thank you for coming. we're going to makesome history together today. so, welcome to macworld. you know, it was just a year agothat i was up here and announced that we were going to switch to intel processors. a huge,heart transplant to intel microprocessors. and i said that we would do it over the coming12 months. we did it in seven months, and it was the — it's been the smoothest andmost successful transition that we've ever
apple share price history 10 years, seen in the history of our industry. and itwas because we made a beautiful, seamless version of osx for intel processors. and ourteam created rosetta software which lets you run powerpc apps on top of osx on intel processors.our hardware team got to cranking out a new mac with intel processors every month, andwe completed this transition in seven months.
but we didn't do this alone. we did this withthe help of a lot of folks. our new colleagues at intel really helped us. thank you verymuch. our third-party developers rapidly moving their apps to universal versions to run atnative speeds on intel processors. thank you very much. and most of all, our users. theminute you saw these lightning-fast machines, you bought 'em. and we've had an extremelysuccessful year, and i want to thank our users very much.now, as many as you know, our retail stores have for a while been selling over half theirmacs to people who have never owned a mac before: switchers. well, i'm pleased to reportthat now, in the u.s., macs selling through all channels, over half of them are sellingto people who have never owned a mac before.
it's not just limited to our retail storesanymore. half the macs we're selling in the u.s. we are picking up lots and lots of newmembers of the mac family, and we couldn't be happier. as a matter of fact, here's onethat might be coming on soon. jim allchin at microsoft was quoted recently as sayingif he didn't work for microsoft, he would buy a mac, and he's retiring soon, so i'vealerted our seattle stores to keep an eye out for him and give him really good service.you know, vista's coming out, and you know our ads with the mac guy and the pc guy, wemade a little ad for vista, and i'd love to show it to you now, if you'd like to see it.so, 2007 is going to be a great year for the mac. but this is all we're going to talk aboutthe mac today. we're going to move on to some
other things and over the course of the nextseveral months we're going to roll out some awesome stuff for the mac. but for today,we're going to move on. so, the first thing i like to do is give youan update about our music business. as you know, we've got the ipod, best music playerin the world. we've got the ipod nanos, brand new models, colors are back. we've got theamazing new ipod shuffle. the ipod, in addition to being the world's best mp3 player, hasbecome the world's most popular video player, and by a large margin. the ipod nano is theworld's most popular mp3 player, by a wide margin. and the new shuffle is the world'smost wearable mp3 player. so we had an incredible line-up for this holiday season, all refreshedand new products. now i'd like to tell you
a few things about itunes now that are prettyexciting. number one, we have crossed a major milestone. we have sold over 2 billion songson itunes. it's amazing. now, there was an article recently that said itunes sales hadslowed dramatically. i don't know what data they're looking at, but this is our data,and what we see is itunes sales were really up this year. it took us over three yearsto get to a billion songs. we got our second billion in 10 months in 2006. and growingoff an over 600 million song base, we doubled it in 2006. so we couldn't be happier withthe growth rate of itunes and selling 2 billion songs.now, we are selling over 5 million songs a day now. isn't that unbelievable? that's 58songs every second of every minute of every
hour of every day. and the last time we talkedto you, we said that we were the 5th largest music reseller in the u.s. now all these otherguys sell music on cds, and of course we sell it online. but if you add up all the musicthat's sold, we were the fifth-largest reseller. because of the growth of itunes, i am pleasedto report that we have now passed amazon. we sell more music than amazon, and we arenow number four. and you can guess who our next target might be. so that's an updatefor music. now i want to talk about tv shows. we've gotawesome tv shows on itunes. as a matter of fact we have over 350 tv shows that you canbuy episodes from on itunes. and i'm very pleased to report that we have sold now 50million tv shows on itunes. isn't that incredible?
now, let me go on to movies. when we startedwith television shows, the pioneering partner we had was the walt disney co. they decidedto throw in with us and sell tv shows, and boy did it work. well, when we decided tosell movies, they were right with us there again as our pioneering partner to sell movies.and i am really pleased to announce that in the first four months of selling movies, wehave sold 1.3 million movies on itunes, which i think has exceeded all of our expectations.and today, we have a new partner joining the walt disney co. to sell movies on itunes,and that is paramount. we're thrilled because they have some awesome movies. let me justshow you a few of the titles here that are going up as we speak. all six star trek movies.so we are going to be moving up from the hundred
movies we've offered so far to over 250 moviesnow offered on itunes. these are getting up as fast as we can over the next week or so.and we hope to be adding even more movies as other studios throw in with us as 2006rolls on. so that's an update on itunes. now, as i said, we had a very strong lineupof music players for this holiday season. we always have stiff competition. that's justpart of this business. and we had a new competitor this past holiday season, which was, of course,microsoft's zune. so how'd they do? well, we don't have data for december yet, becauseit's not out till next week or the week after, i forget. but we have data for november, whichwas their launch month, should have been real big. and they garnered 2 percent market share.two percent market share. ipod had 62 percent
market share, and the rest had 36. again,we don't have data for december. we know we went up quite a bit in december in terms ofmarket share. and we'll find out how they did. but 2 percent in their launch month.so, no matter how you try to spin this, what can you say? so that's an update on how we'redoing in the new music business, and we've got a few new ads for ipods. you know, wework with some of the greatest folks to create advertising. and they created this wonderfulad that i'd love to show you right now, so let me go ahead and roll it.now, just to let you in on our process a little bit, these guys are incredibly creative, theycouldn't stop, and they took the same song, which is an up-and-coming british pop group,and they took the same dancers, and they did
some different animation, and they came upwith what you're about to see. isn't that great? so, those will be runningshortly. and that is an update to our music business.now, i'd like to talk about a product we introduced in september. the code name was itv. we havea new name for it. it's called apple tv. but you should either go with your code name,like we did with the mac, or you should pick a code name quite a bit — a real name quitea bit different than your code name, so i'll probably stumble and call this itv five timestoday by mistake. i apologize. so apple tv. apple tv is a way to enjoy your media on yourbig screen tv. so let's backtrack and talk about what we did when we previewed this inseptember. you can buy great content on the
itunes music store. movies, tv shows and music,of course. and you can download it to your computer, be it a pc or a mac. i'm going touse a mac here. you can put other content on your computer from other places, of course.and you can put that content on your ipod, right? now, you can go out and buy a wide-screentv, hook up an apple tv to it, and wirelessly transmit that content from your pc to yourapple tv and watch it on your big screen tv. it's that simple. right? it's that simple.so, this is it. let's take a look around the back at the connectors to refresh ourselves.we have a power connector, usb 2, and ethernet. and we have wi-fi wireless networking builtin. and then we have ways to get video out. an hdmi connector, which is digital audioand video. or component video and analog and
digital audio. right? all out the back. mostpeople, however, will just use these three. they'll plug it in. there's no power bricknecessary. and they'll hook up an hdmi cable to their wide-screen tv, and they'll use wirelessnetworking to get their content. so it's really, really easy to use.let me tell you a little more in-depth about what this box does. first of all it deliversup to 720p high-definition video. right? number one. number two, it's got a 40 gigabyte hard-driveinside of it. so it will store up to 50 hours of video. which comes in handy for somethingi'm about to show you. and it has 802.11 wi-fi wireless networking, and it's got all threeof the popular standards. it's got b, g, and the new draft n standard, which is really,really fast. and it's got an intel processor
in it, so it's got the processing horsepowerto do the kinds of user interfaces we like to do. so it's a really cool box. it workswith video, music and photos. it was designed for wide-screen tvs. it's got wi-fi wirelessnetworking, internal 40 gig hard drive. you can auto-synch your content from one computer.and you can stream content from up to five computers. so let's examine this in a littlemore detail. auto-synch from one computer. what does this mean? it means you can takeone of the computers in your house, and right from itunes, just like you would set up anipod, you could set up your apple tv. and you can set up your apple tv to say, oh, takemy ten most recently purchased unwatched movies and automatically put them on the hard driveof apple tv. so that whenever i walk up to
apple tv, they're there. right? so let meshow you, i'm going to do this with six tv shows. they just automatically, whenever ibuy them, they just automatically will stream in the background to apple tv and be storedon the hard drive. right? so whenever i go to watch something, they are there.now, i can also stream from up to five computers. in this case, i'm going to take content fromfive computers, and i can watch it on apple tv but i will not store it on the hard drive.so you can just stream it live and watch it from other computers in the house. or if yourneighbor comes over with a notebook and they've got something cool that you want to watchon your widescreen tv. again, pcs or macs, i just choose the computer that i like.so, this is apple tv, and why don't we go
ahead and show it to you? you can controlit with this very simple remote. so let's go see a demo. this is the screen saver. takesall your photographs here and just puts them on your tv and they're gorgeous, because asyou know, photography these days is high-def, with these amazing digital cameras that wehave. so, let's go into the main menu of itv, and here's what it looks like. we've got movies,tv shows, music, podcasts, photos. so let's go into movies here. and we go into movies.and we have all my movies that are stored on itv, as well as the itunes top movies.i can go see what's selling on itunes and stream it down and watch it on itv. i canalso look at theatrical trailers. again, this is not stored on itv. this is actually comingover the live internet. into my house through
my internet gateway, wirelessly to i — toapple tv, and i can watch theatrical trailers streaming from apple.com. so let's go in here,and watch a cool trailer. there's one called the good shepherd. so let's watch this, ijust click on it, and this is streaming live from apple.com.so you get the idea. you can sit on your couch and watch theatrical movie trailers with itv.now, let's back up here, and let's go play a movie. we've got zoolander here. let's goplay a little part of zoolander. one of our new paramount movies.isn't this great? so, that's movies, and let's go take a look at tv shows here. it's, again,incredibly cool. let's go into "heroes," a really great new show, and let's play an episodecalled better halves.
ok, well, that's tv shows. now let me showyou music. you know, itv, of course is — apple tv is primarily for video, but it turns outit's awesome for listening to music on your home theater system, as well. we think a lotof people are going to buy it for that. so we've got music here, we've got the itunestop music, top music videos. and let me go down into playlist here. we've got a favoritesplaylist, i'll go into that. and i'll just shuffle some songs, because i want to showyou what it's like when you're playing music here.so it does that so it doesn't burn a hole what it's like to play music. alright.so now let's go to photos. again, your photos are high-def. these new digital cameras areawesome. and so you can just, again, move
your photos to itv or stream them over, overwireless networking. and see your photos right on your tv. so as an example, here's a photoalbum i made of ... just beautiful. so you get the idea. it's really cool to watch photoson your widescreen tv. now, what i've been demonstrating so far isprimarily content that has been synched to apple tv from my computer and i'd like toshow you what it's like when you want to connect to someone else's computer. let's say philschiller my neighbor comes over and he's got his macbook. phil, what do you have on yourmacbook. you got some content we could watch? well, let me just go down here to sources,and here's the apple tv that i've been playing off the hard drive of, and i just say i wantto connect to a new itunes right here, and
itunes is running on phil's machine. it saystype in this pin, for security reasons, and phil types in the pin into his macbook. they'refully authenticated now, and there's phil's macbook right up there and i push it, andnow i'm going to be looking at the content right off of phil's macbook and what do youwant to watch, phil? alright, here we go. ... alright go to 30rock here. ... jack meets dennis, ok, great. here we go. we're streaming off of phil'smacbook to this apple tv live. thank, you phil. that is apple tv.so we think this is pretty cool apple tv. movies, tv shows, music and photos all onyour widescreen tv. really excited about it. so apple tv is going to be priced at $299.right? $299 for all this built in. and we're
going to be shipping them next month, in february,and we are taking orders starting today. so, apple tv. enjoy your media on your big-screentv. we think this is going to be really something quite special apple tv.this is a day i've been looking forward to for two-and-a-half years. every once in awhile, a revolutionary product comes along that changes everything. and apple has been— well, first of all, one's very fortunate if you get to work on just one of these inyour career. apple's been very fortunate. it's been able to introduce a few of theseinto the world. 1984, introduced the macintosh. it didn't just change apple. it changed thewhole computer industry. in 2001, we introduced the first ipod, and it didn't just changethe way we all listen to music, it changed
the entire music industry. well, today, we'reintroducing three revolutionary products of this class. the first one is a widescreenipod with touch controls. the second is a revolutionary mobile phone. and the thirdis a breakthrough internet communications device. so, three things: a widescreen ipodwith touch controls; a revolutionary mobile phone; and a breakthrough internet communicationsdevice. an ipod, a phone, and an internet communicator. an ipod, a phone ... are yougetting it? these are not three separate devices, this is one device, and we are calling itiphone. today, apple is going to reinvent the phone, and here it is. no, actually hereit is, but we're going to leave it there for now.so, before we get into it, let me talk about
a category of things. the most advanced phonesare called smart phones, so they say. and they typically combine a phone plus some e-mailcapability, plus they say it's the internet. it's sort of the baby internet, into one device,and they all have these little plastic keyboards on them. and the problem is that they're notso smart and they're not so easy to use, and so if you kind of make a business school 101graph of the smart axis and the easy-to-use axis, phones, regular cell phones are rightthere, they're not so smart, and they're not so easy to use. but smart phones are definitelya little smarter, but they actually are harder to use. they're really complicated. just forthe basic stuff people have a hard time figuring out how to use them. well, we don't want todo either one of these things. what we want
to do is make a leapfrog product that is waysmarter than any mobile device has ever been, and super-easy to use. this is what iphoneis. ok? so, we're going to reinvent the phone. now,we're going to start with a revolutionary user interface. it is the result of years of research and development,and of course, it's an interplay of hardware and software. now, why do we need a revolutionaryuser interface. here's four smart phone, right? motorola q, the blackberry, palm treo, nokiae62 — the usual suspects. and, what's wrong with their user interfaces? well, the problemwith them is really sort of in the bottom 40 there. it's this stuff right there. theyall have these keyboards that are there whether or not you need them to be there. and theyall have these control buttons that are fixed
in plastic and are the same for every application.well, every application wants a slightly different user interface, a slightly optimized set ofbuttons, just for it. and what happens if you think of a great idea six months fromnow? you can't run around and add a button to these things. they're already shipped.so what do you do? it doesn't work because the buttons and the controls can't change.they can't change for each application, and they can't change down the road if you thinkof another great idea you want to add to this product.well, how do you solve this? hmm. it turns out, we have solved it! we solved in computers20 years ago. we solved it with a bit-mapped screen that could display anything we want.put any user interface up. and a pointing
device. we solved it with the mouse. we solvedthis problem. so how are we going to take this to a mobile device? what we're goingto do is get rid of all these buttons and just make a giant screen. now, how are wegoing to communicate this? we don't want to carry around a mouse, right? so what are wegoing to do? oh, a stylus, right? we're going to use a stylus. no. who wants a stylus. youhave to get em and put em away, and you lose em. yuck. nobody wants a stylus. so let'snot use a stylus. we're going to use the best pointing device in the world. we're goingto use a pointing device that we're all born with — born with ten of them. we're goingto use our fingers. we're going to touch this with our fingers. and we have invented a newtechnology called multi-touch, which is phenomenal.
it works like magic. you don't need a stylus.it's far more accurate than any touch display that's ever been shipped. it ignores unintendedtouches, it's super-smart. you can do multi-finger gestures on it. and boy, have we patentedit. so we have been very lucky to have brought a few revolutionary user interfaces to themarket in our time. first was the mouse. the second was the click wheel. and now, we'regoing to bring multi-touch to the market. and each of these revolutionary interfaceshas made possible a revolutionary product — the mac, the ipod and now the iphone.so, a revolutionary interface. we're going to build on top of that with software. now,software on mobile phones is like baby software. it's not so powerful, and today we're goingto show you a software breakthrough. software
that's at least five years ahead of what'son any other phone. now how do we do this? well, we start with a strong foundation. iphoneruns osx. now, why would we want to run such a sophisticated operating system on a mobiledevice? well, because it's got everything we need. it's got multi-tasking. it's gotthe best networking. it already knows how to power manage. we've been doing this onmobile computers for years. it's got awesome security. and the right apps. it's got everythingfrom cocoa and the graphics and it's got core animation built in and it's got the audioand video that osx is famous for. it's got all the stuff we want. and it's built rightin to iphone. and that has let us create desktop class applications and networking. not thecrippled stuff that you find on most phones.
this is real, desktop-class applications.now, you know, one of the pioneers of our industry, alan kaye, has had a lot of greatquotes throughout the years, and i ran across one of them recently that explains how welook at this, explains why we go about doing things the way we do, because we love software.and here's the quote: "people who are really serious about software should make their ownhardware." alan said that 30 years ago, and this is how we feel about it. and so we'rebringing breakthrough software to a mobile device for the first time. it's five yearsahead of anything on any other phone. the second thing we're doing is we're learningfrom the ipod, synching with itunes. you know, we're going to ship our 100 millionth ipodthis year, and that's 10s of millions of people
that know how to synch these devices withtheir pcs or mac and synch all of their media right on to their ipod. right? so you justdrop your ipod in, and it automatically synchs. you're going to do the same thing with iphone.it automatically synchs to your pc or mac right through itunes. itunes is going to synchall of your media onto your iphone. your music, your audio books, podcasts, movies, tv shows,music videos. but it also synchs a ton of data. your contacts, your calendars and yourphotos, which you can get on your ipod today, your notes, your bookmarks from your web browser,your e-mail accounts, your whole e-mail set-up. all that stuff can be moved over to your iphonecompletely automatically. it's really nice. and we do it through itunes. again, you goto itunes and you set it up. just like you'd
set up an ipod or an apple tv. and you setup what you want synched to your iphone. and it's just like an ipod. charge and synch.so synch with itunes. third thing i want to talk about a littleis design. we've designed something wonderful for your hand, just wonderful. this is whatit looks like. it's got a three-and-a-half-inch screen on it. it's really big. and, it's thehighest-resolution screen we've ever shipped. it's 160 pixels per inch. highest we've evershipped. it's gorgeous. and on the front, there's only one button down there. we callit the home button. takes you home from wherever you are. and that's it. let's take a lookat the side. it's really thin. it's thinner than any smart phone out there, at 11.6 millimeters.thinner than the q, thinner than the blackjack,
thinner than all of them. it's really nice.and we've got some controls on the side, we've got a little switch for ring and silent, we'vegot a volume up and down control. let's look at the back. on the back, biggest thing ofnote is we've got a two-megapixel camera built right in. the other side, we're back in thefront. so let's take a look at the top now. we've got a headset jack. 3.5 millimeter allyour ipod headphones fit right in. we've got a place, a little tray for your sim card,and we've got one switch for sleep and wake. push it to go to sleep, push it to wake up.let's take a look at the bottom. we've got a speaker, we've got a microphone, and we'vegot our 30-pin ipod connector. so that's the bottom.now, we've also got some stuff you can't see.
we've got three really advanced sensors builtinto this phone. the first one is a proximity sensor. it senses when physical objects getclose, so when you bring iphone up to your ear, to take a phone call, it turns off thedisplay, and it turns off the touch sensor, instantly. well, why do you want to do that?well, one to save battery, but two, so you don't get spurious inputs from your face intothe touch screen. just automatically turns them off, take it away, boom, it's back on.so it's got a proximity sensor built in. it's got an ambient light sensor built in, as well.we sense the ambient lighting conditions and adjust the brightness of the display to matchthe ambient lighting conditions. again, better user experience, saves power. and the thirdthing that we've got is an accelerometer,
so that we can tell when you switch from portraitto landscape. it's pretty cool. show it to you in a minute. so three advanced sensorsbuilt in. so, let's go ahead and turn it on. this isthe size of it. it fits beautifully in the palm of your hand. so, an ipod, a phone, andan internet communicator. let's start with the ipod. you can touch your music. you canjust touch your music, it's so cool. you've got a widescreen video. you can find yourmusic even faster. gorgeous album art on this display. built-in speaker, and, why not? coverflow. first time ever on an ipod. so rather than talk about this some more, let me showit to you. alrighty. now, i've got some special iphonesup here, they've got a little special board
in them so i can get some digital video out,and i've got a little cord here which goes up to these projectors, so i've got some greatimages, and you get to see what it really looks like. so, let me, i've got a camerahere so you can see what i'm doing with my finger for a few seconds. and let me go aheadand get that picture within picture up. i'm going to go ahead and just push the sleep/wakebutton and there we go, right there. and to unlock the phone i just take my finger andslide it across. want to see that again? we wanted something that you couldn't do by accidentin your pocket. just slide it across. boom. and this is the home screen of iphone righthere. and so if i want to get in the ipod, i just go down to that lower right hand cornerand push this icon right here, and boom, i'm
in the ipod. i want to get home, i push thehome button right here, and i'm home. back in the ipod. now, here i am you see five playlistsacross he bottom. playlists, songs, videos and more. i'm in artists right now. well,how do i scroll through my lists of artists? how do i do this? i just take my finger, andi scroll. isn't that cool? a little rubber banding up when i run off the edge.and if i want to pick somebody, let's say i want to pick the beatles, i just tap them,and here's the beatles songs with their albums right here. if i want to play sgt. pepper'si just hit sgt. pepper's right there, and "a little help from my friends." look at thisgorgeous album artwork here. of course, i've got a volume control. now, i've got a littlebutton up in the corner right here, you can
see in the upper right-hand corner, i canhit that and flip the album art around. there's all the other songs back here. and i can play"lovely rita" if i want to. flip back around. very simple. right, i can set some stars backhere just by setting the arrows. that's a now, let me show you something else. i justtake my unit here, and i turn it landscape mode, oh, look what happens! i'm in coverflow. let's go into dylan here, let's play "like a rolling stone." i just thumb through,just thumb through my albums. it's real easy. anytime i find something i like, i just turnit around, and play something. it's that easy. it's that simple. isn't that great? alright.i could play with this for a long time. again, i've got playlists here. i can go intomy playlists. i've got artists. i've got songs.
i've got more over here. i've got albums.i've got a great album view again that shows all my album artwork if i want. and i've alsogot audio books and compilations and things like that. i've also got videos here. so ipush videos and i've got a video podcast loaded on, and a music video. and i've got a tv showand a movie, and i'd just like to show you the tv show here. this is an episode fromthe office. all videos we look at in landscape. we have touch controls on here, of course.isn't that awesome? isn't that awesome? now i want to show you a movie playing. let'splay pirates of the caribbean, the second one. great movie, by the way.now this is a widescreen movie so i just double-tap and i can see the whole thing here, or i canfill up the screen, whichever i like. and
again, i've got on-screen controls here. isn'tthis cool? so we can be watching feature-length movies just like this. alrighty. so that isthe ipod. pretty cool, huh? we've just started. so again, touch your music to scroll throughyour songs, scroll through your playlists. it's incredible. widescreen video like you'venever seen on a portable device, 160 pixels per inch, gorgeous screen quality, gorgeousalbum art, and cover flow. it's the best ipod we've ever made. again, some of the screenshots. it's unbelievable. here's some album art i just put up, so you can see what itlooks like. just, no matter what you like, it looks pretty doggone gorgeous. and of course,cover flow and video, with on-screen controls. you know, i was showing this to somebody — iwas giving a demo to somebody a while ago,
who had never seen this before, inside apple.and i finished the demo, and i said what do you think. they told me this, they said, youhad me at scrolling. so, the iphone with the most amazing ipod ever. you can now touchyour music. so that's the ipod. now, let's take a lookat a revolutionary phone. we want to reinvent the phone. now, what's the killer app? thekiller app is making calls! it's amazing, it's amazing how hard it is to make callson most phones. most people actually dial them every time. most people don't have verymany numbers in their address book they use their recents as their address book. right?how many of you do that? i bet more than a few. so, we want to let you use contacts likenever before. you can synch your iphone with
your pc or mac and bring down all your contactsright into your phone. so you've got everybody's numbers with you at all times. we have somethingthat's going to revolutionize voice mail. we call it visual voice mail. wouldn't itbe great if you had six voice mails if you didn't have to listen to five of them firstbefore you wanted to listen to the sixth? wouldn't that be great if you had random accessvoice mail? well, we've got it. just like e-mail you can go directly to the voice mailsthat interest you. excellent audio quality. iphone is a quad-band, gsm plus edge phone.we have decided to go with the most popular international standard, which is gsm. we'reon that bandwagon, headed on that roadmap, and plan to make 3g phones and all sorts ofamazing things in the future. so, quad-band
gsm plus edge, and of course we have wi-fiand bluetooth 2.0 edr built in, as well. so this is what it looks like when you geta call. this is what it sounds like. it's one of our ring tones, you can pick of course.so, i want to show you four things. i want to show you the phone app, photos, got a calendar,and sms messaging. the kind of things you would find on a typical phone, but in a veryuntypical way. so let's go ahead and take a look. so let's go to our phone first. yousee that icon in the lower left-hand corner, the phone? i just push it right here, andboom, i'm in the phone. and i've got five buttons across the bottom: favorites, recents,contacts, keypad and voice mail. i'm in contacts, right now, again. how do i move around mycontacts? i just scroll through them. and
so, let's say i want to make a call to jonyive. i can just push here, and i see jony ive's context, with all his information: histhree phone numbers, his e-mail, whatever else, his address, whatever else i've got.it's all in one place. and if i want to call jony, all i do is push his phone number. i'llcall his mobile number right now. and now, we are calling jony here.hey, jony, how you doing? well, it's been 2.5 years, and i can't tell you how thrilledi am to make the first public phone call with iphone. i remember when we first started workingon this, and it's just unbelievable. woah, what is this? i've got another call comingin. jony, can i put you on hold for a minute? so i put jony on hold and ...hey, steve, i wanted to be the first call!"
sorry phil! as you can see, it's put jonyon hold, and phil, i can just touch jony and bring jony back. hey, jony are you there?hey listen, phil called. do you mind if i conference him in?i guess so, you can see the button has changed to mergecalls right there in the middle, so i just push that right here, and now, i've createda conference call. jony, you there? phil, you there? yes.so here we are, and listen i gotta get back to my keynote, so if i want to do that, ijust touch this arrow right here, and i'm going to go ahead and take jony private hereand put phil on hold. jony, do you have anything to say on the first phone call?"it's not too shabby is it?"
it's not too shabby. you take care. and iend this call. phil's on hold. i take him off of hold. phil, thanks very much, i'vegot to get back to the keynote now. alrighty. so, now i've also got a way to make a list of favoriteshere, from my most-often called numbers so i can just touch it once and dial the number.and i might want to add somebody to favorites, so let's say i want to add phil schiller,i just push that plus button in the upper right-hand corner right there, and up popmy favorites, and i can just go to s is here and there's phil, so phil schiller is rightthere. and i'll put, let's say i want to put phil's work number, and it's added phil, rightthere you see favorites. i can edit favorites
by pushing the edit button in the left-handcorner, and i can move phil up if i want to, maybe to the top. and let's see, tony's changedhis number i've got to update this anyway, so i'm going to get rid of that and i canjust remove tony. boom, there we go. it's that simple to edit these things. very, veryeasy. i've got recents right here, which is all my recent phone calls. if i want to seethe ones i've missed, which are in red, i can just go up and touch that button at thetop, and boom, those are all the ones i've missed, and those are all the calls that i'veplaced or have gotten. if i want to dial the phone, if i'm real last-century, i can pushkeypad here, and i can dial a call just with ... oops, called four, sorry. wrong number.408-996-1010. and it formats the numbers and
if i want to, i can just keep dialing, let'ssay it's a european number, and the numbers just keep getting smaller, real simple. verysimple to dial with the keypad. now let me show you visual voice mail. this is so cool.this is a collaboration that we've done, which i'll talk more about later, and it allowsus to have random access voice mail. go directly to the voice mails we want. so as an example,i come to my voice mail, and i say, oh, there's one by al gore. i want to hear that one. ijust push it. now, if i want to call al back right now,i can just push that call back button. but i want to listen to one from tim cook thati've got here, so let me listen to tim. isn't this awesome. and so i've got voicemail how i want to listen to it, when i want
to listen to it, in any order i want to listento it with visual voice mail. so that is a quick tour of the phone app.now what i want to do is show you sms texting. so i just go to that sms icon in the upper-left-handcorner and push it. and i not only have sms texting, but i have multiple sessions. soi can be carrying on conversations with people, and every time i get messages from them, ican be alerted to that, and go check it out. as an example here, i've got eddie q and i'vebeen carrying on a conversation with eddie, and i just tap this, and here's the conversationi've been carrying on right here. and if there's a new message it will tell me. and so there'sa new message from phil, and let's see the conversation was what.and i've got this little keyboard which was
phenomenal. it does error prevention and correction.not that i won't make some, i probably will. but it's actually really fast to type on.it's faster than all these little plastic keyboards on all these smart phones. so ican just say sounds great, see you there. and i can send that. and there it is. it'sthat simple. and when phil messages me back, i'll be alerted, i'll see the dot, and i canjust go pick up that conversation where it left off. if i want to send a message to eddieor scott, i just push this and send a message and go. it's so simple. so that's sms messaging,and again, you've seen the keyboard, it's pretty awesome. we'll come back to that alittle later. and the third app i want to show you as partof the phone package is photos. you know,
we have a two-megapixel camera built in, asi said. we also have the coolest photo management app ever, certainly on a mobile device, buti think maybe ever. and so here's our photos. i'm going to go into our photo library, andthis is our library and again, i can just scroll through photos here with my finger.pretty cool. let me go to photo album, i'll pick italy, and i just, let's start at thetop. and to go through pictures, i just swipe them. i can just swipe through my photo library.there's one that's landscape. i can just turn my device and take a look at it. pretty cool,huh? so i can even swipe when i'm in landscape here. isn't this awesome? the other thingi can do is i can take any of these pictures and i can make them bigger. so let me go aheadand get the camera back up. i can take my
fingers and i can, we call it the pinch, ican bring them closer together and move them further apart to make it bigger or smaller.so i can just move them further apart and stretch the image. isn't that cool? i canmove it around, and ... isn't that cool? and now what i can do is i can pick to make thismy wallpaper. and of course, i could jigger it around then and just set the wallpaper,and now if i'm back at home and i go to sleep, when i wake up from here on out, until i resetit, that's my wallpaper. whenever i'm making a call, that's what i'm going to see. boom.there we go. so photos, sms and the phone app. that is part of our phone package foriphone. get a call, again, just really great callmanagement features, just scroll through contacts
with your finger. all the information at yourfingertips here. favorites, last century, visual voice mail. calendar, sms texting,incredible photo app, the ability to just take any picture and make it your wallpaper.it's pretty unbelievable, and i think when you have a chance to get your hand on it,you'll agree, we have reinvented the phone. ok.so, now, let's take a look at an internet communications device as part of iphone. sowhat's this all about? well, we've got some real breakthroughs here. to start off with,we've got rich, html e-mail on iphone. the first time really rich e-mail on a mobiledevice. and it works with any imap or pop e-mail service. you got your favorite mailservice, it'll likely work with it. and it's
rich text e-mail. we wanted the best web browserin the world on our phone, not a baby web browser or a wap browser, a real web browser,and we picked the best one in the world, safari, and we have safari running on iphone. it isthe first fully usable html browser on a phone. third, we have google maps. maps, satelliteimages, directions and traffic. this is unbelievable, wait until you see it. we have widgets, startingoff with weather and stocks. and this communicates with the internet over edge and wi-fi. andiphone automatically detects wi-fi and switches seamlessly to it. you don't have to managethe network. it just does the right thing. now, i want to take a second and talk aboute-mail. we hook up to almost any imap or pop3 mail service. i just want to give you someexamples. imap of course is the best because
you can keep folders and all your e-mail onthe server and access it from anywhere. yahoo mail is imap. microsoft exchange has an imapoption. and obviously .mac mail is imap, as well. pop3, google gmail, aol mail, and mostisps are pop3 e-mail. now, i want to take a minute and highlightone. yahoo mail. yahoo mail is the biggest mail service in the world. they have overa quarter billion users. biggest e-mail service in the world, and today, we are announcingwith yahoo that they are going to provide free push imap e-mail to all iphone customers.so, this isn't just imap e-mail. it is push imap e-mail. so when you get a message, itwill push it right out to the phone for you. same as a blackberry. free imap push e-mailfrom yahoo. so we think this is a pretty big
deal. so what i'd like to do now is i'd liketo show you mail, safari, google maps and widgets running on iphone. so let's go see.so let's go into mail. second icon from the left on the bottom there. i just touch itwith my finger, and boom, i'm there. and so i've got an in-box here, and this is, by theway, running live on yahoo imap e-mail. this stuff is coming off a yahoo server somewhereup in the cloud. and so i can say james vincent here sent me an e-mail. he's a proud father,and there we go. and i can just scroll here. i've got in-line photos, rich text e-mail.so let's look at another one. phil schiller. she loved the gift. again, in-line photos,rich text, pretty nice. shopping list, again, rich text right here. pretty cool. directionsto sushi ron for tonight's dinner. now, iphone
of course parses out phone numbers and youcan see there's a phone number in blue. i can just touch it, and boom, i'm going tocall this place. i don't really want to call them so i'm going to end the call here. butyou get the idea. and this last one, ken bereskin is one of our marketing folks. he just returnedfrom antarctica. ken's a great photographer, and he took all these great photos of penguinsin antarctica. look at this, it's great. right in your e-mail, right on your phone. and ifi want to by the way, i can look at my e-mail with a split view just like i do on my computer,and so i can select something here and just look at it down here if i want to peruse mymessages real fast and just find that one message i was looking for. but i actuallylike the full-screen view. and of course,
we have a standard in-box and drafts, andall sorts of folders you can put things in as well. so it's real e-mail, just like you'reused to on your computer, right here on your phone. it's extraordinary. and again, freeimap e-mail from yahoo. now, let me go ahead and create an e-mailmessage. show you what that's like. so again, when i don't need a keyboard it's not there.when i do, it's there. i want to send a message to, let's say, phil. i just type ph, and boom,phil schiller, it's address completion and maybe i'll send one to scott forrestal, aswell, and there's scott right there, and let's say the subject is dinner. boom, and i just hit send. it sends that e-mail, and we'redone. so that is mail. full desktop class
e-mail running on a mobile device.all right, now i want to show you something incredible. i want to show you safari runningon a mobile device. so let's go to the web, and here we are. i'm going to load in, ratherthan apple.com here, a more universal site. i'm going to load in the new york times, it'skind of a slow site because it's got a lot of images, but here we're loading and we'reloading over wi-fi right now. and rather than just give you a wap version of the new yorktimes, rather than giving you this wrapped version all around, we're showing you thewhole new york times web site, and there it is. guess what i can do, i can just put thisinto landscape mode, and there it is right there. and i can scroll here if i want. scrollup and down here. still loading it in. there
we go. or i can just get back like this. now,this is really great and i can see the whole page but of course i can't read it. it's alittle too small. so i can get in with my fingers and pinch it but we have an optimizationhere. i can just double-tap on anything and it automatically fills up the screen withit. and i can just scroll around like this and scroll over here and i can even make thistext bigger if i want to, and there it is. just double-tap again to get back to the wholepage. isn't this cool? look at this. there is the new york times. and again, any articlei want, boom, there we go. boom. unbelievable. now, you can look at multiple web pages aswell. you can have multiple web pages open. so i just push this button in the lower-righthand corner. shrinks it down, and i can add
a new page if i want. and i'll go to amazonhere out of my bookmarks. so let's go to amazon. and i love to go the dvd section of amazonand see what dvds are selling. i like it especially when disney's are in the top. and, so here'samazon, and even before the whole page is loaded on, i'm just going to double-tap onthis, and i'm going to say let's go to the dvd section here, and now it's doing that.and here we are. and there's a section over here in the right hand side, and these aretop sellers, updated hourly. oh look, al's inconvenient truth is number one. alright.and here's the other movies. gray's anatomy, i like that. pirates of the caribbean. fantastic.and so i've got this right here, and i can go back to the new york times if i want. zoomup to that picture so we can all see it. and
again, isn't this cool? just go over thereand get back to this one. i can get rid of it just by hitting the x. and there we go.isn't that incredible? safari. you know, if you've ever used what's called a web browseron a mobile phone, you'll know how incredible this is. i hope you'll never really know,because it's bad out there today, and this is a revolution of the first order, to reallybring the real internet to your phone. let me show you something about widgets here.let's go to stocks right now, and we're going to load stock information off the web, andjust right onto the phone here. oh, look, apple's up! that's great! well, i could lookat different graphs here if i want to. and that's fantastic. let's look at the percentageshere. oh, good. good good. so i've got stocks
right here, and i can go look at the weather.let's see what it's like outside. 49 degrees, but it's supposed to get to 61 today, so that'sgood. we'll just stay in here until it warms up. now, i've got paris right here. i canhave as many of these as i want, so it's nighttime in paris. it's actually warmer in paris atnight than it is here today. wow. aspen, well, no snow until later in the week. and hawaii.oh, it's raining, that's not good. well, anyway, here's four places. hawaii, aspen, paris andsan francisco, and again, the weather widget. now, to conclude with the internet devicesection here, i want to show you something truly remarkable, which is, google maps oniphone. i hit our maps application here and it's coming up. and it shows us north america,and i'm going to go to moscone west. that's
where we are right now. and here we are. boom.that's where we are. now, what i'm going to do, is i'm going to go look for something.i'm going to certainly want a cup of coffee afterwards, so i'm just going to look forstarbucks, right? starbucks, so i'm going to search for starbucks, and sure enough,there's all the starbucks. now, i can get a list of starbucks here, and i can pick thatone if i want, and i can even go look at that starbucks, and there it is, and let's givethem a call. good morning, starbucks, how can i help you?yes, i'd like to order 4,000 lattes to go, please. no, just kidding, wrong number. thankyou. bye-bye. ok. now, i can zoom in by just pinching if i wantto. or i can just double click to zoom in,
and i get just higher and higher resolutionversions of the map. so let's go somewhere else here that i've got bookmarked. let'sgo to the washington monument. and so here's washington, d.c, and i could just double-tapand i'm going in a little further here, just double-tapping in. and there's the washingtonmonument there, and i'll double-tap in again. but now i want to show you something else.satellite images. so i just hit this button called satellite at the bottom. it's goingto replace the map with satellite images, there we go. and i can just double-tap in,and double-tap in again. and let's double-tap in again. this is the washington monument.look at this. i can see people down there. whoops, there we go. yep. isn't that incredible.right on my phone! it's unbelievable. so let's
go, i've got another one, the eiffel tower,which is very cool. i set this one to be, look at this, there's the eiffel tower. there'speople at the eiffel tower you can see. look at that. incredible. and here, one last onei have to show you, the coliseum in rome. so again, here we are in rome. that's as faras we can go with the map, but we can go a little further with the satellite. there'sthe coliseum. there's the roman coliseum. satellite imagery, right on the phone. lookat that. that's the coliseum. unbelievable. right on the phone. what do you think. isn'tthat incredible? so, all these amazing things. this is a breakthroughinternet communicator built right into iphone. the first rich html e-mail on a phone. thefirst real web browser on a phone. best version
of google maps on the planet, widgets, andall with edge and wi-fi networking. we're very, very happy with this. again, push e-mail.imap free yahoo and almost any other imap and pop service you want to hook up to. incrediblenew technology for entering text. far better than we've seen on phones before. a real browseron the phone. we can see real web pages in portrait or landscape. we can zoom in on whatwe want to take a look at more closely. google maps and widgets. it's the internet in yourpocket for the first time ever. now, you can't really think about the internet, of course,without thinking about google, right? and for google, what we have on our phone, workingwith them is of course google search, we have that built right into the browser. just typewhat you want, hit google and you're off.
and google maps. we've been working very closelywith them to make this all happen. we're thrilled with the results, and it's my pleasure nowto introduce dr. eric schmidt, google's ceo. now, you also can't think about the internetwithout thinking about yahoo. and again on the phone, we've got yahoo search built rightin, you can select which one you want to use. just type in something, hit that yahoo buttonand boom, you're off. and of course, we also have yahoo imap e-mail services. and so, itis my great pleasure to introduce jerry yang, co-founder and chief yahoo.you know, it's been great having the two greatest companies on the web right down the block.google and yahoo. and we've been able to work with these guys really closely, and it's beenan incredible pleasure to work on this great
technology and bring it to everybody in iphone.so thank you guys very much. you've really helped us put the internet in your pocket.so, internet communicator, an ipod and a phone. let's put them all together and see what youcan do in a real-life scenario. so, let's take a look. i want to listen to some music,so i want to go into my ipod here and let's see, in artists, i want to listen to, oh,maybe red hot chili peppers, i love those guys. and so i'm listening to a song of theirs.and let's see what happens when i get a phone call. music fades out. screen changes. gota phone call coming in. so i can ignore it, but i think i'm going to answer it. so i'llanswer it. howdy. hi phil, listen i'm kind of busy right now. what can i do for you?oh, ok, hold on just a sec. so i push the
home button on my wallpaper and i go homeright here, and i'm still on the call. you can see the phone thing flashing right thereon the lower left. and i go into photos and now i'm in photos and you can see the baracross the top, the green bar, i can just touch that to return to the call. and philwants a photo that he wanted to use it for his screensaver, it was one of the ones thatwas taken in hawaii, i think it was this one. yep, there it is. so you want me to mail thisto you, phil? so i again i just go down here and push this button, and rather than useit as wallpaper, i'm going to e-mail it. so watch what happens now. it shrinks it a littlebit, and then a compose windows will come up right behind it. there we go. and i willjust tap in the to field and send this to
phil here, phil schiller there we go. andthe e-mail is there, yep, it's there, and i'm just going to send it. hey, phil, thatshould be on its way right now. anything else? ... let me go check it out.i think i've got fandango in my bookmarks here. yes, i do. let's go to fandango, figureout what movies are playing. ... to go back to my call i just touch the top here, andi'm back at my call, and i'm just going to go ahead and end the call. what happens now?back in my music. so, this is what it's like when you put it all together. iphone. todayapple is reinventing the phone. now how does this stack up. let's go backto these guys. let's take a look. well, these are their home screens. and again, as yourecall, this is iphone. this is what their
contacts look like. this is what iphone'scontacts look like, and again, you just pick one and you see everything about that person,all the information you have. this is what mail looks like on these smart phones. againthis what mail looks like on iphone. you have rich, html, rich text e-mail. this is whatcalendars look like on these guys. this is what calendars look like on iphone. this iswhat the web looks like, and we tried to make it look as good as we could on these. it usuallylooks worse and this is what you get, and of course, this is what you get on iphone,and you can zoom in and see anything you want. and this is what you get for music players,nobody really uses them much, and this is what you get on iphone. so after today, idon't think anyone is going to look at these
phones quite the same way again.now let me tell you about some accessories we've got for iphone. got some great stereoheadphones we're going to be shipping, and they've got a little addition to them, whichis this little thing right over here. it's a microphone and a switch, so you can talk,you have them in there, you can get a call and just talk. beautiful reception on themicrophone. and just push it together to answer a call or hang up on a call. so you can bewearing them. it just dangles right there and picks up your voice beautifully. and wealso have a bluetooth accessory headset that we're going to be shipping and there it isright there. it's incredibly small and just to let you see what it looks like, it's gotone button on the top for answering and hanging
up a phone call. you never have to turn itoff or on. it just goes to sleep. it automatically pairs with iphone so you don't have to worryabout pairing. it's really simple. and it's very tiny. this is what it looks like in-ear.it's just beautiful. it's the coolest one that we've ever seen. so bluetooth headsetcoming as well. battery life. a lot of these smart phoneshave pretty low battery lives. we've managed to get five hours of battery, and that's fortalk time, video or browsing. five hours of battery life, and 16 hours of audio playback,so that's dramatically better than any of these smart phones. there is a tremendousamount of high technology in iphone. we've been pushing the state of the art in everyfacet of this design. so let me just talk
a little bit about it here. we've got themulti-touch screen. a first. miniaturization, more than any we've done before. a lot ofcustom silicon. tremendous power management. osx inside a mobile device. featherweightprecision enclosures. three advanced sensors. desktop class applications, and of course,the widescreen video ipod. we've been innovating like crazy for the last few years on this,and we filed for over 200 patents for all the inventions in iphone, and we intend toprotect them. so, a lot of high technology. i think we're advancing the state of the artin every aspect of this design. so iphone is like having your life in your pocket. it'sthe ultimate digital device. so what should we price it at? well, whatdo these things normally cost? an ipod, the
most popular ipod, $199 for 4 gig nano. what'sa smart phone cost? well, they say you get the phone and some of the internet with it,although that's questionable. but they cost somewhere around $299. you can get them for$199. palm just introduced one at $399 yesterday, so they generally average about $299 witha two-year contract. now, these phones sort of do music but nobody uses them for musicbecause they're not very good and so they end up buying an ipod to go with the phone.we know, we sell the ipod. and so people spend $499 on this combination. what should we chargefor iphone. cause ipod has got a lot more than this stuff. it's got video. real video.it's got this beautiful gorgeous wide screen. it's got multi-touch user interface. it'sgot wi-fi. it's got a real browser. it's got
html e-mail. it's got coverflow and on andon. and this stuff would normally cost hundreds of dollars. so how much more than $499 shouldwe price iphone? well, we thought long and hard about it, because iphone just does somuch stuff. so much better experience on call, on managing your contacts and visual voicemail. random access voice mail for the first time. texting and e-mail and real browserand google maps. tremendous ipod and cover flow and video. what should we price thisthing at. well, for a 4 gigabyte model, we're going to price it at that same $499. no premiumwhatsoever. $499. and we're going to have an 8 gigabyte model for just $599. so we'regoing to price it starting at $499. now, when's it going to be available? we're going to beshipping these in june. we're announcing it
today because with products like this we'vegot to go ahead and get fcc approval which takes a few months, and we thought it wouldbe better if we introduced this rather than ask the fcc to introduce it for us. so herewe are, and we're going to be shipping it in june in the u.s. we're going to europehopefully by the fourth calendar quarter of this year. and in asia in 2008. so in june,in just a few months, we'll be shipping in the u.s. and when we do, our partner is goingto be cingular. we've chosen cingular. they are the best and most popular network in thecountry. 58 million subscribers. they are number one. and they're going to be our exclusivepartner in the u.s. now, it's a unique partnership though. we're not just going to be sellingphones and services together. we're going
to be doing innovation together. we workedwith cingular on visual voice mail. because it's an innovation that requires both innovationon the phone and in the network. you can't do it in just one place. you have to do itin both places and collaborate. and so visual voice mail is the first fruit of this collaboration,and you will see more. and when we start shipping in june, we will be selling iphone throughour own stores, and through cingular stores. and it's my pleasure to introduce the ceoof cingular, stan sigman. let's take a look at this market, and howbig it is. my clicker's not working. oh there it is. so how big is this market, well let'stake a look. clicker is not working. they're scrambling backstage right now. you know,when i was in high school, steve wozniak and
i, mostly steve, made this little device calledthe tv jammer. and it was this little oscillator that put out frequencies that would screwup the tv. and woz would have it in his pocket, and we'd go into like a dorm at berkeley wherehe was going to school and he'd screw up the tv, and somebody would go up to fix it, andjust as they had their foot off the ground, he'd turn it back on. if they put their footback on the ground he'd screw up the tv again. and within five minutes he'd have somebodylike this for the rest of the star trek episode.so game consoles. 26 million game consoles were sold in 2006 worldwide, actually a littlesmaller than you'd think. it's not such a big market. digital cameras dwarfed it at94 million. mp3 players 135 million. and pcs,
about 209. mobile phones, just about a billionlast year, worldwide. so what does this tell you? what this tells you is, that 1 percentmarket share equals 10 million units. this is a giant market. one percent market share,you're going to sell 10 million phones. and this is exactly what we're going to try todo in 2008, our first full year in the market, is grab 1 percent market share and go fromthere. so we're going to enter a very competitive market, lot of players, we think we're goingto have the best product in the world, and we're going to go for it and see if we canget 1 percent market share, 10 million units in 2008, and go from there.so, today, we've added to the mac and the ipod. we've added apple tv and now iphone.and you know, the mac is really the only one
that you think of as a computer. right? andso we've thought about this and we thought, you know, maybe our name should reflect thisa little bit more than it does. so we're announcing today we're dropping the computer from ourname, and from this day forward, we're going to be known as apple inc., to reflect theproduct mix that we have today. i didn't sleep a wink last night. i was so excited abouttoday, because we've been so lucky at apple. we've had some real revolutionary products.the mac in 1984 is an experience that those of us that were there will never forget. andi don't think the world will forget it either. the ipod in 2001 changed everything aboutmusic, and we're going to do it again with the iphone in 2007. we're very excited aboutthis. there's
an old wayne gretzky quote that i love. i skate to where the puck is goingto be, not where it has been. and we've always tried to do that at apple. since the veryvery beginning. and we always will. so thank you very very much for being a part of this.
