Steve Jobs on Innovation: Safari, iLife, and PowerBook

I watched them grow, they learned much more than I'll ever know And I think to myself, what a wonderful world Yes, I think to myself, what a wonderful world Oh yeah Good morning Good morning What a beautiful San Francisco day to start the year with And boy are we going to start the year here at Macworld today We've got two Macworlds worth of stuff for you today I'm going to talk a little faster and try not to keep you here too long Also I want to let you know, as you know we stream our keynotes, MPEG-4 streams This will be the largest MPEG-4 streaming event ever We already have over 50,000 streams at up to 250 kilobits per second each

We have over 130 countries streaming this event live, including a stream going into the Vatican With a little help from our friends, everything will work today So let's get started First I've got some updates for you Our Switcher campaign We started this last summer Hopefully you've seen a few of these people in television and print And their own websites And we set up a website called apple.com switch Which told people why to switch and how to switch in a lot of detail And guess how many people have visited this site since last summer We've had 7.8 million unique visitors to this site But what's even better than this is we can tell what kind of computer they're running when they come in 68% of them are running Windows If you do the math, that's over 5 million people running Windows coming into this site to check out why they ought to switch And we've added a new word to the vocabulary for what a lot of people are doing So the Switcher campaign has been one of the best ad campaigns we've ever, ever run Next up, Apple Retail Stores We opened our first Apple Retail Store 20 months ago And we now have 51 stores all across America Now this is where people live that buy personal computers in America So that's exactly where we put our 51 stores

And now 85 million people in America live within 15 miles of an Apple store 85 million people Let me show you two stores This is our Soho store in New York It's really outstanding Matter of fact, it's a 100-year-old post office A 100-year-old post office The post office is still in the back And 100 years ago they named it Station A Just anticipating that we could come along So this is the inside of the store It's got a great skylight and these wonderful glass stairs It's one of the best buying experiences in the world And we feel very proud when people walk into the store With all of the Mac geniuses and the buying experience that they have there So this is Apple Soho This is our most popular store in LA It's in an outdoor mall called The Grove It just opened this fall It's a fantastic store You can tell we're not shy about using our logo And inside it's also very, very wonderful It's got a giant genius bar, tons of software And this store does extremely well So we have 51 stores Now, what were our revenues last quarter?

We did the quarter that ended in September We had our first $100 million quarter in our retail stores But during the Christmas quarter We heard a lot of stories about retailing being difficult And I'm very pleased to report that we were right on target With our retail stores for the quarter ending last month $148 million But even more gratifying In our retail stores 50% of the computers we sell are to Windows switchers So our mission was to go after the other 95% of the people that don't own a Mac Put our stores in high traffic locations and ambush them And it's working This is an example of a larger sale that we made a few months ago A family was buying four computers to switch their entire household We had a lot of visitors to our stores I'm just going to take last month, the month of December How many people visited our 51 stores in the month of December?

1.4 million people Now just to put that in perspective That's equivalent to 20 Macworlds last month alone That's what these stores are doing for us So that's the update on Apple retail stores We could not be happier And I hope that we've won over some of the critics Who when we opened our first store said we would most certainly fail Next up, 10 for teachers We started this program about four months ago Because we want to get Mac OS X in the hands of teachers across America They are our greatest advocates because they know kids learn best on a Mac And sometimes their districts are slow about upgrading them to 10 We want to get 10 in their hands without delay And that's what we've done If they come to our website and register We will send them a free copy of Mac OS X And in the last four months 290,000 copies of Mac OS X have been sent out to teachers around America The program expired on December 31st But we are extending it to the end of this quarter So if you know any teachers who don't yet have 10 Tell them to come to our website and get their free copy So that is 10 for teachers Next, iCal and iSync These are two wonderful apps And last week we went ahead and updated them both iCal to 1.0.2 and iSync to 1.0 iCal has been an unabashed hit There have been over 1.1 million copies downloaded so far Since we released it last summer

iCal lets you put all the calendars of your life in one place But the most important feature of iCal Is it lets you publish your calendars And anyone over the internet can subscribe to them And they will be updated whenever you update your calendar So I can subscribe to people's calendars off the internet And they will be updated when the originators update their calendars There are now websites devoted to hosting iCal calendars iCalShare has over 750 iCal calendars that you can go out and subscribe to It's wonderful Football, sports of any kind, rock band concert tours, you name it Matter of fact they have so many calendars They've even made a Sherlock channel So you can find stuff You can type in football and get all the football calendars as an example iCal 1.0.2 fixes some bugs Dramatically improves some performance If you haven't already gotten it I'd suggest you go free download apple.com iSync iSync was a public beta We think iSync is a really important strategic application for us Because it allows you to synchronize the address books and calendar on your Mac With your portable devices Your iPod, your cell phones, your palms And other Macs if you're a .Mac subscriber And with one button click, boom, everything's auto synced And iSync went 1.0 last week This is a stellar product If you haven't tried it, it's a free download on apple.com And you'll be hearing a lot more about these two apps this coming year Next, .Mac .Mac is a collection of amazing internet services Mac.com email

iDisk, a hundred megabytes of internet storage Which we host and we back up every night The ability to create your own websites that are hosted on Mac.com Right out of applications like iPhoto Virus protection software Backup software The ability to use iSync to sync your addresses and calendars across multiple Macs And the ability to host iCal calendars So that anyone can see them using iCal or even using a web browser That's what .Mac is And .Mac costs $99 a year Because it's not free for us to run it And we finally had to, we decided we were going to keep investing in this Had to start charging for it And we announced this four months ago And let me just say there was a bit of noise about that We got some feedback But we want to keep investing in .Mac And we made our case, and I'm very pleased to report to you, that over 250,000 people saw the value in .Mac, and we have over a quarter million paying subscribers to .Mac today.

And it's growing every month. So that's .Mac. Next, iPod. I wish I had a dime for every time I heard this. iPod is being recognized as the Walkman of the digital age. And we've been shipping iPods, it seems like forever, but it's only been 14 months. Only 14 months. And in 14 months, I'm very pleased to report that we have shipped over 600,000 iPods. Now that, if you calculate it, since a year ago November when we started shipping, that is one every minute since we started shipping. iPod has become the number one MP3 player in the US and in Japan, the land of consumer electronics.

And in Japan, it has a 42% market share for all MP3 players. So that's iPod. Now, there are a lot of accessories out there for iPod, things that let you play it in your car and do this and do that. But today, we're going to introduce a new one. In the world of snowboarding, there's one company that virtually invented and popularized snowboarding, and that is Burton. And Burton makes the coolest snowboards. They also make the coolest snowboarding apparel. And we have worked with Burton to make this. It is a snowboarding slash skiing jacket. They would just say snowboarding, but it works great for skiing too. And it's got a pouch for your iPod right in it.

Routes it right up to your headphones. That's nice, but that's not what's cool about it. Here's what's cool about it. You want to change the volume or go to the next song? Just go to your sleeve. This jacket is wicked. And it's made out of the finest Gore-Tex money can buy. It's beautiful. It's going to sell for $499. It's going to be an Apple online store exclusive for this ski season. Next ski season, they should be everywhere. But this ski season, they're on the Apple online store. And Burton was only able to make a certain number.

So it's a very limited edition. If you want one, I would get one soon. I've already got mine. So take a look at them. We will have them in the booth. And we will also be displaying them in the Apple retail stores. If you can't buy them there, but you can go check one out and go online and buy one. So that's my iPod update. And that is all of my updates. Now I'd like to talk about Mac OS X. Mac OS X, as you know, Jaguar was a monumentally important release for us. Mac OS X really came of age with Jaguar. A ton of new applications, technologies, and services all on top of a super stable and super communicative Unix base.

Mac OS X Jaguar talks with everything. So how many active users of Mac OS X do we have? Well, let me tell you. We hit our goal. We now have 5 million active users of Mac OS X. And if you've noticed, we've climbed from 1.2 million at this time last year to 5 million active users. So we've added 3.8 million active users in 2002. And we feel confident that we are going to get to 9 to 10 million active users this year. So the 10 transition is basically over. We've got a few laggard apps that we've got to still get out, but most of the stuff is shipping. We all know which one we're talking about. But on the applications front, we've also made enormous progress.

We've gone from 2,000 to 5,000 native Mac OS X apps. And of course, at the top of the heap is Office for Mac from Microsoft. And they did a great thing this last fall. Together, we launched a promotion called Office Party, where when you buy a new Mac, you can get $300 savings on Office. You can buy Office for $199 at the time that you buy a new Mac. Now unfortunately, that promo expired. But I'm very pleased to say that Microsoft is going to extend it to April 7, 90 days from now. You can buy Office for $199 when you buy a new Mac. So Microsoft Office. Next, the most requested app on the Mac started shipping a few weeks ago. And that is QuickBooks Pro for Mac OS X.

Thank you, Intuit. And we are working very closely with Intuit. We are thrilled with this product. It's a dynamite product. And if you're a QuickBooks user, you're going to be delighted with this product. We saw our first driving game with Force Feedback start to ship a few weeks ago. If you've got one of these Logitech Force Feedback steering wheels, go get this game. It's really, really hot. One of the hottest games on the Mac. We've also seen, the last few weeks, Virtual PC 6 start to ship, the best version of Virtual PC ever. Runs on Mac OS X beautifully. If you've got Windows apps that you've got to run for some reason, you can run them great on Mac OS X with Virtual PC 6. We've also, in the last month, seen Macromedia ship Director on Mac OS X. Thank you.

All of our guys internally use this. They say it's a great release. And we're very, very happy. Thank you, Macromedia. And today, DigiDesign is announcing that they're going to ship Pro Tools for Mac OS X this month. And to show us, I'd like to welcome Dave LeBolt from DigiDesign to give us a little tour. Dave, all yours. Thanks, Steve. DigiDesign's a member of Avid Technologies' team. And we've been making hardware and software for the Mac since 1984. Pro Tools has come of age. We've done 6.0 for OS X shipping this month. And it's being shown for the very first time here at Macworld.

What is Pro Tools? Essentially, it's like a word processor for sound, a recording studio in a box. Can you put the waveforms up on the screen, please? Pro Tools has everything that you need to make your recordings. You have on-screen waveforms, tracks, MIDI, and audio. You can work with literally hundreds of them. You can work with DSP plugins to do effects processing for DigiDesign and third parties. And you can use the on-screen faders to do mixes, everything you need to finish an audio project. Who uses it? Well, basically, everybody who's anybody in audio, whether they're working in television, radio broadcasting, film, you name it, they use Pro Tools. Talking about records, people like Eric Clapton, Jennifer Lopez, Nine Inch Nails, LL Cool J, Eminem, Dr. Dre, Madonna, and these guys, Smash Mouth, they all use it. But you don't have to be a millionaire to use Pro Tools.

You can get in. Whole systems start at $4.95. The great thing about what Apple's done with OS X is they've committed the resources to give fantastic performance for audio and MIDI with Core Audio and Core MIDI ongoing. That's going to be a great benefit to our customers. I'm going to play a little bit of this tune, and then I'll show you some stuff we can do with Pro Tools. OK, there's a little bit of a tune. Let's have some remix fun with this. I'm going to cut out a little piece of the drums over here, some real drums. And let's take a listen to that. OK, there's a little bit too much of a hold there for me.

So I'm going to pull out a single bass drum hit and a crash cymbal over here, and we change the arrangement. Let's take a listen to that. OK, that sounds pretty cool, but let's add in some DSP madness, a little bit of a plug-in automation, some slap echo with the plug-in. Hear that bouncing delay? Sort of for a coup de grace, we'll add on some Jimi Hendrix-like flanging, or Beatles. I know Steve likes Beatles. Let's play that. That gives you an idea of what you can do with Pro Tools.

The upgrades to OS X start at $75. Come by and see us at the Avid booth. Thanks a lot. Thank you, Dave. It looks very hot, doesn't it? So next up, Final Cut Pro. And Final Cut Pro has become the number one pro video editing application in the world, as measured by units sold. And it's fantastic. There's only one downside to it. Even though it's thousands of dollars cheaper than any other solution to do pro editing, it's still $999. And there's a lot of people that want to do pro video editing that don't need every single pro feature at the top of Final Cut Pro.

And so today, we're introducing a new product that's the same as Final Cut Pro, just minus a handful. of features that only the pros need, and we're calling it Final Cut Express. Final Cut Express lets you edit like a pro, and to show you how, I'm going to ask Phil Schiller to come up on the stage and give us a little demo of Final Cut Express. Phil? Thanks, Steve. Well, good morning, everyone. I am so excited to be the first to show you Final Cut Express. It is incredibly cool. Let me bring it up on the big screen for you, running in Mac OS X, and the first thing you're going to notice, for those who have seen it before, well, it looks just like Final Cut Pro, which is great.

Not only does it look like Final Cut Pro, it works just like Final Cut Pro. The same award-winning interface I have on the bottom left there, my browser with all my media, I can look at it as a list view, I can look at it, an icon view. The top left, I've placed my viewer, where I can scrub through all my video, and I can set my in and out point, apply filters and effects. On the bottom right, we've got our timeline, and just like Final Cut Pro, I can have unlimited layers of audio and video and graphics, and have instant access to my compositing and my titling tools. Well, I have a project we've loaded in here. It's on A Day in the Life of Apple, that great book, a video project in DV that we worked on with them, and this project was in Final Cut Pro. We could move it right into Final Cut Express, because it shares the same file format, but we can read other formats as well.

For example, you can move your iMovie projects right into Final Cut Express. Let me show you just two quick features. That's a cool one right there. Let me show you two quick features that sort of illustrate the incredible power in Final Cut Express. Well, first of all, if we move later on in my project here, you'll see I have two beautiful DV clips. Let me play those for you. Well, they're really nice clips, but they have a hard cut right between them. So I have over 200 effects and transitions, professional quality effects and transitions I can apply. So let me go to my effects bin and grab a nice transition. Let's go and grab an edge wipe. I'm going to drag it right between those two clips. Now, just like in Final Cut Pro, I can drag that in, and it will automatically fill in the spot.

And let me play it. There. Now we've created a professional quality edge wipe, but I didn't have to stop and render it because I have the power of software real-time effects. Let's go in and edit that effect. I can double-click on it, just like in Final Cut Pro. Up come my tools. Let me change it and throw it on an angle. Let's go back and watch that again. Or maybe I want to go grab another transition. Let's go back to our effects bin. Let's scroll up. Let's grab an oval iris. I'm going to drop it right in place over it. And now watch that effect. So in just seconds, I've applied three professional quality video effects with real-time encoding and real-time transitions, software only, no extra hardware.

Only Final Cut Express can do this kind of powerful transitions. Let me do one more thing while I have time on stage, while Steve's still offstage so I can do some more stuff. Let me open up a video interview. Now this is staged really nice for a beautiful interview, but it's a little too dark for my tastes. Well, thank goodness Final Cut Express has professional color correction tools built in. Let me go up, and I'm going to grab a color correction filter I've used before and just drop it right in place. And now you see the entire clip has been color corrected because Final Cut Express has professional quality color correction built in place. That's just two features that demonstrate the incredible power of Final Cut Express. Steve? So we've heard a lot of our customers want the power of Final Cut Pro.

They want to edit like a pro, but they want something a little more affordable, and Final Cut Express is $299. You can edit like a pro now for $299, and it's available today. This is what the box looks like. You can see it out in the booth. And it's one, these are some of the apps that have allowed us to go from 2,000 native Mac OS X apps at the beginning of this year to 5,000 native apps today. As I mentioned, there's only a few laggards, and we're going to pick those up hopefully in the next few months. Now this has given us the confidence to, a few months ago, announce that all new products, including speed bumps, starting today, are no longer going to boot into 9.

This takes a lot of work of our engineering departments to do, to make these things boot into two operating systems, and we're going to put all our eggs in the 10 basket from here on out. All the new products will boot into Mac OS X. Of course you can run 9 in classic on top of 10, so you can run your 9 apps in 10, but they're not going to be able to boot into 10 anymore. We're focusing everything on 9 from here on out. So that is Mac OS 9, 10, from here on out. Okay. Next, let's talk about the digital hub. We live with these amazing digital devices. We live in an incredible time in history now.

It's an inflection point where so much of our lives is going digital. All our music is going digital. All of photography is going digital. Digital cameras were the number one or two selling consumer electronics device this holiday season. I bet 90% of you now own a digital camera out there. It's exploding. Almost all camcorders now are digital video, and the digital video disc is the most explosive consumer electronics device ever in history. And so these devices now are a part of our life. We announced our digital hub strategy two years ago here, and we have delivered. We've delivered iPhoto for digital photography, iTunes for digital music, iMovie for digital movie making, and iDVD for making your own custom DVDs that play in almost any consumer DVD player.

A lot of other people have talked the talk, but no one else has delivered the solutions, and we have. Now, we're in a very unique position because only Apple has created all four of the key digital lifestyle applications. No one else has done it, and we've learned something super important. We've learned that you want to use your music in the slideshows of your digital photographs in iPhoto. You want to use your music in your movies, the soundtracks, and you want to use your music for menus in iDVD. We found that you want to use your digital photographs in your movies.

It's wonderful to bring in digital still photography in your movies, and you're going to see a quantum leap in that today. And there's nothing better to send a bunch of digital photographs to somebody than a DVD. You can put thousands of digital photographs on a DVD with iDVD, and it's wonderful to watch them on a television. And, of course, we want to share our movies with iDVD. So if you look at this, there's a tremendous interaction between these applications that no one's ever really discovered because nobody's had all of them yet. Well, we discovered it. We discovered it over a year ago. And yet, we wrote these applications individually, and they were not fully integrated. And over the last 18 months, we have written all new versions of these applications that are totally integrated.

We are going to do for the digital lifestyle applications what Microsoft Office did for productivity. So let's take a look at them one by one. iTunes. We distributed 18 million copies of iTunes. It helped us win a Grammy, the only computer company ever to do so. It powers the iPod. And we introduced iTunes 3 last summer. Its major feature was smart playlists. But I can tell you now there were some hidden features in iTunes 3 that are just going to spring to life today as you see how well it integrates with the rest of the apps. So iTunes 3 was the first of our new generation of apps, but we couldn't talk about that until now.

So iTunes 3. Next up is iPhoto. iPhoto is the digital equivalent of this. It allows you to super easily get the photos off your camera and safely store them, organize them, and share them in some amazing ways. iPhoto has been out 12 months. We introduced it here a year ago. And in those 12 months, we distributed over 6 million copies of iPhoto. Today, we're introducing iPhoto 2. iPhoto 2 has some really cool features in it. Number one, it's integrated with iTunes. So right from iPhoto, you can see your entire iTunes music library and playlists and grab songs. Second of all, if you're less than a perfect photographer, you're going to love this.

One click enhance to fix less than perfect pictures. It works amazingly well. Third. touch brush that I'll show you in a minute, and fourth, the ability to archive your photo albums and library to CDs and DVDs. So let me show you how this works. Let me launch iPhoto 2. The first thing I want to show you is there's no share button anymore. We've taken the keywords and we've put them in their own window so that we can put all the amazing ways to share your photographs right under Organize where it's even more convenient. Now, let me go ahead, I'm going to pick an album, Maui Vacation, and I'm going to pick the slideshow, and I can display my photos in random order and repeat it and all that stuff, but here's music.

I've got my entire iTunes music library right here, and I can see any playlist I want to just by selecting it or the whole library, and I have searching just like I have in iTunes. So I want to find a Hawaiian song that has H-E-N-E in it. There we go. So I'll pick this one right here, and I'll play the slideshow, and it's that simple. Now in addition, each album stores its own music for its own slideshow. So each album can have different music for its slideshow, which is really nice. So full integration with iTunes, all right. Now let's say I want to make a slideshow on a DVD with iDVD. You know how that worked before. I'd have to drag the photos over, maybe make a stop on the desktop.

Let me show you how easy that is now. I want my Maui Vacation album as a slideshow. I just push an iDVD button, iDVD 3 launches, which we'll talk about in a minute, and we're going to see the slides automatically transfer over. I'm going to go in. It builds a menu, Maui Vacation, for my slideshow. There they are. It's building the thumbnails right now, and here's all my slides, and I've got 53 of them right there. That's how easy it is to transfer photos to iDVD for slideshows. All right. Now I want to show you one-click enhance. I've got some photos here that need a little enhancing. They're good photos. They're just not great photos. I'm going to pick one. We'll go into edit right here, and again, a good photo. Here's one button enhance.

I'll push it. Look what it does to the photo. This is not... Let me show you another one. Let's go to the next one. Again, this is a good photo, but not a perfect photo. Let's see what one-click enhance does to it. A little bit better. Now this is an interesting one. Consumer digital cameras never get the white balance right, so this snow looks like a little animal had visited it before we got there. One-click enhance doesn't just fiddle with the contrast or brightness. It looks at a whole variety of factors, like white balance, to make your pictures as good as they can be. So let's see what one-click enhance does to this.

See? See how much better that is? And one last one, you know, a travel photograph, it's overcast. This is like what a lot of us take with our digital cameras, isn't it? Let's see what one-click enhance does with that. Simple. One-click enhance, it's really, really smart. Again, you can see some befores and afters like this. Look at that. It's pretty impressive. Now I want to show you the retouch brush. I've got three photographs here, and I'll go ahead and take a look at this one. Let's zoom in on this one. You can see that this kid here was trying to be Harry Potter and got himself a pretty good scratch here. So we're going to take our retouch brush, and watch what we can do.

We don't have to pick any palette of colors or anything like that. This is very, very smart in what it does, and again, look at that. It's very subtle. It preserves the underlying color and texture. It's way better than anything that we know of that's been done before. Here's another one. This little guy. Look at this little guy. You know? He got wiped out right here. So let's go ahead and clean that up. While we're at it, we can just go ahead and take a few of his freckles off.

So again, take a look at before and after. Now this last one I want to show you. Look at this. This is a wonderful photograph, were it not for that piece of hair on the face. That's too bad. Well, let's go see what we can do about that with the retouch brush. Again, because we're preserving the color and the texture underneath, look at what we can do. Isn't that amazing? Look at that. So that, ladies and gentlemen, is iPhoto 2, a brief overview. We've got full integration into the iTunes music library, every song, every playlist, real-time searching.

We've got one-click enhance, which is going to be a lifesaver for those of us that aren't professional photographers. We've got the retouch brush for hair, for lens dirt, for you name it, for freckles. And we can archive our whole library or albums or any number of photographs we want easily to CDs and DVDs for safety and to share with others because it preserves all the meta information about the albums. So that is iPhoto 2. Next up, iMovie. We have distributed over 12 million copies of iMovie. And today, we are going to introduce iMovie 3. iMovie 3 is great. It's fully integrated with your digital photography from iPhoto, with your audio from iTunes, and with iDVD.

In addition, we've added the most requested feature in iMovie, which is chapters, which will automatically get picked up by iDVD, as we'll see in a minute. And we've added something wonderful. Now that we have access to digital photography from iPhoto, you know, it's wonderful to import digital photographs in your movies. But who does the best job of that in the world? Have you ever seen any Ken Burns documentary? He gets more mileage out of still photographs than anyone in the world because he had to. You're documenting the Civil War, they didn't have movies. So he gets tremendous value out of still photographs, and he invented a variety of techniques to do so. We have implemented something we call the Ken Burns Effect.

And we got Ken out and showed it to him, and he blessed it. He loved it. So we're going to call it the Ken Burns Effect, which I'll show you in a minute. And another requested feature, precise audio editing, so you can now edit within clips. So let me go ahead and show you iMovie 3. First of all, we have a new user interface. It no longer takes over the whole screen, it is a window. You can make it larger or smaller. We've got a movie in here. And let me just go ahead and play the movie here a little bit. So, you know, pretty simple movie. A little special effect there.

We've got our timeline down here, we've redone the whole timeline, so it's even nicer. And let me go add a soundtrack to that movie. This again is iTunes, and I have all my playlists right here. But I'm going to add a song, I'm going to add a song with snow, and it's an old Dean Martin song. There we go, Let It Snow. And I'm just going to drag it right down in here. Boom. Puts it in there, and I'll just drag it to the beginning of the movie. And let's just go ahead and play that movie from the beginning. Yay, it's a snowman! Yay! Snowball fight! Oh, the world outside is frightful, but the fire is so delightful. Let's make a snowman! Yeah! Let it snow, let it snow, let it snow.

One, two, three! And my dear, we're still goodbying, but as long as you love me so, let it snow, let it snow and snow. See you later!

So, there's our movie, and I want to point out something in this movie that's really wonderful. So, first thing I want to do is, you saw that little special effect there. In addition to having our iTunes library, we've added some sound effects from Skywalker Sound. This is George Lucas' sound company. By seven-time Academy Award winner, Gary Rice. He does all the Star Wars sound effects, he also does all the Pixar's. He's wonderful and we've got a bunch of them in here that are really fun, you know. So you get the idea.

All that's built into iMovie 3 as well and we have precise audio editing too. So again, I can zoom my timeline up here, I can just pick a clip like this one here and I can turn on editing and you can see here what I can do is just say I want to lower the volume there and maybe raise it back up here and I can change the slope of this curve if I want to. I can put it back, no problem like that. And again, you know, take it off, whatever I'd like to do. Now I want to show you something really remarkable, I think. We're going to go back to this clip here. If you recall this clip here, look at this. Look at how effective this is. This is a still photograph and we're panning along that still photograph and then we're putting titles over it.

Now how do we do that? Not so easy until you see the Ken Burns effect. So we're going to go to photos here and this is all of my photos from my iPhoto library. I'm going to go into an album called Snow Day and I'm going to pick this first photograph. Now to use the Ken Burns effect, you take your starting point right here and you can zoom in on it to any degree you want. You pick your starting point. I know this is a little small but hopefully you can see it. You pick your starting point right here and then you pick your finish point. And I'm going to pick a finish point of right here. You pick your duration and you get this. And that's how simple it is.

A whole new way to use digital photography in movies. Thank you, Ken Burns. Lastly, we've got a whole bunch of new titles and we've got a whole bunch of new transitions and effects but I don't have time to show you that. Lastly, I just want to show you chapter markers. So I'm going to pick a point in this clip right here at the beginning of the clip and all I have to do is say add marker and it adds a marker and lets me label it and I've now added a chapter marker. It's that easy to add chapter markers. You can remove them, whatever you like. Now before, when you wanted to get your movie from iMovie to iDVD, you had to do this thing called exporting out of iMovie, right? This wasn't fun. It took a long time. Let me show you how easy it is to take your movies from iMovie to iDVD now.

All you do is in the iDVD pane push create iDVD project. iDVD 3 is going to launch. It's going to transfer the movie over there instantly and we're going to see it in just a second. There it is. Now, I want to show you one other thing. Not only can I play my movie, right here, but iDVD has automatically built me a scene selection menu based on the chapters from iMovie. And so I can go to that chapter I just selected. I like that. Okay.

So that is iMovie 3, or at least as much as I have time to show you. So iMovie 3. Complete rewrite. Independent app. Doesn't take over the entire screen. Fully integrated with iPhoto, iTunes, and iDVD. The Ken Burns effect. This thing is going to be wonderful. And precise audio editing. Another one of our most requested features. And chapters. Easy to set chapter marks. Automatic integration with iDVD. Transfer your movie over instantly. And iDVD picks up the chapter marks and automatically builds a scene selection menu. That is iMovie 3. Now, iDVD.

We've distributed 680,000 copies of iDVD. We've been on iDVD 2, but today we're announcing iDVD 3. Its main features, as you might guess, it is fully integrated with iTunes, iPhoto, and iMovie to get all of your media. We have 24 new amazingly, amazing themes. Professionally created themes that will blow your mind. The scene selection, automatic scene selection I just told you about. Let me show you iDVD 3. So, let me go ahead and I'm going to put this away and just start a new here. So we'll just bring it up again.

And I'm going to drag a few movies in. I go over here and I go to my movies tab right here and here's all my movies. And so I can just grab a few movies like this. And I'll just drag them in here. And boom, these are my movies now. And I think what I'll do is I'll drag one of them into this drop zone. And this is one of our new themes. It's called theater. Turn up the volume please. Turn it up some more please. Thank you. So this is one of our new themes. Let me show you some of the other new themes. This is another one.

Here's another one that's really wonderful. Now I'm going to drag, see our menu right here? It's really wonderful. I'm going to drag another movie in there. And I can even move the video. You can see I can move it around like this. Just center it like that. Isn't this wonderful? Let me show you what the, this is nice too. Each one has their own nomenclature. Here's another theme called projector. Look at what this does to the video. It takes your movie, not our movie, your movie, and ages it and puts film strips in it, puts a soundtrack on it. Turn it up please. There we go. And we'll put another movie in here. Let's see. This one's fun, the steam movie here. It makes it look like you're living in 1953.

Okay. Here's another one called Gen Y. Again, your movie. Let's say you're not a skier. Let's say you're a surfer. You've got a surfing movie. Again, some of these come with soundtracks. Of course, you can override that and put your own music on them. Here's another one that's really cool. Picture in picture. Notice this. It's putting your movie in the window with color, but it's taking your same movie, blowing it up, blurring it, making it black and white, and putting it in the background.

Isn't that incredible? Look at this. Isn't that incredible? Now, I'll show you another one that's really remarkable. I'm going to put a soundtrack on this one too. Look at this one. Yeah. I'm going to go find Louis Armstrong. It's A Wonderful World. Here we go. A Wonderful World Isn't that nice?

All right. Let me show you another one. Isn't that wonderful? This is why we do what we do. Here's another one. This one's really fun. I was having fun with this one. I'm going to put in a movie, a rowing movie that we have here that somebody, Apple, made. Here's a rowing movie. I just want to show you the difference that audio makes. I was playing around with this the other day, and I was putting a few different songs on it. I'll just put this one on. A Wonderful World Now that's pretty cool, but look at the difference this makes.

You can make this stuff. You can send DVDs. You can send DVDs to your friends and families and colleagues. We've got a bunch of pro themes too that will blow their minds, that are better than what they can get out of Hollywood, and you can do it right on your Mac. Here's another one, a little passport one. Oops, sorry, that's a western one, but I...

There's something for everybody here, and a really nice kid's one. So you can pick whatever you want, make the DVD that expresses what you're trying to say. So that is iDVD3.

It's fully integrated with iTunes and iPhoto and iMovie, some amazing new themes like nothing you've ever seen before, a level of production value that our industry just never sees, and it's getting cheaper than ever to make your own DVDs. We're lowering the price of the blank discs now to $3 a piece. That's a five-pack for $14.99, and these will go even lower. I predict that within 24 months, these will hit $1 a piece, the same way that CD art discs went down in price and became so popular. The same thing has happened here. This is iDVD3. We are so far ahead of anybody, it's not funny in this. So the digital hub. Announced two years ago, we have rolled out all the applications to make it real.

We started with individual apps, but today we're bringing it all together, and we're going to give a name to this integrated suite. We're going to call it iLife, iMovie, iTunes, iMovie, iDVD, iLife. It's for a new digital lifestyle, and it all works together. So iLife is going to be available on January 25th, Saturday, January 25th, and it's going to be bundled with all new Macs. But in addition to that, you're going to be able to get a free download of iTunes, which you can today, the same iTunes that's there now. You're also going to be able to get a free download of iPhoto 2, and you're going to be able to get a free download of iMovie 3.

However, we've never provided free downloads of iDVD. Why? Because it's so big. These themes are very, very large. iDVD3 is hundreds of megabytes. And so we're going to have to sell that one. And rather than sell it alone, we're going to take all of the iApps and put them in a box and sell them together, because some people on narrow band do not even want to download iPhoto, iTunes, and iMovie. They prefer to actually pay something and buy it in a store. So we're going to bring that box to the store, so you can get them one of two ways. Download iTunes, iMovie, and iPhoto for free, or $49 in retail for all the apps. The new iLight, it all works together, and it's going to do wonders for our new digital lifestyle.

So buckle up. Got something totally new for you now. What is this? It's a totally new application. It's called Safari. And it is a turbo browser for Mac OS X. We have done our own browser, and it's hot. It's the first major new browser in five years. And it's sweet. So let me tell you about it. First of all, why did we do a browser?

There's two reasons. Number one, speed. Speed. This is the fastest browser on the Mac, period. And let me show you how. iBench, standard internet, independent internet speed testing. We tested four browsers on the Mac. Internet Explorer, the latest version, Netscape, the latest version, Chimera, the latest version, and Safari in a beta version. We tested it on an 800 megahertz G4 iMac. So let's go to the first test, iBench's HTML load speed test. Now this is a test where they take a lot of web pages and load them into a browser, one after the other, without stopping. And they measure how many seconds it's going to take. So let's see how everybody did.

IE took 53.7 seconds to complete this test suite. Netscape took 33.6 seconds. Chimera took 21.8. And Safari took 16.6. And if you do the math, that is three times faster than IE on the Mac. Three times faster. Let's go to the next test, JavaScript, iBench JavaScript test. Again, a long JavaScript test. They measure the number of seconds it takes to complete it. As you can see, Safari is over twice as fast as IE on the Mac. Very fast JavaScript on the Mac now. And load times and launch times, we can see, again, 40% faster.

It launches really fast. So speed was our first reason for doing this. It is the fastest browser on the Mac. You're going to like this a lot. But the second reason was because we wanted to innovate. We think there's a lot of innovations left in browsers and we want to make the best browser ever. So we've done a few things. How many of you use Google, right? We've integrated Google right into the toolbar so you don't have to go to Google to type your search. You just type it right into the browser. Now when you're searching on Google, you find a set of search results. You pick one. You go down into it. You go down another level. You go down another level. You go down. Oh, that's not the right one. I want to get back up to the top. Back, back, back, back, back, back, back, right? No longer. We have a new feature called Snapback.

The little arrow you hit takes you right up to the top, shows you the Google search results. We have a whole new way of doing bookmarks. What we found in our research was people don't use bookmarks. They don't use favorite bars very much because this stuff is complicated and no one can figure out how to use it. So we have a whole new way of looking at bookmarks and ease of use because as you know, you only use what you understand. It doesn't matter how many features are in a product if you don't understand them because you can't use them. So we want to make this thing easy to use. So let me show it to you. I scrunched it off so it will fit on the screen here. But this is the UI. It's a very minimal UI. We want to get out of the way and let the content of the page be the star here.

So we've got back forward buttons. We've got reload buttons. We've got add to bookmarks, place to put your URL, Google integrated right into the toolbar. We've got our bookmarks bar for your favorite bookmarks and we've got our bookmarks library for the rest. So this is how simple it is. It's the most innovative browser we know of and I'd like to show it to you now. Let me launch Safari here. Boom, that's it. Let me quit it again. Launch it again. Boom, that's it. So this is Safari. Now, let me show you what it's like to search some of these sites in the bookmarks bar.

Here's Apple. Here's Amazon. Typically a little slower of a site. Here's Yahoo. Ebay. Salon. Internet Movie Database. City Search. And I can... Let me show you some standard sites too. Wired is a site that's got the latest internet. It's got some Data Page entered through different networks. Awesome. But I love Jail Break. This is a developer site. This is a developer thing. Developer site. That's what I'm about. So I'm kind of coming back and forth with all of you. I've got the best web quality in the world here. So let's go to Wired News and again just see that everything works, everything works fast. Here's another site, ESPN, very popular and they do a lot of wacky things with their site. Again, works perfectly. Finding Nemo, one of my favorite sites. Obviously we've built QuickTime and Flash and everything else into the browser, which is nice.

If you haven't seen this trailer, I highly recommend it. And then another site that I want to show you, this is really fun, this is a Flash site to the max. If you haven't seen this one, it's really fun, I'm on high bandwidth, and so you can just make music here. Anyway, you get the idea. So, really fast to almost any site.

Now, let's talk about the bookmarks bar. That is this bar right here that has my favorite sites on it. First of all, I can move anything around just by dragging it, which is really nice. Second of all, I can get rid of something just by dragging it off and it goes poof and of course I have undo to get it back, but it's very easy to move things around and rearrange them on the bar. But that's not the coolest thing. The coolest thing is, let's say I want to add a site to the bar. So I type NYT, which I know is New York Times, I like to go read the New York Times online, and I want to add that to my bookmarks bar. Well, you know what it's like to add something to your bookmarks bar, because the name from these sites is giant, so you have to go in somewhere and rename things and it's really a pain. Well, let me show you how we do it.

I can drag this anywhere in the bar I want, or I can just hit this button and what happens? A sheet pops down and says, would you like to rename this thing? And instead of this giant name, the New York Times on the web, which if I said, no, go ahead and add it, look at what it's added here. I don't want that on my bookmarks bar, so I say, no, go ahead and add it, I'm going to rename it NYT, there we go, and now I have the New York Times right here and I can put it anywhere I want, that simple. Again, you know, Disney, you'd think would have a nice simple name, but oh no, you go to Disney and, you know, Disney Online, where the magic comes to you, and I don't want all that on my thing, so I'll just pick Disney and I'll add that, because I wouldn't mind Disney on my bookmarks bar, again, put it anywhere I want to.

So it's that simple to add bookmarks. Now we're going to go to the bookmarks library and this is all of my bookmarks. What does it look like? Does it look a little like iTunes and iPhoto? Yes. We found this metaphor works perfectly for bookmarks. So here's my bookmarks bar, everything up there, and, you know, I can edit it, you know, I can have pull-down menus up here, obviously, and I can edit them right here. I've got my bookmarks menu up here and I can edit it, again, right here, it can be different than the bookmarks bar. My address book, every website in my address book is automatically put right here, so I don't have to go to my address book to find it. Here's my history, you know, this is all the websites I visited today or the day before, and then all of the folders that I want to create with bookmarks in them, you know, I can drag a bookmark, here's National Geographic, I can just drag it up to here, ask if I want to rename it, no, I think I'll just throw it right up there, and obviously I can go to any website just by clicking here as well, right?

Very, very simple, very powerful way to manage all of our bookmarks. Okay. Lastly, I want to go to Google, and so what I want to look for in Google is, let's see, Safari, travel. So I'm thinking about taking a Safari and boom, there are my search results. I didn't have to go to the Google site to type them in, I typed them in right up here, and I can, you know, just pick one of these sites and let's go check it out. Here's a site, African Wildlife Safaris, you know, classic Kenya Safari, and I'm pretty far down in the site and I could go back, back, back to get up to the top, but see this orange thing that appeared here, this orange arrow? I just click that, that snap back, and boom, I'm right up at the top of the Google search.

Now we thought that worked so well for Google, we wanted it for any URL, so I'm going to type in Amazon, boom, Amazon, go to Amazon, and I'm going to say, well, let's see, I'll just pick something here, I have no idea what this is, and I'm going to go down and maybe I'll go to here, and I'm going to, you know, go down here and go into this site a little bit more, and, you know, whatever it is. And for me to get back to the top of Amazon, I also get a snap back thing right here and I just hit boom and I'm right at the top of Amazon. So we think you're going to love Safari. Now there are over 10 million websites out there, and I'm sorry to report that we haven't had a chance to test Safari with each one.

So what we've done is if you encounter a website that's got any problems, there's a little bug button over here, and you just push it, and it puts that site in here and you can describe the problem, you can even tell us what the problem is if you want to be more specific and send the source of the current page, you just hit the submit button, and this will submit it to Apple, and we will have that and be able to then go address any problems that you find. So that is Safari. So again, why are we doing this? Speed. It's the fastest browser on the Mac, three times faster than what most people use. It's also the most innovative browser around.

It's very, very simple to use, very easy to figure out, and some totally new ways of managing bookmarks, again, being able to rename them instantly, and a whole new way to keep your bookmarks library that you can actually figure out. In addition, we've got Google right on the toolbar, so you can search for things and snap back instantly to the top level of Google or to the top level of the website that you've navigated to. Now Safari is based on standards. It's very modern technology. So here's a list of some of the standards. I don't have time to go through these, but you can go to our website and see them all. Just all the latest and greatest stuff in Safari.

How did we do this? We based Safari on an HTML rendering engine that is open source. About half the code in Safari is this open source rendering engine. Now, we started working with this open source code base over a year ago, and it needed a lot of improvement. We dramatically improved the performance. Some things are up to an order of magnitude faster, and some people have a problem with open source. We think it's great. We think it is great, and we are going to be putting all of our improvements to this code base. We're going to be posting them on the web today.

The code base that we decided to start with was KHTML. It's very popular in the Linux world, and it was a very well architected HTML rendering engine that is now dramatically improved, and the HTML rendering engine in Safari, we have built an incredible browser around it, and we could not be happier. So Safari runs on Jaguar. If you're not using Jaguar, now's a good time to go start. We are going to release a beta release, because we haven't had time to test all 10 million sites. It's a very, very solid beta release, and it's going to be a free download starting today. So, go get your copy.

I know our server farms are going to be busy today, but we think you are going to love Safari. All right, next, we have this. What is this? This is another brand new application that we are announcing here today, and it is called Keynote. Keynote is a presentation app for when your presentation really counts, like this one. And Keynote was built for me.

I needed an application to build the kind of slideshows that I wanted to show you at these Macworld Keynotes. Very graphics intensive, and we built this for me, and now I want to share it with you. Now we hired a low-paid beta tester to beta test this app for an entire year, and here he is in the process. Because secretly, I have used... early versions and more mature versions of Keynote to build every one of my Macworld Keynotes in 2002. And I can assure you, it's a great app. So rather than a bunch of slides about slides, let me just show you.

All right, let me go ahead and launch a little slideshow here. Now the first thing you'll notice about Keynote is it's got a slide navigator as its primary way to navigate around your slides. And so you can have hundreds and hundreds of slides and work with them very efficiently. As an example, my slideshow today has almost 500 slides in it. And you can group them here and you can expand and collapse the groups, move things around very efficiently, et cetera. So the first thing I want to show you, and you have outlining as well if you want to outline, but I love this view.

The first thing I want to show you is text, graphics, and compositing. So I'm going to start with text, and I can have text of any size I want, and you'll notice that it is fully anti-aliased from the tiniest size up to the biggest size. Beautiful typography, and I'm going to type amazing in here. And again, I can have this whatever size I want, just beautiful, beautiful text. Now next thing I want you to notice, notice this line that popped up here. Keynote has alignment guides, and you can turn them on automatically for the center here so that whenever you're in the center, horizontally or vertically, they appear, and you can put them wherever you want. So you can go to a master slide, and of course you have multiple masters, and you can say, I want an alignment guide right up here, right like that.

And now, right here, I have not only an alignment guide in the center vertically, but I have one up here as well. So wherever I am up here, very easy to align with. All right. The next thing I want to do is talk about graphics. This is key. Keynote supports full alpha channel graphics, full quartz graphics. So you notice there's no box around my graphics of white or black, which forces me to use a white or black background for my slide. So I have full alpha channel. I can move things around. Of course, the alignment guides, as you see, work on the graphics. I can also resize my graphics, and I get professional quality resizing right from within Keynote. I also get professional quality rotation, okay?

And this is really nice when you start to work with images. But now I'm going to do something else that's interesting. I'm going to let me rotate this straight on here, let's see. I'm going to take this butterfly, I'm going to put it on top of the text, and make it a little bit bigger. And now what I'm going to do is I'm going to go to my inspector, which has a whole bunch of ways to control elements in Keynote, and I'll just turn down the opacity, you know? Very, very easy. So I can, you know, of course I can send that butterfly to the back or bring it to the front, but I can also change its opacity. Let me go ahead and bring in another element here, bring in a magnifying glass. And I think what I'll do is I'll take that magnifying glass and I will rotate it around this way, and maybe I'll make it a little bit bigger.

And you notice there's some opacity in the glass to make it look like glass, right? And here we are, and again I can, you know, I can be rotating the butterfly in here and everything's on the fly, just like that, right? Full quartz graphic support. And this lets me do things like this. It lets me take a slide and do a dissolved transition. You saw a few of these in my slideshow, and do very nice things. And Keynote supports about every graphic standard there is, PDF, TIFF, JPEG, you can bring in Adobe Photoshop files, we preserve all the layers, Illustrator files, Flash, you name it, Keynote supports it. Okay, next I want to talk about tables and charts.

Keynote has built-in tables and charts, so I can build a table just like this. Here's a table, and I can say, well, let's see, I think I want, you know, four rows and five columns, and I can resize this to whatever size I want, and I think, you know, I just type in some text, and of course I can change the text size, and, you know, let's say west, mid, and east, and it's got extremely sophisticated chart management, but let me just show you another cool thing. We ship Keynote with over 100 images in an image library, and I'm going to go into one of those libraries now full of objects, and we ship a bunch of fun stuff here, a bunch of road signs and stuff, a bunch of, you know, things like that, a bunch of money, gold we ship, you know, gold bars, and chess pieces, and the world, and clocks that you can set the hours on, and stopwatches, and tickets, and dice if you're doing a business presentation these days, and justice, but I want this one, I want these hands right here, I'm just going to go grab that, and I'm going to put my hands right here, and I'm just going to, again, you know, line them up here, maybe stretch them a little bit to fit, send them to the back, and maybe go, you know, tone down the opacity a bit, and I can do all sorts of tables this way.

Let me just show you a few that I made earlier. You know, I can have tables enter with some pretty cool effects, you know, simple things like that. I can also build by row or column, just literally in a matter of seconds, just tell it what I want it to do, and it'll automatically do all this stuff for me. Here I use these little gold bars. Very, very easy to do all this stuff. And again, put a picture behind them, pretty much anything I want to do. And I also have charts. I just push a button, I get a chart, and I also get a little spreadsheet here with all the data, so I don't have to go to another application. If I want to change this to 70, boom, you know, I can just change it on the fly. If I want to go to a pie chart, I can just go to a pie chart here, you know, pull out a wedge if I want to, you know, center this thing, let's say, select something, pull out a wedge, change anything I'd like to, and I can even, you know, put again interesting effects on how to, you know, bring things in like that.

Very easy to do. So that is charts and tables. But now I want to show you something pretty amazing. Our goal in Keynote was to let you create presentations that looks like you've got an entire graphics department working for you. Night and day creating these presentations, right? That's our goal. But most of us can't afford a graphics department, so we have built in production value into this app like you've never seen before. It's all built in and you can see what it's like. So we got a theme. We have themes. I'm going to show you a few of them. This one's called Blackboard. It changes the text, it changes the background, it changes the bullets, and we even have pictures on it.

Notice this picture stuck on there? We go, well, but that's not my picture. Well, let's make it your picture. Because a lot of these themes, all of them actually, have what we call photo cutouts. And so this is just a picture in a photo cutout. I'll bring it to the front. This is a picture I got out of the image library. Let me go get another picture. I've got a picture of a sunflower here, right, that I took. It's one of my digital photographs, not the best, but... And I just put it to the back and I can resize it, you know, down to a size and put it wherever I want and boom, there is my picture, complete with tape. Again, you can see the bullet points, you can see the chalk bullet points, graphs you can see. Notice the chalk of the graphs, the chalk texture in them.

All this is automatic. So that's Blackboard. Here's another one called Letterpress. This one's pretty classy. Again, a photo cutout, bullets, all the fonts are chosen for you. This looks like it's letterpressed right into beautiful paper. Look at this. Look at the texture on the graphs. All this is done automatically for you, whatever you want. Colors are chosen. You can override anything, but everything is chosen for you to begin with. Here's one called Pushpin that's kind of fun. Again, notice the photos tilt a little bit. You can put your own photos in there. There's an old one of me. And Pushpins for the bullets, you know, again, look at the textures, right. So that's Pushpin. This one's Sandstone.

It's beautiful. Look at this. Look at the bullets there. Really beautiful stuff. And you can have this in your presentations with zero effort. Like you've got a graphics department at your fingertips. This one's called Notebook. We saw that a little earlier. There's my sunflower again. Here's one called Parchment. It's really beautiful. Look at the bullets on this one. The fonts. Again, this is just a table where I've taken off the outside lines. That's trivial to do. So the fun thing, you notice anything from iDVD, right? We thought it was a good idea. We brought it over here. Your pictures.

Again, very, very high production value throughout. There's one called Crayonline. Whether it's a presentation to your most important customer or to the school district or wherever you've got to make a presentation, we've got themes for you. We've got 12 themes built into Keynote and you can make your own custom themes and use those as well. Now we also wanted to build in pro-quality transitions. We all watch TV and we go see movies every day and we're used to these very high production value things for free on television every night.

Well I think people want to see them in their slideshows too and so look at what the team has been able to do. I'm going to show you some beautiful transitions. We're going to start off with a very simple one, a beautiful cross dissolve, a beautiful cross dissolve, a push, a reveal, a beautiful wipe. Look at that beautiful wipe. See the blur on the edge of that wipe? Very hard to do. A pivot, a drop, and a twirl. Now what I haven't told you is that all these transitions have been actually going through Quartz graphics and the OpenGL pipeline. You don't care about that when you put your presentation together, but you will see the results of being able to go through a 3D pipeline for these transitions right now.

3D mosaic, small and large. Let's just flip it around. I'm just going to flip these around. Imagine this in your slideshow. And now, why not a cube? What do you think? So now let's apply this to some of the themes. Look at Blackboard. Again. Very easy. Letterpress. Crayon line with mosaic.

And sandstone, again, with a cube. So, that's what Kino can help you build and help you build fast. Now, in case you've already got something built, Kino is compatible. Kino imports and exports PowerPoint. But it also can export into Adobe PDF and into QuickTime. So you can share your presentations with anyone. And we have an open file format in Kino.

It's all XML based. You can read it. And so we think that third parties are going to start to build applications that go into databases and get information and automatically build presentations for you. Imagine coming in in the morning, if you're in business, and having a presentation built for you automatically that shows the stats of the day before. You know? That's the kind of thing you can do with an open file format. And that's what Kino has. So, that is Kino. All right. So, Kino. Slide navigator. A beautiful way to navigate through hundreds and hundreds of slides and keep everything organized.

Amazing text. Anti-aliased. Infinite number of sizes. Rotations. You name it. Alignment guides. Once you use this, you can never go back. This is such a powerful feature. Graphics. Fully anti-aliased. Professional resizing. Professional rotation built in. Full alpha channel. Full compositing. Transparency built in. A dozen themes. We saw. Blackboard. All these beautiful themes built in. And these amazing transitions. Compatibility built in. The ability to share your presentations. Kino runs on Mac OS X Jaguar.

Another reason to go get Jaguar. And this is what it looks like. We are going to sell Kino for $99. And Kino is available starting today. Now, seeing as that you were the first people to ever see Kino, we want you to be the first people to get your hands on it. And so we are going to get you a free copy of Kino when you leave this auditorium today. So. So how are we doing so far? Well, I asked you to buckle up before we get started.

Now I want you to put on your shoulder harness. So. So how are we doing so far? Well, I asked you to buckle up before. Now I want you to put on your shoulder harness. Two years ago, here, today, we introduced a landmark product for Apple and the industry. It may be because it's only one inch thin. Or weighs just 5.3 pounds. It may be because it has a 15.2 inch screen.

Or is super computer fast. It may be because it's made out of titanium. But, you know, whatever it is. Jeez, you're just going to so want one. The incredibly thin, ultra light, mega widescreen titanium portable super computer. So. The titanium power book instantly became the best notebook computer in the industry. The number one lust object. Every review said so. And you know what? No one's caught up with it in two years. Every, almost every reviewer today still says it is the number one notebook in the industry.

No one's even close. And this has really been important for Apple too. Because we believe that someday notebooks are going to even outsell desktops. Notebooks are going to be over 50% of the personal computers we ship. And so let's see how we're doing. In 2000, about 20% of the computers we ship were notebooks. About the same as the industry. But again, we think in a few years this number is going to get to 50% and possibly even higher. In 2001, with the introduction of the titanium power book and the iBook, look what happened. Apple's share went up to 35% of the computers we ship were notebooks.

Last year we dipped down a little bit to 32%. But this year we think we're going to be at 35% again. Leading the industry by over 10 points to get to 50%. And this is really important to us. We want to replace even more desktops with notebooks. So how do we do this? What's next? Well the titanium power book is a milestone product and it still is and it's not going away. But we're going to step it up a notch to attract even more people from their desktop to a notebook. And how do we do that? We do that with this. The new 17 inch power book.

17 inch landscape screen. Where did we get this? Well, I wonder. We have taken the same display that has been greeted with applause on the iMac and we have built it in with a thinner backlight into the new 17 inch power book. It is stunning. And when you close it, it is only 1 inch thick. It is actually a little bit thinner than the titanium power book. It is the thinnest power book ever.

And let me go ahead and show you one. I happen to have one right here. It is the most incredible product. ever made. Let me show it to you right now. The new 17 inch PowerBook. It's amazing. Look at this. Look at that screen. Look at how thin it is. Isn't that incredible? When it's closed, it's less than one inch thin. It's beautiful too. There it is. This is clearly the most advanced notebook computer ever made on the planet.

Our competitors haven't even caught up with what we introduced two years ago. I don't know what they're going to do about this. You will be able to see these, touch these, use these in our booth. The new 17 inch PowerBook. It's got a 1440 by 900 display. Of course, that is widescreen. Apple pioneered widescreen displays on portables. 16 by 10 aspect ratio. It is a stunning display. Look what you can do on a notebook now. You can have your Photoshop images with all of your palettes up. You can be using InDesign not just on one page but on a spread.

Look what you can do with Final Cut Pro or Final Cut Express. Look what you can do with DigiDesign or, in this case, E-Magic's Logic. You've got a desktop that's one inch thick on the road with you. It's stunning. Let me show you one other industry first feature that I think you're going to like. The keyboard is the most solid keyboard we've ever shipped. It's beautiful. Let me show you what happens when the lights go down. There is more engineering that's gone into this product than probably anything Apple's ever made.

It is stunning. Our engineering wizards came up with a fiber optic backlighting system for the keyboard, but they didn't stop there. They built in ambient light sensors that automatically detect when the light goes down to bring the keyboard back lighting up. So, all of this, 17-inch display, a lot of glass, full-featured notebook, only 6.8 pounds. Keep in mind that most of our competitors' 15- and 16-inch portables are 8.5 to 10 pounds. 17-inch, first 17-inch notebook in the world, 6.8 pounds.

And we built it out of a new material. After researching everything, the best material to build this out of was an aircraft-grade aluminum alloy. It's beautiful, and it's hard anodized and not painted. So, what's inside? We know what's outside. One gigahertz G4 with a one megabyte L3 cache. This thing screams. A SuperDrive slot load. New GeForce 4 440 Go graphics, really fast 3D graphics with 64 megabytes of graphics memory.

And now something new. Today, we're announcing FireWire 800. FireWire 800 is the FireWire you know and love that runs twice as fast, 800 megabits per second, faster than FireWire 400, faster than USB 2.0. It screams. And let me show you the connectors on the portable. We've got a USB connector. We've got FireWire 400. We've got FireWire 800, which needs a new connector. But guess what? If you want to use it as a FireWire 400, there's a little adapter, so you can have two FireWire 400 ports on your portable as well. Gigabit Ethernet. We're the only people still to do this, to build in 10 megabit per second, 100 megabit per second, and gigabit per second Ethernet into our portables.

S-video output and, of course, DVI output, digital video, which includes VGA. Let's go around to the other side. We've got security. We've got power. We've got the modem. We've got a second USB port. So no matter which handed you are on the mouse, you can plug it in. We've got a PC card slot. We've got line in, and we've got headphones. But we've got some I.O. that doesn't need any connectors, because this is the most wirelessly equipped notebook in the world. First of all, Bluetooth is built in.

So you can talk to all your Bluetooth peripherals, whether it's the cell phone in your backpack that you don't want to dig out, or some other Bluetooth peripheral, all built in. Second of all, AirPort is built in. Let me say a few words about AirPort. Apple pioneered 802.11 wireless networking computers. We were the first company to ever ship 802.11, which kicked off the whole Wi-Fi revolution. And we shipped over 2 million 802.11 airport devices. Over 2 million. Now, they all run at 11 megabits per second, which is great. That's the industry standard. That's what every hotspot is based on. But today, we're taking it up a level, and we're introducing AirPort Extreme.

AirPort Extreme runs at 54 megabits per second. And it's based on a new standard called 802.11G. Now, let me explain this. What's the G about? Well, when we first shipped 802.11, the first in the industry, it was actually 802.11B. And 802.11B is the 11 megabit per second standard that became an industry standard. It's what's in every hotspot around the world. 802.11B, today's standard. Some people felt, though, that that wasn't fast enough. And they wanted to go faster. And so about 6 months ago, some companies started shipping 802.11A.

Don't ask me why A comes after B. It just did. 802.11A runs at 54 megabits per second. But guess what? It's not compatible with anything out there that's B. It's not compatible with any hotspot in the world. It's not compatible with any other 802.11 device. And we think, for that very reason, A is doomed to failure. And so we didn't adopt it. We waited for G. Because G offers the same 54 megabits per second, and yet is fully compatible with B, with every hotspot on the planet. And it will become the industry standard. And so, if you have 802.11G in your notebook, it still works with a B base station.

It just throttles down to 11 megabits per second. You don't have to run out and buy a new base station. And if you run out and buy a new base station with G in it, and you're using a notebook with a B card in it, the base station throttles down to 11, and it works just fine, too. It all works together. And when you have a G in both, it runs all the way up to 54 megabits per second. So that's Airport Extreme. We have a new card that is built in to the 17-inch PowerBook. And we've put the antennas where they belong. We have two antennas in the screen. And in the notebook world, the gold standard for 802.11 reception is the iBook.

It's what every competitor measures against. Guess what? In our testing, the new 17-inch PowerBook has a range that is equal to the iBook. So that's what's in the computer, built in to the 17-inch PowerBook. Now let's talk about the base station. We have a new Airport Extreme base station, up to 50 users. Now this is really 50 users, way more than competitive base stations. 50 real users, and it's great for education or for small business or for anyone who needs more than 10 or 15 users, like most base stations handle. We are also introducing wireless bridging into the airport base station. And so if you want to extend your range, simply get another airport base station.

You can seamlessly walk around between them, and you will automatically be bridged. Another feature that people have been asking us about a lot, no one's ever done this before, USB printing. There is a USB port on the base station. You can plug in a USB printer and share it. among all of your wirelessly connected notebooks. The AirPort Xtreme Base Station is going to sell for $199. So that's AirPort Xtreme, and along with Bluetooth, that makes the 17-inch PowerBook the most wirelessly capable notebook in the industry.

We also have the best battery technology. It uses lithium prismatic batteries, a state-of-the-art battery technology. There's one battery on the bottom, just pops out, pops in, and with this giant 17-inch screen, we still get, through great power management, four and a half hours of battery life. We're very happy about this. So, 17-inch PowerBook, 17-inch widescreen display, one-inch thin, 6.8 pounds, backlit keyboard, ambient light sensor, four and a half hour battery life. And then, what's inside? Gigahertz G4 with a one-megabyte L3 cache, half a gigabyte of DDR memory running at 333 megahertz, GeForce 440 Go with 64 megabytes of graphics memory, a 60-gigabyte hard drive, and a SuperDrive.

This is the most communications ever in a PowerBook. Airport Extreme built-in, Bluetooth built-in, both FireWire 800 and FireWire 400 built-in, gigabit Ethernet, every possible way to get video out, and, of course, dual display support. The new 17-inch PowerBook boots into Mac OS X. And we are going to bundle the new QuickBooks for Mac OS X with every 17-inch PowerBook. This is a $299 value. So what are we going to sell this for? Sell this for $32.99. And we will be shipping these next month, in February.

So, the 17-inch PowerBook. We just took another giant leap. There is one more thing. It's one more small thing. When we were inventing all of the technology to build this, tremendous technology to be able to do this, it's way far ahead of what anyone in the industry is capable of doing. We decided to apply that technology to something a little smaller, which is this. Yeah. Want to see that again?

A new 12-inch PowerBook that is only 1.2 inches thick, weighs 4.6 pounds. It is the smallest PowerBook ever, even smaller than the Duos, if you remember those. It is the smallest full-featured notebook in the world. New 12-inch PowerBook, and I happen to have one right here. There it is. It's got a full-sized keyboard, and you can see the enclosure. It just hugs that keyboard.

Beautiful 12-inch display. This is smaller than the iBook in every dimension. All the I.O. you could ever want. Slot load drive. Slot load optical built in. It's just a beauty. It's really, really tiny. So, 12-inch PowerBook. It's got a 10x7 display. It's got an 867 megahertz G4 built in. This runs the iApps beautifully. It runs 10 beautifully. It's very nice. GeForce 4 420 Go graphics chip for really good graphics with 32 megabytes of graphics memory built in. It's got a slot load combo drive built in, so you can play DVDs and burn CDs.

Slot load's right in the side. It's got a lot of wireless built in, too. It's got Bluetooth built in, and it is Airport Extreme ready. It's got the antennas in the right places. It's ready for Airport Extreme. The module costs $99. You just pop in if you want to use it. Battery life, five hours. Same as the iBook, even though it's got a G4 in it. We're very, very excited about this product. 12-inch display, 10x7, 1.2 inches thick, 4.6 pounds, five hour battery life. Very fast product, G4 based, quarter gigabyte of memory, DDR, 266 megahertz, 40 gig hard drive, combo slot load drive, and again, Bluetooth built in, Airport Extreme ready, and all the IOU you would need.

It boots into Mac OS X, and we are bundling QuickBooks for Mac on this as well, and we're going to sell it for $17.99. This is the most affordable PowerBook ever, and we will be shipping them in about two weeks. So, another cool thing is, you can build this to order on our website, or through your dealer, and you can build it to order if you want with a SuperDrive in it. So you can even burn DVDs in this 12-inch PowerBook, and that's going to cost you $19.99, only $200 more.

You can have a SuperDrive in your 12-inch PowerBook. So this is clearly going to be the year of the Notebook for Apple. We've got the 12-inch iBook, starting at $9.99. This thing is an incredibly popular product. We've got the 14-inch iBook, and now we've got the 12-inch PowerBook, we've got the 15-inch Titanium PowerBook, and we've got the new 17-inch PowerBook. And so this lineup has our largest screen portable ever, and our smallest portable ever. This is going to be the year of the Notebook for Apple. So I've got a video I would like to show you, if that's okay. So let's roll the video.

Two years ago, Apple introduced the Titanium G4, and no one has come close to it yet. And now Apple is raising the bar again with the world's first 17-inch Notebook. We took the same gorgeous display as the 17-inch iMac and created the new PowerBook around it. And incredibly, it's only one inch thin and weighs only 6.8 pounds. The new PowerBook is unquestionably the most difficult PowerBook we've ever designed. The 17-inch display defines the X, Y, but the real challenge is with the product's thickness.

And it took the collective learning of the entire team to actually make this the thinnest PowerBook ever. For an optimal strength-to-weight ratio, we actually formed the main shells from an aircraft-grade anodized aluminum, which is not only a really beautiful material, but it's actually extremely durable. We've combined a 1 GHz G4 processor with a new high-performance architecture to make the fastest PowerBook ever. There are two FireWire ports, one using the new high-speed FireWire 800, The 17-inch PowerBook is the first notebook in the world to ship with the new 802.11g wireless standard. We call it AirPort Extreme. And with built-in Bluetooth, you can surf the web or check your email without cumbersome cables.

One of my favorite new features is the fiber-optic system for backlighting the keyboard. There are two ambient light sensors that are continually adjusting the illumination of the display and of the keyboard. Typically, Apple, the nature of the solution is so understated, it completely belies the complexity of the problem it's actually solving. And if creating the world's largest notebook wasn't enough, Apple has also created the world's smallest full-featured 12-inch notebook. Tiny, but with all the features you'd expect from a PowerBook G4. With both the largest and smallest full-featured notebooks ever made, you'll have a hard time remembering why you ever needed a desktop.

How'd you finally do it? Do what? Manage to give a woman flowers and be president at the same time. Well, it turns out I've got a rose garden. Mr. Peter, the President of the United States! I wrote The American President on what was the first Apple portable computer. I wrote the series Sports Night on a G3 and now I write The West Wing on a G4. So the computer is my friend. Writing, whether you're writing a movie or a television series, is a tremendous amount of rewriting. You really want to be able to see as much of the page as you can. A big screen like this is a lot of help. You're cutting and pasting and you're moving this speech to that scene and you're cutting this scene and moving it to that episode.

It doesn't feel like the world is coming down around you anymore. You can kind of see your work in front of you. This is the kind of thing that Apple and only Apple seems to come out with. I'm not sure with what part of the brain they're thinking, but it's the good part. This is called a laptop. And this is by a company called Apple. I've always traveled with my PowerBook wherever I go in any country that I'm in. Apple computer. It's just simple, it's easy and it always works. This is sweet. This will easily fit in anybody's backpack.

You're going to find photojournalists are going to just crave this one. The most fun about being a photojournalist is that you get to compete with your friends every day. And if you can beat the next guy by even 10 seconds, you win. You beat him and your picture appears in the paper or gets on a website. And that's what's really cool. I love that and anything that increases our speed will help me over the next guy. With Bluetooth technology, being able to transmit my pictures right from my computer, right off my cell phone, without having to dig it out of the pack, just keeping it in my backpack or whatever, is going to be a huge advantage. That's terrific. This is my digital darkroom on the road.

I want powerful tools, but I want them to become secondary to my art, which is music. And Mac lets me do that. I didn't think that you guys would be able to top the titanium. And that's what's so astonishing about this. I really enjoy having multiple monitors hooked to the same computer, because it allows you to kind of see what you're working on. And so to be able to do that on stage is just going to be outrageous, man. What's going on? You have to be joking me. Oh, my God. Wait, and it's auto-sensing? You turn the lights down? Okay. When do you guys stop thinking of cool stuff?

4PC users are going to have major gear lust now. They thought it was bad before. I see trees of green, red roses too. I see them bloom for me and you. And I sing to myself, oh, wonderful world. Our preoccupation developing these products wasn't with visual language, although we care massively about appearance. No, our obsession was with real design, was with how the products were built, how they're going to be used in the real world.

I've been waiting for this my whole life. The screen is incredibly clear. The keyboard's lit up. This is beautiful. I've been looking for a power book that was small, that was tough, that I could carry with me. I think this thing will fit the bill terrifically. Bluetooth ready. It's got a 17-inch screen. You've got audio inputs and outputs. There's nothing I can think of that I would have asked for that you guys didn't put in this computer. Not a thing. And some things I wouldn't have even thought to ask for that are going to make my life a lot easier. What a wonderful world.

So I've got one more thing to show you today, which is some TV ads. I want to know what you think of them. I've got two of them. So could we run the first one now? It's enormous. It's expansive. It's awe-inspiring.

It's the first 17-inch notebook computer in the world. And it's not alone. Presenting the most compact full-featured notebook computer in the universe. The new 12 and 17-inch power books from Apple. So that's our classic product spot. But then we were thinking, how could we talk visually about the largest screen notebook in the world and the most compact notebook in the world? And we came up with this. See what you think.

Presenting the new 12-inch power book, the world's most compact full-featured notebook computer. And the new 17-inch power book, the world's first and only 17-inch notebook computer. The new 12 and 17-inch power books. The next big and small figures from Apple.

We have the great fortune to work with some of the most creative guys in the world at Shia. Lee Cloud, James Vincent, the whole team there are fantastic. So that is our new power books. And in closing, I just want to say that what's driving us is one simple thing. And that's innovation. Look at what we've seen here today. You know, I read some of the rumor sites that said this was going to be the most boring Mac world in history. Let's benchmark that. We've got Final Cut Express. You can edit like a pro for $2.99. We've got iLife, three brand new iApps. And they're all integrated together, doing the same for the digital lifestyle that Microsoft did for productivity with Office.

We've got a brand new browser, the fastest browser on the Mac, the best browser in the world. And we've got Keynote, when your presentation really counts. And we've got the world's first 17-inch notebook and the most compact full-featured notebook in the world. So I guess you shouldn't believe everything you read. And all of this stuff, all of this stuff doesn't just materialize. There are a lot of people that put their lives into this stuff. And I'd like everybody from Apple that's here right now to stand up. We've got fantastic engineering in John Rubenstein's hardware group, in Abhi Tiwainian's software group, in Sina Tamaden's applications group.

Phenomenal. All the guys from those groups, please stand up. I want to give them a round of applause. And surrounding them, we've got the best ops team on the planet that's killed themselves to bring these powerbooks into existence. And the rest of the infrastructure at Apple helping us all do what we want to do, which is to drive this industry with innovation. And I hope that when you get your hands on this stuff, when you go see it out in the booth, when you buy it hopefully, you're going to agree with us that Apple is really leading this industry.

So thank you very much for coming today. I look forward to hearing your feedback.