The Steve Show 2004

By Brian T. Nakamoto
January 7, 2004
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Copyright 2004 by Bill Fox All rights reserved.

For those that read the Mac rumor sites, anticipation was high for this year’s Macworld Conference & Expo at San Francisco’s Moscone Convention Center. The exclusive presence of giant colored iPod banners that greeted attendees to Steve Jobs keynote hinted that some of the rumors—at least about the iPod—might have been true. Would Apple release a low cost iPod for the rest of us?

20th Anniversary of The Macintosh

As usual, Steve entered the stage to loud applause from the capacity crowd. Steve started with a slide of Apple’s PR boilerplate, emphasizing that Apple reinvented the personal computer in 1984. Of course, 2004 marked the Macintosh’s twentieth anniversary. Steve went on to reminisce about the history of the Mac.

He showed early advertisements from the Mac’s debut. Steve playfully said that back then, computers used a command line interface that was “very weird.” Then Apple unveiled the Macintosh with its graphical user interface that “changed everything.” It was such a revolutionary change that Apple had to actually run ads to explain what a mouse was. They ran detailed ads to show people how to copy and paste—and why doing so was useful. There was even an ad featuring a photo of a young Bill Gates that drew laughter from the crowd. After all, it was the Macintosh upon which Microsoft first introduced Word, Excel and PowerPoint. It was the Macintosh that brought the 32-bit processor to personal computing.

Steve could have gone on with Mac innovations, but quickly moved along by showing a photo of the original Mac team, including one of himself proudly holding a Mac. He then brought up the ultimate original Mac ad, an Orwellian commercial that was only aired once on national television. Steve noted that the ad was the brainchild of Lee Clow, Chairman and Chief Creative Officer at Apple’s then and now ad agency, TBWA Chiat Day. It was a touching moment when Steve raised the lights and had Lee Clow stand up to receive applause from the audience. Then, to the audience’s delight, Steve played the 1984 commercial.

The crowd roared even more as people noticed that the runner that takes out Big Brother’s projected image in the ad was sporting an iPod and a hairdo fitting of the current iPod commercials. Steve proclaimed that Apple is “going to make something of this year,” and excited the audience yet again by mentioning that free posters of the iPod runner would be available at Apple’s booth to help commemorate the Mac’s twentieth anniversary.

The Transition Is Over!

“Microsoft is copying us again,” Steve joked as he started his progress update on Mac OS X. With that in mind, Steve highlighted Panther features one won’t find on Windows: Exposé, iChat AV, the new Finder, and Fast User Switching.

Steve declared that “the transition is over” and that it’s been the fastest operating system transition on record. Mac OS X has over 10,000 native applications. Steve highlighted several: Lego/THQ Bionicle, Macromedia Studio MX 2004, Pearson’s Knowledge Box educational software, MYOB’s Account Edge, BakBone’s Net Vault enterprise-class backup software, and Apple’s own Final Cut Express—2.

Final Cut Pro 4 Inside

According to Steve, Final Cut Express 2 is based on Final Cut Pro 4 technology. It features over 200 filters and effects, real-time color correction, and real-time transitions. Steve stated that Final Cut Express along with Final Cut Pro and iMovie make Apple the number one video software supplier in the world. Final Cut Express 2 is available now for $299; users of the previous version can upgrade for $99.

20 Years of Great Microsoft Software On Mac

That was how Roz Ho, General Manager of Microsoft’s Macintosh Business Unit began her demo of Microsoft Office 2004, which Steve followed the Final Cut Express demo with. Roz reiterated that Microsoft Word, Microsoft Excel and Microsoft PowerPoint were first on Mac “before Windows.” (Albeit, there wasn’t really Windows in 1984.) Roz introduced an extremely scripted engineer to do a demo of some new Office 2004 “Mac-first” features in Word, Excel and Entourage. After they demonstrated the ability to record audio into Word 2004’s “Notebook View,” someone nearby in the audience sarcastically suggested that a typical Word file attachment could now be 100 MB (although it’s not clear if Word actually stores the QuickTime audio file in the Word document or what cross-platform compatibility ramifications there may be). Perhaps the best news was that Roz implied there were already engineers working on future versions of Office for Mac.

Office 2004 for Mac is available under Microsoft’s Technology Guarantee Program. Translation: Get Office v.X now and receive a free upgrade to Office 2004 when it ships sometime around this Spring.

The Fastest Personal Computer In The World

Steve declared the IBM G5 as the future of Apple’s roadmap. (This may bode well for PowerBook and iBook users.) Steve re-iterated that the G5 is “the fastest personal computer in the world.” He said that he couldn’t begin to talk about the G5 without talking about Virginia Tech’s third fastest supercomputer in the world that’s a cluster of 1,100 dual 2 GHz G5 desktops—some of the first G5 desktops. Steve somehow managed to garner acceptance for the shipping delays that some early G5 customers experienced by starting his apology with, “We had to piss off a few other customers…”

Steve played a video that highlighted the Virginia Tech Mac OS X-based supercomputer that makes Virginia Tech the first academic institution to break into the Top 10 list with 10.28 TF of computing power. Even more impressive, the entire project cost Virginia Tech only $5.2 million so “anyone can afford them.”

Steve said that Virginia Tech probably wished that Apple had a G5 Xserve at the time, and then he announced the G5 Xserve with impressive specs such as: 1 U form factor, single or dual 2 GHz G5 processors, ECC DDR 400 memory, support for up to 8 GB of total memory, and Panther Server with an unlimited client license. Steve pointed out that it’s “just like Linux” because you can have unlimited clients, however it’s “unlike Linux” because “mere mortals can use it.”

Steve stated that the Xserve would ship in February in single, dual, and node configurations for $2,999, $3,999, and $2,999, respectively. They will be joined by an update to the Xserve RAID that ups the ante to 3.5 TB of total online storage, sports industry standard SFP connectors, allows for RAID set slicing, and on-the-fly RAID set expansion. Steve said the Xserve RAID is qualified to work with popular Fibre Channel switches and “virtualization thingamabobs,” noting that he did at least “know what Fibre Channel is.” Xserve RAID is also, by popular demand, certified to work with Windows and Linux allowing users of other platforms to take advantage of its unbeatable $3 per GB price.

The Xserve RAID is available in 1 TB, 1.75 TB, and 3.5 TB configurations for $5,999, $6,499, and $10,999, respectively. Alas, the audience seemed disappointed when Steve next moved on to iTunes as speed-bumped G5 desktops were rumored to debut at Macworld too.


Steve talked about iTunes, stressed Mac and Windows compatibility, and announced that 30 million songs had now been sold—“tens of millions ahead of competitors.” Steve showed a graph that the iTunes Music Store is getting close to selling 100 million songs a year. After noting that it has a 70% market share, Steve remarked that it “feels great to be above 5%.” Steve also amused the crowd by challenging them to guess how much the biggest iTunes Music Store spender was. “Bill Gates!” was shouted from the light-hearted crowd to which a smiling Steve replied that it “isn’t Bill Gates.”

Whoever it was, as Steve was careful to convey that they didn’t really know the customer’s identity, he or she had spent $29,500 to date at the iTunes Music Store! It’s no wonder that Steve’s other music store factoids paled in comparison: 50,000 audio books and 100,000 gift certificates sold since October, 2003. These were all available to over 20 million AOL members that, along with other iTunes members can now access live artist recordings called Sessions@AOL.

And More Music

Steve related that iTunes Essentials, collections (playlists) of some of the best song in every genre were a hit so it’s only fitting that one of the new features of the iTunes Music Store was to browse Billboard Hot 100 Charts of the most popular music from 1988 to Present. Music lovers will also be able to sample 12,000 new classical tracks that help bring the iTunes Music Store to more than 500,000 downloadable songs—the largest online music store in the world. Steve mentioned that some other service also made that claim, but only Apple makes them all available for download at 99¢ a piece sans a subscription.

Steve recapped from the iTunes Music Store for Windows launch event last Fall that Pepsi and Apple are giving away 100 million songs legally starting February 1. Pepsi will kick off the promotion with a Super Bowl ad. 1 in 3 specially capped Pepsi drinkers will be a winner and get “instant gratification” by being able to redeem a winning bottle cap code at the iTunes Music Store for a 99¢ credit. “So start drinking,” Steve wisecracked.

Integrated iLife ’04

Steve restated that Apple couldn’t be happier that everyone loves iTunes so much. He then transitioned to iLife that he described as being: “Like Microsoft Office for the rest of your life.”

Steve introduced the next major revision to the iLife suite dubbed iLife ’04. It included iTunes with the new features that he had just reviewed. Next came improvements to iPhoto, which Steve admitted was designed at the dawn of digital photography when everyone had only 500 to 1,000 digital photos. Undeterred, Steve announced that the new iPhoto was designed for the future, with support for 25,000 photos that can be scrolled through with no waiting. The new iPhoto also featured: time-based organization, Smart Albums ala iTunes’ Smart Playlists, fast preview controls, ratings, enhanced Slideshows, Rendezvous photo sharing for (according to Steve) sharing photos with no copyright issues.

Steve demoed iPhoto’s smooth scrolling, seamlessly zooming in and out of a library of over 25,000 photos. He fixated on a “nicer” and “faster” Sepia filter. He caused unintentional humor when he showed off time-based organization by calendar year “or whatever” as the view merely narrowed down his hypothetical search to 6,000 photos. Smart Albums were a welcome new feature as were the Slideshow enhancements. Of course, Steve had to show off the 3D cube slide transition.

Peter Lowe, the iLife product manager, was invited onto stage by Steve to demonstrate iPhoto’s Rendezvous capabilities. Peter’s photos instantly appeared in Steve’s iPhoto list of shared pictures much like music is shared in iTunes. Like iTunes, the photos went away once Peter closed his iBook leaving one to wonder what would happen if Peter had done so while Steve played his Slideshow of Peter’s pictures.

It was sly of Steve to buy a song that he wanted for an iPhoto slideshow from the iTunes Music Store. The new iPhoto allowed Steve to choose an iTunes Playlist for his background music. No more repetitive looping soundtracks! Finally, for iPhoto users in Japan and Europe, Steve announced the ability to order prints of pictures and photo albums due in January and March, respectively. He apologized for the long wait.

Steve switched to the new iMovie 4 and showed: non-destructive clip trimming, new and enhanced titles, DV import from Apple’s iSight camera, easy sharing to .Mac HomePage, audio scrubbing, and alignment guides inspired by Apple’s Keynote presentation software. Among the new title effects, clip image and clip video garnered the loudest applause. There were also cheers for the Star Wars-like title effect as the demo copy hinted at the common analogy of Apple as Rebels against a certain Empire in the Pacific Northwest.

iDVD also received a revision to version 4. Steve listed: 20 new themes, enhanced menus, enhanced slideshows (much like the new iPhoto), a Navigation Map, Pro encoding for 2 hours on an “industry standard DVD,” and the ability to archive projects to be burned on a SuperDrive equipped Mac. Steve noted that the last feature was a big request from schools.

As if the iTunes, iPhoto, iMovie and iDVD enhancements weren’t worthy alone to merit the moniker of iLife ’04, Steve introduced, “A major new Pro music tool for everyone.” Steve related that research showed over half of households have at least one musician. Then he broke from the iLife nomenclature to introduce Garage Band, the next big thing. Steve described Garage Band as software that turns a Mac into an audio tool that can mix 64 tracks, reproduce 50 software instruments via a USB or MIDI keyboard, and comes with 1,000 professional audio loops that automatically adjust their pitch and tempo. It records live performances, includes 200 audio effects such as vintage and modern guitar amps. Steve compared it to having a “$50,000 Yamaha grand piano on your Mac,” and a whole lot more.

Perhaps leveraging Apple’s new musical connections, Steve then introduced John Mayer to help run Garage Band through its paces. The fans went crazy. The demo started with a USB keyboard so John sheepishly disclaimed, “I play guitar.” He also gave credit to Garage Band for enabling a synthesized keyboard to reproduce a guitar with realistic nuances before Steve took creative license and composed a new piece consisting entirely of audio loops. The audience was so far impressed although perhaps more awestruck that John Mayer was performing wonderful feats of music.

The funk got down when Steve and John moved on to use a guitar connected to a Mac. For the record, the “Seventies Rhythm” is John’s favorite guitar amp. Steve proclaimed that budding musicians could now take their PowerBook with them instead of lugging around an amp. He was also ecstatic that the Motown drum loops were actually done by the Motown drummer. John interjected that Garage Band is a great predictive tool and that he wished it were around when he was growing up. Almost annoyed that he was interrupted, Steve indicated that John was Apple’s “new marketing campaign.”

The audience cried, “Save it!” and “Sell it!” when it appeared that Steve was about to delete John’s guitar jam session. Steve just smiled and proceeded to show everyone how easy it was to export music from Garage Band to iTunes as a file (not the music store). “What would this cost on Windows?” Steve wondered aloud… He drew laughs when he went on to say, “We hear Windows is cheaper.” In Steve fashion, he then used a table to assemble $306 of comparable Windows software that isn’t as good and “don’t work together.”

Relieving the suspense that had accrued, Steve announced that iLife ’04 would be just $49. A lady shrieked in delight when he also claimed that it would be free on every new Mac. iLife ’04 will run on Panther and Jaguar, and be in stores on January 16, according to Steve. There will also be a Garage Band Jam Pack available for $99 packed with 100 more instruments, 2,000 more audio loops, and 15 more amps. Furthermore, Steve announced that Apple is reselling mAudio’s USB keyboard for $99 before queuing a celebrity packed MTV-like iLife ‘04 video.


After the video, Steve toyed with the audience and asked, “How many don’t have an iPod?” Few raised their hands. (Some probably lied out of fear of being grouped with the few Wintel toting laptop press core members at Macworld.) Steve approved, “Not a lot.” He then ticked off impressive iPod stats: 730,000 iPods were sold during October through December 2003, the 2 millionth iPod was sold in December, and iPod was number one in units and revenue in October.

Steve played with the audience more during a non sequitur mini-rant about how $50 MP3 players that people buy and never use because they only hold—like—3 songs.

Back on track, Steve announced that the 10 GB iPod had been upgraded to 15 GB for the same $299 price. There were no changes to the 20 GB and 40 GB models, which remained at $399 and $499 respectively. Steve then messed with the audience’s collective minds when he hyped a new iPod accessory that turned out to be optional $39 in-ear headphones. The air almost went out of the room after Steve then played a new iPod TV commercial as if the keynote were near its end.

But then, Steve resumed more talk of iPod’s market share. He showed a pie chart of the iPod’s 31%. He added another 31% slice that represented high-end flash players, and then another 31% slice that symbolized low-end flash players. Steve sarcastically dismissed the remaining 7% as “hard disk players we’re in the process of eliminating.”

iPod mini

Finally! Steve pulled up a picture of a Rio 256 MB MP3 player that was 0.8 to 1.2” thick, had a poor user interface in Steve’s opinion, and sold for $200. Suddenly, Steve’s non sequitur had found its place as Steve reiterated how people that buy $200 60-song capacity MP3 players either used them once before throwing them into a drawer forever, or went out to buy expensive flash memory to be able to shuffle around music in a cumbersome fashion.

Thus, Steve unveiled the iPod mini:

  • 4,000 MB (4GB) – 16x more storage
  • 1,000 songs – 16x more songs (clever marketing)
  • 0.5” thick – half the size with the length and width of a business card
  • iPod’s award winning UI and “patent pending” iPod scroll wheel
  • $249 – $50 more but 940 more songs for only $50

Steve then produced an iPod mini from his front jean pocket. He held up its small size and showed off how its designers had moved the navigation buttons onto the solid-state scroll wheel to conserve space. He reassured everyone that all of the beloved functionality from the iPod lived on in the iPod mini. In fact, the iPod mini featured both FireWire and USB 2 cables in the box (in lieu of a dock). It also had a cell phone-like cradle belt clip. Optional Apple accessories included a dock and armband.

Potentially alluding to future Mac color options, Steve presented the iPod mini’s anodized aluminum (non-interchangeable) casing in gold, blue, pink, and green. iPod mini hits shelves next month in the U.S. and worldwide in April.

Before anyone could hope for a second, less expensive iPod mini configuration, Steve asked all of the Apple employees in the audience to stand to receive applause for their hard work and dedication. Those that had high hopes based on unfounded rumors may have been slightly disappointed; however the twentieth anniversary of the Macintosh promises to be yet another year full of non-stop innovation from Apple.

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