"Apple is in a pretty unique position because we're a world-class hardware designer and a world-class software designer," the company's iPhone/iPod marketing boss told Fortune Magazine in a recent interview. "It's rare enough to be on one of those lists, and we're the only company I can think of that's on both of those lists. So whenever we design a product, we try to take advantage of that capability that we have, to engineer the hardware and the software together so we can take full advantage of each." Apple made some "courageous" decisions in 2000 and 2001 when the tech industry remained in a slump, vowing to innovate its way out of the low period even as other companies were laying off employees to shore up costs. "We didn't lay people off. Instead we invested in our products like we never had before," Joswiak explained. "We invested in the OS X transition." "We invested in not only revamping the hardware line, but you could say we over-invested in portables, even though they were only about 20 percent of our mix then, with the realization that there's no reason that they couldn't sell as many portables as we could desktops." "We created an applications division that was all about how to create software that was better on the Mac than anywhere else you could get it. And of course we started this whole music business, and we started a retail division. Those are all pretty dramatic things to do during hard times." Looking ahead to potentially rough times when consumers are expected to dramatically reduce spending, Joswiak is confident that Apple's products -- including its iPhone and iPod line -- will remain strong even during hard times. The executive also pointed to overseas markets, hinting that those economies could help offset slow sales in the U.S. during future slumps. Staying focused, iPod is still a music player Worries that Apple's growing list of features available with its newer iPod models could dilute consumer focus -- and therefore result in fewer sales as consumers look for simpler solutions -- pose little risk to the company right now, says Joswiak. "If you remember, I think I used to say that we never wanted to forget that first and foremost, the iPod was a great portable music player. And a lot of times people will have a hit product and kind of lose their way, forget what the product was about," Joswiak said, pointing to the video iPod with its larger display but smaller overall size as well as the iPod nano with new video capability that takes up the same amount of space as the previous non-video model. "That's what I mean about being focused on what your primary use is. All along, from the early days, we gave the iPod other great things that it could do. We gave it calendars, to-dos and contacts and things of that sort. We have been relentless in the innovation we've brought to the stage, and every year coming up with something that seems to be a big hit for that holiday, and blowing people away." Apple's iPhone/iPod marketing boss also turned to the company's forthcoming software development kit (SDK) for iPhone and iPod touch, which will enable non-Apple developers to create custom software applications for the portable devices. Expressing high hopes for future iPod/iPhone software, Joswiak describes the SDK as "an unbelievable platform" for developers, along with the degree of reliability provided by digital signatures. "Of course what we want to make sure we've done is keep the phone safe and reliable, and that's why it's taken us a little while to get this SDK out. Especially now that we'll have a real SDK which means legitimate developers are going to come into the space. There are all kinds of fantastic and great things that they're going to do." Joswiak addressed worries of cannibalization surrounding the iPhone and iPod touch, noting that customers make the distinction between the iPod touch -- which is solely and iPod -- and the iPhone, which serves as a cellular phone that accommodates an entirely different group of consumers. "If you're in the market for a phone, we think we've got the best phone in the world with the iPhone. If you want an iPod, we have a whole choice of iPods including the iPod touch. And they really are different, in that you're either in the market for an iPod or a phone," he said. "And the sales for both responded well. Our sales went up pretty dramatically at the time when we decreased the price on the iPhone, and certainly we saw the iPod touch get off to a pretty dramatic start." The marketing lead also offered a brief history of iPod advertisements, from the product's introduction with the need to spread awareness of what an iPod actually was to its current state in the U.S. Joswiak says some overseas markets still require ads to broaden awareness in those regions, while others like Japan and the UK already boast high market share. Apple has plenty of room to grow its iPod sales in numerous foreign countries, according to Joswiak, and because PC penetration has increased recently many of those areas already include PCs and Macs with iTunes software installed. "There's a pretty good likelihood if there's a PC out there that iTunes is on it. There's more probability then of getting an iPod." Finally, the marketing chief looked back on the many skeptics who predicted Apple's downfall in numerous areas -- including its booming retail division, the wildly successful iPod, and an ever-growing Mac business that recently helped the company to report yet another record quarter. "When we were investing so much in portables, people were saying they didn't get it because cheap desktops were where the sales were. And the iPod -- people thought we were insane. We launched it six weeks after September 11, if you remember. People thought, again, what are we doing launching a whole new business at a time when we ought to just be tightening the belt? We actually even ran TV commercials that first holiday quarter, even though there were only so many iPods to sell. So certainly opinions have changed over time, but there are always naysayers." Looking ahead, Joswiak says he tries his best to understand what customers are looking for in the future. "I'm fond of the Wayne Gretzky quote -- you skate to where the puck is going to be. We try to understand as we develop our product road map, what's going to be exciting in the future. And that's one of the advantages we have over our competitors. Our competitors tend to put the cross hairs on where we are now, and by the time they come up with a product that tries to match where we are now, we're beyond them. We're one or two generations beyond, moving faster than they are."