Steve Jobs on Macintosh Introduction: The computer for the rest of us

You're about to see a few people learn to use one of the newest, most advanced business computers in the world. If you know how to point, you already know how to use it. Macintosh, the computer for the rest of us. This is KSTS-TV 48 in San Jose, your computer connection. Good evening, I'm John Scully, president and chief executive officer of Apple Computer, and I'd like to welcome you to this special showing of our annual shareholders meeting, which was held on January 24th, 1984.

But first, I'd like to apologize to those Apple shareholders who were unable to attend this meeting because the facilities weren't large enough. I'd like to assure you that in the future, we will make either ticketing facilities available to you prior to the meeting or we will have larger facilities. January 24th was a very special day for all of us at Apple because it marked the introduction of a major new product for this industry called Macintosh. I hope you'll enjoy this show in its entirety, and I look forward to talking to you later on. Good morning. Good morning and welcome to Apple's 1984 annual shareholders meeting.

I'd like to open the meeting with a part of an old poem about a 20 year old poem by Dylan, that's Bob Dylan. Come writers and critics who prophesize with your pens and keep your eyes wide, the chance won't come again and don't speak too soon for the wheels still in spin and there's no telling who that it's naming for the loser now will be later to win for the times they are a changing. Now. Now, I'd like to introduce Apple's board of directors. This is a group of people that have really guided Apple through many years, especially the last turbulent one we've been through. First, Dr. Henry Singleton, chairman of the board of Teledyne Corporation.

Next, Peter Crisp, senior partner at Venrock, our first investor ever. Next, Arthur Rock, our timeless director. And someone who is shepherded out, shepherded Apple, I think longer than anyone else ever has. That's Mike Markle. Regrettably absent today is Philip Schlein, who's chairman of Macy's California, also a director of Apple, and of course, John Scully, whom you'll be hearing from in just a moment. I'd like to now call the meeting to order and ask Al Eisenstat, vice president and secretary of the company, to proceed with the formal business of our annual meeting of shareholders. Al.

Thank you, Mr. Chairman. I'd like to begin by thanking the board of directors for their generous support and to proceed with the formal business of our annual meeting of shareholders. Al. Thank you, Steve. Good morning. I'm Al Eisenstat and I'm going to take us through the formal part of the meeting, the legal part, if you will. But the real excitement hopefully will not come from me. It's going to come with what you hear later. The record date of this meeting, as set forth in the proxy statement, was November 25, 1983. I have for your inspection affidavits of mailing from the First National Bank of Boston, our transfer agent, and from the mailing house of Los Angeles.

The notice of meeting the proxy cards, the proxy statement with supplement and the 1983 annual report were mailed to shareholders on December 5, 1983 and December 20, 1983. The affidavits of mailing will be attached to the minutes and the proxy cards were previously addressed by the transfer agent, the First National Bank of Boston. We have appointed two inspectors of election for this meeting, Bernard J. Crowley, shareholder services officer with the First National Bank of Boston, our transfer agent, and Sandra Marin, an attorney with Apple Computer. Both inspectors have signed oaths of election to their office and these oaths are available for your examination.

The inspectors have informed me that there were 59,378,283 shares that were eligible to vote at this meeting. Preliminarily, if that's up to this point, 43,652,860 shares have been voted at this meeting, which is approximately 73.5 percent of the eligible shares. Now, this is a preliminary count and the exact count will be restated following the tally of the vote. Accordingly, since the majority of the eligible shares have been voted and the meeting is being held at the time and place indicated in the notice of meeting, I hereby declare that a quorum is present in person or by proxy and that the meeting is adjourned.

If you are eligible to vote and have not submitted your proxy, or if you want to change your proxy previously voted, a supply of proxies are available and were available before the meeting. My recommendation is that you submit your proxy at the time and place indicated in the notice of the meeting. If you are eligible to vote and have not submitted your proxy, I hereby declare that the meeting is adjourned. The next item on the agenda is the approval of the minutes of the last annual meeting. Monitors on either side of the auditorium and in the balconies will hand out proxies if you still don't have one and collect them. Please raise your hand if you wish to receive a new proxy.

The first item of business prior to the items contained in the notice of annual meeting is the approval of the minutes of the last annual meeting held on January 19th, 1983. Please note that these minutes will be available for your inspection immediately after this meeting. Do I hear a motion to dispense with the reading of the minutes and for the approval of the minutes as prepared by the Secretary of the Corporation? Thank you. Do I hear a second? Thank you. Well orchestrated. It has been moved and seconded that the minutes of the last annual meeting of shareholders held on January 19th, 1983, be approved of the reading of such minutes be dispensed with.

All in favor, please signify by raising their hands. All opposed? The motion is carried. The first official item on the agenda will be the election of seven directors to serve for the ensuing year or until their successors are elected. The floor is now open for nominations. There being no nominations other than those contained in the proxy statement, do I hear a motion for the nomination for the election of those individuals named in the proxy statement to act as directors of Apple Computer Inc.

for the ensuing years or until their successors are elected? Thank you. Do I hear a second? For those of you who are voting by proxy and have not yet turned it in, please indicate the way you wish to vote and see that your proxy gets turned into a monitor.

The next item before the meeting is the ratification by the shareholders of an amendment to the 1981 stock option plan to increase the number of shares of common stock reserve for issuance. Twelve million shares authorized by this amendment. I hear a motion.

Is there a second? Is there any discussion? We will now proceed to vote. Please mark your proxy cards indicating the way you are voting. The final item of business in this section of the program is for the ratification of the appointment of Arthur Young and Company as independent public accountants for the 1984 fiscal year. Is there a motion to ratify the appointment of Arthur Young for the ensuing fiscal year?

Thank you. Is there a second? There seems to be competition for the job of seconding a motion. We'll note that two people seconded the motion. Is there any discussion? There being none, please mark your proxy accordingly indicating the way you'll be voting. Now for those of you who have voted directly at this meeting and have not yet turned in your proxy, please sign the proxy card in the same form that you hold your stock. Print your name and address and fill in the number of shares of Apple that you hold. When it is completed, please hold up your hand and pass the proxy card to the monitors at both sides of the auditorium and in the balconies.

Okay, that seems to have been taken care of. People have had the opportunity to vote and have done so, and therefore we are going to take a recess in this portion of the meeting to enable the directors, to enable the inspectors of election to make a final tally of the votes. While this unexciting number crunching is being done, John Scully and Steve Jobs are going to tell you more about some of the really exciting things that are happening at Apple. Now we've changed all our plans.

We are Apple. Leading the way. We are Apple. And we're making good men today. What a feeling. And we've only begun. It's believing. The tomorrow we're trying for. Apple is leading the way. And now look ahead to the dreams yet to come.

Lifting our goals to the sky. We are Apple. Leading the way. We are Apple. And we're making good men today. What a feeling. And we've only begun. It's believing. The tomorrow we're trying for. Apple is leading the way. Leading the way.

Apple, show your colors now. Leading the way. Apple, we can have it all. And we're making life better today. What a feeling. And we've only begun. It's believing. The tomorrow we're trying for. Apple is leading the way. Apple, keep believing. Apple, show your colors now. Apple, keep on dreaming.

Apple, we can have it all. Leading the way. Leading the way. We are Apple. All together now. Apple. Good morning.

Hi, I'm John Scully. I'd like to extend my personal welcome to all Apple shareholders, our Apple employees, and other members of the Apple family, and the many Apple watchers that we have in the audience today. But before looking ahead to 1984, let's spend a few minutes reviewing our performance in fiscal year 83. Once again, we had a phenomenal sales increase of plus 69 percent, and that was an absolute growth of $400 million. It's almost like growing another Apple computer in just one year. And the role that we've chosen for Apple is to be the leader in technological innovation.

So we continued heavy investment in research and development, reaching $60 million for an increase of 58 percent. We also want Apple to be recognized as an outstanding product marketing company. So we increased our investment in marketing and distribution by 92 percent, for a total of $230 million. Apple's net income for fiscal year 83 increased by 25 percent to $76.7 million after tax, and our earnings per share reached $1.28, or up 21 percent over the previous year. But I'd like to take a few minutes and explain our balance sheet philosophy, because I think it clearly demonstrates the conservatism of our financial policies.

We ended the year with cash and investments of $143 million. Working capital, which is the difference of current assets, which were $469 million, that includes things like cash and accounts receivable and inventories, less the current liabilities of $129 million, which is things like accounts payable and accrued payroll and accrued marketing expenses, netted us with a very strong $340 million. Now, there aren't many billion-dollar corporations that have that kind of working capital. The only long-term liabilities that we have are deferred taxes from our foreign operations. So, very importantly, Apple Computer has no long-term debt.

I don't think there's another Fortune 500 company that can say that. Our major financial focus as managers is assuring that Apple continues to have exceptionally strong cash flow. And our cash flow, which includes the $77 million of net income, and then you add back the non-cash items, such as $22 million of depreciation and $36 million of deferred taxes and $44 million of after-tax cash flow. from our company's stock option program, that gave us an inflow of $179 million. So even after we spent $64 million on new plant equipment and service inventory, we had an increase in working capital for the year of $115 million.

To put that into further perspective, since Apple Computer went public in December 1980, we've grown the business from $120 million to almost $1 billion in sales revenue and have significantly increased our cash position without any additional financing. It's because we have a strong balance sheet that we're able to make extremely aggressive investments in product development and marketing to assure that Apple is not just a survivor, but a major leader long-term in the personal computer industry. There's an old saying that if you follow the cash, you'll see how well a company is managed. And it is our strong cash flow position and our balance sheet policies that now give Apple the confidence to be daring and bold in our new product development and marketing spending plans for the future.

But I'd like to share with you a further perspective that I think goes beyond the numbers. First, we had some very important successes last year. You know, it was just one year ago at this meeting that we introduced the Apple IIe, which is one of the most important computers in this industry. And at last year's shareholder meeting, we also announced Lisa, a great technological achievement which will form the technology base for our next generation products for the remainder of this decade. And all of our functional divisions excelled in the handling of what turned out to be a 94% unit growth on the Apple IIe. And sales in Europe were increased significantly, while operating expenses were brought under far better control, resulting in a major turnaround performance for Apple Europe.

And after the successful passage of the so-called Apple Bill in the state of California, we gave over 8,000 Apple IIes to every public school in the state with a fair market value of greater than $16 million. I think this is an important statement. I think that's an important statement of the kind of company that we want Apple to represent and our long-term commitment to education, and obviously you feel that way too. So why was fiscal year 83 so difficult? Well, all of us knew that eventually the shakeout must occur in the personal computer industry, but none of us were prepared for it coming so soon.

And as a result of the shakeout, which began the summer of 83, other competitors' failures drove a very nervous market to the safe harbor of the computer industry's giant IBM and the IBM lookalike products. Meanwhile, Lisa, which had captured the world's imagination as an elegant technological achievement, was still a stand-alone product without the important other products needed that would make it a complete system. But we've taken some important strategic actions, and I can tell you that they are working. The highest priority at Apple Computer over the last nine months has been to develop a product line strategy, which now is focused around two important mainstream families of personal computers.

The Apple II, and of course that includes the Apple III, which leverages off of our strong franchise in kindergartens with 12th grade education, a serious home use and small business, and our new Apple 32-bit Supermicros, which are targeted at the 25 million knowledge workers in business and the important college education market. Now, in order to implement our new product line strategy and to get Apple ahead of the product development power curve, we substantially increased our research and development and accelerated our plans to bring new products to the market, which are consistent with this strategy. We also have developed a comprehensive business strategy, which includes our product line strategy, and this has been communicated to over 150 Apple managers from around the world at a recent conference that we held here in California.

And as part of implementing this comprehensive business strategy, we began last year accelerating our marketing spending, which will continue through fiscal year 84. You remember I said marketing distribution expenses were up last year by 92%. In July, we started implementing an organization consolidation to better target our people resources against our product line and business strategies. And this process has continued most recently with the consolidation of Lisa and McIntosh divisions into the new Apple 32 group. And starting last September, we began a process of strengthening our internal expense controls throughout the corporation, which I believe is an important objective if we're to effectively manage as Apple becomes a much larger, far more complex business.

I'd like to share with you some perspective on our first quarter of fiscal year 84 that just ended this past December 31st. This may have been the most difficult period in Apple's history. The industry shakeout was in full swing. The market anticipation of PC Jr., especially in October, resulted in a major softening of Apple IIe sales. And with several new products planned by us for early 1984 introduction, we were still faced with the need for increased research and development. And as other companies began crowding the personal computer industry with lower price and higher performance benefits, it became clear that we needed a new price performance value for the Apple IIe.

So here was our Apple II Christmas sales plans. First, we wanted to very clearly demonstrate our strong commitment to the Apple II throughout this decade. So we began announcing some major new accessory products, such as ProDos, Profile, Apple II mouse and mouse paint, and some really great new software like AppleWorks. Then we took a major drop in price on the Apple IIe system to our dealers. But rather than suggest a new list price, we let the price float in the marketplace. And I can tell you that the street price is hot.

And to get our dealers behind this effort, we substantially increased our consumer advertising, television, radio, newspaper, and our dealer support programs. And finally, as it became known of possible shortfall in available product from our competitors, we expanded our inventory on the Apple IIe. The result for December was that we had a record month shipping in excess of 110,000 units. And that equates to $160 million in revenue.

And let me put that into perspective. That's almost a $2 billion annualized run rate for December, which is two and a half times the $1 billion annualized rate we achieved just one year before. So I think congratulations to everybody at Apple, our reps, our dealers, anybody who had a part in this success. It's nice to be on top again. As previously announced publicly last November, we have and will continue to invest a substantial part of our short-term margins into implementing our long-term strategy. So with $316 million of revenue for the first quarter of fiscal year 84, we're reporting 10 cents earnings per share.

Now that's slightly higher than what we forecasted last November. But what is most important is that we've regained sales momentum on the Apple IIe prior to the announcement of new products. So now let's look forward to what we can expect for the remainder of fiscal year 84. In just a few minutes, we will announce Apple's first mainstream product family since the original Apple II. I think this is far more than a new product introduction. Our new Apple 32-bit Supermicros will become the foundation for much of Apple's future growth through this decade and into the 1990s. Without Lisa Technology, we all know these products just couldn't have been developed.

But we are returning to our roots of offering high technology at a really low cost and offering very high technology that is radically easier to use than any other personal computer. And we will continue to build products that live up to Apple's distinctive reputation for the most reliable products in the industry. And that's something that we should be proud of, and we're going to continue to make sure that we have the most reliable products. And we will sell to the marketplace primarily through Apple's strong retail dealer network. Well, I can tell you that already these products have changed our lives at Apple. And starting today, we expect that they will change the lives of millions of knowledge workers around the world.

Before the end of this fiscal year, we will also dramatically expand our Apple II product family. And we're totally confident that Apple II can continue as a major mainstream product family throughout this decade. Now look at it this way. We have, at a lower price point than our Super Micros, the largest list of software of any personal computer in the world, a host of exciting products to come, which will enhance the value of all existing Apple IIe's. And so we're tremendously excited about the future of the Apple II. There's no doubt in our mind that we will be a major consumer retail marketing force in fiscal year 84. Our products and our programs are coming together. And we are right where we need to be on our schedule to succeed.

Before the end of calendar year 1984, we are confident that we will again be a very profitable company correctly positioned for future growth. But you know at Apple, being the best is more important than being the biggest. And to be the best, we know that we must be bold enough to dare to be importantly different. I think that most people joined Apple because of our commitment to a set of values that are different from any other corporation in the world. We're a young company, but as we grow up, we intend to take these Apple values with us.

We intend to continue to be the leader in innovation. We intend to prove to the world that a small team of highly motivated, very bright people can successfully compete even with the best managed, largest traditional corporations. We needed Macintosh to be incredibly great, and it is. We needed our focused automated factory to be ready, and it is. We needed Lisa 2 to be great, and it is.

We needed momentum with the Apple IIe, and we have it. Now I know there are some Apple watchers who doubted that we could get so many different things together on schedule, but you, the people of Apple, have done it. And we're still going for it, because before 1984 is over, we will do it all. Now last Sunday, 43 million Americans saw a new Apple TV commercial that said, 1984 won't be like George Orwell's 1984, because we aren't intimidated by technology.

We have the confidence that we can harness technology and help make people more creative and more productive than they ever dreamed of. And in just a few minutes, all the world will know that Apple Computer will be leading the way in 1984. Thank you. Well, it's been about nine months since I've been at Apple, and I can tell you it's been an exciting time for me.

And perhaps one of the great things has been the chance to see our exec staff team become even closer and more molded as a team. And I'd like at this time to introduce our exec staff, and I'll do it as a group. If we can raise the lights. Will the exec staff please stand, please? I said I'd introduce the exec staff as a group, but I would like to single out Mike Markliff. I really owe a lot to Mike for bringing me into Apple, and I think that it's important for everyone to know the great job that Mike has done, because I think when someone follows someone else, you get to see what your predecessor did.

And I don't think we could have gotten as much done in such a short period of time if Mike hadn't built the foundation, and particularly in bringing in, you know, strong talent on our executive staff. Having our two executive vice presidents already in place when I came, Floyd Kwame, executive vice president of sales and marketing, and Ken Zerbe, our executive vice president of finance and administration, that has really made a difference. So I just want to express my debt of gratitude to Mike Markliff at this time. Over the last few weeks, we've had a lot of people interviewing us for a lot of stories to do with the introduction of our new Apple 32 Super Micros.

And one of the reporters asked me, what has been the most important thing that has happened to you in your life since you joined Apple Computer? And I thought about it, and I'll tell you what the answer was. The most important thing to me that has happened in the past nine months since I've been at Apple has been the chance to develop a friendship with Steve Jobs. The two of us have had tremendous challenges together in leading this company, and I think the rapport that we've developed and the friendship that has resulted to me means an awful lot. Steve is our co-founder of Apple Computer. He's a product visionary for this industry, and it's my pleasure now to reintroduce Steve It is 1958.

IBM passes up the chance to buy a young, fledgling company that has just invented a new technology called Xerography. Two years later, Xerox is born, and IBM has been kicking themselves ever since. It is ten years later, the late 60s. Digital Equipment Corporation and others invent the minicomputer. IBM dismisses the minicomputer as too small to do serious computing, and therefore unimportant to their business. DEC grows to become a multi-hundred-million-dollar corporation before IBM finally enters the minicomputer market. It is now ten years later, the late 70s. In 1977, Apple, a young, fledgling company on the West Coast, invents the Apple II, the first personal computer as we know it today.

IBM dismisses the personal computer as too small to do serious computing, and therefore unimportant to their business. The early 1980s. 1981, Apple II has become the world's most popular computer, and Apple has grown to a three-hundred-million-dollar corporation, becoming the fastest-growing company in American business history. With over 50 companies vying for a share, IBM enters the personal computer market in November of 1981 with the IBM PC. 1983, Apple and IBM emerge as the industry's strongest competitors, each selling approximately one billion dollars' worth of personal computers in 1983.

Each will invest greater than fifty million dollars for R&D, and another fifty million for television advertising in 1984, totaling almost one-quarter of a billion dollars combined. The shakeout is in full sling. The first major firm goes bankrupt, with others teetering on the brink. Total industry losses for 1983 overshadow even the combined profits of Apple and IBM for personal computers. It is now 1984. It appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money. Dealers, initially welcoming IBM with open arms, now fear an IBM-dominated and controlled future.

They are increasingly turning back to Apple as the only force that can ensure their future freedom. IBM wants it all, and is aiming its guns on its last obstacle to industry control, Apple. Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right? Today we celebrate the first glorious anniversary of the information proliferation of the Internet. We have created, for the first time in all history, a garden of pure ideology, where each word will be looming, secure from the pests of any contradictory influence.

Our communication, of course, is more powerful than any fleas, one after the other. We are one people, with one will, one resolve, one cause. Our enemies shall talk themselves to life, and we shall beg them with our own courage. We shall prevail. On January 24th, Apple Computer will introduce Macintosh. And you'll see why 1984 won't be like 1984. There have only been two milestone products in our industry.

The Apple II in 1977, and the IBM PC in 1981. Today, one year after Lisa, we are introducing the third industry milestone product, Macintosh. Many of us have been working on Macintosh for over two years now, and it has turned out insanely great. And we are introducing Macintosh at a mainstream price point of $2,495. And you can go see a Macintosh in any one of our over 1,500 dealers in America today. I want to briefly cover some of the innovations in Macintosh.

The first one is, we've pulled Lisa technology down to a mainstream price point, with its radical ease of use, mouse, windows, icons, pull-down menus, point, click, cut and paste. We've managed to find a way to pull that down to a $2,495 price point. And Macintosh, to accomplish this, uses a 68,000 microprocessor, the same 32-bit microprocessor used in Lisa. It's necessary for Lisa technology, and it eats 8088s for breakfast. Macintosh comes with 192k bytes of memory. 64k bytes of ROM contains the entire operating system, the whole graphics foundation, and the entire user interface, all contained in ROM. There's 128k bytes of RAM.

Just as the 5 1⁄4-inch floppy disk drive was an innovation in the 70s, the 3 1⁄2-inch disk drive will be the disk of the 80s. It is far safer, and we're storing over 400k bytes of information on one side of a disk that can be put in your pocket. Macintosh comes with two built-in serial ports. There are RS-232, RS-422, and an incredible thing called Apple Bus Interconnect. Macintosh has four-voice sound and speech built in. And it communicates with you on a high-definition, super-crisp bitmap 9-inch black-and-white screen, which has over twice the number of dots on its screen of any current-generation personal computer. You have to see this display to believe it. It's incredible.

And all of this power fits in a box that is one-third the size and weight of an IBM PC. And we're introducing a family of products with Macintosh. The ImageWriter printer, an external disk drive, a modem, a numeric keypad, Macintosh carrying case, and a security kit so your Macintosh won't go anywhere without you. You've just seen some pictures of Macintosh. Now I'd like to show you Macintosh in person. All of the images you are about to see on the large screen will be generated by what's in that bag. Applause Laughter Music Laughter Music

Applause Music Applause Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Now we've done a lot of talking about Macintosh recently. But today, for the first time ever, I'd like to let Macintosh speak for itself.

Hello, I am Macintosh. It sure is great to get out of that bag. As accustomed as I am to public speaking, I'd like to share with you a maxim I thought of the first time I met an IBM mainframe. Never trust a computer you can't lift. Obviously I can't talk, but right now I'd like to sit back and listen. So it is with considerable pride that I introduce a man who's been like a father to me, Steve Jobs. Steve Jobs Steve Jobs Steve Jobs Steve Jobs Steve Jobs Steve Jobs Steve Jobs The team that developed Macintosh is sitting up here in the first five rows.

And they must feel awfully good right now. We've got a lot of stuff to get through. Macintosh is targeted at two primary markets. The first is the 25 million knowledge workers who sit behind desks, and particularly those in medium and small-sized businesses. And the second market is the college worker. We think that's the knowledge worker of tomorrow, and there are over 11 million college students in America alone. Now the telephone was the first and only desktop appliance, and we think Macintosh can become the second desktop appliance for these tens of millions of people. Because of the 235 people in America Only a fraction know how to use a computer.

Macintosh is for the rest of us. And we need to communicate this message to those knowledge workers and college workers. And to do that, we are launching the largest advertising campaign in Apple's history, which will premiere on the Winter Olympics starting February 6. And I'd like to show you five commercials now. It's more sophisticated, yet less complicated. It's more powerful, yet less cumbersome. It can store vast amounts of yesterday or tell you what's in store for tomorrow. It can draw a picture, or it can draw conclusions. It's a personal computer from Apple, and it's as easy to use as this, Macintosh, the computer for the rest of us.

Introducing Macintosh. It does all the things you'd expect a personal computer to do. It does a lot of things you wouldn't expect a personal computer to do. And it does some things no other computer has ever done before. Of course, to do all this, you will have to learn to do this. Macintosh, the computer for the rest of us. The real genius of Macintosh, Apple's newest personal computer. Isn't its 32-bit microprocessor, or that it captures the power of a mainframe on a board 10 by 10 inches? Or even that it costs half as much as computers half as powerful?

The real genius of Macintosh is that you don't have to be a genius to use it. Macintosh, the computer for the rest of us. You're about to see a few people learn to use the newest, most advanced business computer in the world. If you know how to point, you already know how to use it. Macintosh, the computer for the rest of us. This is a highly sophisticated office computer. And to use it, all you have to do is learn this.

This is a highly sophisticated office computer. And to use it, all you have to do is learn this. This is Macintosh from Apple, also a highly sophisticated office computer. And to use it, all you have to do is learn this. Now you decide which one is more sophisticated. Macintosh, the computer for the rest of us. This is KSTS-TV 48 in San Jose. You're watching KSTS-TV 48. KSTS-TV 48 in San Jose, your computer connection. Those ads were prepared by Shiat Day, our agency, the same people that did 1984.

Over 70% of all the computers used in education in this country are Apple's. And we feel pretty good about that. We care a lot about the educational process and it reflects a bit about what our values are as a corporation. And it's also an incredible leverage point for the Apple II. Now most of those are in kindergarten through 12th grade. A year ago, we went in search of about a half a dozen colleges that would use a large number of personal computers in 1984, large being at least a thousand, campus-wide. We didn't find half a dozen, we found two dozen. And today I'm really pleased to announce the Apple University Consortium, formed of those 24 colleges and universities around this country. And they're the opinion leaders.

They are the Ivy League. And they collectively have placed orders for over $50 million today of Apple 32 Super Micros. And this is the list of colleges. Stanford, Harvard, Dartmouth, Princeton, Yale, Brown, Carnegie Mellon, University of Chicago, Columbia, University of Pennsylvania, it goes on and on. Every major university in this country that's going to be using a large number of personal computers next year chose Macintoshes and Leases. And a ton of them are doing courseware development and all of them are leading the way for the other 3,000 colleges in America.

And they are telling us that Macintosh is the ideal campus computer. And we're really excited about this program. Now, when we first designed the Apple II in a garage, what most people don't know is we designed it to be built in a garage. And we thought if we ever built 50 a month, we'd be doing great. Now we've obviously exceeded our expectations by over 2,000 times in the month of December. But never before Macintosh has a personal computer been designed from the start to be built in the millions. From day one on Macintosh, we kept manufacturability in mind and have designed it as the first personal computer to be built in the millions. And I want to take you very briefly through how a Macintosh goes together.

We first take the front bezel, which is the most precisely tooled piece of plastic that Apple has ever manufactured, and to it we affix a stamped sheet metal part and the cathode ray tube. Next, we attach the single board containing the entire high-definition video electronics and the entire lightweight switching-type power supply. Next, the 3 1⁄2-inch disk drive is attached, followed by a shield around the disk drive. Next, the single 10-inch by 10-inch board containing the entire 32-bit digital graphics processing computer is slid into the metal infrastructure, and the cables are attached. And with four screws, the rear case is then put on and the Macintosh is tilted up for the first time and ready to go into an automated 24-hour burn-in, after which the keyboard and the mouse are added.

And the challenge for us is to do this once every 27 seconds. Now to do this, in addition to designing the machine, in the last year and a half, we have designed and built the machine to build the machines. We have invested over $20 million to build the computer industry's first automated factory in Fremont, California, overlooking Ford and GM. The factory is based on the concepts of just-in-time delivery of zero-defect parts, and it's a manufacturing process which allows extremely high-volume production of extremely high-quality products.

And were it not for this shareholders' meeting today, we'd be building over 500 Macintoshes. The Macintosh was developed by a small team of incredibly talented artists. And the rest of Apple supported this core group of about 100 people, and they were able to leverage the resources of a billion-dollar corporation to create their dream. And I have never in my life had the privilege of working with such fine and talented people. And the experience of Macintosh has changed all of our lives, who've had the privilege of working on it for the last few years. And we think it's going to change the millions of people, their lives, the millions of people that buy them in the next few years.

And we made a multimedia show, really for ourselves, that I want to show to you now that captures some of the spirit of this group. And I'd like to show it to you now. Here we go. We started in a very tight-knit, small group, and we had this dream. It was sort of us against the rest of the world. But we started working on it, and us five, six, seven people believed in the dream, and eventually it sort of grew. The machine is based on the Motorola 68000 microchip.

When we started working on Macintosh, we really wanted to get a unique synergy. Firstly, there's 128k bytes of dynamic RAM. There's 64k bytes of ROM. No compromise. Do it right. Do it really good, the way you would want it, and then figure out how to make it cheap so people can afford it. The display is a bitmap display. It has 512 by 342 dots. And we all loved the machine so much that everybody was interested in the whole picture. There is an interface for an external disk drive already built into Macintosh. What I've particularly enjoyed about working with the people on the Macintosh project is the spirit of cooperation between the groups and individuals.

There's a engraving that is on the inside of the back cover of the Macintosh case that has everyone's signature that worked on the original design. We looked at every detail, every small thing, will this work in France, will it work in Japan? When you're working on something as wonderful as Macintosh, you want to bring it out to the whole world. It will come out and it will be, I think, several years ahead of its time. It is the best possible thing that could be done today. You know, when people ask us who is Macintosh for, we like to say that the market for Mac is the desk.

Over the last few years, we've sold between three quarters of a million and a million Apple IIs. And that seems like a really large number, but even a bigger number is 25 million. And that's the number of knowledge workers in the United States alone who are sitting behind desks every day doing their work. And the way they do their work really hasn't changed since probably the start of the Industrial Revolution. So our marketing goal is really very simple. It's to create a product that will improve the life at the desk. To appeal to this vast group of people who know very little about computers at all. First of all, Macintosh will have to be a very, very powerful computer because it has to handle lots of information processing problems for the knowledge workers. So the brains of the computer is the Motorola 68000, a 32-bit microprocessor.

Our second concern has to do with ease of learning and ease of use. We've taken the mystery out of computers and you learn how to use a Macintosh. Our third concern is with the actual physical package, the thing you touch and hold. We want Macintosh to be the first desk appliance that sits with you at your desk in your office place. And last of all, we know we have to provide lots of very real solutions to those people at the desk. So we've come up with a wide variety of very good software applications like word processing, spreadsheets, databases, accounting packages. And because we're Apple, we'll be sure to toss in a few great games so you can have fun when the boss is not around. And in the years to come, we expect literally hundreds of new Macintosh applications to come from all the leading software houses all around the world.

You know, for us in the Macintosh group, the product is like this torch being carried into a pitch black room. We like to say that it's simply incredibly, insanely great. Here, let me show you what I mean. It's like the cursor is not connected to the mouse anymore. It's connected to your hand and you're just moving your hand around. Waiting with your finger. The user doesn't have to get mucked up in the mechanics of how they want to do what they have to do. They can just go and do it and make it look neat and wonderful. When you turn on Mac, what appears before you is a crisp black and white picture with a little bar across the top with words that suggest things you might be able to do.

When you find the command that you want to execute, you simply let up on the button of the mouse and that command will be executed. A great number of the things that you see are little pictures called icons. Symbols that actually allow a user to perform an operation that the symbol represents. One of the starting points of Mac software is Bill Atkinson's amazing QuickDraw graphics package that's the heart and soul of not only Macintosh but Lisa. The reason we have multiple fonts is because the world has multiple fonts.

We emulate the real world by providing a variety of type styles just like you'd see in any well typeset manual or book. We built a machine that would be fun for us to use. And fun doesn't just mean playing games. Fun means using a word processor, using a spreadsheet can be fun too. Part of what we really want to do is recreate the Apple II phenomenon. There are several thousand extremely bright and talented software developers doing software for the Apple II and it's an incredible competitive advantage.

In the software business, volume is everything. You want to be able to sell onto a large set of machines. Microsoft is choosing this Apple Macintosh environment because over time the other environments won't be interesting. The technology that's in Macintosh makes it possible for us to move the state of the art ahead in software. We can really do something that's of value to people, to lots and lots of people that we simply couldn't do before. And that's what's exciting, that's why we're in business. So we're going to devote at least half of our R&D resources developing software specifically for the Macintosh. And I wouldn't do that unless I really believed in one, the product, and secondly, that we had a chance to have an outstanding relationship with Apple.

The manufacturing philosophy behind Macintosh started out as being able to find a way to make a truly high quality, low cost, personal computer. And that way is focusing on a component that's going to be able to make a really high quality, low cost, personal computer. And that's what we're doing. We're building a computer that's going to be able to The manufacturing philosophy behind Macintosh started out as being able to find a way to make a truly high quality, low cost, personal computer. And that way is focusing on a quality improvement process. This improvement process has two key ingredients. The first being quality, being defined as conformance to requirements. And the second being a performance standard that focuses on zero defects. So we've designed this whole process, the whole factory, at the same time as the product and with the product.

And we're going to be making a computer every 27 seconds. That's a thousand computers in an eight hour shift. And the way we're going to accomplish this high volume is through our working relationships with our vendors. And these relationships will focus on delivering us 100% quality parts. Macintosh What we're all excited about is that we know Mac is sort of the next big revolution in the kind of tool that we can give to every person. When you think about it, you know, over three quarters of a million people, well over a million people by the time Mac is introduced, will have gone through the less than fun experience of having to learn at least 50 bizarre words and will have had to have remembered dozens of sequences of esoteric commands.

And I think once a tool like Mac hits, which eliminates the need for that, then you're going to see the numbers jump from really hundreds of thousands to millions to tens of millions. And that's what this next revolution is all about. Macintosh Macintosh Now Macintosh was one of the worst kept secrets in the world.

But one of the best kept secrets in the world is that we're not introducing just one stand-alone product today. Today we're introducing a family of four new 32-bit products. We introduced Lisa one year ago, and it set the technical direction for the entire industry with its mouse, windows, icons. We're seeing imitations, Visa On, MS Windows, even a rumored IBM windowing package in the works. But today we're introducing three new Lisas. The first is Lisa two with 512k bytes of RAM and a three and a half inch disk for $3495.

The second new Lisa is Lisa two slash five, which has a five megabyte profile Winchester disk drive for $4495. And the third new Lisa is Lisa two slash ten. It has a built-in ten megabyte Winchester disk drive which sits right above the floppy, and it's priced at $5495. All of these new leases use the 3.5-inch floppy disk drive that is compatible with Macintosh, and there is an upgrade for all existing Leesa owners to upgrade their Leesa 1 to a Leesa 2-5, absolutely free.

But perhaps the biggest news will be that all three new Leesas are 100% Macintosh software compatible. Now together, these four workstations form the foundation of the Apple 32 Super Micros, a family of compatible products based on Leesa technology and 32-bit architecture. And these four workstations span an incredible price-performance range, with Macintosh as the key building block at $2,495 to Leesa 210, the flagship in performance, at $5,495.

We didn't start Apple to build adequate products. And we didn't start Apple to simply put computers on the desks of computer-trained professionals to connect to IBM mainframes. What we wanted to do and what we want to do now is to build great personal computers and bring them to tens of millions of people. Never before has the time been riper, and never before with our radically easier-to-use family of 32-bit products have we been closer to doing just that. Thank you very much.

I'd like to turn the meeting back over to Al Eisenstadt, who will give us a tally of the votes. Al? Thank you, Steve. Before I get started with the tally, I'd like to make an announcement. It's a little bit unfortunate, but there are people in the front of Flynn Center who were not able to get into the auditorium. They arrived later. We had no admission cards, and they were not able to get in. The fire laws are such that even though you may look around and say there are wide aisles here, because of fire laws, we were not able to fill those areas.

Let me say this on behalf of Apple. Last year, we had our meeting here, and there were between 1,900 and 2,000 people here. This auditorium holds approximately 2,600 people. That gave us about a one-third margin of safety. We felt that was adequate. Our proxy statements went out in plenty of time, so the opportunity to vote was there. We have collected proxies on the outside, so people had an opportunity to vote, even though they were denied admission here, which I truly regret. What we're going to do, and I'm making this announcement to all those here as well as those who I believe my voice is being piped in outside, this entire shareholders' meeting has been videotaped.

We are going to arrange in the next month, sometime in the next few weeks, to run that videotape in a large auditorium, perhaps here if it can be arranged, perhaps a movie theater, a hotel, somewhere in the area. We will run announcements in the newspapers of this event. And for those of you who may be outside of the area, please drop me a note at Apple, and I will make certain that you get an announcement of the time and place of that event. Furthermore, we will have John Scully and Steve Jobs present at that videotape in person, so that with respect to the question and answers and the opportunity to meet them, the president and chief executive officer, as well as the chairman of the board, and perhaps other members of the executive staff, will be in attendance, so you will have an opportunity to talk directly to them.

I'm truly sorry for this. It certainly is not what we planned on, and it's unfortunate. Once again, my really heartfelt apologies. The inspectors of elections have completed their tally of the votes cast by the shareholders at this meeting. The results of the voting are as follows. Of the total number of shares eligible to vote at this meeting, which was 59,378,283 shares, 45,595,582 shares were actually voted.

With respect to the three measures on the ballot, first with respect to the election of directors, 4.7% of the shares eligible were withheld for the vote of directors, and therefore the lowest vote was 95.3% in favor of the election of the seven directors. No director received less than 95.3% of the shares cast. With respect to the amendment of the 1981 stock option plan, 76.1% of the shares cast were voted in favor of the amendment of the 1981 plan.

9.4% of the shares voted against it, and 14.5% of the shares cast abstained. Finally, with respect to the ratification of Arthur Young as the independent accountants for the 1984 fiscal year, 94.9% of the shares cast voted in favor of the ratification of A.Y. 4.5% of the shares voted against, and 0.6% abstained from the vote. I'd like to thank all of the shareholders present here, as well as those whose participation was solely by proxy.

And with that, bring the formal part of the meeting to an end. Do I hear a motion to adjourn the 1983 Annual Meeting of Shareholders of Apple Computer? Do I hear a second? All in favor say aye. All opposed? The meeting is hereby adjourned. As Steve Jobs mentioned earlier, we've set aside some time for questions from those present here today. So I would like to ask John Scully and Steve Jobs to come out.

If there are any questions in the audience now, Steve and I will try to answer that. And I will also announce that following the end of this question-and-answer period, our exec staff, who I introduced earlier, are available to answer other questions. So are there any questions from the audience? Yes, sir. When you buy an ImageWriter printer, normally it's $595. But if you buy it with a Macintosh as a special introductory offer, it's $495, which means for $2,990 you get a Macintosh, an ImageWriter printer, and we're also throwing in the word processing and illustration software for a limited time only. So you get a pretty complete package.

The modem, there are two versions. One is a 300-bit per second, and another is a 300-1200-bit per second, and they range in price from, I believe, $200 to $500. And the rest of the things, we can probably get you a price list after the meeting. That first question was what was the price list for the prices for the peripherals and accessories for Macintosh. Any other questions? Yes, sir, back there. What about availability for the Macintosh? If you went out now and wanted to buy one, you could buy one, but you better hurry. Any other questions?

We have 128K RAM on Macintosh. In the future, we intend to introduce a larger version with 512K when there is availability of 256K dynamic RAMs, which we expect to have in 1985. Well, we are fully able to manufacture leases earlier. our manufacturing for a Lisa into our Dallas facility and we are building leases we have inventories of leases and we have converted what Lisa ones we have and are still doing that process now over to the Lisa twos so we are able to supply the Lisa two slash five product right now and the Lisa two oh and the Lisa two slash ten will be available in the coming weeks so the full line will be available starting immediately no we have no intentions of buying into Motorola we're more interested in their bits than their stock right now so yes I'm sorry what was the question independent software will be available starting today Microsoft will be making

announcements on that and you will see ads appearing starting today from a number of independent developers there are over 100 developers who will be bringing out software shortly and we are very confident that we're going to recreate the Apple to phenomena of having a tremendous amount of software on Macintosh just time for one or two more questions yes sir one of the strengths of the Apple to software base and one of the strengths that we want to recreate on Macintosh is that software will be done by thousands of companies not just by Apple and obviously we can't speak for those thousands of companies and I think that's sort of the state of affairs right now your time for one more question the Lisa upgrade is available right now that concludes the formal question and answer period as I said the executive staff is available for questions that you may have further thank you very much I hope you've enjoyed watching Apple's annual shareholders meeting and I'd like to now give you a brief update of what's happened over the past month since we first announced the Macintosh starting on January 24th dealers across

the country were besieged with people coming to their stores wanting to see Macintosh and try it out for themselves ever since then there's been a tremendous amount of activity as people have become more and more excited about this new product we've had an opportunity to speak at a number of important conferences where major software and hardware developers have been in attendance and I think there's a consensus building that Macintosh is going to be a major milestone for this industry super graphics radical ease of use are going to be the things that everyone is going to expect in the personal computers to come well thanks to channel 48 and to all of you for joining us this has been a pleasure to show you Apple's annual shareholders meeting you're about to see a few people learn to use one of the newest most advanced business computers in the world you if you know how to point you already know how to use it Macintosh the computer for the rest of us Apple's Macintosh is an exciting development in personal computing and teamed with two long peripherals the Macintosh becomes a powerful flexible and expandable business tool the new Devon Mac disk system provides from 5 to 32 megabytes of hard storage and coming soon

Devon will offer a multitasking local