Steve Jobs on the Power Mac G3: Think Different Performance

They're not fond of rules and they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them, but the only thing you can't do is ignore them because they change things, they push the human race forward. And while some may see them as the crazy ones, we see genius because the people who are crazy enough to think they can change the world are the ones who do. Hopefully you've seen that commercial a few times.

Thank you. We get to spend some time together this morning. We've got some pretty exciting things to announce today and so we'll get going. Everybody's been up all night getting ready for this so if something doesn't work or I forget something, I apologize in advance. Think Different is our ad campaign. It's also something that's really, we are taking to heart and we're thinking different about everything we do as Apple Computer, Inc., about the products we make, about how we make them, about how we sell them. And I've been at Apple now about four months and I have had the privilege of working with some really great people, many in this audience today, and people have been working round the clock to bring us some of the things we're seeing today. So let's get started.

Think Different. We're going to think really different. And these are the symbols of what we're going to think different about. If you go to the Apple website, it's been down for the last 24 hours and there's, people are wondering what these things mean. Let's take a look at what they mean. The first one, a cookie. What's that mean? A very different chip. Very different chip. We are very pleased today to announce our very different chip, which is this thing. It is the PowerPC G3 processor. G3 means generation three. It is the third generation PowerPC processor.

This processor has been developed by the partnership put in place several years ago by Motorola, Apple, and IBM. And contrary to what you may read, this partnership is alive and very healthy and is turning out some wonderfully sweet things. As a matter of fact, we're hitting sort of a sweet spot in the PowerPC in the next few years, especially compared with the Pentium. And so we've got this incredible new chip. This chip gets loaded onto a daughter board with cache memory. And this little daughter board is the module that we use in all of our products. Now, this is not a normal cache memory. It's called a backside cache. And what a backside cache is, for those of you that are not familiar with it, is instead of putting the cache, the second level cache on the same bus that you use to get to the PCI peripherals and the main memory, it's got its own separate bus.

And that enables the overall throughput to be 2 to 3X what it has been before backside caches. So these products basically scream. Now, how do they scream? Well, let's compare them. We're announcing two speed versions of the G3 today, a 233 megahertz and a 266. We're going to compare the fastest one of those, the 266, with the fastest Intel processor available today, which is a Pentium II running at 300 megahertz. And that module is Intel's processor and cache assembly that they ship to all their customers. Well, the first thing we notice is that the PowerPC G3 is dramatically smaller. It's 67 square millimeters versus 203. Now, why is that important? Well, it's important for cost. But much more important, it's important for speed and power, i.e. heat.

And as you see, the G3 draws 6 watts compared to 43 watts for the Pentium II. You can fry an egg on this thing. And so why is that important? Why is that important? Well, it's important because of portables. You cannot get a portable with a Pentium II in it today. I mean, here's the module right here. I've got one here. This thing draws twice as much power as a G3 portable, just this. So you can't put them in portables in their next generation. The Schutz, I think, is called. You can probably fry an egg on it, too. The portable prototypes we've seen have two fans in them. So power is pretty important. And on power, we're a third the size, and we're a seventh the power.

What about performance? We love bite marks. We think they're a pretty stable benchmark that's pretty good. And we toast them on integer performance, and we are faster than them on floating point. We're 44% faster on integer performance and 15% faster on floating point performance. And that's at 266 megahertz compared with 300 megahertz for the Pentium II. So we've got a lot of headroom to take the speed up, and you'll see that coming over the next several months. When you put it in a system, here's what you get. We ran, I think, 16 different Photoshop tasks, Photoshop 4.0 tasks, which is a very common thing that our customers do. When you look at a Pentium II running at 266 megahertz, it's about a little over 800 seconds.

When you go up to the 300 megahertz Pentium, you cut 100 seconds off of that. When you go to a G3 running at 266, you cut 100 seconds off of that. So we are extraordinarily pleased with the performance of these products. Now what are we putting them in? We're putting them in some wonderful products. Three. Number one, the desktop. We've got a G3 desktop, two, Minitower, and three, PowerBook. So we've got all three. These products have been re-engineered from the ground up, and they've been re-engineered from the ground up to take the performance level that's only been available on our $5,000 and $6,000 products and bring it down into the sweet spot mid-range of our product line.

And so these products start at $1,999, and most of the ones we'll sell will range from $1,999 to about $2,999. Now the portable, the PowerBook, our current PowerBook, the generation before this, is the fastest portable in the world. As you're going to hear, this is twice as fast as it is, twice as fast as our existing PowerBooks. It is by far the fastest portable in the world, and it's priced alongside portables that are substantially slower in the Wintel marketplace. All these products obviously come preloaded with OS 8. OS 8's doing great, so we've shipped over two million copies since the announcement this past summer.

And we got some early units of the G3 product line to our developers, Microsoft, Macromedia, Adobe Quark, and many others. And I wanted you to hear firsthand from some of these guys what they think of these products. So we made a little video, and if I could run the video now, that'd be great. There's nothing more important than energy and vision in getting people focused in the right direction. And I think the recent moves at Apple are focused on doing that. A new board of directors, more openness to third-party developers, bringing out new Macintosh systems that are focused on end-user customers in education and publishing, and bringing them out at price-performance levels that are going to be attractive to customers.

Most of the publishing industry has standardized on Macintosh, and so the fact that Apple is actually going to focus on developing that market, I think, bodes well for the future of Apple. And I think that can only help Apple to be focusing on the things that historically have made them money. Focusing on really great products to solve customer problems has sort of been Apple's traditional value structure. Fundamentally, my entire development group are Macintosh users at heart. There isn't a person in the group that doesn't have a Mac at home as well as one on their desk. The reports that I've gotten from my engineers about the Power Mac G3 series is that it really outperforms in Photoshop any other machines that we've come across. The first time we saw the product run on the G3 was outstanding.

I mean, Internet Explorer literally screamed. We also have an opportunity to run pre-releases of Mac Office 98, and we're used to running it on 8500s, and it runs very well there. The performance on the G3 is pretty astonishing. We saw various kinds of publishing tasks done with freehand on the G3. They were blazingly fast. We saw beautiful multicolored animations done with Director on the G3, and again, the quality and the speed was just outstanding. Feature for feature, going down and benchmarking the machine, I think there are very few exceptions where the new G3 machines are not faster than anything we've seen. Earlier in this year when people were very worried about the future of the Macintosh and we asked our customers, are you going to give up Mac and go somewhere else?

And the resounding answer from almost all of them was no, we're going to stay with Macintosh. When WebWeek did a survey of the platforms that web developers use, the Macintosh was the number one platform. And so Macromedia made a decision to invest in the Macintosh for our new product Dreamweaver because the Macintosh was the primary platform. We've had a significant investment in Macintosh development for the past two years. My team has grown from a start two years ago of roughly six people to over 70 and we plan on growing beyond that to do Macintosh Office, large team over 100 people, that team is growing. So there's a strong investment by Microsoft and Apple and that's something we've done since 1985 and look to do in the foreseeable future.

We're really excited about them getting in the market because they're more affordable, they're going to be accessible to a much wider audience and we're always looking to expand the market for our tools. So the people in my team that got a chance to experience the G3 fell in love with it. It's the hottest Macintosh they'd ever seen. One of the things that's very important to me is the productivity of my engineers and so in fact when the new systems come out, we'll probably be replacing every engineer's Macintosh with a new G3 based Macintosh because that productivity is the most important thing that I can give them. We've got some great developers, don't we? As I said, we are taking the performance that's even beyond the high end of our product line and moving it down into the center sweet spot of the highest volume machines we sell today.

And now, let's show them to you. I'd like to invite Phil Schiller, who's our Vice President of Product Marketing, come out and take them for a spin. Phil? Good morning everyone. As Steve told you, we've been working into the wee hours of the morning to show you some really exciting things and I hope you're as pleased with what we have to show as we all are. Well, let's start right off at the top. Let me put our best against their best. What we have here in front of you on stage and up on the two screens is the best G3 Power Macintosh up against the best Pentium II money can buy at any price. As you see, it's a $29.99 Power Macintosh G3 Minitower in our new Minitower case right here.

And next to it, we've put a Compaq Personal Workstation 5100. Big name. It's got a Pentium II with MMX at 300 megahertz, more than you could pack into it than you'd ever imagine. It's got gobs of memory, ultra-fast and wide SCSI hard drives, 100BASE-T running Windows NT. And it costs a little more too. In fact, I can almost buy my Minitower and a new desktop G3 for the price of the Compaq Workstation. Now, I know what you're saying. This isn't really fair. We're taking a more expensive NT machine, pitting it up against the fastest G3 mid-range Power Mac. And if this were any other computer, you'd be absolutely right. That's not fair. But we're thinking different about performance, and you have to think different about the G3.

You get great high-end performance in the mid-range of the line, and that's exactly what we're going to show you. So let's start with something, something that many, many Macintosh users use. In fact, their businesses rely on Adobe Photoshop. We're going to open up a Photoshop file on both machines. The exact same file has been brought to both machines. And one of the great things you can do with Photoshop is script a bunch of actions. So instead of just opening an image, which of course is faster on the Power Mac, we won't wait for that to happen on the NT machine, instead what we're going to do is actually script over 30 Photoshop actions in front of you and build an image right here on the screen. So this is happening in real time. When I click the buttons, we're going to create a beautiful 50 megabyte image using 30 Photoshop effects.

You ready? On your mark, get set, go. So we're bringing in some imagery, imagery we used for the Mac OS 8 launch. We're compositing it. We're creating drop shadows. We're creating special effects. We're cropping, we're cutting, we're pasting, we're rotating, and in the end, when you see the Apple logo come up on the bottom left hand side, the Mac is done. And we're waiting, we're waiting. Any moment now, very soon, very soon, here it comes, there you go, let's hear it for the Windows NT machine.

So I think, for those of you who actually have to create beautiful images, and many of you do, in your day to day life, I think if you want to get your work done, you know what machine to do it on. So let's not stop there. So we've created a beautiful image using a leading tool on the Macintosh, now let's try and create something more complex. Let's actually animate some of these beautiful images. So for an NT workstation, you should be able to at least excel at creating complex, advanced animation, something a lot of high end customers want to do if they're going to spend $5,000 on a computer. So to begin with, we're going to pull up another leading, very powerful, great application, Adobe After Effects. Again, we have After Effects on both machines, and now what we're going to do is we're going to create a QuickTime movie out of a bunch of the graphic elements we used in the Mac OS 8 launch.

When I click the buttons, we're going to start to render, frame by frame, this very powerful, high end QuickTime movie. One, two, three, go. So both machines have started. Close enough. We'll give them a, we'll give them a, what it would engulf a, we'll give them a 10-stroke handicap. Now the Mac is ahead and will continue to get ahead. Here we are rendering frame by frame, compositing the graphics. You can't see it happening, but it's also laying down the audio track and creating a QuickTime movie. And we're almost done on the Mac, and the PC is just under half the way done.

There, the Mac is done. In fact, we have enough time left on the Windows side to, why don't we go on the Mac to the Finder and open up the animation and play it for you. Here's one of my favorite things. We'll actually loop, lap right past the Windows machine, playing it back.

So we'll get to the point that the Windows is rendering where we're already playing back the animation. There, we've just passed it. And in a few moments, the Windows NT machine will get done. There, the Windows machine is finished. And so we've done two demos here. And I think it's pretty clear the Mac is two for two, but this is the G3 launch, so it's only appropriate and probably poetic that we do three speed tests.

For the third demo, what I'd like to do is now take this one step further and actually create an interactive animation, one that customers could view, learn all about Mac OS 8, and play around in. To do that, we'll use Macromedia Director. Now I could do it again on the PowerPC versus the high-end Pentium, but what would be the point? I mean, I think we all know what would happen, don't we? Anybody? So instead, let's take it to another place. Let's go over to the portable arena, where we have, right here, on my right-hand side of the stage, the speed demon you heard about, the PowerBook G3, which for the first time takes a high-end processor, the latest, greatest, newest processor, and puts it into a portable application. And right next to it, the fastest Pentium notebook you can buy.

We have the NEC Versa, the NEC Versa, it's the number one selling Intel portable, particularly in Japan, where portables are so popular, and same price point, but radically different performance. Now, to be fair, this isn't a pretty fair competition, because everyone knows a Pentium, this is called the mobile Pentium, the brand new mobile Pentium, doesn't compare to the PowerPC G3 new generation. But the fact remains, it's all you can buy in the Intel world, is this new mobile Pentium, which brings to the Intel market the performance we've had in our last generation PowerPC-based systems. And this is what you get for your money, so we're going to do the demo anyway. So I'm going to open up Director 6.

What we have preloaded here is an animation that was created. Now this is not making an animation, you're actually playing it in real-time playing back. In an ideal world, what you want is as close to real-time performance as you can. So it's not just about finishing fast, it's also about the bandwidth, being able to see this stuff happen with smooth animation and very fast interactivity. So you have to watch for two things now. So I'm going to click play on both products to my very level best to click them at exactly the same time. Ready, set, go. So we see the animation happening on the Mac. And fortunately, the new Tillamook Intel-based system kind of choking on the data rate.

Now at the interactive part on the Mac, the Windows machine will catch up in a moment. Accelerate. Mac OS 8 goes native with more PowerPC native code than ever. There, the PC is caught up. So as you see, in graphics, in animation, and in interactive multimedia, the PowerPC G3 systems and the new Power Macs have a tremendous performance advantage over anything there is at any amount of money in the Intel space. So I'd like to leave it on one last demo. That isn't so much performance demo side by side, but I think there's a lot of people out there who do the same tasks that many of us do every single day. And this is something we've heard a lot about and I hope you appreciate that we have been listening and dealing with something that customers have asked for. So I'd like to go back to my desktop, Power Macintosh, and show you one last demo.

It's the simplest thing, but sometimes the simplest things are the most impactful. I'm going to open up Microsoft Word. And for those who have had to wait, I think you might appreciate what the existing first version of Word does. There. But wait. We don't have to stop there. Let's open up Excel, too. There. So I hope you're all starting to think different about performance, just as we all are at Apple, that the highest end performance can come in the smallest package and can hit the majority of customers with a powerful new product like the Power Macintosh G3.

Thank you. All right, well, that takes care of the cookie. What's the next one? Right, a very different store. Before we get to the very different store, though, let's review the existing stores and how our customers have been buying our products, because we've been engaged for the last four months in a major tune-up in our existing distribution channels. So let's review how we get our products to our customers. The first way is education.

We sell direct to education in this country, represents about half of our business in the United States. And we sell to over 7,000 education accounts through our direct sales force, right? Major channel for Apple. And that's doing great. Distributors. We sell to a lot of VARs. We have some fantastic value-added resellers that we sell through our distributors. And we used to have five of them, and we just axed three of them, and we got it down to two, the two best ones, in our opinion, Ingram and MicroAge. And this allows us to better serve our VARs, to spend more time with these folks, to put more innovative programs in place, and those are the exact kind of things we're doing. It used to be that VARs to buy direct from us had to buy $20 million a year.

And what we've done is we've lowered that threshold to $2 million a year, so that some of the larger VARs we can have a direct relationship with. And this doesn't tax us, since we already have a direct relationship with 7,000 education accounts anyway. What's another few hundred of our biggest VARs? And so that's starting to happen. And we're able to get product to them very quickly. We're able to get product to them at the most cost-effective way, and we are able to understand their sell-through instantly. Next are the regional resellers. These are terrific. They're all over the country, different regional chains. And around here, of course, we have Fry's and MicroCenter as two great examples. They're both terrific. And we are focusing a lot on the regional resellers to, again, enhance the buying experience of our products.

But nowhere has the buying experience been as bad as the national resellers. I get a lot of email, and I've gotten over 1,000 emails by people telling me how bad the buying experience has been at some of these big national resellers. Machines not plugged in, nobody knowing how to demo them, salespeople talking the customer into Wintel machines. And so we are really starting to focus on the national resellers. And one of the things that we announced a week ago was a major new partnership with the biggest one, by far, CompUSA, over $6 billion reseller. They're the biggest, and we believe they're the best. I'm a big fan of CompUSA, and I'm a big fan of Fridge, and I'm a big fan of Fridge, and I'm a big fan of CompUSA, and I'm a big fan of Fridge, and I'm a big fan of CompUSA, and for me, they're the place to finally put it out in the universe.

And for a company like CompUSA, you put yourmself in their shoes, and you'll take them to the next level. I know I've had a lot of shows, and I'm part of this now, and I feel it again today, and the only label that will ever leave this business is CompPUSA. I firmly believe today that there is a solution. I believe today that there are solutions, and a solution for the many problems that we face in目 I want to thank all my family, and I want to meet all my friends. Thank you for your generosity.

Thank you for your generosity. Now, that's looking good.

Hi there. Good evening, and welcome to Tuesday Network Live.

Thank you so much for joining, folks. We hope you have a great Tuesday. And enjoy the holiday season if you happen to be here. Thank you for joining us on Tuesday, and thank you for listening that wonderful hymn pen next week. I saved about 30 pounds The fish were upstairs but we had to go all the way down to Kasin and get food and I got in the lead and I won While he was winning first, I got into second when he got back in stops we went down to the end but we weren't in the end I was the second I went back in I got out I got past the bullet I was past all the ice and I couldn't find my way and I went home I saw my son and my wife looking up at the sky and there's an image of us looking at the Observatory And we sat down laying together sitting next to the Sun and watched the stars And she told me what she saw all

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