Steve Jobs on Mac OS X Jaguar: 150 New Features

I was writing paper on the PC and it was like bleep bleep bleep bleep bleep bleep bleep and then like half of my paper was gone and I was like hmm it devoured my paper it was really good paper and then I had to write it again and I had to do it fast so it wasn't as good it's kind of a bummer I'm Ellen Feist and I'm a student kind of a pain to carry around a whole lot of CDs so I try and stick all of them inside one case but that never works because then it puts too much pressure on the little door and always get cracked and split open you have these heavy textbooks that are banging against them all day and CDs spill out and they get scratched by all the crumbs in your bag I love my iPod a hundred CDs and something that's you know that big so much music it makes me feel powerful Hamilton Morris I'm a student you can make art send messages you can write letters you can do your bills communicate play music watch movies Apple all you can do with the parfait is eat it and poop it out I rest my case the computer is better than the parfait and this parfait is good my name is Will Ferrell and I'm a porn actor

welcome to Macworld New York we are really thrilled to be here we got some great stuff this morning too it's gonna be a long show but a good show so let me start off with our switchers campaign which you just saw some fun fun ads of we our research shows us that there are a lot of people that use Windows that want to switch to a Mac but they're a little concerned about this or that and we thought how can we best get them to take the next step and the best way we thought of was to have people just like them who had switched tell them about the experience and what it was like and that's what the switchers campaign is all about these are real people telling their story how successful has it been so far well the stuff we know we set up a website and in a little over a month since June 10th we've had 1.7 million unique visitors to that website and since we can tell whether they come in on a PC or Mac I'm pleased to report to you that 60% of those are about a million of them are running Windows another thing we're seeing is we're seeing products start to come out like this product from a company called Detto which they're announcing at the show today called move to Mac it's got software that runs on your PC that sucks

all the files out all your preferences and all your files and helps you burn actually they have a USB cable in the box you hook it up to your Mac and you run some software on your Mac and it takes those files off your PC and puts them all in the appropriate places on the Mac for I think it's $59 so there's some products like this coming out to the response we've had to this campaign has been off the charts and you're gonna see a lot more of it because we think there's a lot more switchers out there now one of the places we're really seeing this very viscerally is our retail stores we're seeing people walk into the stores with the switcher ads under their arms saying tell me more and as you know we have 31 stores now I'm really pleased to report that in these 31 stores we're seeing over a hundred thousand visitors a week we had a hundred and thirty thousand last week now to put that in perspective this Mac world is the largest computer show on the East Coast and yet in our 31 stores today we're seeing two Mac worlds worth of visitors every week that's a hundred Mac worlds every year five million visitors a year and some of them are buying more than one computer we're seeing small business customers education customers come into the store this one in particular is buying 25 iBooks it's the best buying experience that we know of in the world we're opening our 32nd store tomorrow and we we are so proud to be in

New York City this is our first store in New York City and it's at the corner of Prince and Green Street in Soho this is the subway stop in case you might want to go go there we've been in construction for a while big barricade up in the front and it's a perfect building for us it's in a hundred year old building that's an old post office and it's a New York post office matter fact the post office is still in the back fourth of the building and we're in the front three-fourths of the building and it's called station a hundred years ago they were thinking about us station a and when you walk in this beautiful old building it's pretty wonderful on the inside I'd suggest you go check it out beautiful skylight to get some natural light in the store all of our products displayed and to get you upstairs we we built this really beautiful staircase all out of glass it's an engineering marvel in itself and we have a genius we have two genius bars upstairs 40 feet of genius bars it's been the most popular thing in our stores we have more software titles than we've ever had before we have the best and biggest kids section we've ever had before so it's worth going to check out it opens tomorrow at 8 a.m. if you really want to get in you might want to get there a little early Apple Soho okay so let's get into the technology I want to start with Mac OS 10 there have been some questions raised about how many people are actually using Mac OS 10 lately but let's talk about it how many active users do we have we got a lot we've got we've grown from

under a half a million active users a year ago to two and a half million active users today this is a very accurate number we have several ways to triangulate this and they all point to two and a half million active users but let's add on the next two quarters of this year because we think over the next two quarters we're gonna double that to five million active users by the end of this year as you know in January we switched all the new Macs we ship out of Apple to boot up in Mac OS 10 and we just finished some research that answers the question what percentage of those people who bought new Macs in the last six months are choosing to keep Mac OS 10 as their boot OS and the answer across all our product lines seventy seven percent on average and so we are very confident that we are going to hit five million active users by the end of the year we are right on top of our predictions on these numbers and that represents 20% of our installed base going from 0 to 20% in 24 months that is the fastest OS transition we know of in history faster than anything Apple has done faster than anything Microsoft has done and so we're pretty proud of that and we think the Mac OS transition is going well and of course at this stage it's being driven by applications and we're seeing some great news there too we've gone from under 500 applications 15 months ago to 3,500 applications today native in Mac OS 10 and there's some new ones too being announced at the show alias wavefront is announcing Maya 4.5 here at the show on Mac first now why are they announcing

it at Macworld why would they announce Maya a whole new release of Maya at Macworld because Maya on the Mac has gone from 0% of their business when they announced it nine months ago to 25% of their business today in nine months how many software developers would like to grow their software business by 25% in nine months these days I think a lot another developer Blizzard came out with a wonderful product Warcraft Warcraft came out about two weeks ago simultaneously on Mac OS 10 and Windows and this is exactly what we're trying to see with games and we're starting to really see the game momentum pick up on the Mac OS 10 operating platform Adobe introducing a new release of elements and this is pretty cool because as you know in iPhoto you can set it so when you double-click on a picture it opens up any application you can set it to open up elements and then you can do things like color correction and really cool things in elements but they've put something in elements where when you're done it'll send it right back to iPhoto so you can round-trip through elements from iPhoto to elements right back to iPhoto it's really nice and last one I want to highlight today is real We've all wanted the real player on Mac OS X, and it's my pleasure to introduce Rob Glazer, the Chairman and CEO of Real Networks.

Give us some good news. Thanks, Steve. Welcome, Rob. Good to see you, Steve. It's a real honor and a privilege to be here this morning. I'm joined by my colleague, Steve Banfield, and we're here to show you the real one player for Mac OS X, which is available in beta form today. And without further ado, let's bring it on up, Steve. And what we'll see here is this beautiful real one video from my favorite baseball team. Let's go ahead and watch it. Let's double the size there, Steve. Wow. One of the most amazing things about this, because of the velocity engine and OS X, this is smoother video playback than any platform anywhere in the world. Look at that. Just beautiful. Let the home runs keep going in the background.

Basically, what we now have is we have over 285 million players out there, the real player and the real one player, and now we're thrilled to be adding this to the 2.5 million current OS X users as well as the millions and millions more that are coming in the weeks and months ahead. Go download it today from real.com. It's available. And later this summer we'll have our real one subscription service. We have over now three quarters of a million subscribers to premium audio and video, like sports, like news, other entertainment programming, and now we'll be bringing that to the Macintosh later this summer. So with that, Steve, thank you very much, and here's to a great Mac world. Thanks. Well, there's a lot of great real content out there on the net, and now we're all going to be able to watch it on Mac OS X.

So thanks, Rob. So Mac OS X, 10.1, it's been an incredibly successful release. So what's next? This. This is Jaguar, the next release of Mac OS X. We're officially announcing it today, version 10.2. This is what it's going to look like. That's the most beautiful CD we've ever made. Pixar rendered the fur, by the way. Mac OS X Jaguar has over 150 major new features in it.

And let me go through a few of them. First of all, it's Unix-based, as you know. What you may not know is that Apple has become the number one supplier of Unix in the world. Bigger than Sun, bigger than Linux, bigger than anyone. But we don't want to rest on that. We think we have one of the best versions of Unix out there. Jaguar makes it even better with a whole bunch of cool new Unix things. We're not going to go into them today, but things like FreeBSD 4.4, IPv6, LDAP open directory structures, et cetera. So we think we've got the best, most advanced version of Unix out there, and we are now number one. We're also doing work for Windows.

We have a lot of customers that coexist in mixed environments, and we want to be an even better client on a Windows network. So we've added SMB browsing, active directory support, and VPN support if you want a VPN to your Windows network. We've got major enhancements to the Finder. First of all, it's multi-threaded, so it's much, much faster. Second of all, number one request, spring-loaded folders. And something that's going to prove incredibly useful, integrated search. So I'd like to now ask Phil Schiller, our senior vice president of worldwide product marketing, to come on up. Phil's going to help me with the demos today. Phil, show us the new Finder.

Hey, Steve. Good morning, everyone. I'd like to take just a few moments to show you three of the most popular features in the new Finder that are going to make our daily lives so much better using a computer. Well, first, as I can tell by your own applause, the most requested new feature, the Finder, is spring-loaded folders. I have on my desktop a file, a movie trailer, that I want to move into my movies folder. Well, the normal way is just to go into my hard drive, open it up, find the folder, and then drag it in. And that works fine. But some people want to do it another way, using spring-loaded folders. So I grab the file, I hover over the hard drive, and it automatically spring-loads. Then I hover over my user folder, it spring-loads. Into my own directory, it spring-loads. I can go to any folder I want. Oh, that's music. I don't want that. Let me back off.

Go to movies. Spring-loads there. And I just let go, and it goes exactly where I want and cleans up my desktop. Works just how you want spring-loaded folders to work. Let me undo that and show you one other way it works. Let's open up our hard drive again. As you know, we had Icon View and List View in macOS 9, and they're in macOS 10. We have another view that's new in macOS 10 that wasn't in macOS 9, the Column View. This is my favorite view. And spring-loaded folders works here, too. I can hover over any folder in the Column View and navigate throughout my system and right where I want. So spring-loaded folders works just as customers have requested. The second thing I want to show you is the new integrated search built into the Finder.

I have on my desktop a font folder. I'll double-click it open. It's got over 3,000 fonts. This shows the speed of this new multi-threaded Finder. It's really fast and responsive. As I open up the toolbar, there's the search field integrated right on the toolbar. So maybe in these over 3,000 fonts, I want to find a font. Let's find a font called Dedo. Let me type it in. Hit return. Boom, I find all my Dedo fonts in a split second. It's really fast. Let's go back. Maybe I want to find all my condensed font faces. So I type in condensed, hit return, and there's all my condensed faces in a split second. I can click on any one of them, and down below in the Finder window, I see the path of where that is, all the folders it's in.

Maybe I want to open up a folder. So it's really easy. It's integrated, and search is now built right into the Finder. The third and final feature I want to show you with the Finder is my favorite, and that's something we can do with the desktop and with desktop pictures. We have a new desktop picture, a system preference panel that we can set from all the different pictures that come in Mac OS X. But my favorite feature is to go in and select any folder I want, in particular Pictures folder. I have a folder of pictures from iPhoto of my kids here that I've taken with my Nikon digital camera. I can click on any one and make it my desktop. Here's my sun mark. And not only can I set the picture like before, but now I can select it to change at different intervals.

Whenever I log in, whenever I wake from sleep, or here we'll do it just every five seconds. We'll close that away. So while I'm working, my kids can be with me all day long. And I know some of you advanced users out there use cool tools, like our Unix terminal that's semi-transparent. I can see my kids even through my work. So that's the new Finder. Thanks, Phil. The next thing we've done in Jaguar is to add a lot in universal access so we don't leave anybody behind on Mac OS X.

We've added some really cool things using the quartz graphics of zooming, a screen reader, full keyboard access, and visual notification. We don't have time to go through those things today, but you'll see them in the booth right after the keynote. Next up is QuickTime 6. QuickTime 6 is built into Jaguar. Now, we released QuickTime 6 on Monday of this week, right? A day and a half ago, Monday afternoon. In a day and a half, we've had over 1 million downloads of QuickTime 6. QuickTime 6 is the first MPEG-4 solution out there. And the demand looks to be very high. Now, what's this all about, MPEG-4? Well, our industry has benefited enormously by some standards that we all use.

TCPIP in communications, HTML for the Internet and the Web, MP3 ushered in the digital audio revolution, and MPEG-2, which is the video that's used on every DVD player and every DVD disc that's bringing us this sensational quality. And these standards are really important. They bind our industry together. The next big one is brought to us by the same people that did MPEG-2 that we use in our DVD players, and it's called MPEG-4. It is the best digital video out there, and the world is jumping on it. We're not going to have these islands of proprietary video anymore. Everybody's going to jump on the MPEG-4 bandwagon, except for Microsoft, probably.

But we are jumping on it with both feet. Now, for the video in MPEG-4, they've adopted the best audio in the world, the best audio codec in the world, better than what we've got, better than Windows Media Audio, better than anything, and it's called AAC. It was invented by the folks at Dolby, and it's part of the MPEG-4 system. And we've embraced both of those in QuickTime 6, and we've added instant on streaming. So, Phil, let's see a demo of QuickTime 6, if you will. Thanks, Steve. We have a live stream actually going on the Internet right now, if you don't know, where people are watching on QuickTime. So, hello in Iceland. There's actually about, you know, around 50,000 people that come to the show here. There's just as many people right now watching on the Internet in a QuickTime stream, or 50,000.

And with that, half are watching using the standard QuickTime we've had to date. And for the first time today, half are also trying out the brand-new QuickTime 6 streaming in MPEG-4. This has never been done before in the industry, so a very big event for MPEG-4. So now let me show you off some of the great features of QuickTime 6 using MPEG content. There's both video and audio. I want to do some side-by-side taste tests for you. First, let's look at audio. I'm going to open up an audio file, a music song. And this song is recorded that I've just opened straight off the CD. No extra compression applied. It takes 1.3 megabytes a second to play this. And it's in the AIFF format for those people who know about those things. I'm going to open up the same song again now using that brand-new AAC codec that Steve mentioned.

And it's recorded at a tenth the data rate. It's a tenth the size. And what I'm going to do is I'm going to play them at the same time and tab back and forth between them. And so you can hear one and then the other at the same time. And you can judge for yourself what they sound like. You can tell which one is playing at any time by the little lights in the Mac OS X window. When the window is lit up, you know that's the one you're listening to. So the top one is uncompressed CD music. The bottom one is AAC audio. So let's start them together. So that's back and forth, AAC and raw uncompressed audio.

And I don't know about you, but I can't tell the difference. And this stereo is a lot nicer than what I have in my home. So for the next demo, we're going to open up some video and look at this great new MPEG-4 video codec. The first window I'm opening is DVD quality video, MPEG-2. That's the standard on DVD players. Straight off the DVD's format. That takes 6 megabytes a second to play through of bandwidth. Excuse me, 6 megabits per second. And now let me open up a second video clip. This is the same music video encoded with the MPEG-4 codec at a third that data rate. And let's see how they look. MPEG-4 audio plays.

So beautiful video quality, beautiful audio quality playing side by side. The last demo I want to do for you of QuickTime today is instant on streaming. This is going to make our lives so much nicer as we start to watch more and more content on the Internet. I'm going to play a video coming off of a server in MPEG-4 and AAC quality. And first of all, notice when I let go of the mouse how quickly it starts to play. No more pre-buffering. And then while it's playing, I'm going to jump around in that video clip to different spots. Watch how quickly it does that. It acts like it's on my local machine, but it's coming off a server. And the last thing I'll do is I'll scrub through this music video as if I'm just moving backwards and forwards. And again, watch the incredible responsiveness of the new instant on streaming.

So I'm going to let go right now and start this music video. So that's instant on streaming. It works just as if it's on my local machine. Thank you. So that's QuickTime 6 in every copy of Sherlock and on the Web today.

Sherlock. Jaguar. Next up, Sherlock 3. We've completely rewritten Sherlock. To evolve Sherlock's channels into Internet services. Now, what are Internet services? We're hearing a lot about this. Normally, our interface to the Internet is a browser. We go onto the Internet with a browser and we click and click and click and click and try to get what we want. And yet, on the other end of that Internet is a server. And if we wrote more intelligent clients, we could get what we wanted in a much more intelligent way. And so most of the work on Internet services is business to business stuff. It's pretty highfalutin. But we thought, you know, what about Internet services for the rest of us?

We can do some really great stuff to help people with the things they do every day. And that's what we've done. Internet services for the rest of us is what Sherlock 3 is about. Let me show it to you now. So this is Sherlock 3. And it's got a bunch of channels and we'll be adding even more in the future. So as we go to Sherlock 3, let me just show you a few of these. In stocks, as an example, I go to stocks and I see Apple stock right here. Zero percent change. I can add some new stocks. Let's say Pixar. I might want to follow that one. And Microsoft here. And what's going on? Market hasn't opened up. I was panicked.

But the beauty of this thing is this will track my stocks and every 30 seconds go out and update the prices so that I don't have to go to a web browser and hit refresh to see the prices. It will also grab all the news here. Here's all the news and I can read it right here. I don't have to go to another browser to read it. I can also see stock charts here by year or week or intraday stock charts. So I've got all my information about my stocks right here. Boom. Right? In one window. Let me go to movies now. I don't know about you guys, but finding movies online is a lot of clicks in a browser for me. And so what I've done is Sherlock asks you to put your zip code in. It went out and around an area, a radius of this zip code, found out all the movies that are playing today.

And I can pick one. I can pick, let's say, Minority Report. And it will show me what theaters it's playing at. It will show me a poster and it will even show me if I want to go play a trailer. So you get the idea. If I pick a theater, it will even give me, of course, the address and the destination of the theater. I can pick a movie time. I can even go buy tickets if I want to to that show. Now, let's say I like a certain theater. I can look by theaters and say, you know, I really want to go to the AMC Empire. It's right around the corner. What's playing there? And I can pick something there and find out the times and go see that.

So it's really, really handy. You see the difference between using a browser and using Sherlock 3. If I'm an eBay junkie, I can go on to eBay and search for anything I want. I'm going to search for the Yankees right here. And I'm going to set a minimum price of $500 just to look at the nice stuff. And I'll go search on eBay. And here's everything on eBay that's by the Yankees. And some of the stuff has pictures and some of it doesn't. And it shows me everything that's on eBay. I can track auctions as well. And here's some I'm tracking right now. And we'll keep updating this very frequently so I never have to, again, go and hit refresh, refresh, or go back and check these by hand. Here's some $22,000 and $44,000 items from the Yankees.

Okay. Now I've also got pictures up here. Let me go find some pictures since we're on baseball of Joe DiMaggio. And, again, it goes out on the Internet and finds pictures of all sorts of things. And most of them have something to do with what you asked for. Here's an example. You just click on it. You can go to the Internet site, launch a browser, and get some larger versions of these things. You know, some beautiful pictures of Joe DiMaggio. Really cool stuff. I was playing around yesterday, and I typed in Homer Simpson. And even Homer Simpson is on the Internet. You know, there he is right there. There was a great one here, too. Where was it? There was this one, which was kind of fun.

But the best one was this one. There we go. So. Coolest channel of all is Yellow Pages. With Yellow Pages, again, I've got my zip code in here. And after the keynote, I'd like to go get some sushi. So I type in sushi. And what it's done is it's found every sushi restaurant sorted by distance nearby here. And here's all the sushi restaurants. And if I click on one, here's the directions to it. And here is a map. And so I can just click on through and find out where I want to go for sushi after the keynote. Pretty cool, huh? So this is Sherlock 3. Internet services for the rest of us.

We think it's going to be really, really popular. Next is Inkwell. Inkwell is a really cool technology. As you know, Apple brought handwriting recognition to devices with the Newton a long time ago. That group is still at Apple and doing great work. And we've now taken probably what is the best handwriting recognition in the industry and integrated it right into the text system itself. Not into any particular app, but into the foundation of the operating system. And so you can write in any application without training. And we haven't got time to demo this today. But again, you can go see it in the booth. It's pretty cool. So that's Inkwell. Next up is a technology that I think is going to really change things called Rendezvous. Rendezvous is a technology that will allow us to automatically discover other devices over any IP-based network with zero configuration.

And these devices can be other computers. They can be peripherals. They can be devices we haven't even thought of yet. Automatically discover them over any IP network. And that includes 802.11-based airport networks. Any 802.11 network, any ethernet, any IP-based network literally with zero configuration. Nothing to set up. And so I'd like to just give you a demo of where this technology is going. Phil, you want to help me? We're going to use iTunes for this demo. And this is something where we're going to take Rendezvous and build this into iTunes probably early next year. And this is the kind of thing that's coming six months down the road, nine months down the road in iTunes. So I've got iTunes here. And I can just, of course, play a song out of my own library.

But let's say we have more than one computer in the house. And I want to access playlists on that other computer. Wouldn't that be cool if we could share our music, everybody with a computer in the house, we could all share the music together without carrying CDs back and forth, without changing files over hard drives and stuff like that? But I don't know how to set all that up. I don't know how to make that happen. I don't know what file sharing is. How do we make this happen? So brother Phil walks in with his PowerBook. And all he does is open his PowerBook and wake it up from sleep. These two computers are going to find each other automatically. And his playlist, his library, has just been added to mine. Here's his library here. And I can just play any song I want to. Now, if Phil decides to go away, put his computer to sleep, what happens?

The music stops, and his library goes away. Because we're not copying the music. We're streaming it over AirPort. So let's say Phil comes back, and I can open up his library, see all his playlists, go into folk music, and play another song. We're streaming the music over AirPort. Zero configuration. I didn't know anything about this. Pops up in my iTunes source list. Phil goes away. It dynamically goes away. This is just the beginning. And again, we're going to build this into iTunes early next year, and I think it's going to be wonderful. But you can just start to imagine what kind of devices we can have talking to each other, speaking to each other, and listening to each other.

What kind of devices we can have talking to each other seamlessly with zero configuration. Now, Rendezvous is technology that Apple's pioneered as part of an ITEF working group. That's a standards organization. And it's all based on internet standards, and it's totally open. No one is going to own Rendezvous. And so we think this is going to be a pretty big deal. To automatically discover other devices over any IP network with zero configuration. Now, what's another class of devices that you might like to discover over a network and not have to configure? Well, how many people have ever configured a network printer? Oh, it's a bear.

And I am really pleased to announce today that Epson, Hewlett-Packard, and Lexmark have all adopted Rendezvous and are going to be building it in to their network printers. Again, this is just the beginning of the floodgate opening, I think. We've actually got a prototype HP printer here, and let's go ahead and see what it's like to configure a network printer now with Rendezvous. Phil? So I have a Mac here running, running Jaguar, and I have a document that I've opened, a text edit document, and of course, the document's about Rendezvous, and what I want to do is print it.

But when I go to print, you'll see up in my print panel, it says printer, no printer selected. I don't have a printer. As Steve mentioned, I've got a brand new HP printer right next to it here that understands Rendezvous. It's sitting on, but it's not on the network. This isn't a USB printer that I'm going to have locally connected, because we do that beautifully. Plug in a USB printer, it just finds itself in print. But this is networked, and as Steve mentioned, if you've ever done this before, you have to set your network settings, your IP settings on your computer, and you have to set your IP settings on the printer, you have to put it on the network, you have to go back to the computer, and now configure it to find the IP settings on the printer. Most consumers don't even know what an IP network is or an IP setting, so now, with Rendezvous, I have the Ethernet network here, and I'm going to plug the printer onto the network, and the printer, as I said, is on, but it's going to take a few seconds to recognize, hey, I just joined a network, and it's going to go out, and the computer's sitting here saying, I'm looking for a printer, hello, anyone out there?

And the printer has now talked to the computer and said, I'm a printer, I'm out on the network, I'm called an HP LaserJet 2200, it not only says here I am, here's my IP address, it also says, here's how you connect to me, and here's what I can do. It's self-discovery. So, of course, what do we want to do? We want to click Print, and as I click Print, Print Center now launches, starts to run, it's talking to the LaserJet, and it's printing. I've always said I'd never do a printer demo on stage, it's like watching paint dry, but this is more exciting because it's Rendezvous, and the paper's now coming out of the printer, and, as promised, printing without any configuration.

That's Rendezvous. Thanks, Phil. So Epson, HP, and Lexmark are all going to build this into their network printers, and we're not going to have to configure network printers ever again. So Rendezvous, we think it's going to be amazing technology. Next up in Jaguar, mail. We've dramatically improved mail. We've added all mailbox searching, our number one feature request, so you can search every mailbox at once, sophisticated rules, and much better ways to handle multiple email accounts seamlessly. But the coolest thing we've added is what we call junk mail. All of us are getting deluged with junk mail, and it's a major problem, and no one has come up with a solution for it.

We think we might have. We've got a technology called Adaptive Latent Semantic Analysis, but you don't have to know any of that. And what it does is it goes through and figures out what is junk mail. And it's really good right out of the box, and you can teach it to be even better. And so we think this is going to maybe be the most important feature of the new mail client. Let me show it to you now. Launch mail here. All right. Let me go to my backup system here. Let me launch mail.

Get rid of the dock here. So this is our new mail client, and I can select a message. You've noticed we've added threading in here. Whenever you have threads on an email message, we'll automatically highlight them for you. This is part of the new rule system. You can add your own rules. It's very, very simple to do some pretty sophisticated things. So let me go ahead and search for a message in here. I'm going to search for Dan, and look at how fast that was to find all my messages from Dan in this mailbox. Let me search for Switch. I want to find something on the Switchers campaign. And there isn't anything in this mailbox about Switch. Boom. But let me go ahead and search all my mailboxes. I can go in and say Switch. And this is searching every mailbox in my system. Boom. Instantly find stuff. that I might want to have here, switch on the light, et cetera.

And so that's cool. I can, here's one new Switch commercial, which is what I was looking for. And lo and behold, we even now play quick time in line. So quick time in line and mail messages. But the coolest thing is junk mail. I get lots of spam and you can see some of this stuff here. It just fills up your mailbox and it's really a drag. So what are we going to do about it? Well, junk mail, you go to the mail menu and there's junk mail and we've got three settings, off, training, and automatic. And we're going to ship it in training mode. And when you turn it on, it automatically identifies what it thinks is all the junk mail in your mailbox and turns it brown, right?

Okay, now, and it's really, really good right out of the box. But you can make it even better. If you find something that you think, oh, this isn't junk, you just hit not junk or there's even a button right down here by the message. Of course, this is junk. If you find a message that it does not identify as junk that is, you can say, this is junk and it will learn from that. And so you can use this in training mode. It's not deleting any of your mail. It's not moving any of your mail. It's just marking it. And so you use this for a few weeks and you go, wow, this thing's really accurate. Then what you do is you go over here and you say, let's go into automatic mode now. And it will ask you if you want to take all of your junk mail. Did I get that one? Automatic. Well, it should ask me whether I want to take all of my mail and throw it into a junk mail folder and it would leave me with just my good mail.

And I don't know why it's not doing that now, but it's not. So that we're not gonna be able to see that. But it's very, very cool. Okay. So that is mail. We think the coolest feature is gonna be junk mail. It's super easy to use. And I think when you use it, you're gonna be blown away. We are inside Apple at how well this works. So that's mail. Next is address book. As you may know, the address book we shipped in prior versions of Mac OS X was not great. We've done something really, really great here. A lot of apps have their own databases for information about people.

And what we've done is unified that into a system-wide database for people. One place where all that information can go and it can be used by any application. Totally open APIs for our developers. And there's a wonderful app for you to make this stuff really easy. And let me show that to you now. This is address book. And it's a very, very simple app to use. But it's actually quite a sophisticated app. It handles groups here. And it handles going to LDAP servers and searching for things there. But I'm just gonna use it like this. And it's very, very easy to find things as well. So let me first go ahead and show you editing.

I'll go back to myself here. And I just go into edit mode. And I can just tab around this thing to edit. It's really, really fast and really, really simple. So I'm gonna put in the company Apple here. And I might want to add a new phone number here. And I might want to add a new work phone number. Maybe I'll add a new address. And I've kind of messed it up here. But you see, when I get out of edit mode, it figures out what it needs to have and eliminates everything else and makes it nice and clean for you. Again, we have full LDAP searching. So let me go search for Phil. I found four Phils. I can just cycle through them like this, very fast. And it's super easy to find stuff. So here's Phil Schiller. And we've built in some cool behaviors on this information. On vacation, you can see the rollovers here. So on vacation, I click down, it says I can get a map of this Phil's vacation house in Hawaii.

So I click on this. It'll open up a browser. Go to MapQuest. And give me a map, right? Not too shabby. I can also go over Phil's email address and say, hey, I can open his iDisk in his public folder. I can visit his Mac.com homepage. Or I can even send him email. And again, I can send him email. And there's his email address. Very simple. But one of the coolest things I can do is I can go to his work phone number here. Let me go to his work fax first. His work fax. Let's say my fax machine's across the room. I can go and get large type so I can read it from across the room.

Kind of cool. And I can go to his work phone number, sorry, his mobile phone number. And we've integrated Bluetooth support into Jaguar. The hardware, you can buy a $50 USB Bluetooth adapter from us that plugs into any USB port on your Mac. And when you're running Jaguar, Bluetooth is working and activated. And there's a new generation of cell phones out that has Bluetooth built in. And so we can use Bluetooth as a modem to get onto the internet for our portable computers. But we can also actually dial the phone. And so I'm going to just go ahead and say, dial. And this is now transmitting that information to my phone. And my phone should be calling Phil. And there he is.

Who could it be? Howdy. Hi, Steve. Okay. Now, Phil can even call me, actually. And let's see what happens when Phil calls me. When Phil calls me, it takes the caller ID from Phil's phone, the number, and looks it up in the address book to actually give me the name of Phil Schiller right here. And I can send him to... I can answer, I can send it to voicemail, or I can send an SMS reply and say, I'm busy right now. Send it. Boom. We're done. So, pretty cool. address book.

The simplest thing in the world to use, extremely sophisticated and available to every application, one unified place for information from people. And next up is iChat. We have built instant messaging right in to Mac OS X Jaguar, right into the product itself. It's AIM compatible, AOL instant messaging compatible. We're the first company they've let under the tent with their 140 million strong instant messaging community, the biggest in the world, the most popular in the world. And you can use your Mac.com email address as your screen name or your AOL screen name as your screen name.

Either one is fine. And in addition to buddy lists, one of the things I want to show you today is we've actually used Rendezvous in iChat. How could you use Rendezvous in iChat? What other devices might you want to find? Well, other people. Because if you have a buddy list with all your people on it, but you're in a meeting and the people in the meeting aren't on your buddy list, you can select a menu and Rendezvous will go out and find all the people nearby you and build a special Rendezvous buddy list for you. Let me show you how that stuff works. Okay. So here's my buddy list right here, and I can view that buddy list by first name or by last name, but I'm going to view it by availability right now.

Now I notice Nancy Heinen is not on my buddy list, so I'm going to go ahead and add somebody to my buddy list, and I'll just search. Now this is coming from the address book right here, my one database, and I'll look for Nancy Heinen, and I'll go ahead and add her. And boom, she gets added, and she's online as well. So this is what... Oh, there's an incoming invitation from Fred Anderson asking, where's dinner tonight? Well, I can just click on it, and I can go wherever you want. And, oh, too rich for me here. How about Britney Spears' new place, Nyla?

It just opened. So now, we're having some troubles here. Okay. Now Fred can actually send me a message, which is kind of cool. We're still online here. Okay, here he is with another chat. How about Tribeca Grill, Robert De Niro's place, and it's good. Here's the menu. Oh, we're going offline. Well, what I'm going to do is I'm going to hit...

He can actually send me a URL in a message, and I just click on it, and I'll go to the browser and get the... He sent me the menu for the Tribeca Grill, and so I can see what it's like here. I'm a veggie, so I can see if there's veggie stuff here. Very, very simple, right? Now, I can also send him some stuff too. I'm going to go back online here. Let's say that I want to send I want to send him a map. How do we get to Tribeca? No, actually, it's Phil that wants to join us. Are you going to dinner? Yeah. You want to join us? Yeah. I didn't get a message. Well, I'll send you a map. So I go to address book here and I know I've got Tribeca Grill in my address book.

Tribeca Grill here. And I can go to their address and I can go find a map of this. Get rid of the ad. And so I've got a MapQuest map. Now, how do I send this to Phil? He's not in my buddy list. Sorry about that. But he's not in my buddy list. So what do I do? I go up here and I build a rendezvous buddy list. Now, he's over there on a power book with airport and it's already picked him up. So I've got Phil in my rendezvous buddy list. Anybody around that's running airport or on the local net that I'm on will show up. And how do I do a file transfer to Phil? With iChat, all I do is drag a file over off a MapQuest onto Phil. And boom, it is transferring that file to Phil. It's that simple.

Now, what's it look like on the receiving end? Here, let's go here afterwards. Phil sent a message to me. And, all right, where? Okay, great. Incoming file from Phil. And I just save it. It'll put it on the desktop for me. Double click. And this is how simple file transfer is with iChat. It's really, really simple. Okay, so there we go. That is iChat. And we think it is the best instant messaging experience now in the world. So, rendezvous, a whole new mail client, iChat, whole new address book, handwriting recognition built in, QuickTime 6 built in, much better universal access, a whole new, not a whole new finder, a dramatically enhanced finder, whole new Sherlock 3, and rendezvous, an extraordinarily exciting technology.

The first three have to do with communicating with people. The middle three are based technologies built into the operating system, accessible by any application. And the last three are about finding things, files, information on the Internet, and other devices automatically. And all of this stuff is built into Mac OS X Jaguar. Mac OS X Jaguar is going to cost $129. That's less than a dollar for every major feature in it. And it is going to be on the shelves early. We said we were going to deliver Jaguar before the end of this quarter, late summer, which people interpret in our industry to be September 32nd. Jaguar is going to be on the shelves in stores August 24th, about five weeks from today.

We are early, which is a rare thing in software. And it's really good. This is what the box looks like. Now, if you buy a Mac before August 24th, what do you do? Well, we've got our up-to-date program on every Mac we're shipping from this day forward that you buy. And you send us $19.99. We send you a copy of Jaguar, just shipping and handling costs. So Mac OS X Jaguar, the next major release of Mac OS X, we are really proud of it, and we think it's the most innovative release we've had in a long time. And what it does is it proves out the concept of Mac OS X. We said that the people that were going to love Mac OS X were going to be our users and our developers, but who it was going to benefit the most would actually be us, because we could innovate faster.

And if you look at the innovation in Jaguar that we've done in the last nine months since we shipped 10.1, it's staggering. It's just staggering. So I encourage you to take a look at it. Next up, iTools. iTools extends your digital life. With Mac.com email, iDisk, which is the best and easiest to use Internet storage, and Homepage, which is our web hosting, and we've built it in with one button to iPhoto so you can share, build photo pages, and we'll host them on the web for you, literally one button. And how has iTools done? It's done really well. We've doubled the number of subscribers in the last year from 1.1 million to 2.2 million members, and that's great.

So that's iTools. But the world is changing. The external conditions have changed quite a bit. You used to be able to get free services like crazy from Yahoo, free email from Hotmail, free Internet storage from iDrive, which was the biggest, and a bunch of other Internet storage companies. And all that's gone. Yahoo now charges you serious dollars for everything. You want pop email, you're paying them $30 a year just for email. Same with Hotmail. You can't even get pop email for free anymore. iDrive, they don't charge you anything. They're out of business, as are every other one of the Internet drive companies. And so the world's really different, and we're going to have to reflect that too. And so as of September 30th, iTools as we know it is going away.

September 30th. And we're replacing it with something we call .Mac. Now, where did we get this name? Well, Microsoft's got .Net, and they're talking about all these Internet services, which is exactly what iTools has done all along. And we thought, you know, let's jump in this boat. That's exactly what we're doing, and we're actually delivering stuff. We actually know what it means. And so we're going to call it .Mac. So here's what we're starting off with for .Mac, and as you're going to see, we're going to add more and more to it over time. Email, Mac.com, iMap, Pop, and Webmail.

We've got a fantastic Webmail client, so from any computer anywhere in the world, you can access your mail on Mac.com. Next up is iDisk. We're going to take it from 25 megabytes to 100 megabytes. We've also made it really fast. It's really fast on everything, but it's extremely fast on Jaguar. And we've added password protection, so you can have folders that only people you want to let in can get in. Obviously, we're keeping our web hosting and our one-button iPhoto photo page hosting. We're adding backup software. We've written some really good backup software, which goes out and suggests to you all the things you might want to back up and lets you back them up on your iDisk, on a CD, or on a DVD.

And even though Macs have a few orders of magnitude less viruses than PCs, we're adding some antivirus software for McAfee, checks for over 60,000 viruses, and is updated on an ongoing basis. And so all these things constitute the first .Mac release. And if you went out to buy these things, they'd be over $200. We are providing them in one box, one product, for $99 annual membership. And for all of the iTools subscribers, as of last night, we have a special offer for the first year, $49. And we're going to continue adding to this for the same price, and I think you're going to really, really like what we're doing over time. So this is available today.

You can go to our website and sign up. We'll have actual boxes in the channel in a few weeks. You can extend your digital life with .Mac. What's next? Something really nice. I'd like to introduce a new app today called iCal. iCal, if you use a Mac for calendaring, is a godsend. Now, we have created, I think, the best calendar I've ever seen on a computer. And we started off with the premise that modern life fills multiple calendars. You can't put your life on one calendar anymore. And to schedule your life, you've got to see all the calendars that make up your life.

And so iCal says, okay, you've got a work calendar. You've got a personal calendar. You've got a kid's calendar. I've got a Macworld calendar. And it lets you see any or all of them. This is iCal. It's a single window app just like iTunes and iMovie and iPhoto. Very easy to use. And you can go click and say, I want to see my work calendar. And there it is. But I can say, well, let's take a look at my personal calendar. And I can see the overlaps there. See the two conflicts right there? I can just see them plain as day. Let's see what my kids are doing. And let's take a look at the Macworld calendar too. Because these are the calendars that make up my life. Now, iCal is the first calendar program created post-Internet era.

So we thought, why not be able to share calendars over the Internet? What if we could do that? Well, we can. We've adopted a publish and subscribe model with automatic updating when the source makes changes. So for publishing, I can take a calendar, like my work calendar, and say, I want to publish this. With one menu command, I get a panel here. And I can publish changes automatically just by checking a box and pushing one button. And this will automatically put my calendar up on a Web server, on any Web server you choose. Or if you choose, and if you're a subscriber, it will host it on .Mac. So, first new feature of .Mac happens even today, which is iCal hosting.

We will host your calendars for you on .Mac. So with one button, you can post your calendar. And you get a confirmation. You can send an email to other people alerting them of this, or you can go view the page. And when you go view the page, or when somebody else goes and views the page, this is what they see. They see your calendar up there on a webpage, really beautiful, from any computer anywhere in the world. And we thought, this is really cool. But it's not cool enough. Because what you can't see this calendar, if this isn't my calendar and I want to look at this, I can't see it with the rest of my calendars. I can't see if these events conflict with ones on my own calendar. And so we have built-in subscription. You can go to any calendar.

Let's say I get an email saying, here's the Yankees schedule while you're in New York City. I click on that URL and I instantly get this panel. And it says, you want to subscribe to this calendar? How often do you want to refresh it? Every day? Every hour? Every 15 minutes? Every week? I'll pick every day. And when I push this button, it adds that calendar to my calendar. And it will check once a day to see if it's been updated. And this is what it would look like if I turned it on. And now I can see that calendar with the rest of my calendars. Make sense? So let me show it to you. So this is iCal right here.

Got my work calendar up. It's very easy to add events here. I could just drag out an event here. I could say that I want to take that event and I want to make it an event that happens weekly on Monday, Wednesday, and Friday. And just schedule it like that or delete it. I can move things around very easily, change the times, move the days, whatever I want to do. Very, very simple. And I can add my personal calendar here. And you notice I've got some overlaps here. And I can just decide which calendar is on top. And I can just resolve the overlaps like that. Or I can just live with them and deal with them like we do every day.

I can add the kids and, again, the Macworld calendar. I can search on anything and find any event super fast with these calendars. But let me go ahead and show you what it's like to publish a calendar. Let's just take this calendar here. And all I do is go up into the calendar menu and I say publish. And I get this menu. I want to publish my calendar. I want to publish changes automatically. So every time I make a change, it will update what's on the web server. I'm going to publish on .Mac. And all I do is push one button here. And, boom, my calendar has been published. And I can send an e-mail to colleagues or friends. Or I could visit that page right now with a browser. And this is that calendar page on the browser. And I can look at it by day right here if I want to just look at one day or week or month.

Anything I want right off a web page from any computer in the world. So that's my calendar published. But now what if I want to subscribe to a calendar? Well, you know, I've got my life going on here. And let me go into e-mail. And somebody sends me an e-mail about summer school. And I'm going to have to go search for it. And here's summer school schedule. So here's your child's sixth grade summer school schedule. And all I have to do is click on this link and I get this panel. It says, would you like to subscribe to this calendar? Do you want to refresh it? Yes, I'd like to refresh it. You know, maybe every day is fine. And when I push this button, it adds this calendar, which is the Yankees schedule, to my calendar.

And it will go check every day to see if it's been updated. And it's that simple. Whoa! I can even get calendars over iChat. You want to go to the Yankees game? Here's the schedule. Great. I click on this. I get one of these things. And again, boom. And here is Yankees. Very, very simple. All right? And so this is your life with all your calendars. You can see it all. And you can manage it all so much easier now with iCal. So that's iCal.

Modern life requires multiple calendars. You've got to have a way to see them all if you're going to manage your life. And that's what iCal is about. Sharing calendars over the Internet with one button publish, one button subscribe, letting you add calendars. You keep things as simple as you want or as complicated as you want. iCal runs on Mac OS X Jaguar. We're going to be shipping it this September. It's going to be a free download at apple.com. So check it out. And that's iCal. All right. Now I'd like to talk for a few minutes about the digital hub.

As you know, the digital hub is our fundamental strategy at Apple. We announced it 18 months ago that we believe the personal computer will be the center or digital hub of our new digital lifestyle. We've all got these great digital devices in our life. And having a Mac in the center of them dramatically enhances their value. And it dramatically enhances their value because we've written some incredible applications like iMovie, iTunes, iDVD and iPhoto. And when you take those applications and you marry them to these devices, the results are astounding. And I think most of you know what I'm talking about. This has been an incredibly successful strategy for us. There's nothing like this in the Windows world.

Let me focus for a minute on iPhoto. iPhoto is an amazing application. We introduced it six months ago. It is the equivalent of your shoebox for digital photography. It imports photos from your camera seamlessly, lets you edit and crop them, et cetera, lets you print them out on your printers. But its real value is it safely stores your photographs. It's the digital shoebox, allows you to organize them and find things really fast and share them in ways that we never could before like these. We can print them out. We can order prints online, fantastic slideshows, one page to create a web page of our photos and host it on .Mac. And you can even, for $29.99, get a hardcover book with your photos in it that's truly outstanding.

And so that's iPhoto. I'm pleased to report that in the first six months, we distributed over 4 million copies of iPhoto. This has been one of our most popular apps ever. So that's iPhoto. Next, I'd like to focus on iTunes. We have iTunes 2 out today. It's been an incredibly successful application for us as well. As a matter of fact, iTunes and iPod together contributed to Apple being the first computer company in the world to win a Grammy this last February. And we're very, very proud of that. iTunes 2, since it was announced 18 months ago, we've distributed over 14 million copies.

Really popular. So what's next? Well, iTunes 3. Today, we are launching the next major revision of iTunes called iTunes 3. What's new about it? It's got some great new features. The first one is some new ways to talk about our music. We can rate our music from 0 to 5 stars now. And we have play counts. So every time you finish playing a song, it automatically increments the play count. You can see how many times you played each song. And the rating's really cool, too. You can just take a song and slide it up or down and rate it from 0 to 5 stars. So that's pretty cool. We've also added, in addition to the cross-fading that we have now and the sound enhancing, we've added a feature called Sound Check.

We just check it on and all your songs play back at the same playback volume level, which is really nice. We've also added support for audible.com. We've had a lot of requests for this, so you can now go and buy content, spoken word content from audible.com, whether it be books or whether it be these Robin Williams interviews are fantastic. I'd highly recommend them from audible.com. And listen to it seamlessly. We even keep track of the bookmarks, so if you stop and start, you can pick up right where you left off. Now, all of these features together would make a great iTunes update, but I've saved the big one for last. This is huge. Now, it's in the source column. If you look, I've got my playlists in blue right there, but what are those playlists in purple on the top?

60s music, my top rated, recently played, most 25 played. What are these? These are something totally new. These are playlists that you don't put music in. These are playlists called smart playlists. These playlists put music in all by themselves, and you set them up with rules. So let's talk about that. Let's go to my 25 most played. I want a playlist that always has my 25 most played songs in it. And every time I play a new song and it makes it in the top 25, I just want that playlist to shuffle around and always reflect my 25 top played songs. How do I do that? I make a simple rule. I say, I want 25 songs selected by most played. Done.

I got a playlist with my 25 most played songs. I can get really complicated too. I can go to advanced and I can say, I want a playlist that's got music which is in the range of 1990 to 99. So 90s music where the play count, I've played it at least 20 times and I've rated it 4 or 5 stars and take all that music and pick 50 songs by random and put them in this playlist. Isn't that cool? I can make a playlist that says, I want a gigabyte of songs that I've never listened to at all in a playlist so I can put it on my iPod and listen to it on the train. Stuff like that. Smart playlist. So let me go ahead and give you a demo of this. It's sweet. Get out a mail here. My chat. Launch iTunes 3.

All right. So this is iTunes 3. Looks the same. Just as easy to use. And, you know, I can pick any song. Play it. Same as always. Now let me just go, let me find a song. Let me just drag, let me find one that's got a play count of 0 here. Okay. It's got a play count of 0 and I'm going to drag the song to the end so we don't have to listen to it. And when I'm finished listening to the song, you'll watch this play count automatically increase to 1 as it goes to play the next song. I can also rate this song. I can say, was it, you know, how many stars do I want in it? 0 to 5. Let's say we'll put 4 stars in the song and now I've rated it 4 stars. I can sort my songs by rating and look at the ones that I think are the best.

I can sort them by play count or anything I want. Very, very simple. So now let me go and make a smart playlist. I'm going to make a playlist here. Smart playlist. And I'm going to say I love Bob Dylan. So I'm going to say artist contains Dylan. I can put as many artists in there as I want, but I like Bob Dylan. This is now a playlist of every Dylan song I have. And if I add new ones, they will automatically join this playlist. I can go say, well, this is great, but I want to enhance that playlist a little bit. I want to limit it to 10 songs selected at random. And so now I've got 10 songs selected at random. As a matter of fact, if I get rid of one, if I say I don't like that one, it'll immediately put another one in because it's got to have 10 songs selected at random. Just keep replacing it. Okay.

I can even go and I can say, fine, take this playlist. And I'll switch over to advanced. It'll preserve everything I've typed in. And say, okay, I want another one where it says my rating is, let's say, is greater than three stars. So I want four and five star Dylan songs selected at random. And that's what I'm going to get. So let me go show you another one. I'm going to 60s music here. And this is all my 60s music. I've got a Hard Day's Night here, which is not in here right now. And I can just drag a Hard Day's Night to my library. And what you will see is you will see that immediately getting added to my 1960s music smart playlist because Hard Day's Night is from the 1960s.

And again, I'm going to make one last smart playlist for you here. I'm going to say I want to make a smart playlist. I'll go into advanced where I say I want to limit it to 500. And rather than songs, I've got gigabytes, megabytes, hours, minutes, whatever I want. 500 megabytes of songs where my... Actually, I've got to do this in advance. I am in advance, sorry. 500 megabytes of songs where... No, got to do it up here, I'm afraid. Play count is zero and 500 megabytes selected at random. And this will give me 500 megabyte playlist with songs I have never listened to.

And I'm going to listen to those on my iPod. Boom, there it is. That's how easy it is to create smart playlists. It's very, very simple. And that is a preview of iTunes 3. So, super easy to use just like always. You can rate your songs. You have automatic play counts. There's a whole bunch of other new fields as well. But the biggest thing is smart playlists. This is going to really, I think, change the way we listen to music. We have audible.com support. Really wonderful product. Only runs on Mac OS X. It's a free download at apple.com starting today.

So, that's iTunes 3. Now, what would iTunes be without iPod? Let's talk about iPod. iPod has been a giant hit for us. And we're going to make it even better today. We've got the 5 gigabyte iPod, 1,000 songs in your pocket. Sells for $399. As of today, that's $299. We want to bring it down to where even more people can afford it. The 10 gigabyte iPod, 2,000 songs in your pocket, $499. As of today, it is $399. But for the 10 gigabyte iPod, there's even more.

Because we have made it even thinner. This is the 5. We've made it about 10% thinner, which matters a lot when you're carrying something like this around in your pocket. And we have gone to a totally new solid state scroll wheel. As you know, for those of you that have an iPod, the scroll wheel is one of the coolest features of the iPod. It lets you navigate around super fast and super easy. We've actually gone to a no moving part solid state when it feels like glass. It is so cool. And that's on every 10 gigabyte iPod. And we have also added a little door to protect your firewire, which we got a lot of requests for that. We've also added a remote. Just plug it in. You can plug in any headphones into this.

Volume, play, pause, next, previous, right on the remote. Very simple. And we're also adding a case. We got a lot of requests for this too. So case with a belt clip, just drop your iPod in it with the remote. It's really, really nice. And all this comes bundled with the new 10 gigabyte iPod. But we didn't stop there because today we're introducing a 20 gigabyte iPod. 4,000 songs in your pocket. Includes the case, includes the remote, the solid state scroll wheel, etc. $499. So now we've got three iPod models. We got a 5 gigabyte at $299, a 10 gigabyte at $399, and a 20 gigabyte at $499.

1,000, 2,000, or 4,000 songs in your pocket. We also have some new software on them. It's even better. We've added some really great features in the software. In addition to being able to browse your music by artist, album, or song, we've added genre and composer. Our classical customer said, I want to find Bach, not the performer. And so we've added composer, and I think it's quite a bit better. Play counts. Your play counts will automatically get downloaded into your iPod, and the play count additions from your iPod will get then uploaded back to iTunes to the then current play counts so that every time you play something on the iPod, it's recorded in play counts on your iTunes as well.

We download smart playlists into the iPod. iPod has sound check, so play all the songs back at the same volume if you want, and it supports audible.com with round-trip bookmarking. So you can listen to something on iTunes, stop. When you pick up on your iPod, you pick up right where you left off. You stop, you sync back to iTunes, you pick up right where you left off on your iPod back on iTunes. So, we've got a new menu structure for the iPod as well. So let me show this to you in a demo. This is our iPod here, and of course, we have playlists just like always. We can go look at our music by playlists.

But we have this new menu called Browse, and this is how you can browse your music. You can browse it by artist. You get a list of all your artists here. You can browse it by album. You get a list of all your albums here. You can browse it by songs, of course, alphabetical list of songs. But the two new ones are genres. So we've got all the different genres of music that you can browse your music by, including spoken word here. And composers. So you can browse them by composers, whatever you'd like. You know, go into a composer, pick a song, etc. Very, very simple.

So, that's Browse, but we've added something new to iPod called Extras. Let's go find out what's in it. Well, contacts. We've seen contacts before and we can have our contacts in our iPod. So I can say, you know, let's say Fred Anderson here, and here's all of Fred's contacts. Here's Avi. Here's Avi's contacts here. Right on my iPod. So if I need a list of contacts with me, I don't have to take any other device. But here's something new, calendars. You can have a calendar on your iPod. As a matter of fact, you can have as many calendars as you want from iCal. And so you can drag down any iCal standard calendars.

Let's take a look at them all. And here's what it looks like. And the scroll wheel comes in really handy here because look at this. I can just scroll through the months. Let me go back to today. Boom. And I can go into today and see all the things I've got to do. If I want a better look at any of them, I can just go right in here and take a look. So we've got calendars in iPod now along with contacts. And of course, we have a clock because when you have a calendar, you need to know what day it is. And so we've added a clock in here. And we've made the game very accessible. So if you want to play the game, you don't have to look for it anymore. And so this is the new iPod software. And it's really, really nice. I'd encourage you to look at it. Genres, composers, contacts, calendars.

We've got three iPods starting now at $2.99. These will be in the stores in early August. Boxes look like this. And in addition to this, we are going to sell the accessories for existing iPod owners for $39 each. So if you want to buy a case or you want to buy a pair of headphones and a remote, $39, you can pick them up. So the new iPod, three different models. But there's one more little thing. Charles Haddad of Businessweek recently speculated, what if the iPod did work with PCs? Could it become a Trojan horse that steals inside Fortress Windows and wins over die-hard PC fans?

In other words, could it show them how good it could really be? And we think yes. And so today, we are introducing iPods for Windows. And we partnered with one of the most popular music players on Windows, Music Match, to do it. And we've worked with them and made the iPod so it will auto-sync with their Music Match software. And yes, it's not iTunes, but it's better than anything on the Windows side. So we have auto-syncing. We're going to sell the same three models at the same prices for Windows. We even include a six-pin to four-pin firewire connector for Windows machines, because generally that's what they have.

These Windows models will be in the stores in late August, because we want to take care of our Mac customers first. And this is the new iPod line. OK, now we're going to do something really fun. I want to introduce what I think is a landmark groundbreaking app. And I think this app is going to change a lot of things. We're going to look back on this app as the beginning of something pretty cool and pretty new. And that app is called iSync. The purpose of iSync is to synchronize your digital life.

Now we've got the best address book in the world now. We've got the best calendar in the world now. And when you're on your Mac, life is going to be great. But what about when you're not on your Mac? What you want to do is take these things with you so you have this information at your fingertips even when you're not on your Mac, God forbid. So what is the most popular device in the world? It's the cell phone. And there is a new generation of cell phones now that's a lot different. These are not your father's cell phones anymore. They are GPRS, so they are always on for data. They've got color screens on them. They've got organizers built into them. They've got address books and calendars in them just waiting for data.

They work off an open standard called SyncML when we've joined this group. It's a good standard. And they've got Bluetooth built in them. So this is a whole new generation of cell phones and they synchronize. And we think this is so cool that we want to add it to the digital hub. This is the coolest device since the digital camera that we added in January. So we're going to make some room for it and we are going to add this new generation of cell phones to our digital hub. Now while we're at it, we might as well pick up the Palm and you saw calendars and contacts on the iPod. Wouldn't it be cool if they auto-synced every time you plugged in your iPod the same way your music does?

So let's add the iPod here too. We've got three devices now that we want to sync calendars and address books to. But the most popular of these, of course, is the phone. Some people go, I don't get it. Why do I want to sync my phone with my computer? Well, because you get to enter data on a big display and a full-size keyboard. If you ever try to enter a hundred numbers into this tiny little phone, you go crazy. This way you get to do it like you enter most of your data. But even more so, have you ever lost a phone? Oh, you've just lost your life. All your contacts are on that thing. You are toast. Well, if you lose your phone this way, you don't lose your life because all your data is safely on your computer and you've still got it. And the third thing is, we go buy a new phone, rather than taking hours to enter in the data, you just sync it up and you load the data in seconds.

So these are three of the many reasons why you want to sync your phone with your computer. So we want to sync all three of these devices. And that's exactly what iSync does. This is iSync. And what it does is it shows you all the devices that are connected. Firewire for the iPod, USB for the Palm, wireless Bluetooth for your cell phones, whatever, however they're connected, they show up. And you can examine each one. You can set iPod, I want to synchronize all contacts. You can just choose certain groups, synchronize all calendars, and automatically synchronize whenever it's connected. Boom. That's how you set it up. The phone, same thing. Which contacts, which calendars, and you know, some of the memories in the phones aren't that big.

You can decide how far in the future you want your calendar to go. Boom. And then when you want to sync, you can sync all of them, any one individually, or all of them together just by pushing one button. Boom. Same thing. Takes less than a minute, and they're synced. And it's really, really cool, and I'd like to show you now. Okay. So, I've got iSync up here, and again, the first thing I'd like to say is, you know, Bluetooth has arrived, and we are now detecting phones with Bluetooth, automatically putting them up here in iSync. So, I can go through and configure things, as I said. I can choose, you know, certain contacts to synchronize, or all of them.

Certain calendars, or just some of them. And I can say, yeah, sync to my iPod whenever I plug it in. And I can do the same thing with the phone. Same sort of thing, and how far ahead I want to go with my calendar. And what I've got over here, let's get the phone up, picture in picture. Let's go ahead and get that phone up. Okay. So, I've got a phone right here, and this is a brand new phone. I've turned on the Bluetooth, so the Bluetooth has been recognized, but as you see, the phone book is empty on this phone, right? And it asks me, do I want to load numbers in from a SIM card? I don't have a SIM card anyway, so I'm going to say, no, I don't. And this phone is running on the Singular network.

Singular has got about 30% of the country now, including New York City and all of the West Coast, running on GPRS. It's fantastic. And so what I'm going to do is just sync with the phone. And I'm going to put all of my contacts from my address book into the phone. So all I do, what do I do? I just push this button. And now, whoops. I am syncing with the phone, and you can see it sync right there. Transferring my whole address book over, calendars.

Boom, done. And now what I'm going to do is I'm going to see if this worked. I'm going to go down to my address book, and I'm going to, let's say, pick Avi here. And I'm going to push a button, and let's go see if that calls Avi. I've got Avi down with a microphone on his cell phone here. Hopefully it's going to ring. Is that your beeps? Well, that's all. He's a little strange, but... Great. So, this is iSync, and we think it's the beginning of something very, very big.

What we call it is Mac to mobile, right? You want to get your Mac seamlessly syncing bi-directionally with all of your mobile devices, and that's what we're doing. And again, this is the beginning of something really big with a new era of cell phones. And we think the cell phone joining the digital hub, syncing with the Mac, is going to be something really, really good. One of the companies that's in the vanguard of these new phones is Sony Ericsson. It was formed by a joint venture between Sony and Ericsson, and they're coming on very, very strong. And I'm very, very proud to have Mr. Iharasan, the president of Sony Ericsson, here today. And I'd like to welcome him to Macworld for the first time. Thank you. Good morning, ladies and gentlemen.

And thank you very much, Steve, for inviting me to this exciting Macworld here today. You remember that when we first talked about Apple extending its digital hub strategy to include mobile phones, I was immediately convinced that this is wonderful opportunities. It is wonderful for me to see the best mobile phone seamlessly connecting to the applications on the Macintosh. Today, I believe Apple can proudly say it is a leader in easy-to-use connectivity between the personal computer and mobile phones. Our products complement each other extremely well.

It is also great to have Singular, one of my biggest customers, backing this with a new high-speed network. The first Sony Ericsson-branded product, the T68i, is one of the most powerful mobile phones in the market today. In addition to the application you have just seen in the demo Steve made, with the X-Color screen and the camera attachment, it was the first world-complete GSM solution for taking and sending photos, pictures, instantly to anywhere, anybody in the world.

The top priority of Sony Ericsson and Apple is to make sure our products work together as smoothly as possible, with minimal setup and very easy-to-use applications. Both companies understand the open technology standards are essential to make this happen. We are delighted that Apple has adopted the Bluetooth and SyncML standards. Sony Ericsson is leading the development of both technologies and has introduced several products supporting them. Today, many more manufacturers across a whole range of industries are releasing Bluetooth products.

In the PC industry, Apple has once again taken the lead by embedding Bluetooth support in its operating system. As you can see, I am very much excited about the cooperation between Apple, Sony Ericsson, and Singular. Today, we have reached an important milestone. The dream of easy wireless connectivity between personal computers, mobile phones, and networks is now a reality. This is the result of three companies sharing the vision and the passion to deliver.

The demonstrations that you have seen today are just the first example of what we will be able to do. As phones become even more advanced, the range of applications and their impact will be even more impressive. This is only the beginning of a fascinating journey. Watch this space. Thank you very much for your attention. The third part of this equation, beyond the Mac and the phone, is the network.

The networks are being retooled for GPRS. A company that is in the lead is Singular Wireless. I am very happy to invite Stephen Carter, the CEO of Singular Wireless, up on stage at his first Mac World to say a few words. Thanks, Steve. Well, I guess that it's somewhat inevitable that a wireless company that believes in the power of self-expression should one day come across a company that thinks different. And certainly, thank you, Steve, for the opportunity to get here today. We are on the dawn of a new era, I think, in wireless.

Not your father's wireless phone is a great expression, I think. I'm going to maybe plagiarize that a little bit in the future. But it really is where we are today. Wireless is not about voice anymore exclusively. And why is that? Well, one of the key things is the networks are changing. We're investing billions of dollars in a new network that's going to provide increasingly fast, always-on data capability. In fact, by next year, the GPRS will be enhanced again to something called Edge, which in theory can produce 470 kilobytes per second and actual working conditions easily 150. So we've got networks that are changing.

We've got devices like this fantastic phone from Sony Ericsson, the T68, the color screen, the icons, the incredible functionality in it. So two things going for us. But there's a third thing, and I call it the who-gives-a-damn factor. And the who-gives-a-damn factor is applications. And at Singular, we've been running a developer program now for a couple of years, I guess. And the number of developers coming in, working on applications, it's increased steadily. We have now nearly 5,000 developers enrolled. But when Steve called and talked about this particular application, we really got excited.

We really started to think in terms of everybody's looking for the killer app. No one's found the killer app yet. I'm not sure if this is the killer app, but it comes a darn sight closer than many that we've seen before. And so we're very, very excited about this. The other thing we got very excited about was that phrase, open standards. Because I think we're in a position now where wireline, wireless, computing, it's all coming together. And it should come together. But to enable that, we have to have open standards. And we applaud Apple and Sony Ericsson for embracing that concept. So as we look out now, there are so many applications that Bluetooth and the other technologies can enable.

We're very excited about it. We think the synchronization of the address book, the calendar, et cetera, is just one of the keys to allowing people to change their lives in a mobile sense. And at the end of the day, I think what really is going to make all of this sell is the ability of all of these companies to make the complex simple. Something that we tried to do at Singular, I know is at the heart of your philosophy. And looking at the way that Sony Ericsson's now developing their user interfaces is definitely top of their minds. So again, I thank you for the opportunity to be here today. Thank you all. And buy lots of GPRS phones.

So we are adding the phone to the digital hub. We think this is going to be a really big deal. Now, there's one other time when you'd really love to be able to synchronize stuff. And that is if you have more than one computer, right? How many of us change something on our computer at work and get home and find out Jesus? It's not there It's on my work computer, right? I do it very frequently Wouldn't it be great if you could synchronize your address book and your calendar between your multiple computers?

well This is another thing that we're going to be adding to dot Mac We're going to add dot Mac to I sync and so if you're a member of dot Mac you're going to be able to sync your computer to our internet servers and Do it hourly do it every 15 minutes do it daily and so you sync your computer before you leave work You sync your home computer when you get home and everything you did all day is on your machine at home You have multiple machines and there are frequently syncing with this They're going to stay in sync and this is going to be added for dot Mac members as well So all you do is push one button and sync everything in your life including your multiple computers For your address books and your calendars and who knows what else down the road?

So that's I think work at home computer synchronized so Mac to mobile I think I think runs on top of Jaguar It's going to be available in September It is going to be a free download at apple.com, and I hope all of you have a chance to try it out so Digital hub we've added the phone. We've added the palm Got a great story here, and the thing that really makes this story great Of course is the applications that we've written behind this these are all written at Apple And there's some amazing applications like iTunes 3 blow away. You've got to try this I Photo best digital photography app in the world. I'm movie Best consumer video editing application in the world I DVD the finest way to make DVDs in the world I think a totally breakthrough application that is going to open a whole new door of applications for us and then Applications like iCal the best calendar that we've ever seen on a personal computer Address book the best database and application for managing contacts. We've ever seen Mail with junk mail filtering that is the first real breakthrough. We've seen in that area I chat the best instant messaging on any personal computer and Sherlock 3 the beginning of internet services for the rest of us all

of these applications are bundled or free and there is nothing like them on the windows side of the fence and That's why we think that this is Going to grow and have even more force as we move forward with these amazing new applications So thank you you But there was wait a minute. There is one more thing I forgot about That's the iMac I Wanted to talk about the iMac for just a minute the iMac has been really great for us I think customers just love them with the flat screen the super crisp flat screen displays the really fast G4 Processors and the super drives you can burn your own DVDs that play in consumer DVD players And this design is just stunning where you can move the display anywhere you want and the feedback We've gotten on this has been fantastic Walt Mossberg and not an easy journalist to please said the new flat panel iMac is the best consumer desktop PC on the market and Cost less than a windows PC with the same specs. He said that last month So we're really happy with the iMac. I've got some fun data to share with you We sell three models The high-end one has a super drive in it and burn your own DVDs as I said I'm really pleased to report that the percentage of all the Macs sold with a super drive

50% Customers want the super drive it is the most requested thing We've got in the iMac line in terms of give me one with a super drive I'm showing up in the sales stats and that model sells for 1899 as of today, we're lowering the price back down to 1799 so we can try to reach even more people with it But this doesn't address the number one request we've gotten for the iMac the number one request is for a larger display And the iMac's got a fantastic 15 inch display But today we are introducing a model with a 17 inch landscape display, let's go ahead and take a look at it It is gorgeous It's really beautiful. It's giant and again. You can move it anywhere you like even when it's twirling We've got a 17 inch display on this that 17 inch LCD has the same viewing area as a 19 inch CRT Right on your desktop adjustable to any angle right in front of you it's incredible and It's got 1440 by 900 pixels which is 64% more pixels than the 15 inch iMac Now keep in mind that a cinema display is only 1600 by 1024 This is most of a cinema display right here on this iMac adjustable at any angle And of course it's in a cinematic aspect ratio, which our customers have come to love

It's really wonderful what you can see with this wider screen We've also increased the graphics to Nvidia GeForce 4 So it's got really fast graphics on it and So a 17 inch LCD 800 megahertz g4 quarter gigabyte of memory 80 gigabytes of disk Nvidia GeForce 4 mx and a super drive 1999 We will have these in the store Two weeks from now. I urge you to check them out. They are truly remarkable so this is what I had for you today and In ending I would just like to do two things one I would like to thank everybody in our software groups both obvious group and seen as groups for these incredible Operating system and applications that we're seeing these guys have worked really really hard over the last year, and I'd like to give a round And secondly, I'd like to think all the folk thank all the folks and John Rubenstein's hardware group Tim Cook's operations group for the new hardware The new iPods and the new iMacs you're seeing here today again. They've been working around the clock, too. So thank you guys We finally have the new iMacs We find ourselves in very challenging times across our whole economy and in particular in our industry our competitors are laying off thousands of people And there is certainly cause for despair if you believe that the personal computer Basically is something to do spreadsheets and word processors on and is an HTML terminal to the internet And if that's all you think it is then there is cause to for despair

We believe that the personal computer is undergoing a rapid evolution to be the center of our digital lives And we have never been more excited about this stuff And we are investing and we are going to innovate our way through this downturn like the products you've seen here today and more coming and when this thing turns around It's not just a matter of time We're going to have to take a look at this. It's not just a matter of time And when this thing turns around We're going to be in a great place So we're going to invest our way through this because we see the brightest future ever for the personal computer lies ahead Thank you very much I'm going to take a look at this. It's not just a matter of time. We're going to have to take a look at this. It's not just a matter of time. We're going to invest our way through this because we see the brightest future ever for the personal computer lies ahead In the meantime, I'm going to ask you to take a look at this. It's not just a matter of time. We're going to invest our way through this because we see the brightest future ever for the personal computer lies ahead you