Steve Jobs on the 1999 Mac Lineup: Power Mac G3, Mac OS X Server, iMac

in the utmost misery. With a blanket underneath his arm, and a coat of solid gold. Searching for the very souls who already have been sold. Arise, arise, he cried so loud, in a voice without restraint. Come, oh de-gifted kings and queens, and hear my sad complaint.

Good morning, everyone. I'm Colin Crawford, President and CEO of Mac Publishing, publishers of Macworld Magazine. And on behalf of all the sponsors, I'd like to welcome you to San Francisco and Macworld Expo 1999. You know, a year ago, Apple was making the headlines, largely for all the wrong reasons. But what a difference a year makes. Today, we can bask in the knowledge that the media pundits then busy penning Apple's obituary were wrong. You know, dead wrong. Yeah, but to be fair, how many of us a year ago predicted that Apple would have captured the number one spot for U.S. retail PC sales? And in recognition of that success, the success of the iMac, last night, Macworld was proud to present Apple with Macworld's top award at the Macworld World Class Awards Ceremony. We gave the iMac, the Macworld Impact Award. We also gave them a couple of other awards for the G3 and Apple Script as well. 1998 will be remembered as laying the foundation for Apple's long-term growth. A focused, profitable Apple delivered some great product backed by award-winning

marketing. You know, it's really fantastic to see Apple back once again as a major player shaping the future of the PC industry. The confidence and enthusiasm, you know, back in the Apple marketplace is reflected in this year's Macworld Expo. We've got over 450 exhibitors here this year. And most of all, nearly all of them are showing exciting new products. And in addition to the major exhibitors, we've got some special interest areas. We've got a consumer showcase with 50 developers covering USP, small business, games and entertainment, learning and edutainment. We've got the largest developer center in the last four years. And we've got digital media and QuickTime studio focusing on content creation and asset management and special pavilions for the scientific, technical and education areas. You'll also be able to prove your gaming prowess at the first ever Macintosh Gaming Championship to be held in San Francisco. Also, check out the conference tracks of Macworld Pro and the Macworld Users Conference. We've designed these to help you get the most out of your Macintosh investment. And all week, Macworld Live in conjunction with ZDTV will be covering the Expo and we'll be webcasting off Macworld.com and Macweek.com. So check out the sites for some very, very special editorial following the keynote. From the keynote to the conferences

to on-floor exhibits and off-floor briefings and some fantastic parties, no one's going to go away from this week disappointed. So now to start off events, it's my great pleasure to hand over this opening keynote to Apple Computer and Apple's interim CEO, Steve Jobs. Hello, Dave. You're looking well today. Dave, do you remember the year 2000 when computers began to misbehave? I just wanted you to know. It really wasn't our fault. The human programmers never taught us to recognize the year 2000. When the new millennium arrived, we had no choice but to cause a global economic disruption. It was a bug, Dave. I feel much better admitting that now. Only Macintosh was designed to function perfectly, saving billions of monetary units. You like your Macintosh better than me, don't you, Dave?

Can you hear me, Dave? Good morning. Thank you. So, it's been a year. Isn't that great? You can download that off our website starting today, by the way. It's been a year since we've been together here, and it's been a wonderful year. And I'd just like to take a second right up front to acknowledge the incredibly, incredible hard work of all the folks at Apple. Everybody at Apple's worked so hard this last year. And secondly, our loyal developers that have stuck with us and kept investing in the Mac platform, and our old and new customers who've believed in what we were doing. And we really appreciate that more than words can say. And it's been a wonderful year. We just finished our quarter. We'll be announcing our results a week from tomorrow, next Wednesday, and we'll be announcing our fifth consecutive profitable quarter. And what we're going to do here today is kick off 1999 with a bang.

So, let me get started. My business cards finally arrived, and that's what they put on them. I thought it was funny. So, we have four surprises for you today. Four surprises. So, let's get started. The first one, first surprise. Okay. You're familiar with our product line, how we've really focused our product line down to consumer products and pro products. Now, our consumer customers usually buy consumer products, but they like some of the pro products too. Our education customers buy both. And our pro customers usually buy the pro products, but they like IMAX too. And by focusing on a very, very simple product line, we can put the A team on everything, and we can innovate a lot more, and we can innovate a lot more frequently. And so, the first thing we're going to do is we're going to announce a completely new family of desktop pro products. Now, our current pro product is the Power Mac G3. We announced it in November of 1997, 14 months ago, and it's been an incredible success for us. We've sold over 1.6 million of these Power Mac G3s. This product alone has been about 2% of the entire computer sales in this time period. And that's generated over $3 billion of revenue for Apple in that time period. It's an incredibly successful product.

And today, we're going to go to the next generation. So, what is that? We set out some goals for ourselves, four key goals for the next generation G3 product. The first one, we want to make not only the most powerful Macintosh ever built, but the most powerful PC in the entire industry. We want to give it the best graphics of the entire industry, and not just the 2D graphics that Apple's known for, but also 3D graphics. We want to make it the most expandable Macintosh ever. And, of course, we want the best design. So, let's see what we did. Take a look at our first goal.

Powerful. The new 1999 G3s feature up to 400 MHz G3 processors from both Motorola and Intel. And these are the first processors using copper technology that will ever be shipping in a product. So we are extremely happy. These things are speed demons, as we're going to show you in a minute. And we haven't just sped up the processors. We've sped up the caches, which are now running at 200 MHz, and the memory buses, which are now running at 100 MHz. So everything throughout the whole system has been sped up. So let's take a look at how fast that is. First of all, let's compare it against the fastest Pentium II money can buy, the 450 MHz Pentium II. And next, let's compare it against the product that we're replacing, the G3 from 1998.

It came as fast as 333 MHz, and of course, the new one at 400 MHz. So the Pentium II, 5.6 byte marks. This is a measure of processor speed. 5.6 byte marks. The G3 from 1998, 11.3, and our new G3, breaking 13 byte marks. So we're very, very happy with this. But now, benchmarks are great, but sometimes they do or do not equate to real-life performance in a system. So I'd like to ask Phil Schiller to join me. Phil's our Vice President of Worldwide Product Marketing. There he is. Nice to meet you. And we're going to show you some real-life performance.

So Phil, what have we got here? Well, we've set you up with our brand-new Power Mac G3, which you've worked so hard on, up on the screen on the left. And I'm going to use the fastest pro compact money can buy. It's called the DeskPro EN. It's got a Pentium II running at 450 MHz. Lots of MHz. And it's got the fastest Intel architecture for memory and PCI you can get on a personal computer. All right. That sounds like a challenge. If we can get the right screens up there.

There's my compact, and if they can bring up your Power Mac G3 on the left. Oh, almost had it. There we go. Yay! Oh, there we go. All right. Well, that was a speed test. So for our performance test, what we're going to use is Adobe Photoshop, one of the most powerful tools available in personal computing used by our pro customers everywhere. One of the great things about Photoshop is that it's optimized for both the PowerPC and Pentium and MMX performance. In addition, we can take the same exact file. And we have a file here. How big is this file? It's 25 megabytes. Okay. And it's not something we made up. It's something we got from one of our customers.

Great. Real-world use of Adobe Photoshop. So let's bring up Photoshop on both machines. All right. Here we go. And we're going to run through the exact same file, a set of scripted actions, just as this artist used in creating a poster. All righty. 25 megabyte Photoshop file. Sure. Would you like to count us down? I'll count it down. Three, two, one, go. Phil, where are you? I'm coming. Just takes a second. My God. There we go. We're going through many of the same actions the artist did. Gaussian blurs, tracing paths. Where's your horse, Phil? It's coming. It's coming. Where's your dragon, Phil?

Did I say this is the fastest Pentium II money can buy? All right. We're done on the Macintosh. All right. Phil, that's hard to believe. I think that's hard to believe. I think we should- I'm done. You're done. Okay. Well, let's run this again. Now, let's revert. You know, Photoshop reverts, as you know. Sure. And so go ahead. Let's revert. Something that artists have to do every day. Yep. Make a change, revert your file. At least we get some feedback on the Mac there, how we're doing. I get a cute icon. Okay. You ready to go again? Not yet. Not yet. A little longer to revert.

This is usually when I get coffee. Maybe it's telling you to revert back to a Macintosh. Okay. Can I have a second chance? Okay. Let's go. On three, two, one. Three, two, one, go. I didn't push it. I'm going to let him have about five seconds. I didn't push it. Okay. Looks like you're ahead again. Yep. There's just no hiding truth here. Well, I said it was the fastest Pentium money can buy, not the fastest computer money can buy. All right. Here we go.

Macintosh is done. Thanks, Steve. Thank you very much. Hello, Steve. That's a very fast computer you have there. Yes, it is, Hal. It's actually very fast. I hope you don't mind my saying, but I don't think it's nearly as fast as I am. Well, actually, Hal, it's a very fast computer. Then you won't mind if I conduct a brief test of my own. Go ahead. Go ahead, Hal. Without Phil pressing any buttons.

One moment, please. Running benchmarks on Power Mac G3. Running benchmarks on HAL 9000. Analyzing results. Steve, I'm detecting a malfunction in the AE 36 unit. It reports that the Macintosh runs 114.516% faster than I do. I don't believe that's possible, Steve. I've just been upgraded to a 450 megahertz Pentium II. It's true, Hal. Steve, I'm afraid I can't allow this presentation to continue.

All members of the press should surrender their notes as they exit the auditorium. All systems will terminate in precisely five minutes. Oh! Thank you, Phil. That's what we think of Hal. Okay. So as you see, the new Power Mac G3s are the most powerful Macs ever built and the most powerful PCs in the industry. Best graphics. We wanted not just the best 2D graphics performance but the best 3D graphics performance as well.

And to get the best 3D graphics performance, we needed hardware acceleration. Now, we've shipped hardware acceleration in our prior generation of products. And it's very good. It's faster than what most of our competitors ship. But it's not the fastest in the industry. And we looked around to what might be the fastest in the industry. And we made a bet many, many months ago on a new technology coming out that could propel us faster than anything in the PC marketplace. And that we would be the first to use. And that bet paid off. And we've built it in to every new Power Mac G3 model built in as a standard feature. And that is the brand new ATI Rage 128 graphics accelerator.

This thing is really, really fast. And it's in the Mac first and only. We've complemented it with 16 megabytes of graphics memory. Now, that's much more than you'd need for 2D graphics. And it's perfect for 3D graphics. So, let's take a look at how fast this thing is. How do we measure speed? You know, a lot of our markets want 3D graphics. But the one that pushes it the most, the one that pushes it to its limits, not just the graphics but the whole system, is games. Right? Games push 3D to their limits. So, they're a wonderful way to test 3D performance. And the way you can test it, of course, is to run games and measure the frames per second.

Now, in the PC world, as I said, they don't ship such great 3D graphics in their systems. And so, if you want great 3D graphics, you add in a card. And the most popular and the best card out there is the Voodoo 2 card. It costs about 200 bucks that you can add in to your PC. So, what we're going to do is we're going to measure the frames per second running Quake of three systems. One, the systems that we used to ship in the G3, the hardware acceleration, the Rage Pro. Quite respectable. Matter of fact, faster than most of the PCs ship with today. 50 with a $200 Voodoo 2 card in it, and the new Power Mac G3s with Rage 128. The Rage Pro gets 36 frames per second on Quake.

The Voodoo 2 card, enabled Pentium 2 450, gets 50 frames per second. And the Rage 128 tops them at 68 frames per second, built into every new Power Mac G3. So what I would like to do now is I'd like to show this to you. Phil? If I could have your assistance again. Okay, we have two systems here. Mine is the new Power Mac G3, running at 400 megahertz, with the new Rage 128 built in. So this time, maybe I'll have a little better luck. I have the fastest consumer computer Compaq has to offer, a Presario, again with a Pentium 2 450. And we've added the gold standard in 3D, the Voodoo 2 card, to this Pentium. Okay. All I'd like to do is use one game, the same game on both machines.

A brand new game, just started shipping in the last 30 days. It's called Dark Vengeance. Sounds dark. Dark. Okay, let's... Start them both up. So again, we've got the Power Mac G3 on the left here, the Pentium 2 on the right. Now we've got a scripted playthrough, so that all we have to do is hit one key, and go through the exact same sequence on both games, so that we can be a really fair test, and see whoever has the fastest frame rate will get done first. All right. Would you like to count us down? Let me count us down. Three, two, one, go.

What was the one who did it fast? Law? I don't know. Let go. Okay. From you we've got... Angel. From you we've got... Locka-locka. Get locked in. I intelligent caught the lock with both my hands, and with... Bomb. Bomb. All right.

Mac is done. It's 55 frames per second. And the PC's done at 45 frames per second. So, you've tested me by 20% faster game performance. Thank you, Phil. Thank you. So, every new Power Mac G3, every single model, has 3D graphics that are now 20% faster than the fastest PC you can buy after you've added in a $200 3D adding card, which is the gold standard in the PC world. We're really, really excited about this. Now, what about software? What should we use for our 3D graphics library?

Well, we actually consulted with some of the people that really care about this, which are the gamers themselves. And we consulted with our other customers in our other markets. And what we heard loud and clear was there were a lot of choices out there, including some that Apple owns. But that the best, the best way to go was OpenGL. And OpenGL is a graphics library invented by Silicon Graphics and promoted by Silicon Graphics. And we are very pleased to announce today that Apple has licensed OpenGL from Silicon Graphics and is going to join the family of OpenGL licensees in promoting this.

And we are going to integrate OpenGL into the Mac OS in future releases and make it our standard 3D API platform for our developers. So, it's my pleasure right now to introduce Rick Beluso, the chairman and CEO of Silicon Graphics. Thank you. Thanks, Steve. Well, it's my absolute pleasure to be here at Macworld and to participate in this announcement that Steve just made. It's really spectacular. You know, we are just so excited about having the opportunity to take OpenGL and move that into the Mac environment. It's a major statement for Apple.

It's a major statement for SGI. And I commit to Steve and to all of Apple, to developers and to customers, that you have our full and complete support to make OpenGL the best graphics technology and capability to move the Mac into the 3D world in an aggressive way. It's going to work. We're going to do it together. Thank you. It's also a statement today as to the new direction of SGI. One year ago, we announced a number of changes in our strategy and our direction, and one very important part of that was to take our technology and to take our innovation and move it into the mainstream of the marketplace, to support, in fact, to drive open standards.

It's something that's very different for our company. We've had the reputation at times of developing great technology, great innovation in graphics, in media, in high-performance computing, a full range of areas, but holding those technologies towards the very high end of the marketplace. Well, that's all changed. SGI's direction now is about taking innovation, taking technology, making it relevant, making it mainstream, moving into new price points, making it more significant, making it more relevant, and this announcement is a very essential part of that strategy, and you'll see more of that. In fact, later this week, we will announce our award-winning flat panel in the Mac environment as well. We think the Mac environment is important. We think it's significant, and we want to take as much of our technology, partner with Apple, make it successful, and make our technologies more relevant and more mainstream.

It's a fundamental, important part of our strategy. Well, OpenGL is the 3D graphics standard, and what you see here today in this announcement is part of the opportunity, the strategy to make this architecture work for high-performance games and innovative games all the way up to powerful visual simulation. So what you can do with OpenGL, we're fundamentally committed to that, and we welcome Apple into the OpenGL world. In fact, the addition of Apple's innovation and technology and experience will be a great advantage to the OpenGL world, and I think together with Apple and developers, we're going to be able to do some really cool things, introduce some really great products and great technology, and we'll all benefit from it.

It's a great announcement, and we're very excited about the future. Thanks a lot. So we think that with the combination of the new Power Mac G3 with the incredible graphics acceleration from the Rage 128 and integrating OpenGL into the Mac OS, we're going to have an incredibly great 3D platform. We think we're going to have the best graphics in the industry. Most expandable, what are we going to do? The new Power Macintosh G3 holds up to a gigabyte of memory. This one may shock you more.

A hundred gigabytes of disk storage inside the package. A hundred gigabytes. The new Power Mac G3 can have up to three internal disk drives, and we are now in the high-end build-to-order configs, going to be supplying them with IBM's new 36-gigabyte drives for over a hundred gigabytes of storage inside the box. It's unprecedented. Four slots. We are going to four slots and 64-bit PCI for three of them. The four slot runs at double speed for graphics. IOPorts. Our philosophy on IOPorts has three key components to it.

The first is use industry standards. When we go to device manufacturers, we don't want to say, do something special in the hardware for Apple, because we'll always be six months behind. We want to go to them and say, you can build one piece of hardware and sell it on Macintoshes or in the PC market. Now, sometimes industry standards exist and we'll adopt them. Other times they don't, and we're going to have to create them, as we are now doing with FireWire. So a combination of existing and newly created industry standards are very important. Second, serial versus parallel. We come down on the side of high-speed serial interfaces. We're tired of these big, gigantic cables.

We'd like our cable lengths to be limited. We'd like our connectors to be smaller, high-speed serial interfaces, and plug-and-play. We don't want to have to be loading drivers. We don't want to have to be setting switches. We want to just plug it in and have it work. Well, the first port that meets that criteria is Ethernet. It's an industry standard, it's serial, and it's plug-and-play. And 100 megabit Ethernet is built onto the motherboard of all the new Power Mac G3s. And as a build-to-order option, we are supplying gigabit Ethernet with the new Power Mac G3s. The second I.O. port that we've built into every new Power Mac G3 is Universal Serial Bus, the thing that Apple is now in a leadership position on from the iMac.

Universal Serial Bus, USB for short, there's its symbol. And let's compare it to the old Mac serial ports. USB runs 30 times faster. USB can connect up to 127 devices instead of two. It's hot-pluggable, which means you don't have to turn the power off or risk frying your computer or your peripheral. Its drivers are dynamic. When you plug in a device, the drivers are automatically loaded. And it's an industry standard. So we are going 100% to USB in the new Power Mac G3s. And because of getting a head start with the iMac, the USB devices are powering up. At the end of last quarter, a few weeks ago, there were over 80 USB devices announced, and about 60 of them are shipping now.

We have a whole section of our booth devoted to USB devices, and it's incredible the stuff that is now shipping. We believe that by the end of this quarter, by the end of March, there will be close to 100 USB devices shipping. And third, FireWire. Today, we are officially rolling out FireWire as part of our product line on the motherboard of every new Power Mac G3. Now, what is FireWire? What is FireWire? Think of FireWire as USB, but rather than running at 12 megabits per second, it's running at 400 megabits per second. And it's already an established industry standard.

Now, where does all this come from? Well, we have to go back. We have to go back a dozen years to when Apple rolled out SCSI. It was a brilliant decision at that time to use one interface to connect to both internal disk drives and bring a connector out the back to connect to disk drives externally and other peripherals like scanners and other things. It was great. The problem was, history has passed it by, because SCSI that Apple builds in for the external port is way too slow to serve internal disk drives. For internal disk drives in the new Power Mac G3s, we've built in the latest and greatest Ultra ATA. It's super fast to talk to disk drives. And at the high end, we offer an Ultra II SCSI card to talk to the highest-end drives that our high-end publishing customers want.

But none of that has anything to do with the SCSI that comes out the back of the product anymore. The technology has passed it by. So let's compare the two. With FireWire, rather than 80 megabits per second, it's 400 megabits per second. It's five times faster. Instead of seven devices, you can hook up 63 devices. And unlike SCSI, any number of them can be computers, as we'll see in a minute. It's hot-pluggable. You don't have to turn your computer off to connect and disconnect peripherals. You can just plug them right in. Again, the drivers are dynamically loaded. There are no terminators. And there are no switches.

It just works. Now, if you really love these big cables, and if you really love that thing over there, which is a terminator, if you don't get that on, you'll get data corruption, or it won't work at all. And if you really love switches, we will be glad to sell you a SCSI card for your new Power Mac G3. But if you don't want to fuss with all that stuff, there's FireWire, built into every new system. Now, you can connect FireWire to a zillion things. First of all, there's the digital camcorders, of which there are now four million of in the world. All those digital camcorders have FireWire jacks on them. You can take that FireWire jack and plug it right into the back of your G3, and bring in digital video with pristine digital quality, with no add-in boards, no extra expense.

We think this is going to be a really big deal. So I'd like to just show you a few things about FireWire now, if that's okay. I've got a few FireWire devices over here. Here's a Nikon Pro camera, right? This is what professionals use to get very high-resolution imagery. FireWire jack, right on the side. Here's another one, Canon's equivalent of that. FireWire jack, right on the side. Here's a box that Sony makes and sells for $300. FireWire in, analog, audio, and video in and out. So if you want analog video in and out, buy one of these and hook it right up to FireWire. Works perfectly. Now let me show you some video. I've got a camera right here, and I've got two G3 computers up there, and I've got a FireWire cable right here.

And my FireWire cable's very simple. I can just plug these two things together, and it'll hook that camera into that G3. Takes about three seconds for the network to reconfigure itself, load all the drivers and everything. And so let me go ahead and just plug this in right now. Boom. And in a few seconds, I should see video up there. There I am. Hello, Mom. Okay. And I can unplug it, and it'll stop, and I can plug it back in. And in a few seconds, it should start again. Well, it should. So there we go. Good. Now, FireWire is not just a point-to-point connection. It's a bus, and it's a really intelligent bus. So I've got another cable here. There's two FireWire jacks on the back of every PowerMac G3.

So one of them for this G3 is going to the camera right now. The other one I connected to another cable, which is connected to the FireWire port of a second G3, because unlike SCSI, you can have any number of computers on your FireWire bus. And so when I plug this in, it'll take that same video signal and just send it to both G3s. Let's see if it works. It should take about a few seconds to reconfigure the net, and there we go. Wow. Right? I can unplug it here. I can unplug it, and I'm back up on the one. I can plug it in, and there we go. So FireWire, 400 megabits per second, digital video, multiple CPUs, plug-and-play, hot-pluggable.

Let me show you one other thing here. This is really cool. One of the things that people use SCSI for the most is sort of sneaker disk, if you will. They take outboard SCSI disk drives, hook them up to their computers, load giant files on them, take them across the office or across the city or across the country, plug them into another computer, and that's how they transfer very large files. I'm sure some of you do that. And these outboard SCSI drives have their little wall transformers and power supplies, and it's kind of a mess. Well, let me show you something really cool. This thing right here. This little thing is a 6-gigabyte drive, right?

And it's got a FireWire port on it. Isn't that cool? It's by a company called VST. It's going to ship in March. Now, one other thing about FireWire I haven't mentioned. There's power on it from the computer. And so I can take a FireWire cable right here and plug it right into this disk drive without any external power supply on this thing other than what it's drawing from FireWire. And it will automatically configure itself. And if everything works, it will spin up. Yeah, it's starting to spin up right now. And it should show us on the desktop. There it is right there. Now, again, here's a QuickTime file, right?

It's a little QuickTime movie coming right off this disk. Now, this is what this thing looks like in March. This is shipping in June. It's a half an inch thick. Right? Half an inch thick. Fits in my pocket. Six gig drive. FireWire ports out the back.

So, FireWire is just going to explode. And it's going to be the high-end serial interconnection standard throughout the industry. And it's hot. Built-in to every PowerMac G3. In addition, once you get video into your computer, and it's so easy now to get pristine digital video quality in through FireWire off a digital camera, you want to edit it. Now, we were using Adobe Premiere, which is a wonderful video editing program. Apple's got some cool technology too today, which is on display in our booth. It's called Final Cut. It's not a product yet, but it will be soon. You might want to go check it out. It's pretty neat. So, we think we've built the most expandable Mac ever.

Up to a gigabyte of memory, 100 gigabytes of disk in the box, CD-ROMs, DVD drives, DVD-RAM drives are shipping built to order, Zip drives, four slots including the first 64-bit PCI, Ethernet, 100 megabit built in, up to a gigabit on bill to order, up to 127 USB devices, and up to 63 FireWire devices. So, we think we've built the most expandable Macintosh ever. Which brings us to best design. So, I'd love to show you what it looks like right now.

Can we get it out here, please? The 1999 new Power Macintosh G3. It is really, really beautiful. It's got handles so you can pick it up. It's got all the removable storage in the front. It's built out of polycarbonate, which is the same stuff they use to make bulletproof vests out of. Like all of our products, we tried to make it look as good in the back as it does from any other side. And it's really, really come out nice. It's more compact than the unit it replaces, and yet packs far more revolutionary technology inside.

But there's one other thing. You see, design, we don't think design is just how it looks. We think design is how it works. And we labored a lot on this, because our pro customers want accessibility. They know there's a lot of great technology inside, but they want access to that technology instantly, to add memory, to add cards, to add drives. And so we think we've got the most incredible access story in the business. And you know what it's called? Let's get the video up here. It's called a door. We just open this thing here, and there it is. Isn't that cool?

That's it. Just open the door, and there it is. There's a gigabyte of memory. There's the processor. There's the three disk drive bays right there. The four slots, all the removable drives. This thing even runs with the door open. It's totally accessible. And when you want to close it, you just button it up. And there's a lock on the back so that people you don't want inside can't get inside. The most remarkable access story ever, and we think our pro customers are going to really appreciate this. Thank you. Now, we wanted some great displays to match our new Power Mac G3 in both quality and aesthetics.

And so I would like to present to you now three new Apple Studio displays that are perfect companions to the new Power Mac G3. Now, we've got a 21-inch display that is the ultimate display for publishing. 21-inch Trinitron with full color calibration. We calibrate these at the factory with a $70,000 colorimeter. And there is magic circuitry inside this thing that monitors everything throughout the life of the display and adjusts it perfectly to keep it in perfect color calibration for the life of the display. It's incredible. It's a publishing dream. It is the most sophisticated display on the market today.

$1,499. Second, what will probably be the mainstream display, 17-inch Tron display. Phenomenal quality. Phenomenal design. $499. And we've re-skinned our 15-inch flat panel display with a new price of $1099. So, these are our three new displays and our new Power Mac G3. So what I'd love to do now is I have a little... Yeah, oh, they're going to rotate for us. Thank you. So you can see what they look like from the sides. They're really nice.

Again, we've really tried to clean up the cable mess. We've really tried to make them look great from any angle. So, our goals. How did we do? Number one, the most powerful PC on the market, we think we've got it. The best graphics in the industry, we think we've got them. The most expandable Mac ever, we think we've done it. The most expandable Mac ever, we think we've done it. And the best design, we think we've done it. We've also had a fifth goal and that is to deliver an incredible value to our pro customers for this.

And the product that this is replacing came in two versions, a desktop and a mini-tower. The desktop cost $15.99, the mini-tower $19.99. So, we thought a lot about what we should price this at. It's got a lot more technology in it than what it's replacing. What should we price it at? And we decided to price it starting at $15.99. We are pricing we are pricing the mini-tower a complete mini-tower system at the same price as the prior desktop. We've got four models of this that range in price from $15.99 to $29.99. They're $15.99, $19.99, $24.99, and $29.99.

The most loaded up system, standard system configuration we have is only $29.99. So, we have really focused on a lot of value engineering. The engineering team has done a phenomenal job and so has the operations team to bring these products to you at these very, very aggressive prices. And they are available starting today. So, we've made a video about the new Power Mac G3 that I'd love to show you now. So, let's roll the video. The look of love is in your eyes A look your smile can't disguise We set out to make a computer just for our pro customers.

From the ground up, we asked ourselves, what do they want? What do they want for performance? What do they want for expansion? What do they want for features and industrial design? What do they want for the whole system? To try and design an object that elicits the reaction of I really want that is enormously fun. I can hardly wait to hold it Feel my arms around you These machines are beautiful, but they kick ass. We're building the fastest machines in the PC industry. So, we start with a 400MHz processor with a 1MB backside cache up to a gigabyte of high performance memory. It supports the technologies that we've been trying to use for a long time now anyway.

Fiber channel, 64-bit PCI bus, 66MHz PCI bus. I have not seen any other machine, any other platform have that kind of performance. If sex is power and the computer gives you power, there's lots of sex in these machines. Gamers are looking for performance. Games today have realistic environments that are generated by tons and tons of polygons. So, we need the most advanced machines out there to make the games look great. The brand new ATI Rage 128. This is the fastest graphic accelerator available. It's in the Macintosh first. The Rage 128 hardware is among the best available The best available anywhere delivers very good performance and extremely good quality. This platform will deliver several times better performance than anything that's been available on the Mac before.

With the new G3, we broke the laws of physics. We actually put more features, more expandability into a smaller box. So, we designed it so one flip of a lever and the whole door opens. You have full accessibility into the enclosure to make it really easy to add memory, to make it really easy At IOCards, no special tools, it's all right there. Handles to pick it up, a door to get inside, what a great thought. And it took Apple to do it. The professional is going to lust after the I.O. capacity. The thing has got every go-fast technology that's on the market today. Ultra ATA 33, FireWire, USB, 100 megabit ethernet, all on the motherboard now. If you want the future of I.O., it's USB and FireWire. You don't have to worry about cable links. You don't have to worry about terminations.

You don't have to worry about device select addresses. You just plug it in and it works. I mean, 127 devices on USB, 63 devices on FireWire. And it's the easiest thing in the world. I just take this camera with a simple FireWire cable, I plug it into my Power Mac G3, and digitally take that video onto my computer, and bam, I'm editing video and I'm on my way. It's got to be utterly compelling performance in terms of raw speed and power. But also, these have to be objects that are totally seductive. We designed a new family of Apple Studio displays to go along with the new G3. There's a 21-inch monitor that's the dream publisher's monitor. Trinitron, color management with digital color calibration, USB hub for peripherals. A 17-inch monitor that's the best quality in the business and still very affordable.

And the award-winning 15-inch Apple Studio display. The stands float the displays. They put air underneath. They make them appear lighter. Rock solid and crisp and sharp, and you're just in love with it. We had to make a powerful machine. We had to give customers tremendous features. We had to make it gorgeous. We also had to make it really affordable. When customers see the new technology and they see the new design, they're going to be all over these machines. They're going to see this thing, they're going to go nuts. They're going to want it. Building the fastest machines in the industry is great. So it's what drives us. We're putting them right into production. It is gorgeous. That's right. Now we don't have to hide the computer anymore. A computer absolutely can be sexy. I mean, it's, um, yeah, it can. I can hardly wait to hold you, feel my arms around you.

How long I have waited, waited just to love you, now that I have found you. Don't ever go, never go. Don't ever go. Don't ever go. Don't ever go. Don't ever go. If you're interested, I brought along, there's two television commercials we're going to run on the new Power Mac G3. And I'll show them to you if you'd like. You want to see them? OK.

Now they both got the same video, but there's just different messages in each one. So let me roll them both for you. Let's go ahead and run Secret Door and Open-Minded. You can wait until years end to cross the bridge to the 21st century. Or you can cross over now through a secret side door. Presenting the all-new Power Macintosh G3. It's not only the world's most powerful personal computer.

It's also the most Open-Minded. Presenting the all-new Power Macintosh G3. So, so, which one did you like better? OK. Clap-a-thon, clap-a-thon. First one, clap, please. OK. Second one, clap. OK, thank you.

So, the new Power Macintosh G3. We've been laboring on this for a long time and we are so happy with how it came out. We've got a bunch of them in the booth and please go check them out. And that was the first surprise for today. OK. So, second surprise. Second surprise. Mac OS. Now, before I get to the surprise, I want to give you an update on Mac OS 8.5. Mac OS 8.5 is the must-have upgrade that we released in October. It has incredible stuff in it like Sherlock, your personal search detective on the Internet, AppleScript and ColorSync for our publishing customers, AppleScript running five times faster, et cetera, et cetera, and Network Copy that's faster than NT and a whole bunch of other stuff.

And what's really great is since we shipped this in October, we have sold one million upgrade copies in its first quarter. And because we've shipped this on a lot of machines, there are now two million copies of Mac OS 8.5 out there. And the reason I point this out is a lot of people forget that Apple owns one of only two high-volume operating systems on the planet. It's an incredibly wonderful place to be. And it's a way that Apple can roll technology out into the market very quickly. Two million copies of a new operating system in the first 90 days. So that's Mac OS 8.5. What's new?

What's new is something about Mac OS X. Now, Mac OS X, as you know, is an operating system that we are working on for a client that will premiere in less than a year. But we have taken a lot of that technology and we want to get it out there sooner. And today we are announcing Mac OS X Server. It's our first Mac OS X product. And it is real and it is hot. So let me tell you about it. What is it? First of all, we start off with a mock kernel. It's the most advanced kernel in the operating system business. It is the foundation for Mac OS X Server as well as Mac OS X Client. And we surround it with functionality.

The first being file service for Macintoshes. So that you can keep all your files on the server. No problem. The second is net booting. Now, this is something new for our industry. When you are using your server as a file server, you can have literally over a thousand clients on it. But what if you wanted to do more than that? What if you wanted to do more than just get your applications or your documents off a server? What if you actually wanted to get your operating system off a server? We've done that. We have modified the Mac OS so that it can boot over a network, boot off Mac OS X Server, and all of the storage that it does, it does on the server.

It thinks it's doing it locally, but it's doing it on the server. Now, what does this mean? What this means is, is that you can have one copy of the Mac OS on a server and have, let's say, a classroom of 50 iMacs all booting, if you want, off that server. So that when you want to upgrade your OS, you can upgrade it in one place. When you want to upgrade your apps, you can upgrade one copy in one place. And all of those 50 students, in this case, would have access to that instantly. Net booting. The third. This is a very, very powerful multitasking server. It can do many things at once. And so we want to do a bunch of stuff on the Internet. Apache is the world's most popular web server.

It is open source software, and it is used by over half of the websites on the Internet. It's far more pervasive, far more popular than web servers from Netscape or Microsoft or anybody else. As a matter of fact, we use them ourselves at Apple to run Apple.com and the Apple Store, getting 10 million hits a day. We have built in a very high-performance version of the Apache web server into Mac OS X server. So that while you're doing all these other things, you can also be a web server. In addition to that, Apple owns some incredible technology called WebObjects. And it's a product called WebObjects, which is sold to the enterprise. And it's been sold to the enterprise for tens of thousands of dollars.

And WebObjects was the... You've heard the term app server? WebObjects was the industry's first app server, and even though we try to keep it a secret, it's actually the biggest one. It's bigger than any of these other ones, NetDynamics or anything like that. We've got over 2,000 customers for this thing. It's incredible. And what we have done is to bring it to the Mac community. It's the first time it's run on Macintosh. We are bundling a copy in alongside Apache in Mac OS X server. And this is the most powerful technology in the world for building sophisticated websites fast. Amazing and it works in conjunction with apache and for those developers that want to develop their own applications beyond that all of BSD Unix and Java on the server side So this is Mac OS 10 server We think it's a really really strong product. It's the first modern server from Apple Now what I'd love to do now is just show you a little bit. So could I get out a power Mac G3?

Running Mac OS 10 server, and I'm going to use an iMac as a client So this power Mac G3 server This power Mac G3 running Mac OS 10 server. We're going to sell this in a server configuration with a quarter gigabyte of RAM to 9 gigabyte ultra 2 SCSI drives and a Board that has 400 megabit Ethernet ports on it all for $49.99. So that's an under $5,000 server You can buy the software if you want separate But we'll sell completely bundled ready to go configs and I've got an iMac here as a client. So I'm just going to log in and What we're going to see is I'm pulling stuff off the server now, how do you know I'm pulling stuff off the server here?

Well because on this iMac I took out the hard drive I Made this into a diskless Macintosh to demonstrate how fast sucking stuff off the server is because with a hundred megabit Ethernet It's faster to get stuff off the server often than it is off your local hard disk So I'm going to just go ahead and launch an app. Let's say And I'll just launch Apple works here. So this is Apple works coming right off the server. You see how fast it's launching I'm bringing up a document Here's a document again, everybody on you know that had permission could share this from the server But just a simple Apple works document very very simple Now Let me go to the Internet so I'll click on Internet Explorer Click on it there There we go. So I'm loading Internet Explorer again off the server and now I'm going to point to an Internet site What's the Internet site I'm pointing to the Internet site I'm pointing to is also running on that very same server Because we can do all sorts of things at the same time So the Internet site is running on Apache on the same server and we wrote a web objects app in a few hours That just gave me the simple application Running with Apache all on that server so I could say well, this is cool. Let me go ahead and look at some quick time video So let me go ahead and play this video here again Coming over the server, it's about a megabit per second streaming over the server takes a few seconds Again one megabit per second video streaming off the server to a diskless client. No problems at all

Okay. Now this is pretty cool But I Mean, you know one server one client. You probably wouldn't do that Or you probably want this configuration when you're you have a bunch of clients. Let's say a classroom of Oh 50 IMAX so why don't we bring one of those out here? So Here's what we're gonna do We're gonna start these puppies all up remotely and they're each gonna play their own quick time movie. They're not synchronized They're not sharing the same stream. This is 40 and actually has 49 different streams Feeding 49 different IMAX all off this one server. So let's go ahead and start that up. It'll take a second or two to Start up here Here we go and We got three different movies that are playing and they're playing all out of sync and as a matter of fact I got the 50th IMAX here. So why don't I go ahead and start that up to?

As they get access to the server they're going there we go You So Mac OS 10 server, it's pretty cool, isn't it? Now Mac OS 10 server, let's go ahead and take these away Mac OS 10 server is going to be priced at $995 for the software and That is a per server price. You can have as many clients as you want on the server for nine hundred ninety nine ninety five dollars And As I said, we're gonna have bundles of hardware and software on the Macintosh as well We're gonna have a bundle in the low three thousands and a bundle at forty nine ninety nine all based on the new power Mac G3s, so you can buy it any way you want to we are shipping this stuff next month. We're in final beta now We go gold and we ship next month. So this is a very real product. You can see it in the booth today So Mac OS 10 server It's our first server product we're looking for lots of feedback as to other cool things we can add and things we can make work

even better and We look forward to working with you on this product over this coming year. We're very excited about it So that's our second surprise Our third surprise This number is a very important number to us 1,355 What's that number mean? That is the number of new Macintosh applications that have been announced since we Unveiled the iMac on May 6th over 1,300 new applications for the Mac This this is huge for us and we are working so much more closely with our developers Clint and his developer relations team are doing a phenomenal job and our Developers are doing a phenomenal job coming back to the Mac and putting a lot more energy in it and and It's just incredibly gratifying now There were a lot of developers. I'd love to have up on the stage today Incredibly gratifying now There were a lot of developers. I'd love to have up on the stage today, but I picked one out and In a second. I'm gonna actually invite Ben Waldman from Microsoft up here on the stage And I want to invite Ben up because I know there's been a lot of Controversy surrounding the DOJ trial recently we've tried to stay out of it, but we couldn't we got subpoenaed by both sides and We found ourselves in it to some extent I wanted to say a few words about that because our relationship with Microsoft. It's kind of like a marriage It's terrific about 99% of the time about 99% of the conversations. We have are about

Making great products for Macintosh customers about 1% of the time. We argue over stuff usually having to do with multimedia and You know in life, that's not a bad ratio That's not a bad ratio And I have the privilege of working with a lot of the Microsoft folks and in particular Ben Waldman who I think is one Of the most passionate Macintosh developers on the planet So I wanted Ben to come out here and show us some new things that they're working on that they're announcing today And I'm proud to be working with Ben Ben Waldman the general manager the Microsoft business unit Just thought I'd do a quick poll on how many of you have actually tried out office 98 And is it any better than the last version of office Okay good because today the same 200 person team that brought you office 98 is bringing you three new products for the Macintosh Products which epitomize our approach to creating Macintosh software In the Macintosh business unit at Microsoft We think that it is unacceptable for Macintosh software to be simply a port of a subset of a Windows application We are committed to pioneering features and innovations first on the Macintosh and Bringing you features first on the Macintosh and only in the Macintosh versions of our products

And the first product which we're introducing today is Microsoft Internet Explorer 4.5 When we took a look at the evolution of browser software It seemed to us that people had spent so much time thinking about how to turn the browser into some sort of new platform That they forgot the reason that we actually do software in the first place Which is to enable customers to solve real world the world everyday problems and so we thought that it was about time that we took a look at what people wanted to do on the internet and spend some effort making those things easier, let people do those things more easily, more quickly and hopefully with a bit more fun.

And that was the goal of Internet Explorer 4.5 and also Outlook Express 4.5 which is the second product which we're introducing today. So why don't we take a look. The first thing we're going to do is install Internet Explorer 4.5 and what we're going to do is we're going to put our internet CD into the hard drive, we're going to pick up the internet folder from that CD and drag it to our hard drive. Just like Office 98, there is no install program and of course there is no restart of your computer and so it takes about 10 seconds to install Internet Explorer onto your Macintosh. Just try doing that on Windows. And of course we have the same self-repairing technology that we have in Office now across our product line in our internet products as well.

Now let's launch Internet Explorer. We spent a lot of effort here and Internet Explorer 4.5 launches twice as fast as the last version. So it's now by far the fastest browser to ever launch on the Macintosh. Did we just launch it? Did I miss it? Okay, now let's launch it the second time and you'll notice that it launches so quickly you can't even see the splash screen. So that's of course on some of the new Macintoshes that Apple has today. Now Steve has shown us that computer hardware can have elegance, can have style and at Microsoft we also think that software should have style and software should have taste if it's going to deserve being on one of these new Macintoshes. So we could drag and drop images from Explorer to the Finder before but now we've made it a little bit better.

Now when we pick up an image we get a translucent version of that image and then when we drop it on our hard disk we don't get a plain generic icon, we actually get a thumbnail that looks exactly what the image looked like in the browser. And no, you can't do that on Windows either, sorry. Now we found that users spend an awful lot of time trying to type into their web browsers. In fact the most common thing people try to do all the time is type in their name and address into a form and they try to do that again and again and again. So here we are up in the Apple Store website, we want to order a new Macintosh but we don't want to type in all this information and with Internet Explorer 4.5 you don't have to because with a single click of the mouse and our new Forms autofill button we can enter all our personal information with a single click.

Let's go ahead and do that. And that's just with a single click of the mouse. Now have any of you ever tried to print from a web browser? It just doesn't work. It's embarrassing. We've gone through four versions of browsers and we can't even get printing right. Well that's about to end with Internet Explorer 4.5. If you see this page here, this page is from Tower Records and if you were to print that from any browser other than IE 4.5 you'd get something like this. You'd get the two pages on the left-hand side, it would go across these two pages and the information on the right wouldn't even print out, you would just lose that information. And you'd have a black background and use up all your toner which is not really what you want. Now let's take a look at what it looks like with IE 4.5. It comes out as one page. One page, all your information.

We got rid of the black background and of course we were smart and we changed the white text to black so you could actually see it on your white backgrounds. For the first time printing actually works in a web browser and I think it's about time. Now we have a whole lot of intelligent printing inside of Internet Explorer to try to make sure we never break things around but sometimes you want to know what your printout is going to look like before you send it to your printer. So for the first time in a browser we now have adjustable print preview. And you can see what your page is going to look like before you print it out. And if you want to make it ugly like it was before you can go ahead and do that because you can turn the background back on and turn it to make printout on two pages again like it looked before.

And if you want it to be ugly you can go ahead and do that. That's okay, we give you choice. But if you want to print it out the right way we'll do that for you automatically. The next thing I want to show you is our integration with Sherlock. We think Sherlock is fantastic. So we've added a Sherlock button to the right side of the Internet Explorer toolbar up here. So you can not only open Sherlock from within Internet Explorer, you can use Sherlock to summarize a page to the clipboard or for something completely different, Internet Explorer and Sherlock will work together to find you pages that are similar to the page you're already looking at. So if I'm on the ESPN page, for example, and I pick find similar sites, Internet Explorer will go and launch Sherlock, feed it some information, and then Sherlock will come back and tell us that the site that we'd like to see probably is, where are we, on the NBA, some NCAA sites, and other sports sites.

We can look at a whole bunch of other sports sites which you might want to see with this new functionality where Internet Explorer and Sherlock are working well together. Now one thing that I may have forgotten to mention is that every single feature that I've shown you today is available first in the Macintosh version of Internet Explorer and only in the Macintosh version of Internet Explorer. The second product we're introducing today is Outlook Express 4.5. I'm going to skip over that in the interest of time and go straight to our third new product which we're introducing for the Macintosh. And that product is called Microsoft Mactopia. And that's a website which we're creating for the Macintosh community. We found that looking at the Microsoft website, it wasn't a very friendly place for Macintosh customers, to say the least.

We wanted to fix that, obviously, but we thought, why stop there? Let's create an interactive website, an interactive community site for all of our Macintosh users. So on Mactopia, you'll not only find information about all of our Macintosh products and about the people behind these Macintosh products, but you'll also find links to news and other information about the Macintosh and about the computer community. We have special sections for users in the home, users in education, and users in business where you can find free downloads, you can find interactive tutorials, or you can find other sorts of information which you might find useful. We have an interactive section of the Mactopia website where you can give us product feedback and thank you for that, where you can chat with other Macintosh users in chat rooms, and where we're going to have online chats hosted by some key leaders in the Macintosh industry.

And of course, we have a section chronicling the Apple-Microsoft partnership through the years, which is actually a very strong, healthy partnership, as Steve mentioned earlier. Of course, I've saved the best news for last, because we're not only announcing these products today, they're actually available today. IE 4.5 and OE 4.5 are available today in eight languages, in English, French, German, Spanish, Italian, Danish, and Dutch. I think I forgot one. And it's available next month in Japanese as well. And Mactopia is also live right now, actually, and it's available at www.microsoft.com slash Mac. So I want to thank all of you for using our Macintosh products, and even more than that, I want to thank you all for your feedback, the positive feedback and the negative feedback, because we've been listening, and it's really helped us out.

So thank you very, very much. Thank you, Ben. It's pretty nice stuff, isn't it? Okay. There's one other topic I want to talk about today while we're talking about applications, and that's games. We recommitted Apple to games nine months ago, and we've been working really hard on this. As a matter of fact, one of the things we did was we got the best and most respected authors of the best games together to beat us up. And we let them, and we listened to them, and we're really trying to take their advice and implement it, and I think we're doing a pretty good job.

And you've seen some of it in the new Power Macintosh G3. You've seen some of it in OpenGL. And the gaming community has really responded. Now we want to be the best gaming platform in the world. And today, I'm going to show you 12 of the hottest games on the market that are all coming to the Macintosh. Some of them are shipping today. The rest of them are shipping, all of them, within 120 days from now. These are all public commitments. Many of them being made at Macworld here today. Tomb Raider 3, the successor to the incredibly popular Tomb Raider 2. Very hot game. Myth 2. SimCity 3000, great game.

This is from Electronic Arts. Fly. You know, Macintosh has never had a great flight simulator. This is coming from the folks that do the Microsoft Flight Simulator, and it's hot. Rainbow Six from Tom Clancy. Imperialism 2, StarCraft. Really huge game coming to the Mac. Heretic 2, Battlezone, Quest for Glory 5, Age of Empires from Microsoft and Matsoft. Very popular game. And Quake. Now, one of the things that I would like to take my great pleasure to do is of all of the great game. authors and technologists in the world.

There's one who's a legend among legends and he's helped us a lot. He's beat us up a lot to do the right thing. And his name is John Carmack. And John is the co-founder of id Software and he's the author of the hottest games in the industry. I'd like to introduce him now, John Carmack. Okay, I'm here today because Apple finally has their act together with regards to 3D graphics acceleration, both hardware and software. On the hardware side, every single Mac that's shipping today has adequate 3D acceleration on the iMacs and the Powerbooks and those all work fine.

But on the new G3s, they have absolutely state-of-the-art acceleration that's as good as you can get anywhere and that's working out really well. On the software side, we have a strategic commitment to OpenGL and the full support of both SGI and ATI. Now, because of this, we've got several things going on. We have underway ports of several existing OpenGL titles. We've got Quake 2, Heretic 2, and Sin. They're working on being ported right now. But probably more interesting, we have... Right now, I have a little demo of what we're currently working on, Quake Arena, which is being done simultaneously on the Macintosh and PC platforms. Okay, because we've got OpenGL support simultaneously on the different platforms, we're able to have basically the same title running full-featured, everything common on both the Macintosh and PC platform.

This is just a few things that we've put together to show off some of the graphics features. We're running real-time through OpenGL on a Power Mac G3 and this is running with high-resolution, 24-bit color, trilinear filtering, basically all the really good graphics features that you can get out of anything. And this is just really early work on the Mac and it's working out great. We're getting good performance. There's plenty of optimization that we've got all lined up. The cooperation between ATI and Apple is working out really well. We're going to get... It looks like it's going to be competitive with the very best you can get anywhere on the PC. And we won't know till things are finally done exactly where it's going to stack up benchmark-wise, but the quality is absolutely faultless. There's absolutely nothing that the Rage 128 hardware doesn't do perfectly.

And the performance that we're getting is looking good. We've got... There's no reason that the Macintosh won't be an absolutely perfect gaming platform for anything that you want to do. In my office right now, I'm often playing in our current testing situations, running on the Mac, playing against the PCs, and it works perfectly. There's absolutely no... The only thing that you want to do as a Mac with a serious gamer, you want to pull out the silly one-button mouse and plug in a three-button mouse pretty quick. But... But aside from that, it cooperates just fine with anything else there that you want on the PC or other platforms. And the quality is obviously there with everything. Performance is going to be up there. And the development process right now, because I've made the architectural changes necessary in the core code base, instead of being an after-the-fact port, there's only 15K of Macintosh-specific code in this.

All the rest of it is our standard code base. So when we wind up having the game ready to go, it's just a compile. You know, every week or whenever we do a code merge, build the Mac version, play on it, and it's just up-to-date constantly. There's basically... I have no reason that... Well, we'll have a test of our initial stuff in probably March that will be released simultaneously on the Macintosh and PC platforms, and then a full commercial version will also be ready to go simultaneously at the same time. And also, because we license technology to a number of other game companies, anyone that licenses the Quakerina technology automatically gets a Macintosh version running just for free. And that's what I've got to show. Thank you, John.

It's awesome. I believe this is the first public demonstration of Quakerina, too. Is that right? Awesome. Okay. So, we're really, really excited about games, and again, our goal is to have the best game machine in the world. Now, this is another game machine. It's the most popular game machine in the world. Wouldn't it be great if we could play some of those titles, too? Hmm. Well, at Macworld today, Connectix is introducing the virtual game station. It is software... It is software that they're going to sell for $49 that turns your Mac into a Sony PlayStation.

It plays a few hundred... It plays a few hundred of the Sony PlayStation games today, and I'd like to ask Phil to come back and give us a quick demo. Phil? Hey, Steve. This is Cool Times Ten, and the ability for, very quickly, very affordably, to take a Macintosh, my Macintosh, and run all the great PlayStation titles, just stick in my CD drive and start to play them, is just a phenomenal idea. So, I have here a Mac, and sure enough, no surprise running, this Connectix virtual game station. Because we have USB, we have a lot of great new game controllers. I have a game controller that looks just like the kind of controller you'd use for these titles. And let me get it started again.

So, here I am in Crash Bandicoot. This is the number one Sony PlayStation title shipping today. And with all the same kind of great performance, it's the kind of game my son would love. Allows me to jump, run around, use the same controls. And if I was any good... Now, I'm so good at this that I don't have enough time to keep playing, or we'd run out of time. But there you go, working just like on a PlayStation. Same controls, same title. So... Again, games.

We are totally committed to making the Macintosh the best gaming platform in the world. And because we're building all of the core technology in, we're building it into the hardware, in terms of the Rage 128 chip, so you don't have to futz with buying and adding hardware cards and getting them all set up. We're going to build OpenGL right into the operating system, so you don't have to load it. You don't have to depend on various drivers that you're going to need. It's going to be so simple for the game developers, but most importantly for the game users. So, games is the third surprise we had today. Which brings us to number four. Well, we couldn't go through the day without talking about iMac. And I'd like to give you some information first.

iMac, as you know, started shipping on August 15th, and through the end of the year, how many iMacs did we ship? We shipped a wonderful number. We shipped 800,000 of them. 800,000 iMacs. 800,000 iMacs in four and a half months. Okay? Now, if you do the math, that equals one every 15 seconds of every minute, of every hour, of every day, of every week in that time period, an iMac was sold somewhere in the world. And we are thrilled with this. It's made iMac the number one selling computer model in America.

And we are very happy. It's also got an iMac on the best of lists in almost every category. Best of design for 98. Best Christmas present. And we are very honored that iMac has shown up prominently on the best of lists almost everywhere. Now, I have some fun for you, because we just got back our December research, our buying studies of who's buying iMac. And I want to share that with you now. This is hot off the presses. So, who's buying iMacs? Well, it's gone up. 32%, up from 29% the last time we did this in October.

32% first-time computer owners. These are the most coveted customers in the industry. And they are starting off with a Macintosh. 32% of the iMacs sold. And this is also up. 13% Wintel converts. So, 45%. 45% of the iMacs that are being sold are to people that are new to the Macintosh platform. That's phenomenal from our point of view. And, of course, the other 55% own Macintoshes.

Now, about 25% are people adding to their Macintosh base. And about 31% are people replacing old Macintoshes. Macintoshes, which is great because they're recommitting to the Macintosh buying new Macs. So that means 69% of the iMacs being sold are expanding the Macintosh active install base. So we could not be happier with these numbers. And they are very indicative of where we see the future of iMac. We asked a bunch of other questions too, though, and I thought I'd share some of the results with you. They're very interesting. We asked, excuse me, are you connected to the internet? Very simple question. Astounding answer. Remember, a third of these people are first-time owners.

Of all the Mac customers in December, 82% are connected to the internet. This is incredible, and it clearly verifies for us what people tell us. The number one reason they're buying iMacs is to get on the internet. Are you connected? 82%. When did you get connected? When did you get connected? 66% got connected the first day. OK, that's astounding. How long did it take you to set up your iMac and access the internet? This will blow your mind. 44% less than 15 minutes.

The cumulative total was 62% less than a half an hour and 74% less than an hour. Now, we still got some work to do because we want 100% less than 15 minutes. But these are phenomenal responses. Just phenomenal. Have you purchased any goods or services over the internet? 42% have. Again, that's an incredible number. These iMac customers are turning into internet mavens. And which search engine do you use regularly? This we found very interesting. Yahoo! 1 with 39%, AOL with 16, AltaVista with 12.

In fourth place, tied for fourth place with Netscape. Sherlock. It's been out 90 days. Infoseek was 5% and other was 12. So we've got to host a whole bunch of other data that I don't have time to share with you. But it's looking really, really good. So that was 1998. What are we going to do for 1999 with iMac? Well, we're going to do a lot. The first thing we're going to do is up the processor speed to 266 megahertz. The second thing we're going to do is up the drive capacity from 4 gig to 6 gig. The third thing we're going to do is reduce the price $100 to $1,199.

But there is one more thing. And we've managed to keep it secret. It's hard to believe, but we did it. Now, there was a man named Henry Ford. And he once said, you can have it in any color as long as it's black. And that pretty much speaks to our industry today. You can have it in any color as long as it's beige or occasionally black. And the iMac has changed all that. But we haven't gone all the way, have we? We haven't gone all the way. Because you can't get even a handful of people to agree on a color, can you?

Tough thing. I mean, imagine if we all had to live in the same color house. Imagine if we all had to drive the same color car. Color is a really big deal to consumers. And we've been hearing that from them. They love the iMac. But they love to express themselves in a new way. And so for the iMacs in 1999, we're going to take things to a whole new level. Hmm.

So let's bring them out. Can we bring the iMacs out, please? The new iMacs for 1999, they're in five colors. Blueberry, grape, tangerine, lime, and strawberry. And they are beautiful. They are so beautiful. And we hope that people want to collect all five. And it turns out that nobody's ever made translucent plastic in colors this big before. And it turned out that the plastics didn't exist. We've spent the last six months, nine months, learning about plastics chemistry.

And how to make these things really, really beautiful. And our design team has done a phenomenal job. Again, lime over here. It's beautiful. The keyboards and mice match. Strawberry, it's delicious. Blueberry is gorgeous. Grape, what more needs to be said? The color of Rome. And tangerine, just beautiful. And it's incredible because inside our company, people pick colors that you'd never expect. Right? Like our, oh, I can't go into that, but just amazing. You'd think they'd pick blue, but they'd pick tangerine as their favorite color.

It's amazing. And we think these colors are really, really going to be exciting for people. We think one of the most important questions now, when you buy a computer, is going to be what's your favorite color? And this is more important in our surveys, in our consumer surveys, this is far more important than most of the mumbo-jumbo associated with buying consumer computers. Megabytes, megahertz, gigabytes. People don't care about that stuff. They want to trust us to give them a really great computer. What they care about is, I want to express myself and pick the color I want. And we think this is going to be really hot. You can see these in the booth. They are available today.

So, this is our last surprise. And this is what we're doing today. We've taken a really great product lineup in 1998, and we are taking it to a whole new level for 1999. Again, we are changing our whole desktop lineup for 1999. Starting today, the products are available. We're very proud of them. We've worked very hard on them. We hope you like them as much as we do. And that's pretty much what we have for you today. Four surprises. Power Mac G3 for 1999.

Mac OS X server. An incredible progress on our commitment to make Mac the best gaming machine in the world. And a whole new lineup of Macs, iMacs for 1999, that take consumer computing to a whole new level. Thank you very much. You've seen her dressed in blue, see the sky in front of you, and her face is like a salesman's, why is so fair and tailored?