Steve Jobs talk at the 1983 International Design Conference in Aspen

[Applause] morning introductions are really funny they paid me $60 so I wore a tie um how many people how many of you are 36 years older than 36 years old yeah all you were born pre-computer the computer's uh 36 years old and there's something sort of I think that that there's going to be a little slice in the timeline of history as we look back pretty meaningful slice right there um a lot of you are products of the television generation uh I'm pretty much a product of the television generation but to some extent starting to

be a product of the computer generation and the kids growing up now are definitely products of the computer generation and uh in their lifetimes the computer will become the predominant medium of communication just as the television took over from the r radio uh took over from even the book um boy I'll talk about anything you want to talk about today I have about 15 or 20 minutes of stuff that I I just wanted to cover really quickly and then whatever you want to talk about we can talk about how's that yeah how many of you

own an apple any or just any personal computer uhoh how many of you have used one or seen one anything like that good okay okay uh let's start off with what is a computer what is a computer it's really simple it's just a simple machine but it's a new type of machine uh the gears the Pistons have been replaced with electrons how many of you ever seen an electron that's the problem with computers is that you can't get your hands on the actual things that are moving around you can't see them and so they tend

to be very intimidating because in a very small space there's billions of electrons running around and we can't really get a hold on on exactly what they look like computers are very adaptive it's a very adaptive machine we can move the electrons around differently to different places depending upon the current state of affairs the results of the last time we move the electrons around so if you were here last night and you heard about the brain and how it's very adaptive a computer is in the same way very very adaptive second thing about a computer

it's very new it was invented 36 years ago in 1947 the world's first degree in computer science offered by a university which was University of California at Berkeley and it was a master's degree was offered in 1968 which means uh the oldest person that has a degree in computer science is 39 years old and the average age of professionals at Apple's under 30 so it's a field that's dominated by fairly young people third thing about computers they're really dumb they're exceptionally simple but they're really fast the raw instructions that we have to feed these little

microprocessors the even the raw instructions that we have to feed these giant cray1 supercomputers are the most trivial of instructions they're get some data from here get a number from here fetch a number add two numbers together test to see if it's bigger than zero go put it over there it's the most mundane thing you could ever imagine but the key thing about it is is that let's say I could move 100 times faster than than anyone in here in the blink of your eye I could run out there and I could grab a a

bouquet of fresh spring flowers or something and I could run back in here and I could snap my fingers and you'd all think I was a magician or something and yet I was basically doing a series of really simple instructions moving running out there grabbing some flowers running back snapping my fingers but I could just do them so fast that you would think that there was something magical going on it's exact same way with the computer it can go grab these numbers and add them together and throw over here at the rate of about a

million instructions per second and so we tend to think there's something magical going on when in reality there's just a series of these simple instructions now what we do is we take these very very simple instructions and we by building a collection of these things build a higher level instruction so instead of saying Turn Right Left Foot Right Foot Left Foot Right Foot extend hand grab flowers run back I can say could you go get some flowers could you pour a cup of coffee and we start we have started in the last 20 years to

deal with computers in higher and higher levels of abstraction but ultimately these levels of abstraction get translated down into these stupid instructions that run really fast let's look at the brief history of computers best way to understand it's probably an analogy uh take the electric motor the electric motor was first invented in the late 1800s and when it was first invented it was only possible to build a very very large one which meant that it could only be cost Justified for very large large applications and therefore electric motors did not proliferate very fast at all

but the next breakthrough was when somebody took one of these large electric motors and they ran a shaft through the middle of a factory and through a series of belts and pulleys brought shared this the horsepower of this one large electric motor on 15 or 20 medium-sized workstations thereby allowing one electric motor to be cost Justified on some mediums scale tasks and electric motors proliferated even further then but the real breakthrough was the invention of the fractional horsepower electric motor we could then bring the horsepower directly to where it was needed and cost Justified on

a totally individual application and I think there's about 55 or so fractional horsepower motors now in every household if we look at the development of computers we see a real parallel we look the first computer was called the eniac in 1947 it was developed particularly for ballistic uh military calculations it was giant hardly anyone got a chance to use it the real breakthrough the next real breakthrough was in the' 60s with the invention of what was called time sharing and what we did was we took one of these very large computers and we shared it

since it could execute so many instructions so quickly we'd run some on Fred's job over here and then we'd run some on Sally's job and we'd run some on Don's job and we'd run some on Susie's job and we'd share this thing and it was so fast that everyone would think they had the whole computer to themselves time sharing was what really started to proliferate computers in the 60s and most of you if you've used computer terminals connected with some umbilical cord to some large computer somewhere else that's time sharing that's what got computers on

college campuses in large numbers the reason Apple exists is because we stumbled on to fractional horsepower Computing five years before anybody else that's the reason we exist we took these microprocessor chips which is sort of a computer on a chip and we surrounded it with all the other stuff you need to interact with a computer we made a computer that was about 13 pounds and people would look at it and they'd say well where's the computer this is just the terminal we'd say no that is the computer and after about five minutes of repeating this

they' finally a light bulb would go on in their minds and they decide if they didn't like it they could throw it out the window or run over it with their car but that this was the entire computer that's why we exist fractional horsepower Computing this fractional horsepower Computing created a revolution it was invented in 1976 the first personal computer this year in 1983 the industry is going to ship over 3 million of the little buggers 3 million by 1986 we're going to ship more computers than automobiles in this country and let me digress for

a minute one of the reasons I'm here is because I need your help if you've looked at computers they look like garbage all the great product designers are off designing automobiles or they're off designing buildings but hardly any of them were designing computers and if we take a look um we're going to sell those 3 million computers this year we're going to sell those 10 million computers in ' 86 whether they look like a piece of or they look great it doesn't really matter because people are going to just suck this stuff up so fast

that they're going to do it no matter what it looks like and it doesn't cost any more money to make it look great there are going to be these objects this new object that's going to be in everyone's working environment and it's going to be in everyone's educational environment and it's going to be in everyone's home environment and we have a shot at putting a great object there or if we don't we're going to put one more piece of junk object there buy n you know by an 86 87 pick a year people are going

to be spending more time interacting with these machines than they do interacting with their big automobile machines today people are going to be spending two three hours a day sometimes interacting with these machines longer than they spend in a car and so the industrial design the software design and how people interact with these things certainly must be given the consideration that we give automobiles today if not a lot more and if you take a look what we've got is we've got a situation where most of the automobiles are not being designed in the United States

Europe Japan televisions audio Electronics watches cameras bicycles calculators you name it most of the objects of our life are not designed in America we've blown it we've blown it from an industrial point of view because we've lost the markets to the foreign competitors we've also blown it in a design point point of view and I think we have a chance focusing on this new Computing technology meeting people in the 80s the fact that computers in society out on a first date in the 80s we have a chance to make these things beautiful and we have

a chance to communicate something through the design of the the objects themselves in addition to that we're going to spend over $ hundred million in the next 12 months on media advertising Apple alone IBM will spend at least an equivalent amount and we generate tens of millions of dollars worth of brochures posters more than the Auto industry again as a comparison and this stuff can either be great or it can be lousy and we need help we really really need your help okay let's go back to this revolution what is happening what's happening is the

personal computer is a new medium of communication one of the media and so what's a medium it's a technology communication a book is a medium telephone radio television these are mediums of communication and each medium has pitfalls to it has shortcomings has boundaries which you can't cross but it also generally has some new unique opportunities the neat thing is that each medium shapes not only the communication that goes through it but it shapes the process of communication perfect example if you compare the telephone to what we're seeing now in electronic mail where we link a

bunch of computers together and we can send messages to an electronic mailbox which people can then receive at their Leisure we see that indeed in one sense we're sending Voice through these wires and in another sense we're sending ones and zeros through these wires so the content that's traveling through the medium is certainly different but the most interesting thing that's different is the process of communication when I talk on a telephone with anyone we both have to be on the phone at the same time when I'm working or when I want to send something to

somebody with a computer terminal I want to do a drawing and zip it over and put it in their mailbox they don't need to be there they can retrieve it at 12 a.m. in the morning they can retrieve it 3 days later they can be in New York and retrieve it one of these days when we have portable computers with radio links they can be walking around Aspen and retrieve it and so the process of communication itself changes as the mediums evolve so when I'm claiming is that computers are a medium and that personal computers

are a new and different medium from large computers what happens when a new medium enters the scene is that we tend to fall back into Old media habits and let's look at let's look at a few transitions from one medium to another radio to television television to this incredible new interactive medium of the video dis if you go back and you look at the first television shows they're basically radio shows with a television camera pointed at them and it took us the better part of the 50s to really understand how television was going to come

into its own as its own medium and I really think the first time that that a lot of people were shook into realizing the television had come of age was the JFK funeral the nation a lot of the world experienced the JFK funeral in their living room at a level of intensity that wouldn't have been possible with radio I think another more upbeat example was the Apollo Landing that experience was not possible with the previous medium and it took us the better part of 20 years for that one to really evolve let's look at the

next transition we have this Optical video disc which can store 55,000 images on a side or an hour of video randomly accessible what are we using it for movies we're dropping back into the old media habits and there's a few experiments though that are starting to happen and you start to believe that 5 years 10 years from now that's going to come into its own a neat experiment happened right here here in Aspen uh MIT came out to Aspen about four or five years I think about four years ago and they had this truck with

this camera on it and they went down every single Street photographed every single intersection in every single Street in Aspen they photographed all the buildings and they've got this computer and this video disc hooked up together and on the screen you see yourself looking down a street and you can touch the screen and there's some arrows on the screen and you can touch walk forward and all of a sudden this it's just like you're walking forward in the street and you get to an section and you can stop and you can look right and you

can look straight and you can look left and you can decide which way you want to go you can even go in some of the shops it's an electronic map that gives you the feeling you're walking through Aspen then there's four little buttons in the corner because they came back and they did exactly the same thing all four seasons so you can be looking down a street hit winter all of a sudden you get the same street with three feet of snow on it it's really amazing that's not incredibly useful but it points it points

to some of the interactive nature of this new medium which is just starting to break out from movies and is going to take another 5 to 10 years to evolve okay let's go back to computers we're in the I Love Lucy stage right now in our medium development what we did was micro computers personal computers first come on the scene what do we do we fall back into Old media habits we run these weird languages like cobal we do business accounting on them that's that's the kind of stuff we have been doing on them historically

it took us about four years before we started breaking out of that and we're just starting to break out of it now when you look at Lisa Lisa enables a person like me I'm not an artist in the sense that many of you are I can sit down and I can draw artistic pictures with that thing because there's a program called Lisa draw and if I don't like what I've just drawn I can erase it I can move it I can shrink it I can grow it I can change its texture there's a little airbrush

the more I scrub the darker it gets I can put soft edges on things hard edges on things and so I I have no Talent at drawing at all can make neat drawings and then I can cut them out and I can paste them into my documents so that I can combine pictures and words and then I can send it onto the electronic mailbox so somebody else that's living here in Aspen can dial up a phone number and get their mail and see this drawing that I made so we're starting to break out and you

can just see it now and it's really exciting so where we are is that the personal computer computer is a new medium and that society and computers are really meeting for the first time in the 80s in 15 years it's going to be all over in terms of this first phase getting these tools out into society in large numbers but during the next 15 years if we really we have an opportunity to do it great or to do it so so and uh what a lot of us at Apple are working on is trying to

do it great I want to look at one last thing then we can talk about whatever you want to talk about um what is a computer program do you know what a computer program is anybody no sort of sort of it's an odd thing it's really an odd thing it's it's you can't if I mean you've never seen an electron but computer programs have no physical manifestation at all they're simply ideas expressed on paper computer programs are archetypal what do I mean by that let's compare computer programming to television programming again if you go back

and you look at the tapes of the JFK funeral in 1963 I guess you'll start to cry you will feel a lot of the same feelings you felt when you were watching that 20 years ago why because through the art of Television programming we are very good at capturing a set of experiences and experience two experiences 20 experiences and being able to recreate them we're very good at that it takes a lot of money and it's somewhat limited but we can do a pretty good job of that you can really feel the excitement of Neil

Armstrong landing on the moon computer programming does something a little different what computer programming does is it captures the underlying principles of an experience the not the experience itself but the underlying principles of the experience and those principles can enable thousands of different experiences that all follow those laws if you will and the perfect example is the video game what is the video game do it follows the laws of gravity of angular momentum and it sets up this stupid little Pawn game but the ball always follows these laws no two Pawn games are ever the

same and yet every single Pawn game follows these underlying principles give you another example there's a neat program called Hammer Robi and Hammer Robi there's seven-year-old kids playing this and it's a game and you comes up on the screen he goes and you're King hamurabi goes oh king hamurabi and you get to be king hamurabi of the ancient Kingdom of Sumeria for 10 years comes oh King hamurabi this is year one you have a thousand bushels of weed and storage you have 100 people and you have 100 acres of land land is trading at 24

bushels an acre would you like to sell any land no would you like to buy any land no how much would you like to plant or feed how much would you like to plant and it turns out that if you don't plant enough some of your people will starve the next year and if you plant a lot then people will come from the surrounding Villages because you got a hot Village to live in and you feed them well so you plant you plant a certain amount but you need a then it says um how much

oh I'm sorry so you feed your people a certain amount then it asks you how much would you like to plant and you have to plant so much as well in order to get the grain the next year but you can't plant more Acres then you have people to plant the acres and so if you go on a land buying spree at the beginning and you don't feed your your people well because you spend all your grain buying land then you don't have the people to plant the land so it doesn't do any good if

you don't plant the land and you feed your people a ton all these other people come from the surrounding Villages but they starve the next year and there are these seven-year-old and it goes on year two year three and every once in a while it throws in the rats ate some of the Grain and you're in deep trouble what are you going to do kill some people or sell some land or whatever and it's crude but basically there are these seven-year-old kids playing with this macroeconomic model and you can argue about the the content of

the model but one thing you can't argue about they will sit there for hours and play that and learn and we've got to get our models better and better and more sophisticated but that is an interactive way of learning that none of us ever had when we were growing up and again thousands of individual experiences but all based on that one set of underlying principles when I was um going to school I um had a few great teachers and a lot of mediocre teachers and the thing that that probably kept me out of jail was

books because I could go read what Aristotle wrote or what Plato wrote uh and uh I didn't have to have an intermediary in the way and a book was a phenomenal thing it got right from the source to the destination without anything in the middle the problem was you can't ask Aristotle a question and I think as we look towards the next 50 to 100 years if we really can come up with these machines that can capture an underlying Spirit or an underlying set of principles or an underlying way of looking at the world then

when the next Aristotle comes around maybe if he carries around one of these machines with him his whole life his or her whole life and types in all this stuff then maybe someday after the person's dead and gone we can ask this machine hey what what would aerostyle have said what about this and maybe we won't get the right answer but maybe we will and that's really exciting to me and that's one of the reasons I'm doing what I'm doing so what do you want to talk [Applause] about yeah yeah it's a mess okay okay

how are these computers all going to work together um they're going to probably work together a lot like people sometimes they're going to work together really well and other times they're not going to work together so well what we've got now is we are putting a lot of computers out that are made to be used pretty much in a what we call a standalone mode one person one computer but it isn't very long before you get a community of users using these things that really want to hook them all together because ultimately a computer is

going to be a tool for communication so they want to hook them together and communicate and over the next five years the standards for doing this are going to evolve they all speak different languages right now and uh there's oh man I heard a funny story We we've talked a lot with AT&T um American Bell Etc and there's a a funny story um about the this is a true story when the old I talked to this old guy who was about 80 years old and he was one of the original telephone installers and he would

go out and he'd install telephones in people in farmh houses and they had never seen anything like this and uh it takes two wires he'd run the two wires down and and he'd hook up the phone and he was out installing this phone uh for this Italian family in this farm and he finished installing the phone and the guy asked him well can I speak Italian on this phone and he said why didn't you tell me I got to run a third wire it'll be $50 extra so that's where we are today and what happened

there's been a few installations where people have hooked these things together together the one installation that stands out is is a Xerox did at a place called palala Research Center or park for short and they hooked about 100 100 computers together on a what's called a local area network which is just a cable that carries all this information back and forth and an interesting thing happened when they did that what happened was was that you'd have a distribution list so you'd want to send a memo to all the people in this group and so you'd

say Okay you'd write a memo and you'd send it to the distribution list for all the people interested in the November 4 or a new product Delta or whatever you're working on but then an interesting thing happened uh there were 20 people and they were interested in volleyball so a volleyball distribution list evolved and when there was a the volleyball game next week was changed you'd write a quick memo and send it to the volleyball distribution list then there was a Chinese food cooking list and before long there were more lists than people and it

was a very very interesting phenomenon because I think that that's exactly what's going to happen is that as we start to tie these things together they're going to facilitate communication and facilitate bringing people together in the special interests that they have we're we're about five years away from really solving the problems of hooking these computers together in the office and we're about 10 to 15 years away of solving the problems of hooking them together in the home uh and a lot of people working on it but it's a pretty Fierce problem now Apple strategy is

really simple what we want to do is we want to put an incredibly great computer in a book that you can carry around with you that you can learn how to use in 20 minutes that's what we want to do we want to do it this decade and we really want to do it with a radio link in it so you don't have to hook up to anything you're in communication with all these larger databases and other computers we don't know how to do that now it's impossible technically so we had three options one was

to do nothing and as I mentioned we're all pretty young and impatient so that was not a good option the second one was to put a piece of garbage computer in a book and we can do that but our competitors are doing that and so we don't need to do that the the third option was to design the computer that we want to put into the book eventually even though we can't put it into the book now and right now it fits in a bread box and it's $10,000 and it's called Lisa and it just

so turns out that fortunately there is a giant office Market out there that is buying these things a lot faster than we can make them we're sold out for the next year and we'll sell over $ hundred million of those things the first year so fortunately there is an office marketplace where enhancing personal productivity is absolutely worth $10,000 a person and they're gobbling these things up and they will pay for the development of this new technology the next thing we will do is we will find a way to put it in a in a shoe

box and sell it for like $2,500 and that'll be the next step and finally we'll find a way to get it in a book and sell it for under $1,000 and we will be there within five to seven years and that's what we're working pretty singularly on yeah yeah it is a little crude right okay uh let me tell you that what we're planning to do to sort of be able to provide tools for graphic design that'll never be our Fort um our Fort is going to be PE just people and relative to nothing what

we can give them in the next 5 years is a lot and eventually we'll get to the point where people can create um images that are as good as they could create any other way but it's going to take the better part of this decade to be able to get it down to a price level that people can afford but we're doing some things now every computer to date has used a weird type on the screen as you known the eyes are just as wide as the W's they're nonproportionally spaced fonts we call them you

call them and um it's really been impossible POs to use multiple fonts on the screen at any given time matter of fact the fonts have been just garbage and it's really been impossible to embed any kind of graphics with text if you take a look at Lisa it is totally proportionally spaced text we have 30 40 fonts on the screen that come out at approximately 80 dots per in inch resolution on the screen approximately up to 300 dots per in inch resolution on a laser printer and that's where we are today and what you're saying

is we really want to go to Six s 800 dots per inch on a laser film printer we're not there yet but we're solving the problems of injecting some liberal arts into these computers that's what we're trying to do right now let's get proportionally spaced fonts in there let's get multiple fonts in there let's get Graphics in there so that we can deal in pictures and let's get to the point where three years from now when somebody there is going to be no college student three or four years from now that's ever going to think

of writing a paper without one of these things just like they will not think of going to a science class without a calculator today and where we've got to get to is where people 3 four years from now are using these things they go wasn't this the way it always was that's where we're trying to get to now once we get to there then we can look at some of the other stuff yeah yeah I only heard part of which part you're talking about the people having these big databases about your life orac the Privacy

issue okay um I guess what I see now is um an incredible amount of information but not a very great ability to distill any sort of knowledge or wisdom out of that information we are all bombarded with information every day and there is so much information in data banks um in Congressional budgets in testimony uh in books Journal articles being published every day and our ability to turn all that information to filter it to what we're interested in and to turn it into something useful to us into some knowledge is very low so I think

if we're really interested in a distributed um Society where the ability to understand things and the ability to distill information Knowledge from information is possess by everyone that the first thing we've got to do is give tools to people to help them do that because right now those tools are centralized do you see what I'm saying so I think the first step towards ensuring that uh we don't get a concentration of something something that you don't want is to distribute that intelligence if you will that can turn all this this information into some sort of

knowledge for us so that we can get on and we can look at Congressional any Congressional testimony that has to do with gun control any Journal articles published any newspaper articles published so that I can come home and on a weekend peruse the weekly outpouring of information but put a filter on it because I'm only interested in gun control and I can find out that my congressman gave some testimony last week about gun control that I didn't agree with so I can get on and write a pretty nasty letter and Zing it on the email

system and make sure that at least one of his AIDS will read it tomorrow and I think that that probably is a lot more important than worrying about these Global databases um I don't I don't think that you're going to find um we're moving rapidly into an era of electronic funds transfer and I think that's probably the thing that people are most concerned about right now because you could keep a history of our whereabouts and things like that just based on financial transactions and I think that's the thing people are most concerned about right now

but I haven't heard a ton of issues concerning um these giant databases knowing everything about us that had much substance to them the thing I'm most concerned with is the ability to turn all this stuff into something we can do something about does that make any sense I didn't get my sleep last night so I'm a little fzy yeah mention en what is computer doing in this area as a public service ah Public Service um we we don't do things because we think they're Public Services we do them because we think they ought to be

done I guess we do them because we we want to do them um we're doing a few things the first thing we're doing uh is there's a situation that's occurring in schools right now in that this all started a governor the former Governor of California Governor Brown started this thing called the California Commission on Industrial innovation in 1980 it turns out you know we're a um we'll do about a billion dollars this year and we have a business plan that looks out five years it's not always accurate but it shows us the trends shows us

the general directions shows us some of the pitfalls California is um oh 22 I think $300 billion economy G&P basically is associated with California and uh California doesn't have anything there isn't one scrap of paper there didn't used to be one scrap of paper written down so Governor Brian got all these people together and said we we got to figure out where we're going because we don't want to have a planned economy but we need the infrastructure to support it and infrastructure takes time to build so we have to at least understand the trends if

you want to be turning out more Engineers next year you can't start this year you have to have started five years ago you have to train the teachers etc etc so what infrastructure we going to need to support the growth well the first thing we looked at was employment jobs and what we found was that about 44% of the new jobs in California in the 1980s come directly and indirectly from high technology and we looked at that and we said and what are we going to do to further that and what's going to hinder that

and we there were three things that came up but the biggest one was education by a long shot we looked at the education systems and we are turning out almost as many welders in California as we are computer scientists and these welders are coming out of school and there ain't any jobs for them and this is just a a minute example of the problem and so one of the things that Apple decided to do this is this is not going to make a giant difference but it could be a catalyst to get something started is

we decided we wanted to give a computer to every school in America and there's 100,000 schools in America and we figured if there was just one there at least the kids that were interested would somehow find a way to get to it and possibly they would start to understand a little bit about what computers were maybe integrate them into one or two classes um and so we figured that that would cost uh approximately $50 million and we'd go broke so we went to Congress and we said look we'll pay 10 of this if you pay

40 of it that's 10 right out of our bank account and just to give you a perspective on it uh in 1981 Apple made $40 million total after working our butts off for a year and so we were willing to spend 25% of our 81 profits to do that and uh we got very close to getting this passed but but Bob Dole in the Senate killed it because he didn't really understand it but California being the Bell weather state it was pass the same law because we pay California tax and so we call the program

the kids can't wait the kids can't wait for educational bureaucracy to get around to it the kids can't wait for their parents to understand about it buy them one so we're just going to get one in there right now and we are uh the law got passed in California we've got there are 10,000 schools in California the program was announced UH 60 days ago and starting next month we roll out 10,000 computers one free to every school in California and and I guess the important thing though to restate this isn't going to fundamentally change the

problem but at least it's going to get one computer in there so that if there is a student especially in one of the schools that can't afford these things which is another thing that concerns us this computer have computer have not split at least they'll get exposure to one so yeah constantly told by 2 85% of will be the information bu how do you feel oh um well over half of the gross national product is contributed by companies and people that are already in the information business today and that's true um most of the people

that got laid off from General Motors are never going to go back to work at General Motors ever ever ever and unless we retrain them and give them skills they're going to burn the cities down and that's one of the biggest problems facing us right now it's real easy to talk high-tech it's real hard to take all these guys that have been putting fenders on for 15 years you know servicing computers it's going to be really really hard and we're not paying enough attention to it right now but we're already in the information age we're

ready there now most of us manipulate information for a living yeah right that's right here's a challenge for you want to just make a great contribution have fun make zillions of dollars all at the same time um there is there are about 20,000 programs for the Apple 2 there's for the IBM PC which is the second most popular one now there's about maybe 2,000 programs that's a lot and you go to buy one of these things and you don't know what to buy so you go ask the computer dealer which one should I buy and

that person doesn't know they're out selling computers they're not looking at software and so they give you a answer and you buy it and maybe you're happy and maybe you're not now compare that to records most people walking into a record store know exactly what record they want to buy they don't go up and say what record should I buy they know exactly what record they want to buy because there is the phenomenon of the radio station a free samp l so that we make our decisions before we go in to the distribution center for

the records we need the equivalent in the software business we need a software radio station P quote unquote and what's going to happen is is that I think right now we software is information and the information is expressed with a bunch of ones and zeros and what we do now is we take those ones and zeros and we encode them magnetically on this piece of myar with a bunch of G on the surface of it that REM MERS the ones and zeros we take it we put it in a package with a manual we take

that we put it on a truck we ship it to a dealer they take it out of the truck they put it on the Shelf it sits there for a while costing the money a customer comes in peruses them and picks one out takes it home shoves it in their computer and it translates it back to electrical impulses of ones and zeros now I mean that's a pretty long path where we'll be going is transmitting this stuff electronically over the phone lines to where when you want to buy a piece of software we take our

ones and zeros and you never you ever push a touch tone phone in your right we'll send tones over the phone that the computers will understand and go directly from computer to computer that's what we'll be doing once we do that maybe it's possible to say well we'll give you 30 seconds of this program for free or we'll give you five screenshots we'll let you play with it for a day and if you want to buy it just type in your Visa number and you got it I don't know how we're going to do it

but we need a radio station yeah right okay um there are two things to do to get people and computers together one thing is to make computers easier to use and the other thing is for people to get more and more familiar with the concepts um how many people here own a hulet packer calculator yeah not a lot how many people know about them right do you know the difference between reverse polish notation and the way the ti ones work how the hp1 sort of work backwards right do you know about that no some of

you do though right probably maybe a quarter of you maybe um if you had like tried to explain that to somebody 10 years ago it would have been just like computers are now and yet in 10 years um you know the hp35 was first introduced in 1972 uh in 10 years people gradually understand some of these Concepts if you'd given one of these Casio watches which he got 18 alarms and plays music for you and everything else to somebody 10 years ago and tried to explain to him how to set the alarm and stuff like

that uh it wouldn't have been possible automatic banking machines etc etc so gradually the the the level of technical literacy is rising the problem is we're educating people on these garbage devices you know setting a CIO watch is really a a pain still so even though we have products like Lisa we are still going to need to educate people about what computers are and what they do but where we're trying to get is we're trying to get away from programming we've got to get away from programming because people don't want to program computers people want

to use computers and so our strategy right now is let's write some programs that are generic that sort of will write 90% of the program and you fill in the last 10% of the blanks a perfect example of that's a word processor word processor can be used to write a business letter a report for a college exam it can be used to write a correspondence letter to your friend same word processor uh we write it once millions of people use it uh another program you know there's a lot of database programs there's some spreadsheet modeling

programs where we do 90% of the work you do the other 10 where we're moving in the future though is programming with Graphics connecting the dots if you will and uh that's what you'll be seeing more of over the next five years what's really exciting though let me give you a little um some of the finest people are going into software right now and matter of fact about a year ago I met this little kid in in um Chicago who had started this company called Aristotle software and he was 13 and he started it with

his more mature 14-year-old friend and a year ago they were making about $44,000 a week off selling three game programs now let me give you an example how this can work we have a million Apple twos out there a million and people have paid about $22,000 for them so if they can buy a new program one of these new diset for $100 that lets their computer do something totally new that it never could do before that's a good deal so let's say uh let's say your uh your girlfriend is in the real estate business right

you know a little about computers and uh she comes home and she's filling out all these crazy forms and going through all these calculations trying to do some creative financing well I could write a program for that and you write a program that's not that hard to use and over the next few months you goes well can it do this oh sure that's easy can it do this no that's hard you refine this program to where it's really great and all of a sudden she shows it to all the other people she works with she

brings it into the office or she brings them over one day and they go they just go wow I got to have this this is worth $2,000 to me right there just for that one application okay let's say that you put that program on the market and sell it for $100 well the dealer is going to take $50 of it so you'll see $50 per copy and let's say it cost $25 to make it you're going to make $25 profit per copy if you sell that to just 10% of the Apple 2 owners the first

year not including any new Apple 2 owners because we're shipping almost a million computers a year so it'll double the next year but forget about that even the previous owners of a million you'll sell 100,000 copies times $25 profit per copy or $25 million do profit the first year selling to just 10% of the people and you can write that program with under $10,000 worth of computer equipment that's what's happening that's why they're Aristotle softwares and um and so you're seeing a flurry of activity there right now yeah how did you manage to particularly the

ones were there origin okay um the actual turnover at Apple has been very very low since Inception it's been under 5% since Inception actually um okay we do it in a few ways first thing we do is what's happening is the definition of an American corporation's evolving and it's evolving in a almost semi socialistic Dimension which is very interesting 100% of the professionals at Apple own stock in the company 100% everybody owns stock in the company and uh what that means is these traditional barriers I've never heard the word labor or management mentioned at Apple

ever ever in my life we have no unions or anything people say God the electronics Industry doesn't unions and and that's true in one way but in the other way we've got like one of the best unions of everybody going towards the same exact goals and objectives that I've ever seen in my life it's on sort of an economic scale for sure because it's in everybody's best interest to see the stock go up but more importantly we feel that for some crazy reason we're in the right place at the right time to put something back

and what I mean by that is um is is most of us didn't make the clothes we're wearing and we didn't um cook or grow the food that we eat and we speaking a language that was developed by other people we use a mathematics that was developed by other people we you're constantly taking and the ability to put something back into that pool of Human Experience is is extremely neat and I think that that everyone knows that in the next 10 years that's we have the chance to really do that and we can look back

or while we're doing it it's pretty fun too but I mean we can look back and say God we were a part of that and so everyone is working 18 hours a day right now now on the people side we believe in the phenomenon of great people and what I mean by that is we think there are people that are so good that they can run circles around five pretty good people okay and those are the kind of people that we want at Apple they're hard to to I mean they're all idiosyncratic but they're the

fun people of the world they're the artists of the world and so what we have is sort of a a very small company in terms of people for our Revenue we are going to cross a billion in sales very shortly with under 5,000 people worldwide and that that's phenomenal and um I think our our feeling has been that what we want to do is keep the number of people down so that we can spend time with think you started two or three people right years 5,000 assume a lot of manufacturing people no not very many

are under 2,000 are how did you grow that fast and man that people they were all buddy Budd yeah we do a few things um we right it's exactly right the first thing we do is we've always tried to hire people that were much better than we needed for the current job because within six months they'd be fighting to keep up with it second thing though is we've always tried to hire people the reason we hire people is to tell us what to do and so at Apple when you get hired some people survive and

some don't but in general it's hey this is the general thing we think we need done go figure out what we need come back and tell us and tell us how much it's going to cost and go do it and so we've got an incredible group of entrepreneurs and we're always arguing with each other and things like that but that's just fine and so the 5,000 people we've got most of those people are very independent thinkers and what they really want is they know what to do what they want is the environment where they don't

have to convince 30 other people that it's the right thing to do does that make any sense and and it's harder as we get older um it's harder to spend time with everyone and to pull everyone together but but we really make an attempt to do that and I guess our feeling is is that the day that somebody working in apple decides that they can't make a difference anymore is the day we've lost you know and we have the standard stuff I mean anyone can come see myself or John scolly or anyone else anytime they

want I mean it might take a day or two to schedule it but uh we've got people at all levels floating around the you know coming to see us the other thing we we've observed of course is that the oldest and largest organization in the world has only four layers of management that's a Catholic church and uh five if you count the highest order I suppose but and so we see no reason why we need over four layers of management and indeed we have usually about three that's you know the president we maybe have a

division manager and then maybe under that a marketing or engineering manager and that's really about it so that's what we're trying to do yeah well what's really interesting is that people a lot of times um I mean what's been we have good people and and what they've been able to do over the last 5 years is is pretty awesome but what's even neater is that what we can do in the next five years I mean we we are going to we're in a position now where we're selling a billion dollars of stuff a year and

where we've got one of the most recognized consumer brand names in the country and so if we get it together we can turn out these incredibly great products with incredibly great advertising with incredibly great software and um and so what we want to do is just get great people to come help us do that because that's a pretty giant thing to try to do but that's what we're going for we started with nothing so whenever you start with nothing you always can shoot for the moon you have nothing to lose and the thing that happens

is when you when you when you sort of get something it's very easy to go into cover your ass mode and then you become conservative and vote for Ronnie so what we're trying to do is is to realize the um the very amazing time that we're in and not go into into that mode and I think Lisa is a reflection of that I mean we gambled the company on Lisa if Lisa had bombed Apple would be just one more computer company and we gambled everything on that we had no backup to it everything went into

that for three and a half years the best and the brightest at Apple worked on on this product now how come they came to Apple work on this we hired these people from other companies and the reason they came to Apple was because they knew what to do but the companies they were working for wouldn't take the risk and do it and we said come to Apple and build this and they said well who do I have to convince to do that nobody just go do it and we got a collection of the I think

some of the finest computer scientists in the world that just went and did it and that's why I go to work in the morning is to hang around these type of people they're fun they playing punk rock bands on the weekends and all sorts of stuff computer people aren't you read all this computer nerd stuff it's not really true anymore they're they're really a lot closer to artists than they are to to anything else they come in to work at about I don't know anytime they want but usually about 11:00 in the morning 12: in

the morning play few rounds of ping pong work really hard they work really hard but they'll work and generally about 4 we go out and maybe play you know a game of volleyball somewhere or something like that and then in the evening we work and then they'll have dinner we'll go out to Japanese restaurant for dinner something come back and they'll work till about 2:00 or 3: in the morning and they go home and wake up at 11: the next morning com to work yeah yeah you sure why not how we be tied those SK

us actual that for those us who invested thousands already uh oh can you teach skiing um voice recognition is about it's going to be the better part of the decade away we can do toy voice recognition now the problem is it just isn't it isn't just recognizing the voice when you talk to somebody it's in understanding language is much harder than understanding voice we can sort of sort out the words but what do they all mean and and most language is exceptionally contextually driven other words one word means something in this context it means something

entirely different in another context and when you're talking to somebody people interact it's not a one-way communication it's going yep yep yep yep or and and they they gracefully interact they go in and out of levels of detail and boy this stuff's hard so I think you're really looking at uh the better part of a decade before we we get close even close to that I I don't know how much time we have I think I'm about to get thank you very much I've enjoyed it great [Applause]