Jobs, Now Permanent CEO, Stresses 'Net

Other than citing solid systems sales figures for the fourth quarter of 1999, hardware got short shrift from Steve Jobs, Apple's now-permanent CEO, as he instead opened the Macworld Expo here today by detailing the company's new Internet focus.

In a typically upbeat, applause-gathering keynote, Jobs also provided details about the rollout of Mac OS X (the Mac OS version 10) and an announcement that the company will be partnering with Internet service provider EarthLink Network.

Jobs concluded his two-hour plus presentation with the news that he is no longer the interim CEO, although he said he would like to call himself the iCEO as a reminder of the importance of the Internet.

Indeed, Jobs referred to Apple as an Internet company in his talk to an audience of cheering Appleenthusiasts, and reeled off a list of online-based services as well as unveiling the MacOS 10, with a shiny new user interface called Aqua.

Apple sold 1.35 million Macs last quarter - more Macs in one quarter than any quarter in Apple's entirehistory, noted Jobs. Complete financial numbers will not be revealed until after close of market today. However, according to Jobs, Apple iBook portable sales are also doing extremely well, andcurrently have an 11 percent marketshare in the U.S.

Among the more interesting numbers cited were the number of "Wintel switchers," as Jobs called them,users who left the Windows PC/Intel platform to use Apple products. According to Apple figures, 17percent of all iMac sales came from former Wintel users, while 14 percent of all iBook sales came from the same customer base.

Mac OS X is in its first beta, said Jobs, and will go into second beta in the spring and ship as an upgrade this summer. Apple systems shipping with the new OS will be available in January 2001.

After practically treating hardware with the back of his hand, citing only a new scanner from Canon and a new USB-based microscope as interesting peripherals, Jobs spent most of the two-hour, 10-minutepresentation on new online services.

"Now is the time to move beyond just the box. Today I am going to talk about extending things, and unveil our Internet strategy," said Jobs.

The Internet strategy appears centered around additional services, but Jobs did not offer a big picture of what the strategy is trying to accomplish; perhaps assuming that the audience understood that the company needs to make money from more than just hardware sales.

It also appears that Apple intends to leverage ownership of Apple's latest products as the only way to gain access to new features, and to differentiate itself from the competition.

Only users of Mac OS 9.0 and above will be able to use the new services, for instance.

"We own the client OS. We can take unfair advantage of owning the client OS.

We can create a new class of Internet services called iTools, created exclusively for Mac users," Jobs told the audience.

At its Apple.com Web site the company will add a tab bar on top of the site with iTools as well as two other additional services: iReview, and iCards.

The iTools service is three separate services.

The iDisk service appeared to meet with the loudest audience approval. Idisk will give users 20M bytes of free storage on Apple's network. Once installed, users can create folders and place text, graphics, and video inside the folders. Users will also be allowed to have a "public folder" with which to share files with other users.

Jobs cited the benefits of working at home, saving a file to a folder on the network, and then picking upwhere a user left off when he or she arrives at work. Sharing files via public folders can also be used among co-workers or in the classroom said Jobs.

However, Jobs did not say what would happen if a user wanted more than the 20M bytes of free storage.

The other two iTools services include KidSafe and Mac.com for email. Mac.com is a free email client for Mac users.

KidSafe is an Internet monitoring tool. Apple will certify, using teachers and librarians, said Jobs, sites that are not objectionable for use by children.

Once KidSafe is installed if a child tries to go to an uncertified site they will be unable to gain access. However, Jobs did not spell out for the audience -- other than to mention sexually oriented sites -- what makes a site inaccessible.

Other new tabs at apple.com are iReview, which will offer reviews of Web sites that are user-based as well as by Apple, and iCards, an Internet-based greeting-card creation service.

A fourth service is HomePage, a personal Web site for users hosted by Apple.

Finally, Apple will partner with EarthLink, an ISP with 3.5 million subscribers. EarthLink will become thedefault ISP when the next version of the OS ships and, according to Jobs, Apple will profit by getting apiece of every new ISP subscription from an Apple user.

As part of the partnership, Apple is investing $200 million in EarthLink. Jobs did not say what percentage of equity in EarthLink that amount of money buys Apple.

However, Apple's $12.5 million investment in Akamai, a company that facilitates Internet video streaming turned a $1 billion profit when that company went public.

"We made more profits off video streaming than any other company in the world," Jobs joked.

At the end of his talk, Jobs once again referred to Apple as an Internet company rather than a hardwaremanufacturer. "We believe Apple will be one of the ten most profitable Internet companies in the next ten years," said Jobs.

Apple Computer Inc., in Cupertino, Calif., is at www.apple.com .

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