MacWorld EXPO 1997 The return of Steve Jobs - 4x Upscaled Footage with SECourses Upscaler Pro

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MacWorld EXPO 1997 The return of Steve Jobs - 4x Upscaled Footage with SECourses Upscaler Pro

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Description:

Step back into August 1997 for one of the most pivotal and historic moments in the history of technology. In this monumental Macworld Boston keynote, a recently returned Steve Jobs takes the stage to deliver a brutally honest status report on a struggling Apple Computer—and outlines the radical steps required to save the company from the brink of bankruptcy.

Introduced by Mac Publications CEO Colin Crawford, Steve Jobs addresses the rumors of Apple's demise and lays out a masterful blueprint for the company's revival. He identifies Apple's core strengths, introduces a powerhouse new Board of Directors, and refocuses the company on its most loyal user bases: Creative Professionals and the Education sector.

However, the most shocking moment of the presentation comes when Jobs announces a sweeping, historic partnership with Apple's biggest rival: Microsoft. Featuring a live satellite appearance by Bill Gates, this announcement officially ended the "Apple vs. Microsoft" war of the 1990s and secured a vital $150 million investment that helped keep Apple alive.

Jobs closes the speech with the profound philosophy that "for Apple to win, Microsoft does not have to lose," planting the early seeds for the legendary "Think Different" era.

🌟 Key Highlights in this Video:

• The Turnaround Strategy: Jobs diagnoses Apple's declining sales and lays out a plan to stabilize the company.

• A New Board of Directors: Introduction of industry titans to the Apple board, including Larry Ellison (Oracle) and Bill Campbell (Intuit).

• Reclaiming Core Markets: A deep dive into Apple's dominance in the Creative Content and Education sectors.

• The Mac OS Legacy: Celebrating the massive, unexpected launch success of Mac OS 8.

• The Microsoft Partnership: The groundbreaking 5-point deal including a patent settlement, a 5-year commitment to Microsoft Office for Mac, Internet Explorer becoming the default browser, Java collaboration, and a $150M stock investment.

• Bill Gates' Appearance: Gates speaks to the Mac audience via satellite downlink.

👇 Navigate the Video (Timestamps / Chapters):

00:00:00 Introduction by Mac Publications CEO Colin Crawford

00:04:06 Steve Jobs Takes the Stage to a Warm Welcome

00:07:23 Identifying Apple's Fundamental Problem: Declining Sales

00:08:04 Rebuilding Starts at the Top: Changing the Board of Directors

00:09:37 Introducing New Board Member: Ed Woolard (DuPont)

00:09:57 Introducing New Board Member: Gareth Chang (Hughes International)

00:10:31 Introducing New Board Member: Larry Ellison (Oracle)

00:11:02 Introducing New Board Member: Jerry York (IBM & Chrysler)

00:11:26 Introducing New Board Member: Bill Campbell (Intuit)

00:11:57 Steve Jobs Officially Joins the Apple Board

00:12:57 Video Presentation: Insights from the New Board of Directors

00:17:31 Market Focus: Identifying Where Apple Remains Relevant

00:18:06 Dominating Market 1: Creative Content Professionals

00:19:34 Dominating Market 2: The Education Sector

00:21:27 Analyzing Apple's Greatest Core Assets

00:22:33 Core Asset 1: The Power of the Apple Brand

00:23:07 Core Asset 2: The Mac OS Legacy

00:24:35 Massive Success and Sales Update for Mac OS 8

00:25:14 The Importance of Forging Meaningful Industry Partnerships

00:25:59 Announcing the Historic Microsoft Partnership

00:26:48 Partnership Agreement 1: Patent Settlement & Cross-License

00:27:08 Partnership Agreement 2: Microsoft Office on Mac for 5 Years

00:27:38 Partnership Agreement 3: Internet Explorer Becomes Default Browser

00:28:30 Partnership Agreement 4: Collaboration on Java Compatibility

00:28:45 Partnership Agreement 5: Microsoft's $150 Million Investment in Apple

00:29:43 Introducing a Special Guest via Satellite Downlink

00:30:22 Bill Gates Speaks on Microsoft's Renewed Commitment to Mac

00:32:23 Changing the Paradigm: The Apple vs. Microsoft Rivalry is Over

00:34:00 Apple & Microsoft Together Equal 100% of the Desktop Market

00:35:10 The "Think Different" Philosophy and Final Closing Remarks

Video Transcription

• 00:00:23 Well, good morning. I'm Colin Crawford, I'm  the President and CEO of Mac Publications.  

• 00:00:28 This is an exciting newly formed joint  venture between Ziff Davis and IDG,  

• 00:00:34 which is now responsible for publishing  MacWeek and Macworld. And I'd like  

• 00:00:39 to welcome you all on behalf of the  sponsors to Boston and Macworld Expo.

• 00:00:44 You know, more than any other computer company,  Apple continues to attract a great deal of media  

• 00:00:50 attention. And today is no exception.  For me, and I suspect for many of you,  

• 00:00:59 the last year in the Mac market has felt like  being a bit on an emotional roller coaster. Highs  

• 00:01:04 of optimism followed by troughs of near despair  as Apple wrestled with its turnaround strategy.  

• 00:01:11 Jubilation as Apple improved and rationalized  its product line and made progress with its OS  

• 00:01:16 strategies. And then concern as negotiations  with the licensees appeared to stall.

• 00:01:23 But for all the followers of the  Apple market, nearly every possible  

• 00:01:27 solution... every other... every possible  solution for Apple has been analyzed and  

• 00:01:35 dissected. There's certainly no shortage  of pundits, you know, to give advice.

• 00:01:46 Gil Amelio, Apple's former CEO, once remarked  to me his frustration with the media coverage.  

• 00:01:53 My response was that Apple would be facing an  even bigger problem if the media stopped caring.

• 00:02:07 Despite all the issues and problems over the  past couple of years, the passion and loyalty  

• 00:02:13 remain. People want the Apple Macintosh market to  be successful and return to a state of sustained  

• 00:02:20 profitability and growth. Today, I'm going  to spare you my solutions for Apple. Though,  

• 00:02:26 having been in this market for over a  decade, I've certainly some strong views.

• 00:02:32 It's much more important that we all hear a vision  

• 00:02:35 for the Macintosh platform from Apple and  other senior executives in the industry.  

• 00:02:42 What are future plans for hardware and  software? What will persuade independent  

• 00:02:47 software and hardware vendors that the Apple  market represents a solid business opportunity?

• 00:03:02 I want to leave Macworld Expo at the  end of the week with evidence that the  

• 00:03:07 Macintosh platform is still 1 of the most  exciting segments of the computer industry.

• 00:03:24 I want my belief reinforced that the  Macintosh platform is not just relevant  

• 00:03:29 in today's marketplace, but the leading  edge of technology. And to start us off  

• 00:03:35 in the right direction is an individual  who really needs little introduction.

• 00:04:06 After all... after all, Steve Jobs has  been around since the 1st Macintosh. So  

• 00:04:15 please join with me now and welcome  from Apple Computer, Steve Jobs.

• 00:04:56 Thank you very much for that warm welcome. Now I  guess I'm gonna have to give the speech. The...  

• 00:05:01 I came today to give you a status report  on what's going on and to try to fill you  

• 00:05:07 in on some of the steps we're taking to  get Apple healthy again. Um, as you know,  

• 00:05:14 uh, I'm the Chairman and CEO of a company  called Pixar. And... thank you. And uh,  

• 00:05:20 I, like a lot of other people, are  pulling together to help Apple, uh,  

• 00:05:25 get healthy again. And I am, uh, extraordinarily  confident that that is going to happen.

• 00:05:30 Now, when I, uh, started to get involved, a lot of  people gave me advice. And some of the advice, uh,  

• 00:05:38 that was the most popular was, uh, uh, "Apple  has become irrelevant." Um, there was a great  

• 00:05:45 1 that was, uh, "Apple can't execute anything."  Uh, and another 1 was, um, "the Apple culture is,  

• 00:05:53 is anarchy. You can't, no 1 could manage it."  You've read all these things in the press.  

• 00:05:58 And after, uh, 4 weeks, um, here's what I found.  Quite the opposite of these things, actually. Uh,  

• 00:06:06 Apple's not relevant... as relevant as it used to  be everywhere, but in some incredibly important  

• 00:06:12 market segments, it's extraordinarily relevant.  And I want to share some of that with you today.

• 00:06:19 Uh, Apple is executing wonderfully  on many of the wrong things.  

• 00:06:27 The ability of the organization to execute  is really high though. I mean, I've met some  

• 00:06:31 extraordinary people at Apple. There's a lot of  great people at Apple. They're doing some of the  

• 00:06:36 wrong things because the plan has been wrong. And  lastly, um, what I found is rather than anarchy,  

• 00:06:45 I found people that can't wait to fall into line  behind a good strategy. There just hasn't been 1.

• 00:07:02 What I see is, is the makings  of a, of a very healthy company,  

• 00:07:06 uh, with some extraordinarily talented people who  are still just as passionate and committed, uh,  

• 00:07:12 to the dream of computing as they ever were. Uh,  that need to come together and get a great plan  

• 00:07:18 and then start to execute it. And that's exactly  what's been happening over the last 4 weeks.

• 00:07:23 Now, what's the fundamental problem? Uh, I  think the fundamental problem is a little more  

• 00:07:28 subtle, but I think this is a symptom. But in a  nutshell, um... whoops. Excuse me. In a nutshell,  

• 00:07:39 that's it. Right? Apple sales in, in 1995  were 11.1 billion. In 96 they were 9.5  

• 00:07:48 billion. And in this year they'll be, you  know, 7 billion plus or minus a little bit.  

• 00:07:54 That's the problem. Or the symptom  depending on how you look at it. And  

• 00:07:58 that needs to be stabilized and turned around.  And people are working very hard to do that.

• 00:08:04 So what are some beginning steps that we're  going to take? 1 of the 1st 1s has to be to  

• 00:08:11 start at the top. Uh, Apple's done  a lot of, of change at the bottom.  

• 00:08:16 And I think this change needs to start at  the top, uh, with the Board of Directors.

• 00:08:25 Focus on relevance. Apple needs to find where it  is still incredibly relevant and focus on those  

• 00:08:32 areas. It needs to figure out what its core assets  are and invest more in them. Apple has neglected  

• 00:08:40 its core assets for a while. It has to forge some  meaningful partnerships, not just partnerships  

• 00:08:47 in press releases. And it needs to define some  new product paradigms. And we've got some great  

• 00:08:54 ideas. I'm not going to be talking about products  today, though. I just want to let you know that,  

• 00:08:57 that we have some wonderful ideas that you'll be  hearing about between now and the end of the year.

• 00:09:02 So let's, uh, let's talk about some of  these. Board of Directors. Uh, Apple had a,  

• 00:09:08 uh, a very decent group of people as its  Board of Directors. Uh, they worked very,  

• 00:09:14 very hard for Apple. But I think, uh, with  Apple in the, in the situation it finds itself,  

• 00:09:19 it was time for a change. And the directors agreed  with that. We have put together a new Board of  

• 00:09:25 Directors that, uh, I would like to announce to  you today. There are 2 members of the prior board,  

• 00:09:31 uh, that, uh, we are extremely pleased  are going to stay on the new board. Uh,  

• 00:09:37 the 1st of those is Ed Woolard. Uh, Ed  is the Chairman and former CEO of DuPont.

• 00:09:46 I've gotten to know Ed over the last, uh, several  weeks. And I, uh, I think he's terrific. And has  

• 00:09:51 provided a tremendous amount of leadership,  uh, during this very critical time for Apple.

• 00:09:57 Next is Gareth Chang. Uh, Gareth is the  President of Hughes International. Again,  

• 00:10:01 he's been on the, uh... He's been on  the Apple board for a short while.  

• 00:10:06 And Gareth brings a tremendous international  experience to Apple, in particular in Asia,  

• 00:10:10 which is a very important market,  a high growth market for Apple.

• 00:10:14 And then we're going to add 4 new board members.  The rest of the, uh, prior board has resigned,  

• 00:10:20 and we're going to add... We're going  to add 4 new board members to, uh,  

• 00:10:31 to carry the company forward. The  1st is Larry Ellison, CEO of Oracle.

• 00:10:41 I hope that wasn't a boo I heard. Larry, uh,  started Oracle, uh, in his garage about a year  

• 00:10:49 after we started Apple. It's grown to be the  2nd largest software company in the world. Uh,  

• 00:10:54 we would like to do a lot more in terms  of software. And we thought having some,  

• 00:10:57 uh, software industry expertise  would be a good idea on the board.

• 00:11:02 Uh, 2nd board member: Jerry York,  former CFO of IBM and Chrysler.

• 00:11:12 Uh, Jerry, uh, did a lot of the turnaround  work at Chrysler and IBM. And, uh, is, uh,  

• 00:11:20 extremely well known and respected, uh,  in the financial community for his work.

• 00:11:26 The 3rd new board member is  Bill Campbell, CEO of Intuit.

• 00:11:39 Bill, uh, in addition to being, uh,  CEO of Intuit, uh, was formerly the  

• 00:11:43 Vice President of Sales and Marketing for  Apple, uh, during some of its heyday. And  

• 00:11:47 also ran Claris. And is very familiar  with, uh, some of the successes and some  

• 00:11:53 of the failures, uh, that Apple has had. And I  think he'll be an extremely good board member.

• 00:11:57 And lastly, uh, I am joining the board as well.

• 00:12:15 I'd like to just, uh, take a moment  and, uh, and thank the outgoing board  

• 00:12:18 members. I think it has not, uh, not  been an easy job to be a board member  

• 00:12:22 of Apple over the last few years. And,  uh, these are very decent people. And  

• 00:12:25 they've been trying, uh, very hard to do  the right thing for the company. And, uh,  

• 00:12:29 to welcome our new board members. I think we  have a, a really exciting task ahead of us, uh,  

• 00:12:33 to help, uh, help the management team and guide  Apple, uh, back to health and, to prosperity.

• 00:12:38 And so I hope you'll agree that, uh, this is  a pretty sweeping change. Uh, we're adding a  

• 00:12:43 tremendous amount of, of industry expertise.  We are not naming a chairman at this time.  

• 00:12:48 Uh, we're going to wait till we have a new CEO  and, and, uh, sort things out when that happens,  

• 00:12:53 uh, at that time. Now, I put, I  put together a little video, uh,  

• 00:12:57 if you'd like, I'll show it to you.  That just, uh, I asked the board...

• 00:13:00 We asked the board members a few questions.  And you can just maybe get a little,  

• 00:13:02 get a little familiar with them. Would you  like to see it? Let's go ahead and roll that.

• 00:13:17 You know, the old board has been, um, associated  with the past. And the past has been a failure.  

• 00:13:23 The new board brings hope. The new group  of people on, on the Apple board are all  

• 00:13:27 computer insiders. We've all been in the computer  industry. Everyone knows that the, uh, computer  

• 00:13:32 industry changes at the speed of light. Now we  have people who clearly can help us articulate  

• 00:13:37 and understand where the niches are where  Apple can compete and successfully win.

• 00:13:44 So a lot of times we try to focus on ourselves,  re-engineer ourselves internally. And we forgot  

• 00:13:49 sometimes who pays the bills. It's the customer  out there pays the bills. You know, 1 of the  

• 00:13:53 things that, that, uh, bothered me years ago was  when, when they raised prices. I thought that  

• 00:13:58 that was a, the, the, um, uh, it made me think  that Apple didn't understand the outside world.  

• 00:14:05 I think Apple needs to worry less about competing  with Microsoft and worry more about doing things  

• 00:14:13 that are different. That's back to innovation.  It's back to creativity. It's back to vision.

• 00:14:20 No 1 is really going to believe Apple can  be successful until we get the revenues  

• 00:14:24 and the costs back in line. And that means  we got to start growing the revenues again.  

• 00:14:29 Companies have to look at everything  they're doing and determine, you know,  

• 00:14:34 what are core competencies? What  are the core parts of the business?

• 00:14:38 In a sense, Apple is trying, trying  to do too many different things. We  

• 00:14:42 need to focus on a handful of things  and do them really, really well. Well,  

• 00:14:47 I was on the Citicorp board in 1991. The price  of the stock was $9 a share. And there was many  

• 00:14:53 negative articles being written about Citicorp  was going bankrupt. Uh, the price today is $130.

• 00:15:00 Mainly because we did the fundamental  things that were necessary to focus on the  

• 00:15:05 customer and focus on having a highly successful  business. At, at Chrysler, uh, we had to take,  

• 00:15:12 uh, nearly 4 billion dollars out of the cost  structure to get Chrysler fully competitive,  

• 00:15:18 uh, particularly with the Japanese.

• 00:15:20 I've seen it at DuPont. I've seen it at IBM.  I've seen it at Citicorp. The success starts  

• 00:15:25 to generate additional success. Well, the  confidence has to start with a clear vision.  

• 00:15:32 What are we trying to accomplish? What are  we trying to do? You take that vision down  

• 00:15:36 to a strategy that it has to people have to  look at it and say yes, they can do that.

• 00:15:41 When a company lacks energy, you can't do  anything to the company. So I think with  

• 00:15:44 Steve and the new board members, 1st thing we need  to do is inject tremendous amount of new energy,  

• 00:15:49 new thoughts. Apple has very strong  positions in 2 market segments. Uh,  

• 00:15:55 1st, education. And 2ndly, uh, creative content.

• 00:16:00 What other computer system has 20  to 25 million loyal, enthusiastic,  

• 00:16:06 uh, committed users? Just building  on that base, recapturing, uh,  

• 00:16:11 their dedication and strength because  we're bringing out great products.  

• 00:16:15 Whenever you have a strong position in a  market segment, you can capitalize on that.

• 00:16:21 You know, Apple is the only lifestyle  brand in the computer industry. It's  

• 00:16:24 the only company that people feel  passionate about. You know, my company,  

• 00:16:29 Oracle, it's, it's a huge company.  IBM is a huge company. Microsoft is  

• 00:16:33 a huge company. But no 1 has incredible  emotions associated with our companies.

• 00:16:39 Only Apple is really a lifestyle brand. And  companies can spend billions of dollars to  

• 00:16:44 build a brand. Apple does not have  to do that. It's already been done.  

• 00:16:48 The important thing is to build products that  are wonderful. And uh, or as Steve would say,  

• 00:16:53 insanely great. And it's time to start  building insanely great products. The  

• 00:16:56 biggest thing you can do is go out and buy a  Mac. Do I use a Mac? Absolutely I use a Mac.  

• 00:17:01 I have 3 of them in my home. I've been using  a Mac since 1984, and I'm not about to stop.

• 00:17:07 I have probably owned every single machine that  Apple had ever produced. And I can tell you,  

• 00:17:11 no 1 can change me in terms of personally  what machine I will use. It's gotta be a Mac.

• 00:17:31 So, as you can see, this is a pretty diverse group  of people. A lot of deep industry expertise who  

• 00:17:37 come together to say, hey, this world's a lot  better place with a healthy Apple Computer in  

• 00:17:41 it. Okay, next. Market focus. Yeah, I can't  get anyone to tell me the definitive market  

• 00:17:50 share number for Apple, but it's around 7% from  all I can gather. And the question is, where is  

• 00:17:57 Apple relevant? Where is Apple still the dominant  player? Which market segments? And there are 2.

• 00:18:06 The 1st 1 I call creative content.  It's publishing, design, prepress,  

• 00:18:14 etc. It's creative professionals using computers.  And the interesting thing is Apple is still the  

• 00:18:21 dominant market leader for creative professionals.  By far. It's like 80% of the computers used in  

• 00:18:29 advertising and graphic arts, design, prepress  are all Macintoshes. And 64% is the best number  

• 00:18:38 I could find. 64% of all internet websites  are created using a Mac. It's amazing. But  

• 00:18:52 we haven't been doing a good enough job here.  As an example, there are something like 10 to  

• 00:18:58 15% of Mac sales which can be traced directly  back to people using Adobe Photoshop as their  

• 00:19:03 power app. Right? When was the last time you saw  Adobe and Apple co-marketing Photoshop? You know,  

• 00:19:09 when was the last time we went to Adobe and  said, how do we make a computer that will  

• 00:19:13 run Photoshop faster? These things haven't  been as cohesive as they should have been.  

• 00:19:18 And I think we're going to start proactively  focusing much more on how we do these things.

• 00:19:34 The 2nd market is, is 1 that's very close to  my heart. It's education. Uh, Apple put the 1st  

• 00:19:45 computers in education. Uh, Apple did it again  with the Macintosh. And uh, Apple is still, uh,  

• 00:19:52 the dominant leader in education. Now I'm going to  ask you a question. Who is the largest education  

• 00:19:59 company in the world? Who's the largest education  company in the world? Yeah. The answer is Apple.  

• 00:20:13 Apple is the single largest education supplier  in the world. Okay. Education... supplier to  

• 00:20:19 education in the world. Single largest  education company in the world. Now I've  

• 00:20:23 asked 100 people at Apple this, and only 2  have thought of Apple. It's incredible. The  

• 00:20:29 position Apple still has in education. 60% of  all computers in education are Apples. 64% of  

• 00:20:38 computers teachers use are Apples. It's a  2 to 2.5 billion dollar business for Apple  

• 00:20:44 every year. What an incredible foundation  to build off of. What an incredible legacy  

• 00:20:51 to build off of. And so you're going to see  Apple proactively focusing much more on these  

• 00:20:58 2 markets where it is very relevant. And both  of these markets are growing over 20% a year.  

• 00:21:06 Now Apple's share is shrinking in these markets  slowly, but I think you're going to see that  

• 00:21:10 stabilize and turn around. And you're going to  see Apple grow with these markets because it's  

• 00:21:16 going to do a much better job of focusing where  its relevance is and where its legacies lie.

• 00:21:27 Next. Core assets. As you know, Apple's  greatest core asset is you all. It's the  

• 00:21:35 group of 20 to 25 million active users that  believe that Apple products and Macintosh  

• 00:21:42 is still the best in the world. I don't  think we've been doing a good enough job,  

• 00:21:53 uh, taking care of you. Have you called the,  I mean, I've called the support lines myself.  

• 00:21:58 I've gotten very acquainted with the  hold signal. And uh, so I think we're  

• 00:22:03 going to see some changes there soon. And  I apologize for, for anything in the past.

• 00:22:14 But what I want to do right now is just get  a little more analytical. And I want to say,  

• 00:22:19 sort of from a, a more analytical standpoint,  what are Apple's core assets? And there's 2 of  

• 00:22:25 them that I've been able to uncover. The 1st 1  is the brand itself. And the 2nd is the Mac OS.

• 00:22:33 Now the brand. If you asked, you know, what  are the 5 greatest brands in the world?  

• 00:22:41 If you asked... went out and you asked  professionals this question. You know,  

• 00:22:45 I think Nike would be on everybody's  list. Coca-Cola would be on everybody's  

• 00:22:49 list. Disney would be on everybody's list.  And Apple would be on everybody's list. We  

• 00:22:56 have 1 of the world's greatest  brands, and we haven't paid much  

• 00:23:03 attention to it in the last several years. And I  think you're going to see that start to change.

• 00:23:07 And now I want to focus on the Mac  OS. The Mac OS is an incredibly core  

• 00:23:13 asset to Apple. And we've been walking  all over it. I mean, most people think  

• 00:23:20 that we're about to abandon the Mac OS. Most  people think that, you know, Macintosh OS 8,  

• 00:23:27 which we just released, was code-named Tempo  as you know, right? So we just released Tempo.  

• 00:23:32 Most people think our next release next year,  which is code-named Allegro, will come out,  

• 00:23:35 but then our next release will be Requiem.  And it's crazy. It's absolutely crazy.

• 00:23:44 The Mac OS is still the best thing in the world.  It is still the best thing in the world. There  

• 00:23:50 are over 20 million active users. The numbers are  a little closer to 25 million. There are 1000s of  

• 00:23:56 developers. And there's a 1.5 billion dollar  software industry built around this thing.  

• 00:24:00 This is 1 of the core assets of the company.  And we are going to invest a lot more in it  

• 00:24:07 because we think it is an incredible asset  and it has yet to really be fully exploited.

• 00:24:16 Apple is about the Mac OS. We're going  to be doing other things because we're  

• 00:24:21 creative people. But at the core, Apple  is about the Mac OS. And all of the,  

• 00:24:28 the fears that I've heard of people that  we're abandoning it are absolutely not true.

• 00:24:35 Our latest release, Mac OS 8. I've  got some really good news for you.  

• 00:24:39 We released this thing 2 weeks ago. And  we have already sold 1.2 million copies.

• 00:24:57 That's 4 times greater than what our  forecast was. So we're scrambling to  

• 00:25:01 ship everything. And if you, uh, if  it takes a little bit to get yours,  

• 00:25:03 please, uh, I apologize for that, but we are  scrambling. And this number is going up. I mean,  

• 00:25:07 there's it shows no sign of abating. So  things are going very well with, uh, OS 8.

• 00:25:14 Now, I'd like to talk about meaningful  partners. Apple lives in an ecosystem.  

• 00:25:22 And it needs help from other partners. It needs  to help other partners. And relationships that,  

• 00:25:33 uh, that are destructive don't help  anybody in this industry as it is today.  

• 00:25:45 very professional way. And this has led I  think to uh, an overall relationship that  

• 00:25:51 we're announcing today that's got several parts  to it, and we're extremely excited about it.

• 00:25:57 1st part of it is a patent settlement and  cross-license. Uh, the 2 companies have  

• 00:26:02 reached a full cross-license for all patents  uh, that exist and for patents that are filed  

• 00:26:07 within the next 5 years. And uh, it has been  a, uh, a very serious patent settlement.

• 00:26:14 The 2nd part of this is Microsoft is committing  

• 00:26:18 to release Microsoft Office on  Macintosh for the next 5 years.

• 00:26:29 They are, um, they are going  to release the same number of,  

• 00:26:32 of major releases as they release on  Windows during that time. Their 1st release,  

• 00:26:38 uh, is going to... they're going to target to have  it out uh, near the end of the year. It might slip  

• 00:26:41 a few months into next year, but they're working  real hard on it, and it looks very, very good.

• 00:26:47 Next, we have taken a look at  browsers out there and Apple  

• 00:26:59 has decided to make Internet Explorer  its default browser on the Macintosh.

• 00:27:08 Since we believe in choice, uh, since  we believe in choice, we're going to  

• 00:27:17 be shipping other internet browsers as well  on the Macintosh, and the user can of course  

• 00:27:22 change their default should they choose to.  But uh, we believe that Internet Explorer  

• 00:27:32 is a really good browser. And uh, we think  it's going to make a fine default browser.

• 00:27:39 Java. We are going to be collaborating with  Microsoft on Java, uh, to ensure that uh,  

• 00:27:45 we can get the best from each other and  ensure that there's compatibility between  

• 00:27:49 our virtual machines. And uh, we think that  uh, that will serve everybody's interests.

• 00:27:54 And lastly, Microsoft is making an investment  in Apple. Microsoft is buying 150 million  

• 00:28:01 dollars worth of Apple stock at market price.  It is non-voting shares. And they've agreed...

• 00:28:16 And they've agreed not to sell them for  at least 3 years. So what this means is,  

• 00:28:21 is that Microsoft is going to be part of the game  with us as we restore this company back to health,  

• 00:28:28 have a vested interest in that stock price  going up. We're going to be working together  

• 00:28:39 on Microsoft Office, on Internet Explorer, on  Java. And I think that uh, it's going to lead  

• 00:28:45 to a very healthy relationship. So it's a package  announcement today. We're very, very happy about  

• 00:29:24 Some of the most exciting work that I've done  in my career has been the work that I've done  

• 00:29:31 with Steve on the Macintosh. Uh,  whether it's the 1st introduction  

• 00:29:37 uh, or doing products like Mac Excel, uh,  these have been major milestones. And it's  

• 00:29:42 very exciting to renew our commitment uh, to the  Macintosh. We have over 8 million customers uh,  

• 00:29:49 using Microsoft software on the Macintosh. Um,  we make it very easy for people to use Macintosh  

• 00:29:56 uh, to take their uh, their documents  and work with all kinds of machines.

• 00:30:01 Uh, we're very excited about the new release  we're building. This is called Mac Office 98. Uh,  

• 00:30:08 we do expect to get it out by the end  of this year. And we've got some uh,  

• 00:30:13 some real exciting features. Uh, it's a product  that's going to require no setup. It's going  

• 00:30:18 to be an easy transition for people in the  past. Uh, and I think it's going to really uh,  

• 00:30:23 set a new benchmark for doing a good job with  performance and exploiting unique Mac features.  

• 00:30:29 Uh, in many ways it's more advanced than  what we've done on the Windows platform.

• 00:30:35 Uh, we're also excited about uh, Internet  Explorer. And we've got a, a very dedicated  

• 00:30:41 team that's down in California that works on that  product. Uh, and the code is really specially  

• 00:30:46 developed for the Macintosh. It's not just a port  of what we've done in the Windows environment. And  

• 00:30:52 so we're pleased to be uh, supporting Apple. Uh,  we think Apple makes a huge contribution to the  

• 00:30:59 computer industry. Um, we think it's going to be  a lot of fun helping out. And uh, we look forward  

• 00:31:05 to the feedback from all of you as, as we move  forward doing uh, more Macintosh software. Thanks.

• 00:31:25 Thank you, Bill. You know, where we  are right now is we're shepherding  

• 00:31:44 We have to embrace a notion that for Apple  to win, Apple has to do a really good job.  

• 00:31:50 And if others are going to help us, that's great.  Because we need all the help we can get. And if  

• 00:32:00 we screw up and we don't do a good job, it's  not somebody else's fault. It's our fault. So  

• 00:32:06 I think that's a very important perspective. I  think if we want Microsoft Office on the Mac, we  

• 00:32:13 better treat the company that puts it out with a  little bit of gratitude. We'd like their software.

• 00:32:19 So the era of setting this up as a competition  between Apple and Microsoft is over as far as  

• 00:32:30 I'm concerned. This is about getting Apple  healthy. And this is about Apple being able  

• 00:32:34 to make incredibly great contributions to the  industry to get healthy and prosper again.

• 00:32:49 The last perspective I'd like to  leave with you on this is, you know,  

• 00:32:53 sometimes points of view can really make you  look at things differently. When you hear  

• 00:32:57 a new point of view. Like for me, when  I was looking at the statistics and it  

• 00:33:03 hit me that Apple is the largest education  company in the world. That was like a bolt  

• 00:33:09 of lightning. That's huge. What an incredible  base to build off of. Another bolt of lightning  

• 00:33:15 is that Apple plus Microsoft equals  100% of the desktop computer market.

• 00:33:26 And so whatever Apple and Microsoft  agree to do, it's a standard. And I  

• 00:33:34 think that you'll be seeing us work with  Microsoft more because they're the only  

• 00:33:39 other player in the desktop industry. And  I think you'll be seeing Microsoft want to  

• 00:33:43 work with Apple more because Apple is the  only other player in the desktop industry.  

• 00:33:49 So I hope we have even more cooperation in the  future because the industry wants it. Lastly,  

• 00:33:58 I want to just talk a little about Apple and the  brand and what it means I think to a lot of us.

• 00:34:07 You know, I think you always had to be a little  different to buy an Apple computer. Uh, when we  

• 00:34:13 shipped the Apple 2, you had to think different  about computers. Computers were these things  

• 00:34:18 you saw in movies, they occupied giant rooms.  Uh, they weren't these things you had on your  

• 00:34:24 desktop. You had to think differently because  there wasn't any software at the beginning.  

• 00:34:30 You had to think differently when  a 1st computer arrived at a school  

• 00:34:35 where there had never been 1  before. And it was an Apple 2.

• 00:34:38 I think you had to think really differently when  you bought a Mac. It was a totally different  

• 00:34:43 computer, worked in a totally different way,  used a totally different part of your brain.  

• 00:34:47 And it opened up a computer world for a lot  of people who thought differently. You were  

• 00:34:52 buying a computer with an installed base of  1. You had to think differently to do that.  

• 00:34:58 And I think you still have to think differently  to buy an Apple computer. Uh, and I think the  

• 00:35:04 people that do buy them do think differently.  And they are the creative spirits in this world.

• 00:35:10 They are the people that are  not just out to get a job done,  

• 00:35:12 they're out to change the world. And  they're out to change the world using  

• 00:35:16 whatever great tools they can get. And  we make tools for those kinds of people.  

• 00:35:21 So hopefully what you've seen here today are some  beginning steps that give you some confidence that  

• 00:35:29 we too are going to think differently. And serve  the people that have been buying our products  

• 00:35:34 since the beginning. Because a lot of times  people think they're crazy. But in that craziness,  

• 00:35:41 we see genius. And those are the people  we're making tools for. Thank you very much.