Apple referred the matter to police as a crime and investigators last month raided a home of Gizmodo editor in a hunt for evidence.
Gizmodo said it bought the iPhone prototype from someone who found it in a beer garden, where it was left by an Apple engineer celebrating his birthday.
"There is a debate as to whether it was left in a bar or stolen out of his bag," Jobs said.
Jobs told of being counseled to ignore the loss of the prototype on the grounds that Apple should avoid ugly press sure to result from going after journalists.
"I thought deeply about this and I ended up concluding that the worst thing that could possibly happen as we get big and we get a little more influence in the world is that we change our core values and start letting it slide,"Jobs said.
"I can't do that," he continued. "I'd rather quit."
Jobs stood up for the Foxconn factory in China where iPhones are made, saying the facility "is not a sweatshop" and that much effort is being put into putting an end to a rash of suicides there this year.
He predicted an inexorable shift from desktop personal computers (PCs) to mobile devices such as smartphones, tablets, and laptop computers in a "post-PC era."
The fact that Apple's stock market value has topped that of Microsoft "is a little surreal for those of us who have been in the industry a long time," Jobs said.
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