he knows little about computers). It’s rare for anyone, never mind a big-time CEO, to make such a frank assessment of their career in public.

Update: Here’s an audio version of the entire interview made by reader Rick Mansfield using OS X’s text-to-speech system. It’s a bit robotic (Rick used the “Alex” voice, which he says is “more than tolerable to listen to”), but you might enjoy it while commuting or at the gym. The audio is 52 minutes long and it’s a 45MB download. It’s in .m4a format, which will play on any iPod/iPhone, etc. Download it here (Option-Click the link or right-click and choose “Save Linked File…”).

httpvhd://www.youtube.com/watch?v=HyOUGm0btcI

Alright, couch potatoes… set your TiVos to start recording on Thursday, October 14th at 9:00PM ET. That’s the time you can expect the second episode of Bloomberg Game Changers to air, focusing on Apple CEO Steve Jobs.

After scratching his head for awhile and wondering what to do with a Macintosh Classic II , Maker Matteo from Ithaca, New York repurposed his old faithful Mac into a shelf-top clock.

From appearances, it looks like the clock — which Matteo rather laughably calls “steampunk” in style — only came into being after its creator accidentally doused his Mac Classic in acid then shot with a bazooka, but the innards of the admittedly ugly timepiece work well enough: a 16MHz CPU, 4MB of RAM and a 20MB hard drive running MacOS 7 and a dozen different shareware and freeware clock programs, including one that counts down the seconds to Matteo’s death.

Yeah, it’s hideous, but we love it: this is just the kind of bizarro clock I can imagine discovering thirty years from now in the basement of an elderly and now quite eccentric Steve Wozniak. Great work, Matteo!

httpv://www.youtube.com/watch?v=FncILxajmlw

Rats: just as we were hoping for a heart-pumping, fist-waving performance from Steve Ballmer, a la’ Monkeyboy iPod mash-up above, Microsoft has officially denied he will be appearing at Apple’s WWDC via Twitter:

Steve Ballmer not speaking at Apple Dev Conf. Nor appearing on Dancing with the Stars. Nor riding in the Belmont. Just FYI.

There’s hope, though perhaps he will be considering a stint on “So, You Think You Can Dance?” or emceeing a roller derby match.

Via App Zone

Steve Wozniak is unhappy at the Mac launch, which resembles “Woodstock for nerds.” Part 10 of “My Close Encounters With Steve Jobs,” a personal history of the original Mac by Macworld founder David Bunnell.

We start off with a new batch of lower prices on some App Store items, including “Guerrilla Bob,” a third-person shooter. Everyone has their 15 minutes of fame, and I guess it’s Gray Powell’s turn. Don’t know the name? Powell is reportedly the Apple engineer that helped exposed the iPhone 4G prototype. Get a t-shirt and become part of the “in” crowd. (Woz even has one.) Also on tap is a deal on a family pack of Apple’s MobileMe “cloud” services.

We also check out other items, including “Super Turbo Action Pig,” and iPhone game where a pig gets his revenge, tracking down the butcher. There are other Mac-related bargains, of course, such as MYOB’s AccountEdge and more. As always, details on everything is available on CoM’s “Daily Deals” page, which starts right after the jump.

Gizmodo’s unofficial unveiling of Apple’s iPhone 4G may force the Cupertino, Calif. company to launch its next handset sooner than planned, a Wall Street analyst tells Cult of Mac. The leak could erode sales of current iPhones as consumers hold off until the new smartphone is available.

“This leads us to believe they [Apple] may come out with a new [iPhone] sooner versus later,” Piper Jaffray analyst Gene Munster writes in a Tuesday email.

Burbling up as flotsam in the eBay Apple stream, then yanked beneath the waves just as quickly by the webbed fingers of Cupertino’s eldritch lawyer things: these two iPod Touch prototypes marked DVT-1 and DVT-2, complete with built-in cameras. One of the iPod Touches is non-functioning, while the other runs a provisional “Switchboard” operating system. They look to have been legitimate, but regrettably, they were pulled before Nick Denton could click the “Buy It Now” button.

The question, of course, is where did they come from? Well, we know there’s at least one pissed off ex-Apple engineer with access to prototypes running around as an indignant free agent these days…

According to tech apocrypha, after Commodore International released their revolutionary PET 2001 home PC, a couple of scruffy young men named Steve Jobs and Steve Wozniak plopped down in Commodore’s offices with a cardboard box full of circuit boards and tried to pitch the more established electronics company the first Apple II prototype, a revolutionary home PC with far more advanced color, graphics and sound capabilities. Jobs and Woz had no money, and they wanted Commodore to push the Apple II to market.

Instead, Commodore balked, following up the PET 2001 with the VIC-20 in 1980, and then finally bringing to market the computer they would become best known for: the Commodore 64. Largely thanks to a sub-$200 price drop, It went on to sell 17 million units, making it the best-selling single personal computer of all time with an astonishing 30-40% market share between 1983 and 1986. The computer was such a success that was only discontinued in 1994.

Oh, how things change. Now, Commodore International is basically dead, and the company Commodore shuffled out the door is one of the most profitable computer companies on Earth. But after sixteen years, the Commodore 64 has finally raised a mottled hand out of the grave. Can it compete with Apple once more?