Steve Jobs on the Future of Computing: D5 with Bill Gates

Today I invited three specialists from our industry to have a panel discussion on software. And now, ladies and gentlemen, the love for Macintosh at first sight. Welcome to the game Love for Macintosh at first sight. Programming developers, could you please introduce yourselves? Hi, I'm Fred Gibbons from Software Publishing Corporation. Hi, I'm Mitch Kaepler from Lotus. We make a product called 1-2-3.

Hi, I'm Bill Gates from Microsoft. And in 1984 Microsoft expects to take half of its revenue from selling software to Macintosh. Hi, I'm Bill Gates from Microsoft. And in 1984 Microsoft expects to take half of its revenue from selling software to Macintosh. Hi, I'm Bill Gates from Microsoft. So, software magnate number three, when was your first meeting with Macintosh? We've been working with Mac for almost two years now.

And this is what our best specialists do. Programming developer number three, will Macintosh become the third standard in the industry? Well, to create a new standard, it takes something not just a little bit different. It takes something completely new that will really amaze people's imagination. And Macintosh is the only machine I've ever seen that meets that standard. So, programming developer number three, describe your ideal relationship with Apple. Well, we're going to sell our software separately. So, that means that Apple is going to be able to get a whole set of machines very quickly. Steve, I'm sorry, but time's up. Let's give Steve a minute to decide who the winner is.

So, Steve, who's the winner? Apple is red. IBM is blue. And to make Macintosh the third standard in the industry, I need you all. Apple is the third standard in the industry. IBM is blue. IBM is red. IBM is blue. IBM is red.

IBM is blue. IBM is red. IBM is blue. IBM is red. Now, I'd like to talk about important partners. Apple lives in an ecosystem. And it needs the help of its partners and it has to help its partners. And relationships that are destructive in nature are not helping anyone in the industry today. So, during the last couple of weeks, we've looked at our partnerships and one of them stood out.

It hasn't been going so well, but I think it has the potential to benefit both companies. The discussion from the very beginning was based on some patent disputes. And instead of... Yeah, I know. And instead of repeating the story, I'm extremely proud to say that both companies have been able to solve this problem in a very professional way. And I have a special guest for you today, who's got a live downlink. And let's try to get him on the screen right now. Thank you.

Some of the most... One of the most interesting projects that I've ever done in my life was a joint work with Steve on a Macintosh computer. When we were doing the first introduction to the computer and the first introduction to the Mac XL, it was one of the most important steps in my career. We're looking forward to the release of the new product that we're developing. I think it's going to be released at the end of 2018. And I think it's going to be a product that sets new standards in terms of performance and it's going to be based on Mac's unique features. And in a way, it's even more advanced than the product that we did on Windows. We're also expecting a lot from Internet Explorer.

We have a special team in California that's working on the development of this product. And the code for this program was specifically developed for the Mac. It's not just a port of the version that we did for the Windows environment. We're looking forward to hearing from you about our product. And at the same time, we're continuing to develop software for Mac. Thank you. As far as I can tell, the era when Apple was called a competitor to Microsoft is over. Now our task is to help Apple recover, give it the opportunity to make a huge contribution to industry development and to become a healthy and thriving company again. Thank you all for coming. I look forward to our conversation today.

And I'm sure it's going to be very interesting. Thank you. Is this okay? Well, thank you.

Before we get started, I'd like to say hello to the pioneers of the industry who are in the audience. Of course, we have the main pioneers sitting here in front of us now. But we also have some outstanding people with us today that you've already seen a couple of times in the audience. So, Mitch Capor, who is our regular guest, if you could just stand up and show yourself. Wherever you are. There he is. And Fred Gibbons, who is also here with us tonight. Fred, where are you? There he is. There he is. And I don't know if he's here today, but I'd like to introduce our colleague, Brent Schlinder, from the Fortune magazine, who did the last joint interview with us. And I'd like to say a few words about him.

Brent Schlinder, our colleague, Brent Schlinder, from the last joint interview with Bill and Steve. It happened not on the stage, but on the page of the Fortune magazine. Brent, if you're in the audience, please stand up and show yourself. There you are. There you are. So, let's start. We know that in the press and blogs, there's been a lot of gnawing on that catfight kind of thing. And we want our first question to be that. And we wanted to, first off, what do you think each of you contributed to the development of the computer and technology industry? Let's start with you, Steve, for Bill, and vice versa.

Well, you know, Bill started the first software development company. And, I think he was the first one to do that when they didn't even know what kind of company it was, except for themselves. And that was very important. Very important. And the business model that they developed turned out to be very useful for the industry. So, I think the most important thing is that Bill was one of the first to focus on software development, before everyone else understood the value of software. And I can talk about a lot of things, but I think that's the most important thing that Bill did. He did a lot of work in his company, because it requires a great deal of conviction to attract the best people in your company, and then keep them in your company, keep them working and working, and keep them working to make it the best thing in their lives.

And over all those years, Bill was able to do that. So, Bill, what do you think about Steve and Apple? Well, first of all, I would like to say that I'm not fake Steve Jobs. You know, what Steve was able to do was phenomenal. It all started in 1977 when Apple 2 came out and the idea came up that a computer could become a commodity for the mass market. And the bet that Apple made was huge. At that time there were many other companies but the dream that Apple pursued in those years was just phenomenal. And Apple stayed true to that dream. And one of our most interesting projects was Macintosh.

It was a very risky enterprise. Few people know that at that time Apple itself was put on the map. Lisa turned out to be not a very successful project and many then thought that the overall approach was wrong. But the team that Steve created within the company to implement these projects I even remember some of the things that were a lot ahead of their time. Do you remember the Twiggy drives? 128 kilobytes. Yeah. Twiggy drives, I remember. Steve once gave a speech which is one of my favorite. He said that we want to create products that people would want to use themselves. And so he followed that idea and he said that we want to create products that people would want to use themselves.

And so he followed that idea and his ability to always, around every level, predict what the next bet should be is just phenomenal. And we know that Apple was kneeling when Steve went back and the spirit of innovation and the willingness to take enormous risks has been phenomenal for the entire industry. I would say that we're both lucky to be a part of it but I would say that the contribution that Steve made is not as much as anyone. I would also say that we're incredibly lucky to have partners that helped us found our companies and that we had the companies working with us and that we had amazing people. And everything that was created in Apple and Microsoft was done by phenomenal people.

More phenomenal people than the people in this studio. Not us. Not us. You're sort of saying that these people had a great influence on you. Yeah. Absolutely. So Bill mentioned Apple II in 1977 and he also said that there were a couple of computers with the idea that ordinary people might be able to use them. And looking back on it, it's amazing that at that time not everybody was able to use computers. And Apple II, of course, broadened the potential of computers. I actually watched an ad for Apple II back in 1978. It was a printed ad, of course.

There was nothing else. And it said, thousands of people have invented Apple computers. Thousands of people. And it also said, why do you need computers that you need to put into cartridges? Why do you need a computer that you can put your own programs on? And how can we conclude? We used to have a lot of weird ads. I remember one ad. There was a kitchen and there was a woman who looked like a wife and she was printing recipes on the computer. And behind her was her husband and he was looking back at her. Stuff like that. And how did that ad work? I don't think it worked very well. But let's go back to, if I'm not mistaken, you created Microsoft back in 1977.

Apple was established a year before that, in 1976. And Microsoft was created a year earlier, in 1974, 1975, something like that. And that's when we first started getting BASIC in 1975. Most people, as I understand, some people here know, but most people don't know that Apple II used Microsoft software. Could you tell us how that all happened? How did that occur? Yeah, the... There was a company called Altair and there were 24 other companies that were creating different machines. But in the group of 1977, there was a company called PET, TRS-80, Commodore, Commodore PET, TRS-80, and also Apple II. The reason we had BASIC for Apple II was because we had nothing to do with it.

We were doing BASIC on a floating point that appeared later on, where I was already actively involved in that. I made... So Woz... Woz, my partner that we started out with, Steve Woz, a brilliant, brilliant guy. He created BASIC, which was like the best BASIC on the planet. He was doing something that no other BASIC in the world could do. You don't have to worry about it. You don't have to look up some kind of error message. He did it all by himself. It was perfect everywhere, except for one moment. It's just a fixed point, not a floating point. And so, we put in a lot of effort to make this BASIC with a floating point, and we begged Woz, please, make a floating point. Who was we? How many of you were in Apple? Well, me. And we begged Woz to make this floating point for us, and he just never does it, and he wrote it by hand because he didn't have an Ascender to be able to run it.

Right? So he never got around to making a flying point. Why? Well, I don't know. It's a mystery to the universe. I don't know. But he never did it. Yes. You know, Microsoft, which is a very popular company, we just came to them and said, help. And what was the price? I think you were telling us earlier. $31,000. That's how much Apple paid us. Yeah, that's how much they paid us for the BASIC with a floating point. And then I went to Apple with BASIC on a cassette. That's how many things we were using at the time. Right? And that was fun. I think the most fun was later on when we worked together. Tell us what was the most fun. Later on was not the most fun. Let them talk.

I'm just intrigued. I think Steve would have said it better. At that time, Apple had a great team to develop Macintosh. They were very dedicated teams. And from our side, we also had a very strong team that was completely focused on this activity. Jeff Harbers, for example, and many other brilliant people. And in a sense, we also put our future on the map because the success of Macintosh, in particular, and the graphical interface in general depended on our success. Macintosh was supposed to popularize this idea. We worked together and we didn't even have any clarity about our plans, our graphics, and even the price of the computer. When Steve had just joined this project, this computer was supposed to be much cheaper than it was in the end.

But it turned out very well. So you worked in both places? We were in Seattle and we were in Seattle on a plane. Correct me if I'm wrong, but I read that Microsoft was one of the companies that even allowed to have a Mac prototype. It's true, but the most interesting thing is that not even everyone remembers that at that time Microsoft wasn't doing business in the applications business. They made a big bet on Mac and in the end, that allowed them to enter the apps business. At that time, IBM PC dominated Lotus. At that time, we only had a multi-plan that worked on Apple II. And Mitch made a very good bet on IBM PC when he introduced his product, 1-2-3. It was the leading product in that part of the business.

So the question was what kind of paradigm shift was needed to enter this market? We had Word, but at that time, Word Perfect was the best product for processing database databases. And Word at that time was a text in DOS, right? All the products I'm talking about were DOS-based products. Windows, at that time, wasn't even in the picture at the time. We started working on it in the early 90s. And we made a bet that this paradigm shift would shift towards the graphic interface, in particular, the Macintosh interface, which at that time had a memory capacity of 128 kilobytes. Of those, 22 kilobytes were allocated to the screen buffer, 14 kilobytes to the operating system, 14 kilobytes, 14 kilobytes. The first Mac system was 14 kilobytes. 14 kilobytes needed to be loaded when our software ran.

And when our software ran, it took up all the 128 kilobytes. But the operating system weighed more than 14 kilobytes, about 20 and something. I said, you know, today we have computers with one gigabyte, with two gigabytes of memory, and no one even remembers that there was once 128 kilobytes of memory. Well, I remember. I also remember that people spent a lot of money on such computers. And so, as I understand it, your companies closely collaborated on the Macintosh because you were the main, if not the only, supplier of software for this computer. Is that right? Apple developed the Mac itself, but we also had Bill on our team who developed these applications. We developed a couple of applications ourselves, MacPaint, MacDraw, and others.

But Bill and his team also did a lot of work. Now let's talk about the development. When you left Apple after Steve left, what did you think was going to happen to Apple after Steve left? Well, Apple's balance was on the edge of a cliff. We continued to develop software for Macintosh, for example, Excel, which Steve and I presented in New York City at a very interesting event. And, by the way, that product was done very well. But then, as we remember, Apple just didn't really self-differentiate itself from the larger platform. You mean Windows, right? I mean, DOS and Windows.

Okay, but in the 90s, Windows began to take over the world. In 1995, Windows became popular, but the main issue was not the confrontation between Mac and Windows, but the confrontation between the sign interface and the graphic interface. And when we got 386 MHz and extra memory, and when we got new development tools, that turned like that on, that turned off for everybody who was doing it from the very beginning. But Apple wasn't able to leverage its products. They weren't used to it. I think after the Mac was done, the product line was not as fast as it was in Steve's company. Steve wasn't there.

And I remember we had some negotiations, we had some investments, and we even signed some deals with Gil Amelio. No, seriously. Don't hurt him. I'm sorry. I'm just saying, don't hurt Gil Amelio, because he might see this. And I remember I called him on the weekends, and we talked about stuff, and then Steve called me and said, forget about those negotiations with Gil Amelio. Now you can talk to me. And I said, wow, that's great. Gil was a nice guy. And I said, he said, Apple looks like a ship with a hole in the bottom, and it's leaking water. And my job is to get the ship pointing in the right direction.

Okay. So, and meanwhile, let's go back to all this stuff. I mean, I'm going to go back to the things going on in 1997, which was a great year. But, Windows was just a great gun. I mean, Windows 95. And even though the earlier versions of Windows were fed a lot of the GUI stuff, Windows 95 had an enormous, enormous leap. And with the advent of Windows 95, the graphical interface became a mass phenomenon. And the developers of software realized, wow, this is the way their applications are going to be done. It's amazing that when there were versions of 1993 and 1994, they weren't really taken seriously. But by the time Windows 95 was over, all the talks were over.

It was kind of just mind-boggling. And at the same time, the combination of software and hardware was getting to a certain level of maturity that people could see it. So, I don't want to go into the details of this long story of your return, but, you had, in your video, you said that your competition with Microsoft was a destructive approach. And as I understand, at the time, Apple wasn't doing very well. And for that to happen, there had to be some kind of strategic reasons, not just a desire to be a good guy. But, you know, Apple was facing very serious trouble. And, if the game is a serious game for Apple, Microsoft had to lose, and Apple was going to lose.

And at the time, a lot of people still thought exactly like that. Why? What do you think? At the time, a lot of people thought exactly like that, and I'm talking about Apple, and even the customer base. And we know that Apple had a lot of success, Apple didn't have success, there was jealousy and that. There were a lot of other reasons, but it doesn't matter. The main thing was that, at the time, there were a lot of people in Apple that wanted to play this game. For Apple to win, Microsoft has to lose. And for me, it was absolutely clear that we didn't have to play this game, because Apple was supposed to become Microsoft. Apple wasn't supposed to become Microsoft. Apple was supposed to remember who Apple was, because Apple forgot who Apple was. And, for me, it was essential to break that paradigm. And, at the time, Microsoft was the only company, apart from Apple, that was working on developing software for the Mac.

And, so, this whole thing was happening like crazy. In the end, I called Bill, we agreed to meet, and so, I could try to catch things up. And, at the time, we had a team that was developing software for the Mac, and we paid a lot of attention to this partnership. In fact, our relationship with Apple has always been special and quite successful. Every two years, there was always something new that could be used on the Mac. It was successful from a business point of view. In fact, our relationship with Apple and Microsoft in the field of development has always been very successful. I believe that this is one of our best partnerships. And today, you're looking at each other as competitors. Today, when this whole landscape is developing, we mean the Internet and everything that has to do with it.

How do you perceive each other in today's landscape? In fact, in some ways, you are competitors, at least on the American market. We've seen these ads. And from time to time, you're really getting in each other's way. I have to admit, I like the PC guy more. He's really cool. He's so positive. You know, the point of this ad is not to be mean to each other, but to make these two guys like each other. Thanks. PC guy, PC guy's great. He's got a big heart. His mother loves him. His mother loves him. I'm telling you, I like PC guy totally more than him. Wow.

I do. I don't lie. He's endearing. You know, he just makes it all work. That's really him. All right. It's worth thinking about. How do you perceive each other? Let me ask you, Bill. You know, Microsoft is a much larger company at the moment. It has many more marketing products than Apple does. You know, when you were running your company, or when Steve Ballmer is running it now, you probably think about Google, about Linux in the corporate segment, or about Sony in the gaming segment as a competitor. And my question would be, how often do you see Apple on the radar screen as a potential competitor in a business sense?

Well, I think that radar is very, very potential. If you take a look at Zoom, they probably think of Apple as a competitor. They like the fact that Apple has created this giant market and they're very, very excited to contribute to that. And we love them because they're all our customers. I have to tell you, I was actually told by Jay Allard earlier that the platform for developing software for the Xbox 360 was based on Mac. And he even said that Microsoft was the company that placed the biggest orders on these processors, even more than MacTerminal and then Apple, and it was based on Mac.

I don't know who had more orders, but we have the same processor that was used in Mac at the time. And this is, of course, a bit of an irony. Apple was switching away from that and we were adopting it for the Xbox 360. But for me, that had a lot of reasons because we don't do portable apps and there was nothing that we didn't have in our development plan. But yes, we did, and there's a certain pragmatism that we're trying to follow and do things that way. So that was the process where the first developers tried to prepare their apps for the Xbox 360. And we never did that on that. God, what a modesty. Just an amazing modesty. We had hundreds of them.

Steve is known for his modesty. How do you perceive Microsoft from an Apple standpoint? I mean, your competition on the computer market. I mean, you can certainly say that you're not a competitor, that the era of destructive relationships, as you said, is over. But I think you certainly know what Microsoft is doing and you know that you can follow that company. And you know what's the most interesting part? The most interesting part is that, and we already talked about this earlier today, that if you look at the reasons why the iPod exists and why Apple exists in the Apple marketplace, then we'll see that all these really great Japanese companies that created the portable music market and, in fact, owned it for a long time, couldn't actually develop and promote acceptable software because the most important thing in the iPod is software in the iPod itself, in the computer, in the Mac, in the PC, or in the cloud, in the store.

It's wrapped in a beautiful box, but the most important thing is software. If we look at the Mac, it's pretty much the same. It's wrapped in a beautiful box, but it's in a beautiful box because it's based on OS X. And if we look at the iPhone, the most important thing in the iPhone is software. And so, the biggest secret about Apple, which is probably not a secret, is that Apple sees itself as a software company. And there aren't very many software companies like that, and Microsoft is one of them. And so, you know, we look at what they do, we analyze all this, we believe that some things are successful, and some are not. You know, we don't believe that Mac will ever take over 80% of the computer market. You know, we're very happy when our market share goes up by at least 1%, and we work very hard to do that.

But, you know, we believe that some things are successful, and some are not. You know, we believe that some things are successful, and some are not. You know, we believe that some things are successful, and some are not. You know, we believe Apple is a software company, and there are not a lot of us left. Well, you may be a software company, but for most buyers and journalists, you are a company that pays a lot of attention to the integration of software and hardware. Recently, Microsoft has begun to make attempts to move in the same direction. Maybe these are not the key areas of business, but, nevertheless, Xbox, Zoom, and the Surface computer, which we saw today as another example, these aren't comparable to Windows or Office, but, nevertheless, there are some of your more recent initiatives to move in that direction and use those approaches. Alan Kay had a great phrase that he said back in the 70s.

He said, if you love software, you have to build your own hardware. Well, Bill Lipson and I agree with that. The question is, are there markets where the innovation and variety that you get is a positive outcome? The negative is that, in the early stages, you really want to experiment and develop software and hardware together, creating prototypes. And then, let's take the phone market. We've got more than 140 different hardware devices. And we think it's beneficial for us that even if we didn't get what we get from our partnerships. Or let's take the robot market, which is just starting to develop.

There are more than 140 robots that use Microsoft software. And they're used in the art of toys, in the security systems, in the medical systems. We love innovation and we don't know where we're going to go with this ecosystem. And we're looking forward to it. But when that robotized system finally matures, we're going to have something to offer it. So personal computers, phones, and robots are the hardware platforms where Microsoft makes a choice in favor of variety. It's Apple's way of doing things. For them, they do what works well for them. And there's a few other markets, like Zune, Xbox 360. And this year, we have two new ones. Surface and the meeting room system, the Roundtable.

Of course, it's a subcontractor. But in general, we take all the risks associated with it. And that's why we say it's a Microsoft product. The Roundtable, is that what you've already shown? Or are you just going to show it? We've shown the prototype. It's a 360-degree panoramic system. Oh, right. Cisco has one of that market. I think Hewlett-Packard has one. HP has a very expensive system. It's a little bit like a planet. Okay. Have you ever regretted it? Like, was there something you might have done differently? Like, did you feel like this happened in a different way? Was there something you might have done differently in order to provide a better market share for Mac? And, well, before I answer, I would like to comment on Bill's answer there, which is, it's very interesting that the consumer market and the enterprise market are completely different places.

And in the consumer market, I can make a point of the case that outside of Windows on PC, it's hard to see your examples of software and hardware being decoupled working extremely well together. Not in the phone space, of course. But outside of Windows on PC, it's hard to see your examples of software and hardware being decoupled working extremely well together. And so I think that's one of the reasons why we go to work every day because nobody knows the answer to what's going to happen tomorrow. And only over the years do we know the answer. Maybe we'll both be able to do it.

Maybe not. Yeah, it's good and interesting to try different products. For example, on the music player market, most of the design matters. And the consumer market, the wide variety of different designs is a matter of fairness. Well, it's not that wide. It's not that wide. It's not that wide. Do you ever think, if I should have done this, or if Apple could have done this, it would have been much better? Because we're stuck on the integration of hardware and software. Of course, there's a lot of times when I've done right things in Apple or have done wrong things in Apple or what we're eroding. But in any case, it doesn't matter. It really doesn't matter because you can't do anything about it.

And we are who we are. We are working forward. When I came back to Apple 10 years ago, the first thing I did was I gave the museum in Stanford all the old papers, all the old machines that we had. And then I cleared out the cobwebs and said, stop looking backwards here. We can only look forward to tomorrow. Because we can't look back and say, I wish they didn't fire me. Or I wish I was here. I wish I was this. I wish I was that. It doesn't matter. So let's focus on tomorrow, rather than worrying about what happened yesterday. We'll talk about the future, too. But let's talk about the present. We want to know what you think about the players in today's market and how this market is developing. What surprises you today? Companies that have been around for a long time but still remain key in their importance.

Today there are many companies that have become quite strong. How do you perceive this situation and in particular what is happening on the Internet today? I think there's a very healthy environment. I think there's a lot of young people who are trying to create their own companies and not just creating some startups to sell them to bigger guys, but creating their own big companies. And I see a lot of companies that are creating products of the next generation and some of them we would like to compete with and some of them we would like to collaborate with in some way or another. But anyway, I see a lot of activity out there now. What do you think? Yeah, I'd say it's a healthy period. There are new form factors, new form patterns, new forms of life, new possibilities to use the cloud, to use the Internet as part of any task in a complementary way to the invention and the process of creating new companies.

A lot of existing companies are using new forms of startups, existing forms of innovation. I think in the future we'll look back at this period as a period of big inventions. I think so too. There's a lot of projects today that are very risky. And if you look through these risks on the other side of the river, you understand that it's going to be something great because no one has ever done this before. Do you have an example? I do, but I can't talk about it. Oh, sure. But what I can say is the feeling of being involved in something great is just amazing. That's what keeps you going to work every day and it tells you that there's something great and interesting waiting for you around the corner. Okay, but, so the two of you have, obviously, you're both using the Internet every day. You have your own Internet products. You have a whole host of stuff on the Internet.

You have iTunes and .Mac and all of that. But on the other level, you're the guys who present the great clients, the super, the, you know, big, high-profile men. And there is an issue a little bit that I'm not sure there's enough people in the room that this is all going to the cloud and we need a fairly lightweight device to have all that investment. All of that stuff that you've done over the course of your career has nothing to do with that. So, on the one hand, you can be called two competitors. But on the other hand, you can be called two guys. We're both dinosaurs or whatever. I wouldn't talk about that, but seriously, how do you think, in five years, is there in five years, is there in five years that all of this is going to be based on a personal computer?

What do you think? Well, you know, you can say a lot of things, but it won't come true. And maybe it won't. Five years ago, when we were computers, we were all, you know, five years ago, we were computers. Remember, say, when there were universal computers, there were people who said, you know, like, this is a stupid idea. The mainstream is always under attack. And many people don't realize that you're going to have to push local functionality. And at least our belief is that when you get things like voice and visual technology, as you get natural form factors, it's a question of, oh, so that functionality has to get together with powerful local functionality. And if you look at the devices that are connected to the TV set or connected to the internet in the car, all of that hardware and hardware has an action.

But if you're going to have to screen-rich documents, you're going to need a performance where you can have full screen and full functionality. I'll give you a specific example. I love Google Maps. I use it on my computer, you know, in the browser. But when we created the iPhone, we thought it would be nice to have those maps on the phone. And so we got in touch with Google and they had already done a couple of apps on Java for some phones and they offered us an API that we worked with a little on. And in the end, we created our own client application for those APIs that were offered by the service. And the app, we already have some experience in creating applications, we wrote a program that was one-to-one from any other Google Maps client.

but the impression I got from using it was much stronger and much better than on any other computer. And it was completely different from what they were doing on their phones before. And you know, that client-side application ultimately became the fruit of the technology used on the client. And so, when we showed it to them, they were just blown away by how good it was. And you can't achieve that in a browser. So, today many people are thinking about how to improve browsers, for instance, how to save the current state of things after connecting it locally. They're thinking about applications created with technology that are transparent enough, regardless of whether you're connected or not. But it's happening very slowly, and there's still a lot of things you can do with a rich client-side environment. At the same time, hardware is moving in a direction where you can run a rich client-side environment on lower and lower cost devices.

And so, today you can do a lot of interesting things with those clients. So, are you... Okay, you're saying that a rich client-side environment is still important, but I think you're right. Your example was about a rich client-side environment that is not a personal computer that we're used to. What I'm trying to say is that the marriage of super-rich client-side applications with super-rich cloud services is incredibly promising. And right now, we can use a browser on a client to achieve very high-quality results. I'm saying the marriage of these services plus a super-rich client-side environment is a very high-quality result. In the context of architecture, the question is whether you run these applications on a cloud or whether you load them into a browser.

And it's the same question for both phones and full-screen devices. So, all of these are going to be different types of devices. These are, you know, the 8-inch display can't compete with the 20-inch display or compete with the big display in the living room. So, in each of these devices, of course, there's going to be some type of computing. And of course, they're all going to have internet connection. But the idea is that there's going to be a constant conflict between the immediate interaction and the limitations of internet access, in particular, the speed and the presence of connection all behind. So, I think, in the end, it's going to create a balance between these two approaches. What is that device going to look like in five years? What device are you going to prefer to use? If I'm not mistaken, you're carrying a tablet, right?

Yeah, right. Which has not, as far as I know, conquered the world yet. Yeah, this is like Windows 92. I think so. That is, however, my belief in tablets is still unwavering. Okay, going back to the question of cars, what device do you imagine that you would carry with you, let's say, to use the internet? Jeff Hawkins showed a very compact device recently. Yeah, I don't know if you've seen it or not, but Jeff Hawkins showed a Linux-based device that was very small, and he called it an addition to a smartphone. An addition to a smartphone, that sounded very cocky. It doesn't matter, but in any case, what device would you carry with you in the future? As I understand it, you're carrying a tablet today.

I don't know what brand it is, maybe you changed it. I don't know. You obviously carry a MacBook Pro. Yeah, well, and an iPhone. An iPhone? Do you have one? Yes. With you? Yes. He has one, of course, he showed it today. No, seriously, he was bragging about his iPhone today. What device? What device are you going to use most often in five years? I don't think it's going to be a full-screen device that you're going to be able to carry around so you can read from it. Easy. Yeah, I believe in the versatility of the tablet form factor. I think there's going to be voice control, electronic ink, and a certain way of having the ability to use a laptop.

And then you'll have the device that's going to be able to fit in your pocket. And the whole notion is that it's going to combine different functions. For example, you've got navigation, there's multimedia, there's computer, there's media, and so on. And not only are you going to be able to use even more functions, then again, you really want to be able to do a lot of experiments in the field of pocket devices. But I think that part of it, America, is that these form factors are natural. And by the end of the year, we're going to be able to expect the rapid development of portable machines. And the evolution of these two form factors is going to take place in such a way that they complement each other. For example, if you have one of these devices, then you'll most likely want to buy another one. And then you're going to have a system at home that's going to set up the device. Well, at home, you're going to have a 10-foot screen that's going to be connected to the internet, and you're going to be able to enjoy your games and entertainment on it.

And today, there are a lot of experiments on how the content would look like in that world. As far as your personal room is concerned, again, you'll have a desk that you're going to have a lot of interesting things about. You know, it's interesting. Every horizontal and vertical surface in your house is going to have a projector in which you're going to be able to manipulate that information. Or at least in one room in my house, there's going to be no screen, no projector. You bet. Thanks. Toilet. Well, there's never going to be a more appropriate place. So what's your device going to look like in five years? You know, it's interesting. It has proved to be very durable. And as Bill said earlier, his death is predicted every few years. But when you say PC, are you talking about personal computers in general, or Windows PC in particular?

I mean personal computers in general. You know, for a while, there was a so-called age of productivity when the industry was moved forward by dynamic tables and text processors. And then the development kind of plateaued a little bit. But then came the internet, and everyone needed more powerful computers with access to the internet. And then browsers came along, and that's when the era of the internet began, the era of access to the internet. And then, several years ago, computers started to be perceived as something proper. So that was taken for granted, at least in terms of innovation. And I think at that time, computers started to be transformed into a digital hub, as we call it. It's a sort of multimedia hub for your home. And when digital cameras started to take off, and there were opportunities to exchange files over the internet, there was a need for a kind of local storage, a kind of digital hub for your multimedia life.

And now you can see that something is starting again. We can't say for sure what that will be, but computers are now being used more and more often by various network services and things like that. And of course, computers are becoming more and more mobile. So I think PC, I'm not sure that PC will continue to be with us. It's a tablet, it's a laptop, it's a big desktop computer, whatever we have in our homes. And this device will probably stay with most people, at least in our society. Certainly in other societies it will be different. But at the same time, there's an exciting revolution in what we call post-computer devices. You can call the iPod, and there's a lot of things that can get into trouble.

You can get into trouble for using that term. What? I'm kidding. Post-computer devices. Why? Well, people write letters to editors, they complain. Well, keep going, it doesn't matter. Well, anyway, I think there's a category of devices that aren't universal devices. They're more focused on specific functions, whether it's phones, iPods, Zooms, whatever. And I think all that category of devices is starting to be very, very innovative and we're going to see many more of those in the future. Give an example of a post-computer device. Well, an iPod. A phone is also a post-computer device. Is the iPhone and other smartphones on the market, as I understand it, you think the iPhone is much better than all the other smartphones at the moment.

But they're all computers, just in a different form factor. I really just mean that we're using the term phone, it's actually, we're getting to the point where everything around us is computers in different form factors. So what? Yeah, there's a computer inside. So what? It doesn't matter. What is it? How do you use it? How do you interact with it? And who cares what's inside? And what are the basic functions of a device known as a cell phone? How do we call it? A pocket device. What are the key functions of a pocket device, let's say, in five years? How quickly do all these things that have been very specialized, for example, navigation, digital wallet, telephone, camera, video camera, how quickly do they all come together?

How quickly do those all come together? It's hard to predict, but it's easy to expect that a new device will have all these functions as well. And at the same time, if you have a device that has a small screen, you won't be able to fully perform your homework or, let's say, edit a movie because the screen is too small. And so you're going to need a device that gives you the ability to read and edit and those things. Now, if we could ever get a screen that could turn around like a scroll, then we might be able to have a device that can do everything. You know, at the very first ED conference, we had the guys from E-Ink. You've probably both talked to them and they were talking about this five years ago. We always find ourselves five years.

And there's some progress in the design technologies that are probably going to be used and the flexible materials, but there's not even one place where you can see that on the horizon. And we have a lot of research projects that we're putting a lot of money into, but the results we're going to get is probably not going to be as good as it was five years ago. five years from now, what kind of device will you have in your pocket in five years from now? I don't know. And the reason I don't know is because five years ago I couldn't have imagined that you could have maps on your phone five years ago. But something comes along, gets really popular, people love it, people get used to it. So people invent things all the time. And I think the search for functions that are actually useful in their own way is a real art. And obviously most of the devices that you carry with you are communication devices. You want to do some entertainment, but the main function of those devices is communication. That's what they're there for.

If we can get away from the topic of computers, in your opinion, which areas of the internet are the most promising? What are your companies most interested in right now? Any kind of things that we've talked about in the last couple of days or even today? You know, we're working on something. I can't talk about it. Again. Yeah, again. But there used to be a saying in Apple. It's just out of blow for Apple. Yeah, out of blow for Apple. There used to be a saying. It's just out of blow for Apple. It's something like a sweater without sleeves is called a vest. I never understood that kind of humor.

That was what they used to say to me when I was 20. There's a zillion things going on on the internet. And the most interesting things to me are the services that people create and bring in. Are they entertainment related? A lot of them are entertainment related. But a lot of them also help you navigate your life more effectively. And I think it's amazing when you're showing someone something and you don't even need to explain to that person that they have a problem and they have a problem. They know they have a problem. And as soon as they see something, they understand, oh my God, I need this. And I think in the next year or two, there's going to be a lot of new products like that.

You obviously have a pretty extensive business with the internet. You offer iTunes and you sell things through the Apple Store. But I know that when you buy a computer from Apple, you connect to an internet service called .Mac. And I think a lot of people don't like the idea of that. So I couldn't agree with you, and in the near future, we're going to fill all the gaps. And in your case, we're going to have a lot of big products like Hotmail and Windows Messenger. I guess it's a big number that we don't even know. But we do know that it's a huge number. It's a zillion things. It's a huge number. But on the other hand, you have, as Steve Ballmer was talking about today, you have much stronger positions like search and other parts of the internet.

So, in that regard, because you have a lot of personal computers, do you have any concerns that some of your competitors may be a little bit more advanced in this area? Of course, Microsoft is a huge company. Both of your companies, Apple and Steve, are pretty big companies. Do you have any concerns that you may be a little bit less advanced than other companies that may be represented in this room? Any small companies like yours in 1977? Well, there's always going to be a lot of new inventions that are going to come out of other companies. And we're going to benefit from that. And we always want to be in a position where we can derive the maximum benefit from this and personal computers. And we're also going to want to increase the demand for Windows and personal computers.

I hope Steve mentioned that we're going to work on the search market in the future more seriously than today. Yes, yes, he did mention that. We'll see what we can do. A lot of the applications are very specialized. So, they're not very smart. And what we're seeing happen with education now is that video is mainstreamed. All these tools that allow you to interact more actively with applications. And I'm very excited about that. We've been pursuing the idea of education for a very long time, since the very beginning of our industry. And this would be used by teachers and teachers would find new ways, new ways to teach. We're on the verge of some really interesting things coming out of this market. And our companies, of course, are going to be contributing to that.

It's the ecosystem that's built so that we're all dependent on each other. Where you can finally say that technology has finally done something for education. See, I look at it in a different way. Which is, we're not trying to do a lot of different things. Because it's not a company that has to do everything. So, we have to work with other companies that have done something. Like, we're not doing a great job with Microsoft. Microsoft is great. We're not. We're not trying to create a search. We don't know how to do a great thing in a map. We don't know how to do the back-end. But we don't know how to do the back-end. But we don't know how to do the back-end. But we don't know how to do the back-end. But we are doing is we are working with people who are good at it.

And so, we're actually grabbing all of this information. We're building it into a simple, pleasant user interface. On a coherent and self-sufficient device. And so, in some cases, we have to do a little bit more work than the rest of us. For example, in the case of iTunes, there wasn't a decent music service on the Internet. And we had to do one ourselves. But in other cases, we're not doing a great job with companies that are doing a lot of things better. And so, we're always willing to work with the best of the best. And I think that, as a company, it would be difficult to do everything. Life is a very, very interesting thing. Let's talk about entertainment. This is a very important area for your business. You're selling music. And you're developing your product, Apple TV. Microsoft is implementing projects related to Hollywood. How far do you think YouTube will go?

Recently, we talked to a couple of network specialists. And they talked about the changes that Hollywood is going through. And all the rest of us. What changes are happening now in the entertainment product delivery segment? And what place do you take in all of this? Because today, the means of delivery are very different from each other. Well, the big historical moment is when the Internet becomes a platform for delivering content. And you can get full functionality and interactivity. And I do think that the future of television can be seen more from looking at social media like Xbox Live, where people can talk to each other, or find friends, or watch movies together, or play games together, and then discuss all of that. That division into genres, for example, educational programs, sports competitions, Olympic games, or elections, all of that makes it possible to navigate content more effectively.

And we're not an entertainment product. Yes, we do have Halo, which has become a very popular video game. But overall, we're offering a software platform for all of these technologies. For example, voice technologies, intensive graphics. Things that take years to develop, for example, IPTV, it took 10 years. You know, it took 10 years for companies like AT&T to come along and put all of that together. So we're standing on the threshold of having a unified and holistic entertainment system. Unfortunately, today, most computers don't connect to home TVs. And this is not a space for innovation, but as an example, I can bring up IPTV and Xbox, which are all connected to each other in your living room.

Bill, you weren't here today, but Steve showed us the new Apple TV feature, which allows you to broadcast YouTube directly to the TV. Can we expect anything like that from you? Is there going to be more of that? Are you going to consider yourself, as Bill said, an entertainment provider? I don't even mean your position in the Disney studio. I think people want to enjoy their entertainment when they want it, how they want it, and how many devices that they want. And so a lot of companies that provide entertainment content use different business models. And that's good. If you're a content provider, that's just great. More and more people want to enjoy your content more often and in different ways. But transitions are often painful.

And, you know, if you look at the music industry, it turns out that the internet is pretty fast to be able to download music very easily. There were no legal alternatives. Maybe they made some shortcomings, but they're still trying to find a way to move to a new business model and still be under attack by the pirates. And we can highlight some of the flaws that they might have had to be able to help them out in this transition. But in any case, it's a very difficult task. And as far as Hollywood is concerned, I think they've seen what happened to music, they've seen what needs to be done, what doesn't need to be done. And now they're also trying to figure out how to make some of these transitions to new business models, to new business models that will allow consumers way more freedom in how and when they want to watch their content.

And I think there's going to be a lot of experimentation and it's going to be really good in the end. It's going to be really good for content owners. I'd like to ask you a question about the user interface and personal computer. Recently, Vista came out, which is the best version of Windows at the moment. And it has some improvements to the user interface. You're about to release a new version of macOS this fall, which will be called Leopard. As you demonstrated, it also has some improvements. But fundamentally, we see new file icons, new folder icons, drop-down menus. I know I'm exaggerating. Of course, there's a lot of other new stuff. There's a lot of widgets, gadgets, and all kinds of other cool things.

But in general, we can conclude that it's all based on the results of the research with Xerox. And what do you think, in the next four or five years, is it possible to have some new paradigm for organizing a user interface in a personal computer? Let's leave cell phones and everything else out for a minute. Let's talk about computers, Bill. You know, we've been waiting a long time for a 3D interface. We've been doing a lot of experiments. We've seen a lot of sites on the Internet where you can walk around and meet people. But in fact, the speed and functionality of such systems is still not enough. Today, we see more and more new technologies related to maps. We see a few of the sites where the quality of graphics and tools are getting to the desired level.

And I imagine a bookstore where you could go for a walk and look at books. And the books would be arranged the way you wanted them to be arranged or the way they would be arranged in a real store. So 3D is a way of organizing data that allows you to use more multimedia information in the computer and offers a wider choice, as well as more efficient navigation than we've ever had. And we're able to transfer that to the world of communication, where a PC plays an even more central role. So we can create an even more powerful solution than PBX, one of our latest business systems. And all of this is going to undergo significant changes in the near future. And what about all of these multi-touch technologies? It's really interesting.

As we know, Steve demonstrated them on the iPhone when the iPhone was introduced. Steve Ballmer today demonstrated your new device called Surface. And the company Hewlett-Packard, which is a sponsor of this conference, also has a large multi-touch screen in our foyer. And the question I want to ask is, are you planning to implement these technologies? Will this be implemented, say, in the form of direct manipulation of objects with your hands and your fingers? Will this be implemented in the mainstream? Will this be used, say, in laptops as a new or additional user interface? Or will this be implemented only on the laptops? Vision.

Programming is a visual organ. Imagine a game system where you can take your baseball bat or tennis racket and start swinging it. But we already have such systems. It's called Wii. No, no, that's not it. You can't take your racket and swing it. You can't sit with your friends and do all these natural movements. I'm talking about a three-dimensional positioning device. I'm talking about video recognition. I'm talking about a camera that sees what's going on. It's like a video conference where you not only hear, but also see your interlocutors. And the cameras will be used everywhere. Of course, we will need to develop a mechanism for how we can protect people's personal lives. But the software that will be responsible for vision and vision will be used for very unexpected purposes. And all this will be very actively distributed.

And I'm not just talking about laptops and simple computers. But I'm talking about systems for conference rooms, for living rooms, and so on. But on laptops, maybe I'm wrong. Maybe everything is fine and we don't need any radical changes. But when I turn on my laptop, whether it's a Vista or a Mac, of course, there's a lot of improvement. But it's kind of, in 10 years, nothing has changed. But it's a lot like a computer. The graphics have become a lot better. But you talk about radical changes. You have the mouse. You have the icons. And I remember you talking about how high the stakes were for you in 1984 to then follow on to Windows. And now we see that the approach is basically the same.

And I wonder if it's ever going to change. Touch, voice, visual technologies. It's all going to change. But those things are not radical changes. I think you're overestimating evolution. Because we live with it year by year. You know, they don't just send us back 10 years to say, wow, they have a search paradigm that's more in the center of everything we're looking for. There's a tagging. That's what's in the center. There's, you know, the evolution itself has changed a lot. Let's take, for example, our office, where we recently added a ribbon interface, where when you make it, you have a lot of users who say that they have to get used to this new kind of interface for a long time.

So evolution is everywhere. But you have these natural interfaces, which are more of the revolutionary changes. They're going to be real revolutions. And that, together with the 3D technologies I mentioned. Steve, I know you're working on something magical right now. Yeah, and you can't talk about it. Bill talked about all his secret plans, and you're silent. Yeah, I know, it's not fair. But I think the main question, the question is very simple. How much of the revolutionary things that people are going to create in the next five years are going to be personal computers, or how much of it is going to be post-computer devices?

And there's a real temptation to focus on post-computer devices, because there's a clean slate, there's devices that don't have a lot of functionality, and they don't have a lot of legacy of the existing software. And so I think there's going to be a huge revolution in the post-computer devices. And the main question is how much of it is going to be personal computers. And I think I'm going to say that Microsoft is working on creating a lot of new things, but at the same time, we have to be a little bit humble, because we have tens of millions of users, and in Bill's case, it's hundreds of millions of users who are already familiar with something, and they don't need a car with six wheels. They don't want a car with four wheels.

They don't want to drive it with, for example, a joystick. They want to drive it with a steering wheel. And so, as Bill has pointed out, sometimes you have to add something with new things, and sometimes you have to completely change something. But I think the most radical changes are going to happen in the post-computer devices. I'm going to ask you a couple of personal questions, and then we're going to start answering questions from the audience. I can say that I'm going to transform into Barbara Alters, and I would like to know... She would like to become Barbara Alters. No, I would not. What's the greatest misunderstanding, right? But thank you, Steve. About your relationship. Obviously, you're both in history, and you're both in historical books.

But what's the greatest misunderstanding in the history of your relationship with each other that we could identify? Was it tied to your rivalry, or was it tied to something other than that? We've kept our marriage secret for 10 years. Canada. That's the trip to Canada. I don't think either of us have anything to regret. I don't think either of us have anything to regret. And I know that all these projects, like the MAG project, it was an incredible thing. It was a hell of a lot of fun, and it was very risky.

And in that video, we look a lot younger. Yeah, it is. In the first video, he was only 12. That's what I was trying to do. He was already 12. But no, it was very nice to work together. And I really miss a lot of people who aren't with us today. You know, people come and go in our industry. And it's very nice when someone stays and keeps some context of what we worked on or didn't work on together. The industry gets a lot of crazy about something new. And there's always this paradigm that if the company is successful, it goes away. And it's always very nice to look at how some people are able to oscillate these waves. And what is really considered is the ability of these people to risk and bring something new.

So, let's go to the last question, and then we'll answer questions from our audience. No, he didn't answer us. He said something about a homosexual marriage. Oh, well, I thought that was your answer. No, I haven't answered yet. You know, when Bill and I met and worked together for the first time, generally, we were the youngest guys in the room. Independently or separately, I'm six months older than he is. So, we're pretty much the same age. And now, when we're working in companies, I don't know about you, but I'm the youngest guy in the room. And so, I like to come here. It's such an honor for us. Come more often.

And, you know, I think about different situations in life. I try to sing Bob Dylan or The Beatles. But there's a line in one of the Beatles songs where he says, you and I have memories. Longer than the road going away. And that's completely about us. How nice! You know what I think? Let's just end it there. Let's just end it there. I've been watching. Thank you very much. Thank you very much. Thank you very much. Wow, they're getting up! I wonder why they got up? Where are they going? I have no idea. Probably to the bathroom.

Audience questions, please. So, questions. Let's turn on the light. Roger McNamee from Elevation Partners. Guys, that was fantastic. Thank you very much. We've got a presidential election next year. I'm curious to know what kind of problems you see in Silicon Valley that should be told to the next potential US president. Because this question, one way or another, concerns all of us. It's strange, but it's rare to hear you talk about the problems that are occurring there. And I'm curious to know what you're having in mind. Bill? Well, first of all, education. I would put that on the top of the list. You know, are there any technical solutions today that would be able to change this situation?

No. Of course, technology in the future is going to be more and more effective. But the way that teachers are organized in the higher education institutions, it's based not only on the expectations they have. It's more of an institutional question. It's a question that involves a lot of practice. And I think we need to have a lot of debate as to how all of this is going to work. Steve? You know, we have some serious problems. And I think most of them are much bigger problems that we're going to have to solve. So, hopefully, we're not underestimating how much our industry depends on stability.

We've enjoyed a long period of stability. We've had the opportunity to pay a lot of attention to the development of our technology and our business. And I think we've been taking it for granted sometimes. One of the more serious problems that we're suffering from is, of course, the energy dependence. And we're doing a lot of work in this area. I know that a lot of money is being invested, a lot of money is being invested in alternative energy sources. And maybe the Silicon Valley will play a small role in some of that stuff, too. Are you guys investing in something personally? A little bit. It must be a lot. A billion more, a billion less.

Steve, are you investing in that? No. I think you're investing in Prius. But I really appreciate that. Hi, Don Eklund, Sony Pictures. My question is really, don't you think there's too much diversity? A few times in today's conversation, we've talked about how microprocessors have become cheaper, memory has become cheaper, software has become more diverse. Nevertheless, I've noticed that the standards, the standards of programming and communication, make my life better. And it seems like we're reaching a point where diversity is put in the corner. And the concept of multifunctional devices is starting to disappear. And I'm wondering, will there be an industry, let's say, medical or transportation, where multifunctional devices will still be appreciated, and where gin can still be kept in a bottle?

I'd like to know your idea of a device that will really simplify and enrich the lives of people. Steve? I think Bill and I would be happy if there were two of them. I think it's very hard to limit imagination and innovation. It's hard to create new great things, new great things. And I think that's part of innovation, that to get innovation, you have to get innovation. And I think that often the market will look at a lot of things, and sometimes it should, and sometimes it shouldn't, and when it shouldn't, it will look back at it all the time. Yeah.

Well, not, yeah. Yeah, yeah. As far as the standards and everything else, I think that the internet standards have been increasingly developed and improved, for example, video formats and all that. And I don't really see anything that could really hold back the development of multifunctional devices. I'm sure there's a lot, a lot of wireless technology now that each have their advantages, and a part of them are going to kill the other ones out. But some technologies are developing so fast that they're destroying other technologies. But I think that the industry is doing pretty okay, and it's doing pretty well in adapting to new standards, things that are no longer of a high degree of innovation. Let's pass to Jesse.

Hi, Jesse. Hi, I'm Jesse Kornblut, headbutler.com. Obviously, you're not the youngest guy in the room, and maybe it makes sense for each of you to ask about your heritage. Bill, even the harshest critics agree that your charity has undoubtedly had a huge impact on the planet. Maybe this second act of yours will be even more impressive than everything you've done at Microsoft. Thank you. If you could choose your heritage, what would you choose?

Steve, looking at Bill, don't you think that this guy is very lucky? His company is very successful and rich, and he didn't have to come back every time and save it. Don't you want the same thing to happen to you? I don't think he's going to answer. The most important job that I've ever been lucky enough to do in my life, no matter what I do, has to do with personal computers. You know, when I was growing up, when I was a teenager, when I was 20, 30, I even knew not to get married very late because I was always obsessed with it. That's the work of my life. And I was lucky enough to get some skills and resources, but I put skills first.

And I was able to apply those skills to the benefit of people who don't have the technology that would be able to help them, for example, the medical industry. And I think that I'm very lucky that I have the opportunity to do all that. But the most important thing is that actually, inside my brain, everything is filled with software. You know, it's the magic of software and the belief in software. And I don't think that's ever going to change. So the question was, would you like me to not have to go to Apple every day? No.

Are you jealous of Bill's success in charity? No, I think it's wonderful. I think the world has become better because Bill realized that his goal is not to be the richest guy in the cemetery. And it's very good that he's doing good with the money that he made. And I'm sure Bill and I are very similar. I'm sure Bill and I grew up in middle-class families, middle-income families, and I never really cared about money. And I never really cared about charity. And when Apple became a successful company at the beginning of its journey, I was also so successful because I didn't have to care about money. I didn't have to care about money. I was able to focus on my work and then on my family later on.

And I think that Bill and I are the happiest people on the planet because we found what we love and we were at the right place at the right time. And we got to work with outstanding people who also love what they do. And it's hard to be happy and start to dream about something that is going to be hard to do. So I don't really think about my legacy. I just think about the fact that I can just go to work and just spend the day with all these amazing people and maybe create something that other people would love, like we love. And if we get to do it, then that's great. Yeah. Thank you, Steve and Bill. I'm Rob Killian, and we've got a business partner, Internet Media Business, and we've got about 100 employees.

And I want to ask you for advice on what we need to do to create a real business. I think, actually, it may seem kind of weird and wrong, but in the 70s, it wasn't really saying, you know, Microsoft, you know, even when we wrote down, you know, in 1975, the company was supposed to become a big company. And I often thought, my God, we doubled in size again. How can we deal with such a large number of people? And every time we doubled in size, I always thought it would be the last time.

And so the economic thing is not really the idea of being at the forefront. You know, to be able to see some new technologies and use them, to be able to attract different people, and to give them pretty broad opportunities to improve their skills and work together. And I think we're now halfway through those broad skills, but, you know, there has been a lot of mistakes, perhaps more than anywhere, because it's been harder to get a few teams to work together. And so it's been a lot of people who have the passion, and it's amazing how efficiently this business has worked out the way that it did.

People often say you have to have a lot of passion for what you're doing, and that's totally true. And the reason is, because it's so hard, and you have to do it over a very long period of time. So if you don't have passion for what you're doing, you don't actually love it, you don't give up. And that's how it is for the majority, really. If you look at the people who have been successful in the eyes of society, and the people who haven't been successful, often times it's the ones who just love what they do, because it helps them get through the hardest times. And the ones who just didn't love it, quit it, because they're sane, and you don't want to put a pressure on them if you don't love it.

So it's a lot of work, and if you don't love it, you're going to lose, and if you don't love it, you've got to love what you're doing, you've got to have passion for it, and I think that's the hard part. The second part is that you've got to be, you've got to have a little bit of talent, because no matter how good you are, you've got to have a team of amazing people, and you've got to know how to use their talent. You've got to make decisions, maybe not even knowing people too well, and you've got to hire them, and you've got to use all these amazing people to help a very successful organization. And eventually you're going to need a team of great people around you. Liz? Liz Byer.

Liz, my question is based on purely historical curiosity. You used completely different approaches to the same opportunities. Did you regret that your competitor, before you, came up with some idea and released it to the world? I would give a lot for the sense of taste that Steve has. No, seriously, I'm not joking. He has an excellent intuitive taste, both for people and for products. For example, when people ask me various questions about software, I look at these questions purely as engineering questions, simply because that's how my mind works. And Steve makes decisions based on the sense of people and products, and it's very hard for me to explain.

The way he does it, he does it in a completely different way, and I call it magic. Wow. You know, when Woz and I created the company, we often tried to do everything on our own, and we weren't so good at partnering. And, you know, actually, Microsoft became one of the few companies that we were able to partner with, and we were able to be mutually beneficial to both companies. And the reason for that is where Bill and Microsoft were really thinking, because they think it's a really useful thing in the early stages. And they think, if you're able to partner with people really well, and I think that if Apple had that understanding from the very beginning, it would have been even better.

And, you know, that understanding came to Apple, you know, decades later. Oh, yes. Hi. Charlie Brenner is Fidelity Investments. In our financial services, we pay a lot of attention to the aging and retiring baby boomers, a large number of them. But we're not that old yet. No. The question is different from what it says. The thing is, the lion's share of innovation coming from computer and Internet companies is focused on young people. And I'm wondering, at least sometimes, your companies report that they need to produce products for different ages.

No, that's not true. And I'll give you an example. Recently, we started installing video cameras in almost all of our computers. And the response to that innovation was really good among people of all ages, but especially elderly people who buy these devices for themselves, for their grandchildren, for their kids, to have the opportunity to talk to them more often. So they're actually using video cameras much more often than young people. And it's just amazing. So that's just one example. And there's a lot more examples of how these technologies have found a response in the hearts of elderly people who live separately from their families and want to keep in touch with them. I think it's really good that the market is so big. And it's so big, partly because a lot of companies think about what they can do for their elderly customers.

I think that the natural user interface is particularly applicable here because, you know, we've all grown up to the need to use a keyboard. And for us, it's all very natural. But, for example, when I showed the Surface computer, I showed it to several company directors a couple of weeks ago. And I was surprised how amazed they were when they saw it. Because they've never seen such ease of navigation. And when they realized how easy it was to organize their photo albums with this device, it seemed to me that it made an even stronger impression on them than it did on me. I'll give you another example. We've got a little bit more than 200 retail stores today. And in these stores, we do personal training now for computers.

They're called one-on-one. And last year, we did a million of those personal trainings, each lasting an hour per year. Yeah, less than a year ago. And we've already done more than a million of those per year. And we get a lot of visitors, and a lot of those people are old people. They come and spend their time on, say, an office or an hour-long video conference. They come at any time that's convenient for them. They can schedule their trainings for the whole year. They pay $99 a year, if I'm not mistaken. It's really great. Last question. And now, last question. We all share the characters or the main characters or the main characters or the main characters or the main characters in our life, without having to be around each other.

By the way, thank you both for giving us the best platforms for chatting in the chat and in MySpace. It's a far cry from everything that we've seen in Star Trek with all these holograms. What kind of things do you think in the next 5-10 years that we might be able to step forward from the current 3D iChat and what kind of communication surprises do you have for us? Well, I don't think Steve's going to show the teleporter. I want Star Trek. Just give me Star Trek. No, I think if you put aside the teleporter, I would say that most of what we see in science fiction usually comes true within the next decade.

Virtual reality, virtual worlds that are present at the same time as what's happening in the real world, the possibility to see what we're interested in, moving in space as a way of interacting with a machine. I think that the huge investments that have been invested in research in various directions will most likely pay off within the next 10 years. Steve? I don't know. And that's why I'm really interested in coming to work every day because, as it's been said before, now we're witnessing a very interesting time because there's a lot of stuff happening and I can't even imagine what's going to happen in 10 years. Thank you very much. Thank you.

Thank you. That was great. Thank you.