Now why music?

Well we love music.

And it's always good to do something you love.

More importantly, music's a part of everyone's life.

Everyone.

Music's been around forever, it will always be around.

This is not a speculative market.

And because it's a part of everyone's life, it's a very large target market all around the world.

It knows no boundaries.

But interestingly enough, in this whole new digital music revolution,

there is no market leader.

There are small companies like Creative and Sonic Blue.

And then there's some large companies like Sony that haven't had a hit yet.

They haven't found the recipe, no one has really found the recipe yet...

For digital music.

And we think, not only can we find the recipe, but we think the Apple brand is going to be fantastic.

Because people trust the Apple brand to get their great digital electronics running.

So, let's look at portable music, let's look at the landscape.

The first thing if you want to listen to music portably, you go out and buy a CD player.

Right?

That's one way to go. About 10-15 songs.

Or you can buy flash player.

You can buy one of those.

You can buy an MP3 CD player.

Or you can buy a hard disk based jukebox player.

These are the four choices for portable music right now.

So let's take a look at each one of those.

A CD player costs about $75, holds about 10-15 songs on a CD, that's about $5 a song.

You can go buy a flash player, pay about double that about $150 holds the same 10-15 songs, for about $10 a song.

You can go buy an MP3 CD player and an MP3 CD, which you can burn on your computer, costs about $150 but holds

150 songs so you get down to $1 a song.

Or, you can go buy a hard drive jukebox player for about $300

it holds about 1,000 songs and costs about $0.30 a song.

So, we looked at this and studied all these, and that's where we want to be.

That is where we want to be.

And we are introducing a product today that takes us exactly there, and that product is called...

iPod.

iMac, iBook, iPod.

What is iPod?

iPod, is an MP3 music player, has CD quality music, and it plays all of the popular open formats of digital music:

MP3, MP3 VBR, WAV and AIFF.

But the biggest thing about iPod, is that it holds 1,000 songs.

Now this is a quantum leap, because for most people it's their ENTIRE MUSIC LIBRARY.

This is HUGE.

How many times have you gone on the road with a CD player and said,

"Oh God, I didn't bring the CD I wanted to listen to!"

To have your WHOLE, music library with you at all times is the quantum leap in listening to music.

The coolest thing about iPod, is that your entire music library fits in your pocket.

Okay?

You can take your whole music library right with you in your pocket.

Never before possible.

So that's iPod.

There are three major breakthroughs in iPod, let's take a look at each one of them.

The first one is, it's all for portable.

So if we're gonna keep 1,000 songs on iPod, and it fits in your pocket, how do we do this?

How do we possibly do this?

Well we start off with an ultra-thin hard drive.

We've got a 1.8 inch diameter hard drive, that's 0.2 inches thick.

SUPER thin.

And that hard drive, is 5 GB in capacity.

Five gigabytes, which holds 1,000 songs at 160K bit rate.

Which is a VERY high quality rate of MP3 compression.

VERY high quality.

A thousand songs on this 5 gigabyte drive, and we've built in 20 minute skip protection.

That's not 20 seconds! Twenty MINUTE, skip protection.

So you can take iPod bicycling, mountain climbing, jogging, you name it.

And you're not gonna skip a beat.

So, we've got this 5 GB drive that holds 1,000 songs.

How do we get the 1,000 songs ON to iPod?

We don't want to wait, so we've built in Firewire.

Now Apple as you know invented Firewire, we ship Firewire on every computer that we make.

It's built into iPod, it's the first and only music player with Firewire.

Why?

Because it's fast.

You can download an entire CD, into iPod in 5-10 seconds.

An ENTIRE CD.

So let's take a look at how it compares with USB.

Five-ten seconds for Firewire to load a CD.

On a USB player, you're talking 5 minutes.

Let's talk about 1,000 songs now.

On iPod with Firewire it is under 10 minutes.

On a USB player it is 5 hours.

Can you imagine that?

You get your USB player you want to load 1,000 songs you get to watch it for 5 hours while it loads the songs.

Under 10 minutes with iPod.

It's 30 times faster than any other MP3 player.

So, huge win.

Now, it doesn't matter how many songs you have with you, if your battery's dead right?

So we have built in and extraordinary battery into iPod.

Ten hours, of battery life.

And that is 10 hours of continuous music.

We're using a rechargeable lithium polymer battery, this is a more advanced battery than we even use in our portable

computers.

It's the most advanced battery we've ever shipped.

And you can recharge this 10 hour battery in one hour to 80% of its capacity on a fast charge.

One hour.

But maybe the coolest thing, is that you know Firewire, the Firewire cable that carries all the data from Mac to iPod?

The Firewire also has power on it.

And so, when you plug in to your Mac, it actually charges the iPod over that single Firewire cable.

So you don't have another charging cable to worry about.

It charges over Firewire, every time you plug into your Mac.

Now you might say, "Well what happens if I'm on the road

and I didn't bring my Macbook with me and my battery's running low? What do I do?"

Well, we got a really cool charger that ships as part of iPod too.

And this charger, has a Firewire port on it.

So you take your Firewire cable and plug it right into the charger and plug it right into the outlet, and charge iPod

where ever you happen to be, where there's an outlet.

So 10 hours of continuous music playback with a remarkable new battery technology.

Now you might be saying, "Well, this is cool, this is cool..."

"But, you know I got a big hard disk on my portable iBook, I'm running iTunes, I'm really happy,

I got Firewire on my iBook. I don't quite get 10 hours of battery life, but iBook's got better battery life than any other

consumer portable so, what's so special about iPod here?"

It's ultra portable.

And iBook is really portable, but this is...

Ultra portable.

[Laughter]

And let me show you what I mean.

iPod is the size...

of a deck of cards.

A deck of cards.

It is 2.4 inches wide, it is 4 inches tall...

And, it is barely 3/4 of an inch thick.

This is TINY!

It also, only weighs...

6.5 ounces.

That is lighter than most of the cell phones you have in your pockets right now.

So, this is what's so remarkable about iPod.

It is ultra portable.

We didn't stop there.

iPod has got Apple design.

We've got one of the best design teams in the world, and they have done a remarkable job

and let me show you.

This is what iPod looks from the side...

Again, about 3/4 of an inch thick.

I'm gonna show you the back first, cause I'm in love with it.

It's stainless steel, it's really, really durable, it's beautiful...

And this is what the front of it looks like...

Boom.

That's iPod.

I happen to have one right here in my pocket in fact!

[Laughter]

There it is, right there!

[Applause]

So, this amazing little device holds 1,000 songs.

And it goes right in my pocket.