Steve Jobs on the Intel Transition

After leaving Apple Computer in 1985, which two technology companies did Steve Jobs found? NexComputer in 1985 and the help of Pixar animation studio a year later. He returned to Apple Jobs in 1997. Apple Computer is a company that produces unique and epochal products. And they are preparing for a new epochal business step. After a long cooperation, the company refuses IBM in favor of Intel processors. Steve Jobs announced this today at a conference of developers in San Francisco and agreed to tell us in more detail. Mr. Jobs, glad to see you. Thank you for agreeing to participate with us today. With pleasure. What is this step?

This step is not as epochal as you describe it. We already have excellent products with PowerPC architecture. We are also preparing to provide new products with this architecture. The transition will be gradual. We hope that in a year, when we meet again with the developers, new Macs with Intel processors will be presented on the market. But the transition itself will take a year or two. The attendees say that you strongly responded to the inability of IBM to supply you with what is necessary for the production cycle. What exactly did IBM fail to meet your expectations? You know, we have a very good relationship with IBM. They have their own development plan. Their products are great.

But as we look out into the future, we intend to move in a different direction. We imagine what great devices we want to present to our customers in the next few years. And if you look out into the future for a year or two, Intel's development plan is much more in line with ours than the plans of other companies. That's why we're going to begin the transition now. It's going to take two years. But I think in the future we're going to get the devices that we want to produce. Our products today are fine. It's really going to be a year or two where we see some issues. I understand that you don't want to reveal all the cards, but could you at least describe roughly the development plan that Intel agrees with? Yeah, you know, I should say.

We never discuss the products that have not come out yet, so I can't say anything. You used to say at Apple, it's funny when the ship starts to sink from above. So, no. What about the direction of the company's development? What is the direction in which you want to go? Well, I guess we'll see. Let me ask a question about other things here. Pixar, there are reports that with the current head of Disney, Robert Iger, there will be warm relations with another company that you run and Walt Disney Studios. Is there any, are there any negotiations about the conditions of distribution with Disney or is this premature at this point?

You know, I had a wonderful conversation with Bob Iger and I really liked Bob. We'll see what happens next. I hope that in the next two months there will be more serious discussions. So now they have more trouble than, say, half a year ago? You know, I guess Bob Iger is a great guy and in the next two months we'll sit down and discuss everything. How's business at Apple right now? We're seeing a heavy economy. People are at the same time making a head or tail. But your business is at the same level. And you can assess the state of the industry. How are things right now? Well, you know, between quarterly reports we won't tell you any details, but the last quarter was just great.

We'll see how things are in this quarter and we'll report on that in July. Now, analysts are concerned about the pace of iPod sales, the fact that they've surpassed all expectations in recent quarters. How's business at iPod right now? You know, again, we can't really discuss that between quarterly reports. But, you know, we're very happy that in many stores our product hasn't been taken from warehouses. That hasn't been the case for about a year on most occasions. So I guess that's a good thing. How many songs have you sold so far? Over 430 million. At 99 cents a track? At 99 cents a track. A lot of people thought it was impossible. And we're selling songs for about half a billion a year.

So we're very happy. The iTunes market share has gone up more than 80% in the last 6-9 months. And it's gone up in the last 6-9 months, but we've had a lot of new competitions. I was just going to ask, how do you feel about Yahoo and other companies that are trying to take a share of your share? You know, in the end, it's all about the results. And I'm really looking forward to Yahoo telling me how many subscribers they have. And they will very soon. All I can say is that our share, which is being measured every week, is going up. So I'm also looking forward to their results. Mr. Jobs, I'm always glad to see you. Thank you for joining us. Thank you. Steve Jobs, head of Apple Computer, and, of course, Pixar Studios.