Steve Jobs on iPhone OS 4: Multitasking, Folders, and iAd

Take all our lines away. Take all our lines away. Good morning. Good morning. Thanks for coming this morning. We've got something to share with you that we're pretty excited about, and that is iPhone OS4. The next generation of the most advanced mobile operating system in the world. And before we get to that, though, I've got a few updates on a few interesting topics. The first one is, of course, the iPad. We just started shipping it on Saturday.

Before we shipped it, we got some really great reviews. This is a quote from Walt Mossberg's review that I just love. After spending hours and hours with it, I believe this beautiful new touchscreen device from Apple has the potential to change portable computing profoundly. Walt's a pretty tough critic, and I thought this was a pretty amazing thing he said. Ed Begg, USA Today, the iPad is not so much about what you can do, browse, do email, play games, read e-books, and more, but how you can do it. That's where Apple is rewriting the rule book for mainstream computing. He also said something a little simpler, which is the first iPad is a winner.

Now, the first day, Saturday, we sold 300,000 iPads, and I want to give you an update. As of today, we have sold about 450,000. And I'm told Best Buy is out of stock. Our retail stores, they're getting them in and selling them right out, so they're kind of hand-to-mouth. We're making them as fast as we can. Our ramp is going well, but evidently, we can't quite make enough of them yet, so we're going to have to try harder. iBooks, users downloaded over 250,000 iBooks on the first day, and as of today, just a few days later, they've downloaded over 600,000, which is great.

And we've gotten just tremendous feedback, really positive feedback on iBooks. And the first day, iPad apps, users downloaded over a million iPad apps. We were just thrilled with this. And as of today, they've downloaded over 3.5 million. So again, this is going like this. But beyond all the numbers, what it was really about for us was this. This was some photos taken in one of our retail stores. People are just loving this product.

And as you know, when you create something, you really have butterflies in your stomach right before you put it out into the world. You really don't know if people are going to like it or not. And so far, people seem to really be loving it. So we're feeling pretty good about it. So that's a little update on the iPad. Now, I'd like to talk for just a minute about the App Store. Users have downloaded well over 4 billion apps. Yeah, well over 4 billion apps to date. And we have over 185,000 apps in the App Store now.

So again, we've had some of our biggest days ever with new apps going into the App Store in the last few weeks. It's accelerating. And we have over 3,500 iPad apps in the App Store. So this is also accelerating. And these apps on the iPad are just amazing. This is the App Store on the iPad. And I just want to show you some screenshots of some of the apps because you'll be, if you haven't seen these, you'll be surprised at how great they are. So some great games, Scrabble, Labyrinth, some wonderful games. Toy Story, read-along books from Disney. This is Miss Spider and a really popular book among young kids.

We've got some awesome driving games. The driving games are terrific. This is an app that actually lets you follow a real race on the terrain as it's happening. We've got Zillow, a real estate application that lets you find all the houses for sale and actually go inside and see pictures of them. Comics, Marvel's got a great comic book app that lets you buy comic books right from in the app. It's fantastic. Weather, the universe. Major League Baseball, fantastic app for Major League Baseball, great app from ESPN. Epicurious for recipes, teaching all of us how to make food.

E-Trade, this is a fantastic app from IMDb. You can just learn so much about movies if you love movies from this app. It's fantastic. ABC turned out a phenomenal app for the iPad. It shows all of their shows and you can just stream them right on the iPad and you turn it sideways and just watch these shows in incredible resolution. They're fantastic. Reuters, we've got a lot of news apps. Reuters, the Wall Street Journal, USA Today, New York Times, Time Magazine.

This is a cool app, Guardian Eyewitness. This basically says rather than text, let's give you the day in pictures and it's really nice. And of all of the futuristic magazines out there, Popular Science is king of the hill. These guys did something really, really breakthrough and if you haven't seen it, it's really worth taking a look at. And Netflix. This app has been highly praised. People love watching the free movies on it if you're a subscriber to Netflix and the quality of the video is very nice. And where would we be without an accordion? A lot of apps.

That's just a few of the over 3,500 iPad apps and the over 185,000 apps on the App Store. Now, let's get to the iPhone. We had a really nice thing happen recently. We won the J.D. Powers Customer Satisfaction Award for smartphones for 2010, but it's not just for 2010 because we've actually won it for the last three years in a row. So we've won it 2008, 9, and 10. Now, if we take a look at market share, one way to look at that is what's the share of use? What's the U.S. mobile browser usage? Pretty good proxy. And if you take a look at this, iPhone has a 64% U.S. mobile browser usage share.

64%. And everything else added together is half the iPhone. Everything else added together is just half the iPhone. So it's pretty interesting. How many iPhones have we sold? To date, we have sold over 50 million iPhones. And if you add iPod Touches into that because they run the same apps from the App Store, over 85 million iPhones and iPod Touches. If you're a software developer, that is a plum market to go after. So today, we are giving a developer preview of OS 4, iPhone OS 4, the next major release of the iPhone operating system.

We've been working on this for a while. It's pretty great. And we're going to ship it this summer, and we're going to release a developer preview today. So let's get into it. iPhone OS 4 delivers over 1,500 new APIs to developers. A lot of stuff that developers have been asking for. Developers can now access the calendar, the photo library. They have full access to still and video camera data. Quick look. They can put SMS inside their apps. We are releasing our automated testing tools, the same tools we use to test our apps to our developers so they can test their apps with them.

And we're releasing a framework called Accelerate, which is in itself, actually, we don't count these APIs in the 1,500, over 2,000 APIs for hardware-accelerated math functions. So if their application is heavy into math, they can really take advantage of this. And these are just a few, just a few of the over 1,500 APIs that they're going to have. iPhone OS 4. In addition, there's over 100 new user features. And again, here's just a few of them. Users can now create playlists on their phone. We've added a 5x digital zoom in the camera app. You know how you can tap to focus when you're taking a still picture? You can now tap to focus on video.

Every photo taken on the iPhone is geotagged, and we've added places in the photo app now so you can see where they were taken. You can change the home screen wallpaper. Been a huge request that we've gotten. You can use Bluetooth keyboards. And we've added a spell checker, which is really nice. If you misspell a word, it'll underline it. You just tap it, and it'll give you what it thinks might be what you might have wanted to type. You can gift apps. This has been a big request, too. So you can buy an app and gift it to somebody right from your phone. So again, these are just a few of the end user features, over 100 of them, in iPhone OS 4. Now, of those, we're going to talk about seven today. We call them tentpole features.

We don't have time to talk about all 100, but we're going to talk about seven of them today. So let's get into it. Let's start off with the first one, which is probably going to be the biggest one, and that is multitasking. Now, we weren't the first to this party, but we're going to be the best, just like cut and paste. Other people had cut and paste before we did, but everybody, I think, widely believed that we just nailed it with the way we did it, and it's much better than any other implementation. I think people will think the same about multitasking, because it's really easy to implement multitasking in a way that really drains battery life.

These apps start running in the background, and there goes your battery. And it's really easy to implement it in a way that reduces the performance of the foreground app and makes your phone feel really sluggish. So if you don't do it just right, your phone's going to feel sluggish, and your battery life's going to go way down. And people have experienced that a lot. We figured out how to implement multitasking for third party apps and avoid those things. And that's what took us a little longer, but I think we nailed it. So what I'd like to do now is demo it for you so you can see what it looks like for the end user. We've got a great user interface for it, and I think you'll like it.

So I've got a phone here with a cable to the projector, and just slide to unlock. You can see I've got my wallpaper up there. And I'm going to just go ahead and launch mail right off the dock there. And so here I am in mail. I'm going to look at a mail message. And this mail message has a URL to a website. So I'm going to go to that website, and I just click on it, and I'm taken to the browser. So far, this is what we do every day on an iPhone. And here I am at this Mount Kilimanjaro website. Now, I want to go back to reading my mail. I'm done looking at this website. What do I do? I can navigate back to the home screen and then click on mail again.

But rather than that, I can just double click the Home button. And the window raises up, and it shows me all the apps that are running. These are all the apps that are running. And I want to go back to mail, and I go right back to where I left it. I want to go back to that web page. There I am, right back at the web page. Very simple, very, very simple. So now what I want to do is I want to go to eBay to check on an auction I'm following. I can just tap on it. And again, I go right to where I left off in the apps. So here I am on eBay where I left off. I'm checking my auction. And now I want to go play a game. Let me go play Tap Tap Revenge. And Tap Tap Revenge gives me a countdown.

It keeps me where I was, but it gives me a countdown of a, all right, I'm not winning here. So again, the game stops. And I can say, great, let me go back and look at mail here. Check mail out. I've been playing a game for a while. Oops, that was the website. Sorry. Let's go to mail. There's mail right there. OK, I don't have any new mail that I need to look at. So let me go back to my game. And again, it's going to take me right back where I left off. 3, 2, 1. Pretty cool, huh? And again, I can go home any time I want just by clicking the Home button again.

And boom, I'm home. All right, makes sense? Really simple UI. Puts the icons of all the apps that are running right at the bottom where I can just flick them with my thumb right here. And it's very, very easy to use, very efficient. And we think users are going to love it. Also, you can see the new look of the dock right there. And again, custom wallpaper. So that is our multitasking UI. It's really wonderful. We've been using it a lot. And it really changes the way you use the iPhone. You're bouncing around between apps just with tremendous fluidity. It's very, very nice. So to explain how we did this while preserving battery life and performance, I'm going to turn it over now to Scott Forestall, our senior vice president of iPhone software.

Scott? Thank you. Thank you. So we are really excited about adding multitasking to apps in the App Store. But how do we do it? How are we adding multitasking while preserving battery life and performance? Well, we looked at the tens of thousands of apps in the App Store. And we distilled down the services that those apps need to multitask in the background. And then we implemented all those services ourselves and did so in a way that preserves battery life and performance. And now, in iPhone OS 4, we're providing those services as APIs to developers so developers can add multitasking while the system preserves battery life and performance.

We're providing seven multitasking services. Let me walk you through this now. The first one is background audio. Now, there are a number of popular audio streaming apps on the store, but none as popular as Pandora. With 50 million registered users, 13 million of whom stream their customized internet radio stations right to their iPhones, Pandora is changing the way that people think about radio. And Pandora has a great application that a lot of our customers use. But until now, if you left that application to go to another app, the music stopped. No longer. With iPhone OS 4, Pandora can continue to play music in the background while you switch between apps.

And you can even use these iPod controls on the lock screen to control Pandora. To give you a demo of how Pandora is going to take advantage of multitasking on iPhone OS 4, I'd like to invite up Pandora's founder, Tim Westergren. Tim. Thank you, Scott. Thank you, Scott, and thanks to Steve and the entire iPhone team. It's a real treat for us to share the stage with you today. I'm joined by our Chief Technology Officer, Tom Conrad. He'll be driving. It's no exaggeration to say that the iPhone has single-handedly changed the trajectory of Pandora. When we launched our app in the summer of 2008, we were on a pretty good run. We had over 10 million listeners, and we were growing at a good clip.

But the day we launched on the iPhone, everything changed. Suddenly, I could take this little guy out of my pocket, and I could peruse my personal radio stations. Or I could create a new one to suit my mood. I could plug it into my car dashboard. Or I could take it to the gym. Or I could even dock it at home to stream Pandora through my own stereo system. It was this completely transformative moment for us, because we suddenly became truly anytime, anywhere radio. Our growth rate almost doubled overnight. And we now add over 30,000 new listeners a day just on the iPhone. So what's the one thing that could make this app much better? Background listening. So when Scott asked us to come here today, we jumped at the chance. It took our developers just one day to make Pandora fully background aware.

And we'd like to show it to you now. So let's say I'm on the train. I'm listening to my personalized radio station. Until now, that's all I'd be able to do. But with the iPhone OS 4, I can now head over to Safari, catch up on my newspaper reading. I'm going to browse over to the New York Times website and peruse some of the latest headlines. Notice the performance of the. even with Pandora running in the background. I see the conductor coming. Let me lock the phone and put it in my pocket for a second. Pandora keeps playing. And I can now control Pandora from the lock screen with just a quick double tap on the home button and I'll pop the controls.

Let me skip this song. I've heard that song somewhere before. I can't remember the name of that artist, so let me go back to Pandora. Oh yeah, Matt Costa. I like this song. Let me buy it. I'll go buy it from iTunes. Notice that Pandora keeps playing. 25% of the 120 million hours we stream every day are streamed over an iPhone. So we're already sending a ton of people to iTunes. Just imagine what will happen when this thing goes live. So I could spend my whole train ride like this. I could read my email. I could browse the web. I could catch up with my calendar. And all the while, my personal soundtrack just keeps spinning in the background just like it was always meant to be.

Thanks very much. Thanks, Tim. Pandora in the background is fantastic. Our next service is Voice over IP. Now, VoIP continues to grow in popularity, led by Skype. Skype already connects more than one out of every nine international phone calls made on the planet. It's amazing. They have a great app for the iPhone. But the problem is, up until now, if you left the app, the phone call ended. And even worse, if you weren't running the app in the foreground, you couldn't receive Skype calls.

But again, all that changes with iPhone OS 4. Now, when you're on Skype, you can switch to another app, and the phone call stays on. You see you get this double high status bar to show you're still on the phone call. And even when you're not running Skype in the foreground, when you lock the phone, you can still receive Skype calls. To give you a technology demo of how they can take advantage of multitasking on iPhone OS 4, I'd like to invite up Skype's head of iPhone product development, David Ponsford. David. Thanks, John. Thanks for inviting us here today. We're very excited to be here. I'm here with John Chang, our lead iPhone developer, who's going to help me demo the Skype app today.

Skype enables the world's conversations, helping people make great quality free phone calls. In just six short years, we've amassed over half a billion registered users, touching almost every country on the planet. And now, with iPhone OS 4, it's even more convenient to use Skype. Let's show you how. This is the screen I see when I first go into Skype. I can see all my contacts, and I can see those that are online with a green icon next to their name. And of course, they can see that I'm online too. Now, until today, navigating away from the Skype app meant that I'd go offline. The app would quit, and I'd no longer be able to receive chats or calls from any of my contacts. However, with iPhone OS 4, when I leave the app, I go into background. Yet, I'm still able to receive calls. Let's say I want to go to one of my favorite games.

I just double-click the Home button, bring up the multitasking UI, and go straight to it. Now, even though I'm in another application, I still look online to my Skype contacts because the OS is maintaining a network connection between my iPhone and the Skype cloud. Oh, look, Aaron's calling. Now, even in another app, if someone tries to call me, I receive a notification, and I can answer it with just one tap. Hey, Aaron, are you there? Hey, David, how's it going? Pretty good. Can you just hang on one second? Yeah, sure. Great. Now, the notification you saw was really simple to implement. Just a few dozen lines of code, and we can play our own custom sound. By the way, we're piping the sound from this iPhone through the AV system here, kind of like a giant speakerphone.

This is a real Skype call. Hey, Aaron, are you there? Yep, I am. Hey, I was wondering if you're interested in getting some dinner tonight. Yeah, sure. I'll just go into an app and see if I can find some places. Okay. Okay, so you can see at the top of the screen there's a red status bar. This shows that the Skype call is still in progress, even though the Skype app's no longer in foreground. I'm just looking up some places now, Aaron. How about we go to Abacus? That sounds great. Actually, I always wanted to try that. Cool. Okay, I'll send you the details in a few minutes. I'm just with some folks right now. Okay, sounds good. I'll see you later. Great. Bye-bye. So now I can choose to go to another application, or I can just put the phone in my pocket. In either case, the app will be in background, and I can still receive calls.

Now, with iPhone OS 4, Skype is even more convenient and useful for everyone that depends on it every day worldwide. Thanks for having us here today. Thank you. Thanks, David. So Voice over IP, working in the background on iPhone OS 4. The next service we have is background location. Now, there are two classes of applications that would like to use your location in the background. One are turn-by-turn direction applications, like TomTom. Now, these applications want to continuously monitor your location using GPS, so they can always tell you when to take the next turn. The problem is, until now, if you left an app like TomTom, then it would stop tracking your location and stop giving you directions.

But now with iPhone OS 4, you can be getting directions from TomTom in your car, listening to your music right from your iPhone, and it's still in the background giving you directions. Turn right, then stay in the left lane. So it can continue to track your location continuously with GPS in the background. Now, GPS uses a fair bit of power, and something like TomTom wants to use it all the time, and that's okay for an app like this because it's generally used in the car when your iPhone is plugged in and charging. But there's another class of applications that also wants to use your location, but it isn't used when you're plugged in and charging. These are social networking applications like Looped.

And we came up with a great solution for these apps that doesn't require GPS to be on all the time. And for that, we use cell towers. Now, it turns out our baseband is always connected to a cell tower. It's the way that you receive phone calls. And it knows when you've moved from one cell tower to another. And if you've switched cell towers, we know you've moved location as well. So we're sitting there with this very low power, always listening to it, and we know you've moved locations, normally 500 to 1,000 meters to switch between cell towers. We can then wake up the application and tell it your new location, and it can tell all of your friends. So that's background location. Now, for all these location things, we take privacy very, very seriously.

Ever since we added the first APIs for location, we would put up a panel whenever an application wanted to use your location, and the user would have to approve this. We're taking privacy several steps further in iPhone OS 4. First, we're adding an indicator right on the status bar to let you know if any application is asking for your location, be it a foreground application or one of the background applications, so you can know if something's tracking your location. Next, we're adding fine-grained settings so you can see all the applications that would like to use your location, and the user can enable or disable location per application.

And on top of all of this, if any application has asked for your location in the last 24 hours, we'll add an indicator right next to that app so you can know that it's asked for your location. So we're being completely transparent on the usage of location, and we're letting users set, on an app-by-app basis, the ability for apps to use location. And that is background location. Next, push notifications. Now, we've had these for about nine months now. They're incredibly popular. They're great for things like scoring updates, news alerts, challenging you to a game. So they're incredibly popular.

In fact, in just nine months, we've pushed more than 10 billion notifications. Here's how it works. A third party sets up a server. They send their notification to Apple's push notification server, and then we send it to the phone. And we can do this with very low power because we're always connected. We have a single connection to the phone. And we'll coalesce multiple notifications from multiple sources through this one connection to the phone. So that's push notification. Now, building on push notification, we're adding a new service, which is local notifications. Local notifications are just like push notifications, except you don't need a server. It can all be done right on the phone.

So, for instance, let's say you have a TV guide application, and it wants to alert you, give you an alarm when your favorite television show, The Colberry Pour, is about to start. And it can do all of that with local notifications. So that's local notifications. Next, task completion. There are some apps that take a while to complete an operation, like Flickr. If you start uploading photos to Flickr, it takes a little while to do that. And until now, if you left the application while it was uploading the photos, it would stop. But with task completion, Flickr can continue to upload those photos in the background even after you switched away from it or to another application.

Our last service is fast app switching. Now, this is probably the easiest for developers to adopt and probably the most important. Fast app switching is what allows an application, when you're running it, and switch away, to store all of its state and move into a quiescent state in the background, so it's not using any CPU at all. So let's say you go from tap-tap to mail, and then when you go back to that game or whatever the application is, it's instantly exactly where you left it. There's no need to launch the application. There's no need to restore the state, restore where you are in the game. Everything has been preserved, and you're right back where you were. And these are our seven services for multitasking.

They are very, very deep and provide a lot of power for developers to add multitasking to their apps. To go along with all this, we have this incredible user interface. It's making it incredibly simple and fast for you to switch between applications. And that is multitasking, which is our first tentpole for iPhone OS 4. I'd like to hand it back to Steve. Good job. Thank you, Scott. So our second tentpole. This is one where we've also gotten a lot of requests. Folders. As people are downloading more and more apps, they're having to flick from page to page to page to find them.

They want to organize them. They want a better way to organize them and folders fit the bill. And rather than talk about it, let me just show you what they look like. We came up with a really beautiful implementation of folders. So let me go to my second page over here full of apps, and I want to make a folder with games in it. I have several games, and it'd be nice if I could put them in one folder, keep them all together, and make it real easy to find them. So what I do is I just push my finger on an app, just like I do to move it. They start to jiggle, and I just drag one app on top of another, and it instantly makes a folder. Right? Now, it also automatically names the folder based on the category that these apps came from from the App Store.

I can rename it, anything I want, but if I don't want to bother, I just use the name that it intelligently selects. And that's folders right there. Let me put a few more apps in. I can just drag apps in there, and you can see the icon actually changes as I drag apps in. So now I've got a folder with my games in it, and there they are. And I just tap on one to launch it. I can drag this around anywhere I want. And I can have as many folders as I'd like. I can also even, let me go ahead and make space in the dock. I can even put a folder in the dock so that I have it.

Now, wherever I am, whatever home page I'm on, I've got my games with me. Right? Really nice. Now, one of the other things I wanted to show you, it's not really about folders, but it's about the home screen, which is the ability to change the wallpaper. It's really nice. So let me go into settings and wallpaper, and I've got a camera roll with some wallpaper on it, and I can just change it very easily. I can say, let's pick this one. I could set the home screen to this or the lock screen or both. So I'm going to just set both to that. And now you can see I've changed my wallpaper.

Oops, sorry. And again, you see my folders right there. I can use multitasking and just go right back to settings, exactly where I left. Let's pick denim. There we go. And again, folders. And right back where I left again. And let me pick one more. So there you go. And that's how easy it all is. So that is folders.

An incredibly great drag-and-drop UI with intelligent naming And you used to be able to see 180 apps in your phone over those 11 pages. If you replaced every one of those with a folder, it's now over 2,000. So for the person that likes to download a lot of apps, we have a solution. So that is tentpole number two, folders. Now let's go to tentpole number three. Tentpole number three is an enhanced mail. We've added a lot of great features to mail, a lot of suggestions and requests from our users that we've been able to get into this new mail in iPhone OS 4. The first, unified inbox.

Customers have really wanted this so that you can have multiple email accounts, say a MobileMe one, a Yahoo one, an Exchange one, and all the incoming mail will be put into one inbox. So you don't miss anything. And we've made it so you can have more than one Exchange account as well, which has been another big request. So all of that in the new mail client. Unified inbox. Now, if you want to focus on just one account, we've added fast inbox switching. So with just a few taps, you can move between one inbox or another if you just want to focus on one. In addition, we've added the ability to organize by thread. So you can follow email conversations and discussions much easier.

So as an example, we'll look at the second message down. You'll see that it's got a three and a double chevron right there that says there's three messages inside there. And when we go in there, you'll see the three messages, the most recent one on top that hasn't been read yet. But you can follow that conversation all along by easily looking at the prior messages. They're all bundled in one place, organized by thread. And open attachments. The ability to get an attachment in email, tap on it, and open it with an app from the App Store. This is really great. In this case, it's OmniGraph, and I can just tap it, and it'll open with the app. So some new features in mail. There's lots more, but the biggest ones are the unified inbox with multiple exchange accounts, fast inbox switching, threaded messages, and you can open attachments with apps.

All right. All right, so that is number three. Let's go to number four. For iPhone OS 4, we are adding iBooks. We have a great iBook reader for iPhone OS 4. This is what it looks like. The same bookshelf that we rolled out in the iPad and the same iBookstore online bookstore. I'm really excited about this. We've had a lot of... Even just since rolling it out on the iPad, we've had so many requests to bring this to the iPhone. Of course, we were doing that.

And it's just a great experience for reading. That's what it looks like on the iPhone. There's Winnie the Pooh. And so we think customers will really enjoy this on their iPhone, their iPod Touch. It's a delightful e-book reader with the iBookstore online bookstore. You can buy your books once and read them anywhere. In other words, you can buy it for the iPad and you can transfer it on to your iPhone or vice versa. You just have to buy it once and you can read it on any of your devices. We're going to be wirelessly syncing your current page and bookmarks between devices automatically. And just like we do on the iPad, we're going to supply a free book.

And we think Winnie the Pooh is a good choice. You know, we labored over that with the iPad. What is the book that we could supply just to get people started that we really felt great about? And Winnie the Pooh won. So that is iBooks. And it is our fourth tentpole. Now I'd like to turn it back over to Scott. Temple number five. Thanks, Steve. All right, so our fifth temple are some great features for enterprise. Now, the iPhone has made huge inroads in enterprise. Already, more than 80% of Fortune 100 companies are using iPhones.

And so we have some really nice features here, starting with even better data protection. So now, in iPhone OS 4, we will encrypt all of your email, including all the attachments, with your PIN code, so better encryption in email. And we're making APIs available so developers can encrypt all the data inside their app as well. So great data encryption. Next, mobile device management. This has been a huge request. There are companies out there like Sybase and MobileIron and a number of others. And they build these enterprise solutions for deploying large number of phones to companies. We did the work in iPhone OS 4 to enable those solutions to also manage the deployment of iPhones.

So this is a big one. Mobile device management. Next, wireless app distribution. So a lot of companies are building custom applications. And until now, the employee would have to plug into iTunes to get those apps. But no more. With iPhone OS 4, that company can wirelessly distribute these applications anywhere in the world from their own servers, so wireless app distribution. Next, as Steve mentioned, we're adding support for multiple Exchange accounts on a single phone. And we've added support for Exchange Server 2010.

We've also added support for SSL VPN for both Juniper and from Cisco. So some great enterprise features in iPhone OS 4. And that is our fifth tentpole. Our sixth tentpole is Game Center. And this is a developer preview in iPhone OS 4. Gaming is extremely popular on the iPhone and the iPod Touch. In fact, we have more than 50,000 game and entertainment titles on the App Store. And we're going to be adding more and more of those to the competition. If you look at dedicated gaming devices, like the Sony PSP and the Nintendo DS, we just blow them out of the water, with more than 10 times the number of game and entertainment titles as either of them.

We want to make gaming even better on the iPhone. So we are adding a social gaming network. This allows you to play games on your iPhone, and you can play games on your iPad. We also have a social gaming network. This allows you to challenge your friends to games. This is what it looks like when one of your friends is inviting you to play a game. We also do automatic matchmaking. So if you're playing a game and it requires four people to play, we'll automatically find three others of a similar ability to you in that game and put you all together into the game. You can compare how you're doing against your friends and with leaderboards. And you can see how you're progressing through a game and compare yourself against your friends with achievements.

So Game Center, it's a social networking game, a social gaming network, where you can invite your friends, matchmake, compare yourself with leaderboards, and achievements. It's a preview in iPhone OS 4, and it'll be available for everyone later this year. And that is Game Center, which is our sixth tentpole. I'd like to hand it back to Steve. Thank you. So our seventh tentpole is called iAd. It's mobile advertising. We're building it right in to iPhone OS 4. Now, what's this about? Well, we have 185,000 apps on the App Store created by tremendous developers.

A lot of those apps are free, and the rest of them are really reasonably priced. You've got apps for free, for $0.99, for $1.99. And we like that. Users like that. But these developers have to find a way to make some money, and we'd like to help them. Now, what some of the developers are starting to do is to put advertising into their apps. And for lack of a more elegant way to say it, we think most of this mobile advertising really sucks. And we thought we might be able to make some contributions. So this is what this is all about. It's all about helping our developers make some money through advertising so they can keep their free apps free.

Now, when you look at a mobile device, a phone, it's not like the desktop. On the desktop, search is where it's at. That's where the money is. But on a mobile device, search hasn't happened. Search is not where it's at. People aren't searching on a mobile device like they do on the desktop. What's happening is they're spending all their time in apps. When people want to find a place to go out to dinner, they're not searching. They're going into Yelp. They're using apps to get to data on the internet rather than a generalized search. And this is where the opportunity to deliver advertising is.

Not as part of search, but as part of apps. Now, the average iPhone user spends a little over 30 minutes every day using apps. Over 30 minutes every day using apps on their phone. If we said we want to put an ad up every three minutes, let's say, that would be 10 ads per device per day. 10 ads within 30 minutes is about the same as a television show. We're going to soon have 100 million devices. That's a billion ad opportunities per day in the iPhone community and iPod Touch community.

One billion ad opportunities per day. This is a pretty serious opportunity. And it's an incredible demographic. But we want to do more than that. We want to change the quality of the advertising as well. Now, we're all familiar with interactive ads on the web. That's what they look like. And they're interactive, but they are really not capable of delivering emotion. Which is why the majority of ad dollars still flow through television. Because advertisers can deliver an emotional message through television. We know what that's like. What we want to do with iAds is to deliver interaction, but also deliver emotion.

So interactive ads have no emotion, some interactivity. And television ads have a lot of emotion, but no interactivity. And we want to be here. We want to be even more interactive than the ads you see on the web. And we want to get some of that emotion from video. So that's what iAds is all about. It's emotion plus interactivity. The ads keep you in your app. Now, what's that about? On mobile devices today, when you click on a banner ad, it yanks you out of your app, throws you into a browser, and takes you to the advertiser's web page. You may never find your way back to your app.

And it's almost impossible to get back to where you left off. So what's the result? People don't click on the ads. Who wants to get yanked out of your app? Because iAd is in the iPhone OS itself, we have figured out how to do interactive and video content without ever taking you out of your app. And the user can return to their app any time they want. And so we think the result is going to be people are going to be a lot more interested in clicking on these things, because they're not going to pay the penalty of having to find their way back to their app. So it's built right into the iPhone OS, and for developers to add this to their apps is really simple.

They can add iAd opportunities to their apps in an afternoon. Apple's going to sell and host the ads, and we're going to give developers an industry standard 60% split of the revenues. So I'd like to show this to you. Now, what we've done is we've mocked up a few ads. We don't have any real ads yet, because this isn't rolled out yet. And what we've done is we've taken a few brands that we love, and we've made some ads for them, basically. Now, these folks are not endorsing us in any way. I haven't even seen this stuff. We just love these brands and use them to make some fun ads.

So let's say this is an app that gives me some entertainment news. And at the bottom, I have a Toy Story 3 banner. Toy Story 3 is an awesome movie that Disney's putting out in June. And so I click on that banner. I've seen it. It's really good. And so you click on the banner, and we take over the screen. The ad takes over the screen, comes down with animation. All this stuff is done in HTML5, by the way. It's really easy to do. And you see animation, everything else. Now, you see that X up at the top there? If I just tap on that X, I go immediately back to my app right where I left off.

So the user, at any time, can say, take me back to my app. This disappears, and I'm back in my app. So let's go explore this ad, which is really kind of a universe here. There's a snake in my boat. So I can listen to the characters. To infinity and beyond. Golly, Bob Hattie. And I've got some videos here. Again, this is a little HTML5 gizmo that's made available to developers. And they can make their own stuff like this, too. It's real easy. And so I'm going to just pick a video here. And, uh, hmm. Hmm. Hm. Hm. Hm. Hm. Hm. Hm.

Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. Hm. 90 degrees and watch it this way. All right, I guess I have to say play. Hmm. Kick me. And again, this is all streamed video right onto the phone. And they've included a game in this ad. And, uh, well, we've included a game in this ad. And, uh, so here we go. This is a simple game. And I get to look and see where things are. So that's fine.

I'm not very good at these things usually, but I. There we go. All right. All right. Anyway, this is good. So I've got a game. I've got posters. And I can just tap here and have them as wallpaper. So again, the advertiser can just give me some wallpaper for my phone. And users like free stuff. Theaters, if I want to see where the movie's playing, there it is right there. All right. We know our location. There's a theater. And so I've got my location. And there's a Toy Story Mania game that I can buy right in this ad.

I don't even have to go to the App Store. The ad can sell me the game right here. And I can push this button, and it'll download right onto my phone. So this is an example of a new kind of mobile ad. Have you ever seen an ad like this? You know? Any even close? It's amazing. So let's go look at another one. I've got one here that's Nike. We love Nike. And we made this ad up for their Air Jordan shoe. Again, none of these folks are endorsing us in any way. We just love their brands and love their products. So this goes right into a video. Pretty cool, huh?

So let's go ahead and look at design or some photos. But I'm going to show you this cool thing, history, here. And again, somebody built that little navigator. Very simple. So this is the history of the shoe, starting in 1985. And you can just flick through the different years and see how the shoes evolved each year, if you're really into this stuff. And a lot of people are. You know? So again, you can just see the shoe progress throughout the years. Pretty cool. So let's go back. And here's Nike ID. This is a really cool program where you can make your own shoe. And Nike's been doing this for a while, and it's great. And so it says, shake your iPhone for more examples. So I shake my iPhone, get another one. Shake my iPhone, get another one. And there's an app right here, Nike ID, that I can download to my phone.

And it lets me build these custom shoes and order them from Nike, right here on my phone. And if I want to find a store that's carrying these nearby, again, it'll find my location and put up some places to carry the shoes. So that's an example of what a Nike ad could look like. And here's another one, this one for Target. Target's awesome. And time to get inspired. Great, again, you can have animation bringing these things on. I just click on it. It takes over the screen again. Back to school. All right, so I can play that again.

Or I could build my own dorm room, let's say. So let's see what that's like. I am a dude who's into fashion, skateboarding, music, sports. I'm going to say music, maybe. Music, and I'm going to Baylor Berkeley. My school, Michigan. So let's build my room. And it's going to put up all this stuff that they carry, this Michigan furniture. I want a beanbag chair, let's say. And I want a wall clock. And, oh, I don't know, let's say a Michigan rug. And again, I can just look at my shopping list here. And it shows me everything, and I can just go buy it if I want to.

I can find a Target store either near me or near my school, because I don't want to lug all this stuff back there. It's that simple. And again, I can return to my app any time I want. So that's an example of three ads that are very easy to make. And in addition to ad agencies being able to make these things, there are hundreds of thousands of iPhone app developers that know how to make those things. So we think this is going to be pretty exciting. Emotion plus interactivity. The ads keep you in your app, so you're much more likely to click on them and want to go explore them, because you can always get back with just a touch.

They're built into iPhone OS. iAd is. The framework is. So it's really easy for developers to add iAd opportunities to their app. Apple will sell and host the ads, and the developer will get the majority of the revenue. So that is iAd, and that is our seventh tentpole. So let's review. Multitasking, folders, dramatically enhanced mail client, iBooks, much deeper enterprise features, a preview of GameKit, and iAd. And these are just seven of the over 100 user features and over 1,500 new developer APIs in iPhone 4.

Now, we are releasing a developer preview today. Developers can start testing it now, can start using these new APIs now to enhance their apps. And you can get it today at developer.apple.com. We are releasing it to end users for iPhone and iPod Touch this summer. And that's for the iPhone 3GS and the iPod Touch third generation. That is iPods that we shipped last fall in 32 and 64 gigabyte models. And they will run pretty much everything. And for iPhone 3G and iPod Touch second generation, they will run many things.

But there are some things they will not run because the hardware doesn't support them, like multitasking. So iPhone 3 and iPod Touch second generation will not support the multitasking. The hardware just can't do it. But iPhone 3GS and iPod Touch third generation will support everything you've seen today. So summer. And we're bringing iPhone OS 4 to the iPad this fall. All these features on the iPad. So that's iPhone OS 4. And I really want to thank you for coming today.