Thank you. It always helps, and I appreciate it very much. So... We've got an awesome morning together this morning. And thank you for coming so much. We have over 5,200 attendees here today. We sold out within two hours. I'm sorry, this is the biggest place we can get to have this. So I'm sorry for all those people who couldn't make it. And we wish we could sell more tickets, but... We don't know where to have it if we do. So 5,200 attendees, over 120 sessions.

Over a hundred hands-on labs where you can take your code in and get help tuning it and porting it to some of our newer devices. And there are over a hundred Apple engineers here this week, a thousand sorry, Apple engineers here this week to help you. So there's a lot of Apple folks floating around. Grab them, make use of them, and we hope you have a great week here at WWDC.

Now, we're going to talk about three things today. You know, if the hardware is the brain and the sinew of our products, the software in them is their soul. And today we are going to talk about software. We've got some great stuff to talk about. OS X Lion, the IOS5 and some kind of interesting new cloud stuff. So, let's start with Lion. To tell us all about Lion, I'm going to ask two of my colleagues, Phil Schiller and Craig Federighi, to take us through Lion and give us some demos. Phil? Thank you, Steve.

Oh, good morning, everyone. How you doing? Yeah. Come on, energy in the room. This is the Developer Conference. and more. I am really honored to be the first to present to you the first of our new products today. And this product is all about the Mac. And the Mac is doing incredibly well. Our customer base continues to grow at a tremendous pace.

We now have over 54 million active Mac users around the world and growing. The customers love the products and press and analysts have really incredible things to say about it. Things like this from All Things D. There's really no other way to say this. The Mac is kicking ass. Now, that's really nice, but what did John mean? Well, this is what he means. The last quarter, the PC market actually shrank year over year 1%, while the MAC grew 28%.

In my book, that's an ass kicking. Now, lest you think this is an aberration, the Mac has outgrown the industry every quarter for the past five years. It is going so strong, and it's because the products are incredible. Products like the new MacBook Air. It's beautiful, it's thin, it's light, it's fast. The whole PC industry wants to copy it. But as you know, we've been leading in notebooks for a while.

We were the first to really drive the majority of our PC business to a notebook business. And it's almost three quarters of the Mac business that's been doing that. We are going to talk about the facts we But whether you want a great new notebook or a killer desktop with the new iMac, these Macs are the best that we have ever made in the history of Apple.

And they're great not just because of the hardware they run, but because of the software. Mac OS X is the heart of the Mac. And if you're keeping track, you know we launched Mac OS X 10 years ago. We built it on a solid Unix foundation. We added to it the ease of use and simplicity that we know Apple's renowned for.

And we built into it amazing technologies for all of our great developers to make the world's best applications to run on it. And for those of you who are around and remember this, this is what Mac OS X looked like 10 years ago when we launched it. It was a revolution in its day.

And over the last 10 years it's evolved to become more refined, more powerful, more beautiful than ever before. The Mac OS X is looking incredibly strong. So where do we take it next? Well, next up in OS X is Lion, a major release with over 250 new features. And if you'd like, we can go through every one of them today.

Well I'd love to, I'm told I only have enough time to tell you about 10 key new features. So we'll really get into 10 awesome features. First up, right into it, number one, multi-touch gestures. One of the great things about the Mac from the beginning was that it ushered an era of a graphic user interface with a mouse and clicking and dragging.

But so much has changed over the last 10 years. We now build multi-touch trackpads into all of our notebooks and we offer them on our desktops. We've learned a lot from iOS as well. So now Lion can count on multi-touch. From the beginning you can have beautiful, fluid, momentum-based scrolling. You can have incredible multi-touch taps to zoom in on stories or pictures. You can dynamically zoom with beautiful, fluid pinch motions. You can swipe through your photographs, your slides, your web page. All with an incredible physical realism that's never been possible with a PC operating system before.

And this has implications across the system in a lot of little important areas. Here's a simple example. The scroll bar. Why do we have scroll bars? Scroll bars were there so you could click with the mouse and drag and scroll. But now if you're pushing your window with multi-touch, you don't need them. They can disappear.

You can have a much more beautiful reading environment. But when you go to scroll, they magically appear, give you a sense of place and proportional size. And then disappear. They disappear when you don't need them. So multi-touch is now built throughout the system in a very powerful way.

Number two, full screen applications. We've had some full screen applications before and these are really important for notebooks. 11 inch and 13 inch where you want to take advantage of every pixel on the display. But developers have had to work hard to make their applications hand coded to do full screen applications, including apps like iPhoto. Well now with Lion we've built in a standard method for developers to create full screen applications. And it has a simple system control in the top right so all users know where to tap and then bring their applications full screen.

But this isn't full screen like it was before because now you can keep your application running full screen with a simple swipe gesture, get back to your desktop, get something you need, go back to your application, never having left full screen. In fact you can have more than one full screen application running at the same time.

So we've worked on a number of our applications to bring them into the new full screen mode of Lion. System applications like Safari, Mail, iCal, iLife applications, iPhoto, iMovie, GarageBand, iWork with Keynote and Numbers and Pages and all these applications going full screen so you have a great experience right out of the box.

Here's an example of how it looks. This is now running full screen in Safari. You can have a beautiful place for viewing your documents and now there's a new feature since we've got all this extra room on the left hand side called the reading list. Keep track of things you want to get to later. Here's iCal running full screen. Here's preview showing you PDF documents running full screen so you can just have a beautiful experience like we've never had on a computer before with full screen applications.

Next feature. For many users, this will be the best feature of Lion. It's called Mission Control. Now, we all like to run a lot of software. At Apple, we've created many features to help customers find just what they need. Expose for finding a document, dashboard for getting at a quick widget, spaces for organizing your work environment, but didn't it all work together in one unified way? Well, now with Lion, we've unified that with a simple gesture to get into Mission Control.

And this is a bird's eye view of everything going on in your system. On the main window, well, that's the current desktop you're working on with all the documents now organized by what application is running on them. And you can tap on any document and bring it to the front.

That's right there, center for you to work on. Up above are all your spaces. So you can have multiple desktops, you can have multiple full screen apps running, get to any one with a single tap. And on the left of those spaces is a new special one just for your dashboard widgets. You can get to again with a single tap. So that's mission control. What I'd like to do now is before we move on, have Craig Federighi come up and give you a demo of these three new features all working together. Craig? Hello. Good morning.

So let's take a look at Lion in action. And we're going to start with gestures. Great place to experience gestures is here in Safari. The first thing you'll notice-- Apparently something funny. Is that how simple this UI looks because there are no scroll bars. It's a really clean look.

We don't need scroll bars anymore because we can simply push the content with our fingers. We can flick and get momentum, get a nice little bounce. The page feels really alive beneath your fingers. You can also expand your fingers and fluidly zoom just like that. Zoom out and you get a nice little bounce.

In fact, I can swipe through my entire Safari browsing history just like that. Really smooth.

Next up, I'd like to show you full screen apps. I'm going to launch iPhoto here, and you can see that iPhoto's adopted Lion's standard new full screen control. So I'll just take iPhoto full screen. It's a great way to look at my photo album. If I want to get back to my desktop, take three fingers, and I can just swipe iPhoto away and back to my desktop. But I didn't have to leave iPhoto and take it out of full screen.

It's actually right there. Take a peek at it, go back, just like that. We love this so much that we made gestures accessible in exactly the same way. Swipe over to the left, and I have access to my dashboard. You can see Safari supports full screen as well. Let's go take our Safari window full screen.

So now we have our dashboard over our desktop over here to the left. We have Safari and of course, iPhoto is still there in full screen as well. You'll notice how Safari is making great use of all the available space on the screen for my content. But if I want to get at my bookmarks bar, my menu, just go to the top. You see they slide right out like that really nicely.

And when I want to exit full screen, I have a control right there in the upper right animates right back out. Let's take a look now at Photo Booth. This is an app. Absolutely born to run in full screen. You can see I'm surrounded by the curtains of the Photo Booth and in here I can experience some fantastic new face detection effects. So notice as I move, the birds actually track.

That's the most important feature in Lion. And we can also use this face tracking technology to perform some targeted facial enhancements. For instance, I can finally have those big eyes that I've always hoped for. So let's take a picture of that. So that's pretty cool. So playing around, yeah, that's great stuff.

So, you know, you can spend hours at this. So full screen is fantastic. But of course, Mac users love to do a lot of things at once and that often means that they have a lot of windows. In fact, my desktop often looks a little bit more like this, right? I've got a lot going on.

So how do I get across all of those different activities? Well, I just take three fingers, swipe up on the trackpad, and I'm in mission control. From here, I can get at any window I want. So if I want to get at iCal here, I click, it comes forward, sweep back into mission control.

Over to dictionary, same thing. And across the top, you see I have my dashboard, my desktop, my full screen apps. So I want to get to iPhoto, just click, comes forward from anywhere, three fingers up, and I'm back in mission control. I can also quick look my windows. If I just hit spacebar here, get a better look at my calendar, or take this pile of preview windows and spread them apart with a little gesture up. But you know what's really awesome is the way that multiple desktop spaces are now integrated right into mission control.

Just take my mouse up to the corner of the screen and a little space pops up. I click, I've just created a new space. And I can populate it by just dragging the windows I want to work with in that space just like this. And I've set up a new desktop.

and many more. So, that's really useful. I can swipe through the spaces, of course, here in Mission Control, go over to my desktop and if I want to then take even an entire app and all of its windows and create a new space for that, I can click on the preview icon, drag the whole pile to the corner. I've just created another space. And the spaces are just as easy to clean up as they were to create. I just click, they delete and they--windows fly right back to my original desktop space. So that is mission control. Thank you very much.

Thank you, Craig. You see how these new features now work seamlessly together to create an incredible experience in OS X, unlike anything we've had on a personal computer before. Next up, the Mac App Store. We launched the Mac App Store this past January, and users have found out that it is the best place to purchase and discover new software applications.

Now, for years, there have been many software channels to buy PC software, and they all work kind of the same way. You hop in your car, you drive downtown, you buy a DVD if they happen to have it, you drive back home, you load it up, or you wait for it to come, mail order, well, no more.

Well, now at the Mac App Store, you can get your software right from the comfort of your own home on your Mac. And in the last six months, something incredible has happened. The last six months, the Mac App Store has now become the number one PC software channel for buying software. That's incredible. It's incredible.

passing Best Buy and Walmart and Office Depot. And the developers that have gotten on board with the Mac App Store have seen some great success too. For example, Autodesk. They brought their Sketchbook Pro application to it, and since they put it on the Mac App Store, they've seen a million new users on the Mac.

Ferrell Interactive has brought a host of games including Mini Ninjas. Hopefully you've all played it. Doubling of overall revenue since they brought it to the Mac App Store. And small, great developers like Pixelmator has brought their amazing new image editing application to the Mac App Store. They've seen a quadrupling of the revenue. In fact, they made a million dollars in their first 20 days. So the Mac App Store has been a big hit for large and small developers.

So what's new and lying? Well first, it's built right in. You don't have to go and download it and get it and decide to use it. It's built in for every Mac user. And there's a lot of great features for you developers to take advantage of. Some of them you're used to from the iOS App Store like in-app purchases.

You can now build those in. Push notifications if you want to alert users about important information. You can make your applications more secure. There's a built-in sandboxing method now in the Mac App Store. And for users, downloads will be even faster because you can get these updates as Delta updates.

So that's the Mac App Store. It's a really important part of the whole experience of Lion as you'll hear more about. Number five, a simple but powerful idea, Launchpad. Wouldn't it be great if no matter where you are in your system, if you want to get in an application and quickly launch it, you can with a simple gesture.

Well now you can with Launchpad. You simply make a simple gesture, a pinch motion, and all your applications fly onto your screen. No matter where they are in your system, Launchpad knows where they are. You can have multiple pages of applications that you can organize any way you want.

When you go and buy a new application on the Mac App Store, it downloads, installs right into your Launchpad. And you can make it look however you'd like. You can rearrange your icons, you can create folders just as we're used to from iOS, and now you can do that on your Mac as well. So that's Launchpad.

Next. Resume. Here's a simple idea. From the beginning with a computer, you've had to run applications. Sometimes you quit them. You go back and you're back at the starting point. You have no more windows open. Your documents aren't open. You usually have to pick a template. Why can't applications get you back to work quickly? Well, that's what resume does.

Now when you launch an application in Lion, it brings you right back to where you were when you quit. It remembers what documents you were open. It remembers the text that was selected. It remembers where the palettes were and the windows and everything just how you like it.

And resume doesn't work just on an application. It works system wide. So the next time you have to shut down and restart your Mac for a reason, maybe you've installed some new software and it asks you to reboot, yet you like everything just the way it is. Well, don't worry. You get the new login window. You log in and Lion will bring you back to the work environment as you left it when you restarted. All your applications running, all those spaces you set up, all just the way you like it. Thank you.

So that's with Zoom. Number seven, autosave. From the beginning of using computers, we've all had to remember one really important fact. Save, save, save all your work as you're going. Whether it's file save or Command S on a Mac, you better keep saving. 'Cause the one time you might forget to save what you're doing, something goes wrong and what are you gonna hear? You should have saved what you're doing. Why should you? Why can't the computer help you? Well, that's what Lion does. As you're creating a document, Lion can automatically save it in the background without you having to do anything, without you having to see anything. Your work is just being saved for you.

This is a really powerful but simple thing, but as we got into it, we found there's more things we can do for you since we're autosaving. So if you zoom in on the title bar of your documents, you'll see the name of your document is actually a menu now that you can tap on and take advantage of the power of autosave.

But for example, let's say you're doing work and you don't like the work you did and you're worried it got autosaved over what you'd like that you had done previously. Well, now you can just select revert to last open and get back to where you were when you started.

Or maybe you love the changes you've made and they're exactly what you want. You don't want it to ever get autosaved over it again because it's perfect the way it is. You can just select lock and now your document's locked. It's like a template and nothing can ever change it.

You can even write from within the application, so like duplicate and create a second document just like the first one that you can start working on another version. So you have the power of all of this. Right from the title bar of your window. So that's autosave. Now autosave gave us a great idea to go even further with the next feature and that's called versions. So you're working on a document, you're entering the text, you're formatting, you're adding copy, you're adding graphics and all along autosave is saving your document. In fact, it's saving all these versions of your document as you're working.

So we call that versions. It's automatic. You don't have to do anything. We'll do it for you with Lion. If you love something in a split second, you can of course take a manual snapshot if you want. And it's very efficient. We only store the difference between the versions. They're not whole new documents.

and you don't have to worry if you ever share your work with someone else that they're going to get all that back work that you don't want them to get. When you copy it off or you send it in an email, we only send the current version. So how do you take advantage of this power of autosaving versions? Well again, go back to that menu on the top and there's another choice there that you may have noticed. Browse all versions. You tap on it and you get this beautiful new interface. It looks a lot like Time Machine.

But rather than being about your whole system, it's about that one document you're working on. On the left is the current version, on the right all the past versions. And you have a time scale on the right just like Time Machine. You can scroll back through them and they're all live. You can switch and make any one the current one. You can even cut and paste between them. So that's versions. What I'd like to do is ask Craig to come back up and give another demo showing how this all works together. Craig? Go again.

All right, well, let's start with Launchpad. You see it's an icon right here on my dock. I click and I get an instant view of all of the applications on my system, no matter where they're installed. I can page through them really nicely with gestures. And when I want to launch, let's say like address book, it's just a single click to bring it up. I can also gesture with a four-finger pinch to get in as well.

So of course when I want to add things to my Launchpad, the best way to do that is with the Mac App Store. I'm going to launch it right here. You can see on the Mac App Store we have great featured applications, top paid and free apps, categories. We have also all of your purchased apps.

So then if you buy another Mac or you buy on one Mac and you want to get the app on the other one, you can download them here at no additional charge. And of course, updates. With just a click, you can bring all the apps you have installed on your system from the App Store up to date. Well now, let's try adding Twitter to our Mac. We're going to click here and go to the Twitter product page.

And with a click, you can buy. The app actually lifts up out of the App Store and flies right into my Launchpad, downloads and is ready to use. From here, I can just click and position it wherever I want. I can move it maybe to the first page. And as you see, we have folders like this productivity folder.

Works great. If I want to create my own folder, just pick something up, drop it, and I've created a folder just like that in Launchpad. Next, I'd like to show you just how fantastic the Mac is now with Lion working with documents. I'm going to open a document that I've been working on here on the history of guitars.

When I start editing a document, often I'll position my windows just the way I like them, like this, maybe open up some inspectors, position them the way I want them, and then I'll set down to editing. Now, this guitar, this is my guitar. I'm going to open it up and I'm going to create a new one.

And this looks maybe a little bit too metal for my target audience, so I'll delete that, take this, move it aside, maybe change the font here on this document. So, I'm done with my edits for now and I'm going to quit. And I want you to watch what happens when I quit.

Absolutely nothing. I wasn't prompted to save. I didn't need to be because Lion was actually saving for me all along. But it wasn't just saving my document, it was saving exactly the state of how I was working. So now when I go back and launch pages again, you see it brings back all my inspectors just the way they were, brings back my window position where it was, and even has my text selection highlighted just as I left it. Perfect restore.

But we're not just storing the latest version of the document, we're keeping a history of the document as it's edited. So if I want to go back, maybe I regret these edits, I want to get back to the previous version, I go right here and browse all versions.

And I'm taken right into the star field where I get a view of my current version on the left and the history on the right. If I want this previous version to become current, I click restore, it picks up, flies on top, and becomes the current version. And I'm restored.

But you saw there was actually more history than that. I'll go back into the star field here. You can see I actually have a full timeline here. On the right, I can go back to the very beginning of this document when it was just a few paragraphs, or step forward as I was adding pages and so forth.

But when I restore a document, you know, very often I don't want really the whole old version. I like mostly what my new document has become, but often I want to harvest maybe just an image or perhaps a particular slide and bring it into the current version. With versions I can, because these two windows are actually live here.

So if I have on my current version, maybe a page that can really use an image to punch it up a little bit, and I go back to this past version, I see, oh look, there's a guitar that would be just perfect. Well I can just select the guitar in the old version, copy it, and then paste it right into the latest version, and like that, I've created just the document I was looking for. And that's versions. Thanks.

Thank you, Craig. Next, number nine. Well, as long as we've had computers, we've wanted to share documents. We have a new feature to help you do that and make it easier than ever. It's called AirDrop. You've got your computer, your friends got their computer, and trying to get documents between them has always been such a pain. In fact, the easiest way to do this that no one's done better than is good old sneaker net.

Copy it off of one, walk over to your friend's computer, copy it back on. Well, Lion solves that with a new technology. AirDrop. That's a peer-to-peer Wi-Fi-based network. So how does it work? When you go into the finder in Lion, you'll see on the sources on the left a new choice called AirDrop.

You tap it, you get a new display inside the finder. What you see is yourself, center, bottom right there, and the people around you who are also running AirDrop at the same time. You see their pictures. If I want to drag a document over to Shana's computer, I just drag the document on top of her picture.

And it asks me, are you sure you want to send this? And I confirm I do. On Shana's computer, because she's also now running AirDrop, she sees, pops up over my picture. I'm trying to send her a document. She confirms she wants to receive it, and it downloads right into her downloads folder. And that's it.

That's what it takes to now wirelessly share files between Lion computers. So it's a peer-to-peer Wi-Fi-based network. There's nothing to set up. It's auto-discovery, auto-setup. We have confirmation on both ends, just to be safe. Your data's protected over the air because it's fully encrypted as it's transferred. So that's AirDrop. And that brings us to number 10.

Number 10 is Mail, a completely new version of Mail in line. It's beautiful. The layout on it is incredible. It works in a window. It takes advantage of full screen. You can work in a two column or if you want to have access to your mail sources, a three column view right there on the left. And you see that the design of it's really optimized around reading your mail.

You have a beautiful full height message window. On the left in the message list, you see snippets like we used to from iOS now built into mail. Across the top, you have a favorites bar. Sort of like a browser does. Now in mail, that can be favorite folders where you like to keep things you want to get at quickly.

Probably one of the most powerful features is searching. With searching now, we have new search suggestions. So you start to type what you're looking for, and mail recognizes whether that's a person or a subject and prompts you with the choices you have across your entire mail database, which you can find quickly.

When you select one, it becomes what we call a search token. That's an interactive search token where you can set some parameters on it. And you can have more than one and create Boolean searches if you want. Probably the best feature of the new mail is something we call, yes, you can love that. It's okay. Boolean searches.

Probably the best feature is something we call conversation view. In mail today, as you've got a conversation going, you've got some messages you've responded to or replied and forwards, you see the mail gets longer and longer and they're indented and color-coded, things stripped out, it gets more and more difficult to follow the flow of this and appreciate the messages that were sent. Well now, in line, there's a brand new conversation view that shows your messages just as they were sent.

You see the messages, you see the people who send them, you see the attachments still in line, all there for you to view. Yet it's completely compatible with doing email with other people who don't have Lion and can't get the same beautiful view. So that's Mail and Lion. I'd like to bring Craig up for one last demo to show off Mail.

Okay, well I absolutely love the new mail in Lion. Let's take a look. So it's got this great full-height message list. It's perfect for laptops. Just like this. I've got my message list on the side with snippets. It makes it really easy to find the message I'm looking for. We have this new favorites bar across the top so I can click through my mailboxes really easily. But if I want to get back to my full list, they're available right here as well.

I really find the new search to be just awesome. Because when I search, I'm often searching for a person, let's say like Phil, I start typing "ph." See, it prompts me for people in my mail right now that match. So I go "Phil Schiller," found messages from Phil, just like that. I can use, I can retarget the search to specific inboxes or search all.

And of course, as Phil showed you, I can pick whether I'm searching for "from," "to," or the entire message. Well, suggestions don't just apply to searching for people. They also work for other things as well. Like let's say a subject. I'll search for "trip." You see that it's actually prompting me.

Do you want to search for messages that contain "trip" or where "trip" just appears in the subject line or even suggest specific subject lines that match? So I can select this, and I've done a subject search on "trip." What about dates? I'm going to type "March," start typing "March." There you see it prompts me, March 2011. And like that, I've searched for all my messages in March.

But what's really awesome is the way you can combine these really quickly to pinpoint just the search you're looking for. So let's say I'm looking for a message that Phil sent me. It's a subject with something about reservation. It was from Phil Schiller, and it was last month. Like that, it drills down to exactly the message you're looking for.

It's really nice. As awesome as that is, my favorite feature is conversations. It's this beautiful view of all the messages that were sent in the conversation just as they were sent with all the images and so forth. And you'll notice that all of that extra forwarded reply text that's redundant in the conversation is stripped right out. It's gone. But if I want to show it and I want to see mail the way it kind of looks in lesser mail programs, I can click like this. It folds right out. Yeah, this is awesome.

And if I want to reply to a particular message in a conversation, I can hover, we get a reply control, and watch this animation. So message hops right out. So that's great. And finally, when you want to file a whole conversation away, you can just drag it all at once, drag all the messages, put it in your folder, and you're done. That's mail in Lion. Thank you.

So those are the top 10 features of Lion, and there is so much more for you to learn about and discover in Lion. Amazing features. Just to bring up a few, don't Windows users who want to upgrade to a Mac deserve a migration feature just like we Mac users have? Well now there is in Lion. When you upgrade from Windows, we can help you migrate and get to a better computing experience.

There's FileVault too. Yeah, so for all of you who want more security and encryption in your hard drive, you have that. FaceTime's built in. Even server's all new with Lion. Server isn't another operating system, it's just a bunch of applications you can purchase to run on top of Lion. So amazing depth of features for you. And for all the developers out here, we have over 3,000 new APIs for you to take advantage of the power of Lion. Amazing stuff.

You can do all the things we showed here. You can have full screen applications, you can create versions, you can take advantage of autosave. All of that can easily be done with all these new APIs. So Lion is an incredible new release. So how are we going to get it? Well in the past, one thing every version of Mac OS X has shared in common is it came on an optical disk. No more. Now, Lion will be available only in the Mac App Store.

And that allows us to make it the easiest upgrade you have ever seen. When it's ready, you'll go into the Mac App Store and you'll see a page there where you can read about it, see screenshots, read reviews. And when you're ready, click buy. And it downloads right onto your Mac and starts the upgrade process right there.

So it's on the Mac App Store. It'll be about 4 gigabytes in size, about the same size as a single HD movie that you might download. It installs right in place, no more rebooting from an optical disk. And because it's part of the Mac App Store and the Mac App Store rules, it follows the same rules. When you purchase it, you can use it on all of your personal authorized Macs. You don't have to buy multiple copies.

That's Lion. I know what you're thinking, what should we charge for this? Well, what would you charge? Well, in the past, most major releases of Mac OS X have been $129, and I think there's a lot here for $129. But we love it so much that we want to make it available to even more people, so we're going to price it at just $29.99.

I was hoping you're going to like that. So when do you all get your hands on it here at the conference? We're going to have a developer preview, the latest developer preview available today for you to download and take advantage of everything you've seen up here. And for customers, one will be available in July. So very, very soon, coming in July. So that is Lion. That's the first for new products we wanted to tell you about today. The next product we're going to talk about is iOS 5. And to do that, I'd like to invite up Scott Forstal.

Welcome! So I'm here to tell you about iOS 5. Before I get into the cool stuff, let me give you a quick update on iOS. As you know, iOS powers the iPhone, the iPad, and the iPod Touch. And to date, we have sold, wait for it, over 200 million iOS devices. and that makes iOS the number one mobile operating system with more than 44% of the market.

Now the latest addition to the iOS family is the iPad 2, which is an incredible product. Even thinner and lighter than the original, it comes in black and white, it has cameras in the front and back. It is an amazing product. And our customers just couldn't wait to get their hands on it. Or else they actually did have to wait to get their hands on it. In the first 14 months, we have already sold more than 25 million iPads.

We created a whole new category of device with the iPad and have sold more than 25 million. The iPad 2 joins the iPhone and the iPod Touch for an incredible line up of iOS devices. We've got some great stores to go along with these as well, like the iTunes Music Store. We've already sold more than 15 billion songs from the iTunes Music Store.

This of course makes it the number one retailer of music in the world. Next is the iBookstore. You know we launched the iBookstore just a little more than a year ago. Already all six major publishers have signed up and are providing books to the bookstore. Our customers love it. Our customers have downloaded more than 130 million books. Great.

and of course there's the App Store. Now the size and momentum of the App Store is really hard to fathom. There are currently more than 425,000 apps on the App Store. And more than 90,000 of these were made specifically for the iPad. They take full advantage of the large touchscreen display, and they make the iPad a better product. So we'd like to thank our developers for these great apps.

Now our customers love it. Our customers have downloaded more than 14 billion apps from the App Store and that's in less than three years. It's amazing. Now our developers are being well rewarded for this. Apple so far has paid out more than two and a half billion dollars to developers building apps for the App Store. Thank you.

Now these apps, as you know, cover every genre imaginable. There's great travel apps like this walking tour from Lonely Planet. They're incredibly addictive games. I'd say even mind-controllingly addictive games like Tiny Wings. Great entertainment titles like HBO Go, which lets you take HBO wherever you are and you can watch it right on your iPad. There are deep apps like Mobile Mim, which allow physicians to look at CT scans and PET scans right on their iPad. And this has been FDA approved.

This next one from Jepson has been FAA approved. It allows pilots to look at the charts and the maps for airports around the world right on their iPad. And there's great business apps out there like WebEx which allows you to have a multi-party video conference and really hold a virtual meeting.

So, some great apps out there. For our stores we have more than 225 million accounts all with credit cards and one click purchasing to make it really easy for our customers to find what they want, purchase it and download it directly to their device. These stores go with an incredible line up of iOS devices. Let's talk about the future of iOS and that is iOS 5.

OS5 is a major release. This is incredible for our developers and for our customers. For our developers, there are more than 1,500 new APIs and some great enhancements to our tools. For our users, there are more than 200 new features. Let me go ahead and walk you through 10 now. Number one, notifications.

I'm sure you're all familiar with notifications. It looks something like this, and it looks best when giants are on top. So you can get scoring alerts, you can have alerts that pop up, they can have audio, they can also badge the home screen icons. Well these have been massively popular. In fact, we have already pushed more than a hundred billion push notifications. It's scaled beautifully.

We've heard from our customers that they're receiving so much money, they'd like a better UI to get them. And we agree. And so we've built something that solves some of the problems in the current one. Currently, when you get a notification, it interrupts you. So if you're playing a game, you get a modal alert, you have to deal with that modal alert before you can go on. Also, in the lock screen, you get this nice list of things that have happened while your phone's been locked.

But when you unlock it, that list isn't persistent. There's no way to get back to that list and go through those notifications. Well, we have designed a solution that solves those issues and goes far beyond it. And we call it Notification Center. Notification Center is a single place. which combines together all of your notifications. You can get to it at any time from anywhere on your iPhone or iPad or iPod Touch just by swiping your finger down from the top to reveal the notification center.

So we think it is beautiful. It has your missed calls and voicemails, text messages, mail messages, scoring alerts, Facebook updates, any push notifications that come from the App Store all end up right here in Notification Center. And we've even added stocks and weather right up top. Now we didn't stop there. Notifications are no longer interrupting. So now if you're playing a game and someone sends you say a text message, get a nice animation from the top, it's right there.

We can keep on playing your game and it'll automatically dismiss itself. You could have just tapped on it and it would take you to that app. But it doesn't matter because you can always get back to it anytime just by swiping your finger down from the top. We've also improved the lock screen. You can see more information for notifications here.

And one of my favorite features is for any one of the notifications in the lock screen, you can just slide your finger across it and it takes you directly to the app that sent the notification. Let me go ahead and just show this to you now. So I've got a phone here running iOS 5.

You can see more information there. Now I'm just going to swipe my finger right across that text message and it takes me directly to the messages app and right into the conversation. It's really convenient. Now to get to the notification center, just swipe my finger down from the top and there it is. Dismiss it by swiping up. Really nice animation. You can see that we're still in winter here in San Francisco.

I get all of my messages here, so text messages and scoring alerts. Down at the bottom here I have some alerts from MLB.com at bat. If I tap on that X button, I can just go ahead and clear that out. If I see another notification like the Facebook one, I tap on it, takes me directly to the Facebook app. So it's really convenient, and at any time again, swipe down from the top and you get back to Notification Center. And that is Notification Center.

Number two is Newsstand. You know, I love reading newspapers and magazines right on my iPhone and my iPad. And recently, we added subscriptions. This makes it easier for you to get all the new issues without missing anything. Already, most of the major publishers of magazines and many of newspapers have signed up to support subscriptions. Now, these are incredible titles. Things like National Geographic.

and Spin. So great music magazines and of course when you read these on your iPad you get audio and video in addition to all the articles. Vanity Fair, science magazines like Popular Mechanics and Popular Science. Esquire, GQ, fashion magazines like Elle, the Oprah Magazine, tech magazines like Wired, and automobile magazines, and sports magazines, the New Yorker. Newspapers, new ones like the Daily, but also the New York Times. The San Francisco Chronicle.

Daily Telegraph, and other international papers. And we've now created a single place right in the App Store that combines all of these newspaper and magazines. So you can find them all in one place. When you purchase them, they're automatically downloaded and placed in the newsstand. It's a new place right on the home screen. Looks like this beautiful news rack. In addition to this, we do background downloads.

So if a new issue comes out, say of a newspaper while you're sleeping, when you wake up and pick up your iPad, that new newspaper is already there ready for you to read it. And you can read it offline. On top of this, we set the cover to be the front page of the new newspaper and we'll set it to be the cover of the new magazine for magazines. So that is Newsstand.

Next is Twitter. Now as I'm sure everyone's familiar, Twitter is an incredibly popular service. People send more than a billion tweets per week. And we hear from a lot of our customers on iPhone and iPad and iPod Touch that they love Twitter. And so we want to make it even easier for all of our customers to use Twitter on iOS products. We're doing a number of things for this. First, we're adding single sign on.

So now, when you go to the settings app, it's built in on the iPhone or iPad. You can enter your username and password and now you're configured for Twitter. For any app you download off the App Store, it'll just say can I use your credentials? When you say yes, you're logged in. You don't need to re-log in every single time. So single sign on.

Next, we've integrated Twitter in with many of our apps, like camera and photos. So now if you're at a concert and you take a photo and you want to tweet that photo, just tap on the action button, it's a new option tweet, and it brings up this beautiful tweet sheet. It gives you a nice thumbnail of the photo, gives you a countdown of how many characters you have left to type, and you can even optionally add your location, tap on that, and then you've tweeted the photo. It's that simple.

In addition to tweeting from photos and camera, you can tweet articles from safari, websites. You can tweet videos from YouTube, and you can tweet about businesses or locations from maps. Beyond all of this, we added integration with contacts. Now you might have a lot of contacts that don't have photos, but Twitter may have photos for those people. And so you can use Twitter to automatically update the photos in your contact list and even the @ username for your friends. And that's Twitter integration throughout the OS.

Next is Safari. Safari is the best mobile web browser out there. It's also the most popular. In fact, nearly two-thirds of all mobile web browsing is done on Safari. Beyond this, we took Apple's Safari engine and open sourced it. And it's the basis of all web browsing on Android.

So Safari Engine is the basis of more than 90% of all web browsing on mobile devices. Well, in iOS 5, we're making Safari even better. We've got some great features. The first is Reader. Safari Reader becomes available up here as a new button when you're reading a story on a website.

If you just tap on that button, we take the story you're reading and make it front and center. We get rid of all the distractions, set the font size right, and even if it's a multi-page story, so you'd have to tap through multiple web pages normally to get to it, we put it in a single scrolling story. It's really convenient.

on top of that you can now email the contents of the story before you could just email the link but now when you email You get the link plus the contents in your Compose window. And all of this works really well on the iPad. It works great on the iPhone as well. It's the perfect size for it. It sets the font size right. It's really nice to read stories. So that's Safari Reader. The second one is Reading List.

Reading list is a simple and convenient way for you to quickly save a story to read it later. Just put it in the reading list and when you add an item to reading list, it gets added to the reading list on all of your iOS devices and even the reading list on Safari on Mac and Safari on Windows.

So if you don't have time to finish it here on the iPad, you can finish reading it later on your iPhone. And the next feature is tab browsing. We have added full tab browsing on Safari on the iPad. And you know, let me just show it to you.

Alright. So here I have an iPad running iOS 5. I'll launch Safari here. And the first thing you'll see with tab browsing is it is lightning fast to switch between windows now. Just tap on it and you're there. Great. Now I'm on the DP review site, which is a fantastic review site for cameras.

And they have really extensive reviews. In fact, you normally have to tap through many, many pages to read the whole review. If I look at this one here, it's 20 pages long. If I tap the Reader button here, it loads the entire story up in Reader. Now I can just scroll through. It gets rid of all the distractions, lets me concentrate just on the content. That is Reader.

You even see that when it goes between pages here, where you would have had to tap to say next page, it automatically gives you a little page break so you know when it's going through those pages. Now let's say if I don't have time to finish the story right now, I can just tap the bookmarks bar item and here I have reading list, I tap plus and now it's added this to my reading list and again I can go finish this on Mac, on Safari on my Mac or any of my other iOS devices. It's great. And if I really like this and I want to tweet about it, let me show you the Twitter integration while we're here. I tap tweet, brings up the tweet sheet.

We do completion, so I have a friend Gary Dunn, so I hit at G, automatically fills in the name, tap that and say I like this one. and I can optionally add my location, tap send and it's tweeted. It's that easy. So some really great Safari enhancements and Twitter integration throughout.

All of us are constantly creating lists of things. Lists of things to do, lists of things to buy, like a grocery list. Some of them have a place associated, like don't forget to walk the dog when I get home. And some have a time associated, say buy concert tickets Monday at 10am, so that's when they go on sale. Wouldn't it be great if... You can get rid of all these scraps of paper and store all this on your phone.

But beyond that, if your phone actually reminded you to do things as opposed to just statically keeping a list of things, well that's exactly what the Reminders app does. On the Reminders app you can store lists of things, multiple lists, so things for a trip to San Francisco, or a birthday party, or a grocery list. You can store dates associated with these reminders, so you'll be reminded on that date.

You can also assign location. This is really cool. I can set up a reminder to say, "Remind me to call my wife when I leave the convention today." And it'll set a geofence up around Moscone Center, so when I get in my car to leave, it'll pop up and say "Call." It solves the problem of "I'm leaving right now, I promise." Call in the car. You can of course search through all your reminders and reminders will sync with iCal on the Mac using CalDAV and even with Outlook on Windows using Exchange. And that is reminders.

Next is camera. You know, the iPhone 4 is widely regarded as having one of the best cameras on a mobile phone. It's also one of the most popular. In fact, if you look at cameras used to take photos and then post them to Flickr, now this is all cameras, not just cameras on phones, you see where the iPhone 4 is.

It is already by far the most popular camera on a phone to take photos and it very soon will be the most popular camera overall. We want to make using the camera even better and that's what we're doing. The first thing we're doing is making it way faster to just get in and take a photo.

So now, if there's some moment happening, your kid's doing something really cute, you want to capture it, you double click that home button, you get a new camera icon. When you tap on that camera icon, you're brought directly and immediately to the camera and you're ready to take a photo.

What's really cool about this is even if you have a passcode set, we'll take you right in to take a new photo. We'll protect it as you can't see any previous photos you've taken or anything else on the phone without typing your passcode. But you can start taking a picture immediately. And you can even use the volume up button now to click the photo. And that sound, I think people say, use the shutter button to turn your volume up.

So, in addition to this, We've added optional grid lines so you can use the rule of thirds to compose your photo or line it up. You can now pinch to zoom right within the camera. If you hold your finger over part of the scene now, we'll set the auto exposure and auto focus lock. You can even move it around, you know, stick to that.

Now, this is a really advanced feature and we've brought it to the iPhone and we've made it really easy for everyone to use. Now next, once you've taken your great photos, you can now edit them right on your iPhone. and your iPad. You can do things like crop and rotate, red eye reduction.

So if you've taken the photo at left where the flash has caused a red eye, you can automatically remove that red eye right on your iPhone or iPad. And we even brought over the one click enhance that we pioneered in iPhoto on the Mac and it brought that to iOS. So you can see when you applied one tap enhance to the right how the color tones look so much nicer, how it pulls detail out of shadow. It's really nice. So some great photo editing features and really nice camera enhancements.

Next is Mail. Now Mail is one of the most used applications on both the iPhone, iPod, and iPod Touch. and we're making it even better in iOS 5. We're adding rich text formatting so you can set things as bold, italic and underline. You can control the indentation. So you're forwarding something, you can unindent it or further indent it. You can now drag the addresses between 2CC and VCC. Don't have to retype them again. We've added support for flagging so you can flag and unflag.

This next one has been an incredibly popular request. In addition to searching from, to, and subject, you can search the entire contents of all your messages, both the messages on your phone and all the messages back on the mail server. So search the entire contents of your messages.

For the iPad, we added a really nice swipe to inbox gesture, so it makes it really nice to use this in portrait. You swipe it on, tap on something, swipe it off. And with every release of iOS 5 or iOS, we continue to add more support for our enterprise customers.

And one example of that in iOS 5 is we've added support for S MIME. So now... I think we've done a really nice job of this. Now if you have the certificate of someone else, you automatically get this lock icon right in the addressing field to show you this will be encrypted when sent to the other person. Let me just go ahead and give you a demo of a few of these features now.

All right. So first I can show you a simple gesture. I can just pull on The Inbox, right from there. So anywhere you are when you're in portrait, just pull it on. You don't have to go hunt up and find the right button for it. You can see we have flagging here, so I can tap on that flagged message.

One other feature we've added is a built-in dictionary throughout the OS as a service now. So before, we had a dictionary in the iBooks app, but we now have brought that to the entire OS so all apps from the App Store can use it. So here, if I just press down, let's say on leeches, I don't know what that is, let's say, I get a define in addition to copy, tap define, there it is, built-in dictionary. It's great.

If I say respond to this message, again, I can grab one of these addresses and now just drag it to BCC, drag it to and rearrange it. It's really nice and easy. There's one more feature I want to show you, and it's actually a system-wide feature having to do with the keyboard. When we released the original iPhone, we revolutionized the way people would type on multi-touch displays. And we keep on challenging ourselves to make that even better.

We have a new variant of the keyboard in iOS 5 for the iPad, which we think people who like to type with their thumbs while holding it are really going to like. In the bottom right, you see the keyboard button, and now it has some grab handles. If I just take those and drag it up, it splits it into two.

And so what it does is it just moves the keys closer to your thumbs on the side so you can put it wherever you want. It's really nice and it's persistent for every app in the system. It just stays where you put it. If you want to put it back down, just press and hold, say dock and merge, it goes back down to the bottom. So even a split keyboard.

These incredible devices, the iPhone and the iPad, and people get them. Home, they open up their box and they see this. I said, "What?" Now we're living in a post-PC world. In fact, especially with the iPad, we're ushering in the post-PC world. We have a lot of customers coming to us and saying, "I want to buy an iPad as my only device. I don't own a computer.

I want to buy an iPhone as my only device, my only actually internet access for where I live. It will be my iPhone." We know we're selling to a lot of places where the households just don't have computers. And they want to buy an iOS device as their only device, and that's exactly what we're going to support in iOS 5.

Now, when you take your iPhone out of the box, instead of seeing this, you're going to see this. You can now set up and activate your device right on the device and you are ready to go. It's that easy. And of course there's some other things we had to do to make this possible. Software updates are now over the air.

So you no longer need to go and plug into a computer just to update your software. And of course, they're now Delta updates. So instead of downloading the entire OS, you just download what's changed. Now the next thing we did is we looked at all of the apps in the iPhone, iPad, iPod Touch, and asked ourselves, what are the reasons that people go back to a computer today? And let's add that functionality right to iOS. So for instance, you used to have to go back to a computer to create calendars or delete calendars. You can now create and delete calendars right from iOS.

You saw for photos, we've added really significant editing functionality in there. So you can crop, rotate, one tap enhance, red eye reduction right from within your iOS device. Even in mail now, you can create mailboxes and delete mailboxes right from iOS. So we looked at all of the apps in the iPhone and the iPad, added that functionality, so now if you want to cut the cord, you can.

Next is Game Center. iOS is the most popular gaming platform on the planet. There are more than 100,000 game and entertainment titles in the App Store. And so about nine months ago we launched Game Center. And we did it to make it even easier for people to find players to play games against and also to make it easy for you to compare how you're doing against your friends. Well, in just nine months we have 50 million Game Center users. To put that into perspective, Xbox Live has been around for about eight years, and they have around 30 million users.

So Game Center is very popular and we're making it even better in iOS 5. To make it more fun and social we're adding photos. You can see photos of your friends, change your photos. You can now compare yourself against your friends using achievement points per game. You can see friends of friends as well.

You also will get recommended friends that might be great people to play some of the games that you like. We've also added game recommendations. So there might be some really great games out there, maybe they're new, that you don't know about. And we'll help you discover those. Once you've discovered a game you like, you can purchase and download it directly from Game Center. Now this is great both for our customers and for our developers. Another thing we've done for our developers is we've added support for turn-based games right into the OS.

There are some great turn-based games out there like Scrabble, but the developer had to do all the work for that. And now that's supported right out of the box in iOS 5. So some really nice enhancements to Game Center. Next. is iMessage. Now, I believe we have the best messaging client out there on the iPhone.

It works tremendously well to send text messages, send photos, send videos, and our customers love it. and our iPhone customers. But what about our iPad customers and our iPod Touch customers? They've been asking us for a messaging solution and so in iOS 5 we are launching a new messaging service between all iOS 5 customers.

and we call it iMessage. So iMessage supports the iPhone, the iPad and the iPod Touch. It does everything you've come to expect from our messaging app on the iPhone. So you can send text messages, photos, videos, send contacts, do group messaging, everything you've come to expect. And we've added some really nice new features. Things like delivery receipts. So you can see if it's been delivered to the other person's device. Optional read receipts. So you can see if it's been read.

This is one of my favorite typing indication. So you can tell now if someone starts typing and they're responding to you, you know you're about to get that message. iMessages are pushed to all your devices. So if you start a conversation on your iPad and later pick up your iPhone, you can pick up right where you left off with all the context of that conversation to date.

is supported over both 3G and Wi-Fi and everything is sent encrypted over the air. And I'd like to just give you a demo of iMessage now. To do so, I'd also like to invite up Jaws, Vice President of Product Marketing, to help me. Hey, Jaws, Scott. Thanks for having me. Absolutely. If you don't mind, I'm going to play a game though. Playing a game, okay. Try not to bother me.

Product marketing. So he's on the iPhone on the left, I'm on my iPad on the right hand side. I'll go ahead and launch messages here. So here I have a conversation going with Jaws. Normally we don't stand next to each other when having these conversations. So most I've talked to you all week. Let's grab lunch after the show.

No. Okay, so when I send this to him, you'll notice as he plays the game, it comes in right at the top. and he can keep on playing the game so it's not interrupting him as he does his lovely job playing this game. I'm on a roll, don't bother me.

But at any time, he can get right back to that message. Uh-oh. At any time. I think this might be a good time. At any time. It's so addictive. Just by pulling down, tapping on that, takes him right to this. Now, as he starts typing, see on my side where there's the three dots in the blue, and that lets me know he's currently responding. Well, check maybe some other messages while he's doing so.

So then when he sends the message, you see where it sends, he gets a little delivered, it already knows it's been delivered right to my device. And when I tap on his message, it sends a read receipt saying read 11:15 AM, he knows I've read it. So read receipts great.

We can also send high quality photos and videos. Let me go ahead and choose a photo here. Alright, maybe we can have a picnic by the bridge. Oh, that's so sweet. Send him a little picture again. You can tell from the dots on his side that I'm composing it right now. Send it off.

And again, we go over Wi-Fi as well as 3G. sends it over, and again he gets it, nice, high quality, and the entire transmission is encrypted over the air. And again, I'm on my iPad, so it supports iPad, iPod Touch, and iPhone. Thanks, Joss. Can't wait for lunch.

So iMessage. And we're actually building this on the push notification system we've built, so we know how to scale this. We have incredible features here in iOS 5. Notification system, which is just really nice. Newsstand makes it even better to read your newspapers and magazines right on your iPad or iPhone.

Great Twitter integration, a new reminders app. You can be PC free if you want. And the new iMessage application. And these are just 10 of the more than 200 new user features. There's really something for everyone in iOS 5. And there's other things like AirPlay mirroring. You can now mirror your entire iPad 2 right to your television wirelessly using Apple TV.

Wi-Fi sync to iTunes. Before you had to -- Exactly, before you had to go back and plug into your computer to sync and now when you are charging at night let's say, your iOS device will automatically find iTunes over Wi-Fi and sync with it. And before it syncs, it will back itself up so you automatically get backed up every single day.

There's also some really nice new multitasking gestures, so you can just flick right between your apps. It's really nice. Not only is there something for every one of our customers, there's something for every one of our developers. some great new development tools including significant enhancements to Xcode instruments in the simulator Even Core Image, we brought over the powerful Core Image Framework from Mac OS X to iOS. This allows developers to do complex image operations like red eye reduction, face detection, right from within their apps. So you're asking yourself, when are you getting it? And the answer is, we are giving a developer seed to you today.

This is going to be great for the conference as you learn about all the new APIs and all the sessions this week. You can go and use those APIs immediately using your seed. And iOS 5 will ship to all of our customers this fall. iOS 5 will support the same devices that we supported with our last software update. So that's the iPhone 3GS and iPhone 4, all the iPads, iPad and iPad 2, and the third and fourth generation iPod Touch. And that is iOS 5. Thanks.

And that is the second of the software products we want to tell you about today. To tell you about the third, I'd like to turn it back over to Steve. You like everything so far? Good. Well, I'll try not to blow it. So I get to talk about iCloud. We've been working on this for some time now and we're really excited about it. About 10 years ago, we had one of our most important insights and that was that the PC was going to become the digital hub for your digital life.

What did that mean? Well, it meant that that's where you were going to put your digital photos. Where else were you going to put them? Your digital video off your digital camcorder and of course your music. Right? You were going to acquire it in the device or potentially on your Mac. And you were going to basically sync it to the Mac and everything was going to work fine. And it did for the better part of 10 years. But it's broken down in the last few years.

Why? Well, because devices have changed. They now all have music. They now all have photos. They now all have video. And so if I acquire a song, I buy it right on my iPhone, I want to get that to my other devices. Right? I pick up my iPad and it doesn't have that song on it.

So I have to sync my iPhone to my Mac. Then I have to sync my other devices to the Mac to get that song. But then they've deposited some photos on the Mac, so I have to sync the iPhone again with the Mac to get those photos. And keeping these devices in sync is driving us crazy.

and many more. We have a great solution for this problem. And we think this solution is our next big insight, which is we're going to demote the PC and the Mac to just be a device. Just like an iPhone, an iPad or an iPod touch. And we're going to move the digital hub, the center of your digital life, into the cloud.

Because all these new devices have communications built into them, they can all talk to the cloud whenever they want. And so now. If I get something on my iPhone, it's sent up to the cloud immediately. Let's say I take some pictures with it. Those pictures are in the cloud and they are now pushed down to my devices completely automatically.

and now everything's in sync with me not even having to think about it. I don't even have to take the devices out of my pocket. I don't have to be near my Mac or PC. Now some people think the cloud is just a hard disk in the sky, right? And you take a bunch of stuff and you put it in your Dropbox or your iDisk or whatever and it transfers it up to the cloud and stores it and then you drag whatever you want back out on your other devices. We think it's way more than that and we call it iCloud. Now iCloud stores your content in the cloud and wirelessly pushes it to all your devices. So it automatically uploads it, stores it and automatically pushes it to all your other devices.

But also it's completely integrated with your apps and so everything happens automatically. And so you can see that iCloud stores your content in the cloud and automatically stores it to all your devices. And there's nothing new to learn. It just all works. It just works. And you might ask, why should I believe them? They're the ones that brought me Mobile Me.

It wasn't our finest hour. Let me just say that. But we learned a lot. Now, the three core apps in MobileMe were Contacts, Calendar, and Mail. Three things we'd obviously like kept up to date. We've thrown them away, we've re-architected and rewritten them from the ground up to be iCloud apps.

and we've put them on all of our devices. So, as an example, in contacts, when I make a new contact on my iPhone, it's automatically brought up to the cloud where it's stored on the cloud, right, the truth is on the cloud, and then it's automatically pushed down to my other devices so they're all in sync. It's that easy. I just update a contact on my iPhone and don't even think about it and that contact is updated on all my other devices and if I change it on any device, it's updated on all devices wirelessly, automatically without me doing a thing.

So that's contacts, here's calendars. Works much the same way. I make a new calendar event on my iPhone, it's stored in the cloud, and it's pushed to my other devices. Pretty cool. We've also added calendar sharing. So as an example, if I'm sharing a few calendars with my wife, school and soccer calendars, let's say. Right, and I add a new calendar for a teacher-parent conference on my phone. It's again automatically pushed up to the cloud.

and automatically push to my wife's iPhone. If she adds an appointment for a soccer game, again, goes up to the cloud and back to my iPhone. It's that simple. And so calendars has, it stores your calendars in the cloud, changes on any device or push to all your devices and we have shared calendars. We think you're going to love the new calendars. It just works. And then we have mail.

Mail was in the best shape of all, but it's even better now. We give you a mail account at @me.com. Your new messages again are pushed to all your devices and like we're used to, your inbox and folders are all kept up to date on all devices. So that's mail and no ads.

We build products that we want for ourselves too and we just don't want ads. So we can't get there. So these are the three apps that formed the core of MobileMe. We used to sell them for a subscription price of $99 annually. As of today, this product ceases to exist and those three apps are now going to be free.

But we didn't stop there. We've got three more apps that we've brought into the iCloud universe. The first is of course the App Store. The App Store, you've bought a lot of apps so far and you can buy them of course directly on your devices. Maybe the app you want isn't on the device you've got with you. So for all your purchase history now, you can see it on all your devices, even if the app's not there.

and we've added this button here which is download from the cloud and if you want that app on that device you just push that button and that app is automatically sent to that device. Right? And there's no extra charge. No extra charge. Now we've done that for your purchase history, what about for devices you buy in the future? Well for devices when you buy them in the future, you want to buy Yelp let's say, The cloud downloads it to all your devices, again at no extra charge, all automatically.

So that's what we're doing with the App Store. iBooks, same thing. You've got your purchase history of all the books you've bought on any device. You want to get it on your iPhone, say. Just push the button, it downloads to that device. When you buy a new iBook, let's say you want to buy this book here, The Wave, it downloads it to all your devices now.

and if you're reading it on one device, let's say you're reading it on your iPad and you've just got to run, you get to a page, you bookmark that page, that bookmark is sent up to the cloud and stored and again pushed to all your other devices so maybe you can read another, the rest of the chapter as an example on the train to work. It all just works.

and now backup. We talked about being PC free. Scott talked about how you can wirelessly backup your devices daily to your PC or your Mac. But let's do it to the cloud as well. For those people that want to be completely PC free. So we've added wireless backup to the cloud.

We're going to back up a lot of your important contents to the cloud. If you ever get a new phone or have to replace a phone, you literally type in your Apple ID and password and everything will be loaded onto that phone automatically and wirelessly. So we automatically do daily backups to iCloud over Wi-Fi. We back up your purchased music, apps, and books. We back up your camera roll with your photos and videos. We back up your device settings. And we back up your app data. All to the cloud.

So that is backup. And those are three other apps that come with iCloud. But we couldn't stop there. And so we have a final three apps that are amazing. The most inventive part of iCloud, I think. And I'd love to tell you about them.

If I'm on my iPad and I create a Pages document, right, I create a pages document and it automatically uploads it and stores it in the cloud. When I close that document completely automatically and it then pushes it to all the devices that I have pages on.

So I can get the document between my devices. And we have put that into pages, numbers, and keynote. As a matter of fact, the versions we just released last week have this in there. And to demonstrate what this is like with iWork, I'd love to invite Roger Rosner, who's our VP of iWork, up to give us a quick demo. Thank you, Steve.

All right, let's take a look at how iWork and iCloud will work together. Let's say you're working on a Keynote presentation on your iPad, making a beautiful presentation with all those awesome Keynote graphic effects and animations. You're away from home, you didn't bring your iPad with you, and you run into somebody who wants to see your presentation. Well, the good news is, last week we shipped iWork for iPhone. And even better, for anybody who bought an iWork app for your iPad, you can download that app for your iPhone at no additional charge.

So let's fire up Keynote on this phone. This is the first time we've run it here, so it's going to say "Hi." Then it's going to say, "Do you want to use iCloud?" We say yes. And immediately, it sees all your Keynote presentations that you've been working on in the cloud, and starts to download them in the background to your iPhone.

So I'll open this one we were just looking at. And as you can see, it's all there. I didn't even remember what slide we were looking at. And if I want to, I can just hit play, play it right on my iPhone. And I put exactly zero effort into getting that file over here. Pretty neat.

Of course, all the iWork apps use iCloud, so let's take a look at Pages. And imagine you're out and you're inspired to make some changes to a document you've been working So I'm going to move this graphic over here. Maybe I just took a photograph that I think would be great to spruce up my cover page. So I'll go to my camera roll, insert my graphic, use alignment guides to place it, and I'm done. And I stick the phone in my pocket and I forget about it.

And in the background, iCloud is grabbing all those changes and then immediately pushing them back down to my iPad. So when I get home, pick up the iPad, fire up pages, you can see in the upper left, my document thumbnail has already been updated. And there are all my edits, absolutely no effort on my part. And that is how iWork works with iCloud. I think you're going to like it. Thank you.

A lot of us have been working for 10 years to get rid of the file system. So the user didn't have to worry about it. When you try to teach

But the piece that we weren't finished with was how do we move those documents around to different devices. And documents in the cloud solves that problem for us. and others. The apps can store documents in iCloud. iCloud pushes those documents to a user's devices automatically. The documents update on all devices when changed on any device. and we are releasing API for all of you.

It's really easy to tie your apps into iCloud's storage system. and again you can have complex documents, apps like pages, or we've got another storage facility for key value data. So as an example, if you've got an app that just tracks stocks, you can just update the key value pairs and we'll store that in the cloud as well. So, documents and key value data works across all iOS devices and Macs and PCs too.

So we think this is going to be pretty big. And that is documents in the cloud.

and it's called PhotoStream. And it's going to bring the cloud to photos. How many times have we taken photos on our iPhone, maybe of our kids in the afternoon, and wanted, when we got home, to share them on an iPad and have to go through the process of moving them over.

Wouldn't it be great if by the time I got home they were already there on the iPad? Well that's what PhotoStream is going to do for us across all of our devices. So again I take photos on any device, puts it in the camera roll, That will be automatically uploaded to the cloud where it's stored and automatically downloaded to all my other devices. including in this case a Mac. And so I've got my photos on my iPad just waiting for me when I get home.

Now, in addition, I can import photos. Right into iPhoto as an example on the Mac. It'll upload those to the cloud and do exactly the same thing with them by pushing them down to all my other devices. So it's apps that I, it's photos that I take or photos that I import.

and we built this right into the apps. I hope you've seen that as we've gone through this. We've built this right into the app so there's nothing new to learn. So PhotoStream on the iPad's photo app, we've built it right in, right next to albums. We have a button called PhotoStream.

You push it and you're looking at the PhotoStream. It's that simple. There's not a separate app that you have to go learn. It's right there in your Photos app. It's right there in your Photos app on your iPhone. It's just right there with all your other albums. There you go. PhotoStream.

On the Mac, we built it right into iPhoto, and so it's right there on the side, your photo stream. and on a PC they don't have a photos app so we use the pictures folder. In addition to that, we've even built it in to Apple TV. So Apple TV... Apple TV talks directly over the internet directly to the photo stream servers. Doesn't even go through your PC. Talks directly to the photo stream servers so you can watch the photos right on your Apple TV.

So, one of the problems we faced was that photos are large and will use up all the memory on your devices. They're also large. They'll consume vast amounts of storage in our server farms. So we've came up with a great scheme. We're going to store photos on your devices. We're going to store the last thousand photos.

The Last Thousand. And any photos you want to keep permanently, just move them into an album and they'll stay forever. But they'll be parading by you, The Last Thousand photographs. on your Mac or PC, because we have more storage, we'll store all of them. You can get rid of them by just deleting them, but we'll store all of them. And on the server, we'll store them for 30 days, which is more than enough time for all your devices to connect and automatically download those photos.

So we think we've got a great system here that's going to move our photos around among all of our devices, even Apple TV, so that when I take a photo anywhere, I can view it on all my other devices. We think this is going to be really exciting. To demonstrate this, I've asked Eddy Cu, our VP of Internet Services, to come on up and give us a demo of PhotoStream.

Thank you Steve. Yep. So I want to take some photos to start with. Now I love cars and I happen to have brought one of my favorite ones with me here today and here it is. and we're going to go to our my iPhone and launch the camera app. Lightning McQueen is looking good. I love the headlights. And now these photos are on my iPhone, but let's go look at my iPad. Now we've built PhotoStream right into the Photos app. So right next to Albums is PhotoStream. And there is the pictures I just took.

I didn't have to learn anything new at all. And if I want to save them permanently on my iPad, I can just select them and move them to an existing album or even create a new album. That's it. Now these photos aren't just on my iPad, they're on all of my devices.

Let's move over to the Mac where I've got iPhoto running. And we've built again PhotoStream right in. And there are the photos I just took. So now when I take a photo on one of my devices, they automatically appear on all of my devices without having to do anything at all. It's that simple and that's PhotoStream.

Photos you take or import upload to iCloud. iCloud pushes them to all your devices, works over Wi-Fi. iCloud stores each photo for 30 days, which is plenty enough time for all the devices to be connected. Devices store the last thousand photos, and again, you can just drag them to an album, they stay forever. And Macs and PCs store all photos. So we're really, really pleased with PhotoStream. We think you're going to like it a lot. Last but not least is iTunes in the cloud.

You know, it's the same old story, right? About I buy something on my iPhone, Right, well, and it's not on my other devices. I grab my iPod and I go to listen to that song I bought yesterday on my iPhone, it ain't there. Well, the first thing we've done, again, is for the songs you've already bought, we've added a purchase button that shows you your entire purchase history of all the iTunes songs you've bought on any device. You can look at it by all songs or recent songs, or you can look at it by artist.

So I'm going to pick Bob Dylan here, and I can download any of these albums that I've bought on iTunes to this device just by pushing that cloud download button. Or I could go in to one of them and just download whatever songs I want to this device. So anything I've bought, I can now download to any of my devices at no additional charge, which is great.

This is the first time we've seen this in the music industry. No charge for multiple downloads to different devices. and for the future I flick one switch to on and now any song I buy on any device again will automatically The Keynote is a great way to make sure that your devices are being downloaded to all of your devices. So when I want to buy a song, in this case an Adele song, it will push it to all of my devices. So to give us a demo of that again, I'd like to invite Eddy up. Thank you.

Thanks, Steve. So I'm on my iPhone, and I want to listen to a song I'd previously purchased on iTunes, but it's not in the music library on this device. Well, now I can easily just go to the iTunes Music Store. There's a new purchase tab right on the bottom. And now I'm seeing all of the purchases I've ever done on iTunes.

I can even look at them, the songs that are not on this device that I previously purchased by just tapping that button. Now I'm going to look for a Foo Fighters song, I think it's called "Walk". and there it is. And just tapping the iCloud button, it downloads to my iPhone. Again, because I'd previously purchased this song, it's downloading at no additional cost. Let's go ahead and play it. Just finishing downloading.

Now that's great, but iTunes in the cloud is even better. Let's see what happens when I purchase a new song. And if we can bring up my iPad, I'm going to go ahead and launch our new music player in iOS 5. And on my iPhone, I'm going to go back to the iTunes store. I want to buy a new song. And I want to look at Bruno Mars' new album. I know he has a hit song. I think it's called Lazy Song. That's it. We can preview it.

That's definitely it. Now I'm going to buy it, but before I do, notice on my iPad I don't have any Bruno Mars songs at all. So we're going to go ahead and buy. and it's now downloading to my iPhone. And in addition, there's the Bruno Mars song. and of course LaQuay. So now when I buy a song on one of my devices it automatically downloads to all of my devices without having to sync or do any work at all. And that's iTunes in the Cloud.

Thank you very much. Isn't this awesome? So, music purchased from iTunes, high quality, 256 kilobits AAC, and you can have up to 10 devices, downloading your music to all of them every time you buy it on any device. iTunes in the cloud.

So that's iCloud. It stores your content and wirelessly pushes it to all your devices, and it's integrated with your apps, so everything happens automatically.

So a competitor that doesn't own the apps or doesn't have great developers to integrate with their apps, They can never do this. They can never make it so it just works. And that's what we've done here. So how do you get it? Well, when you upgrade your phone or buy a new phone with iOS 5 on it, all you have to do is type in your Apple ID and password and that's it. And you'll get a switch that's iCloud.

You can turn it off if you'd like. It'll be turned on by default and you're up and running. We're also going to give everybody 5 gigabytes of free storage for mail, documents and backup. And that's even more than it sounds like, because we're not counting purchased music, apps or books. Towards that five gigabytes.

Are we counting PhotoStream towards that 5 gigabits? When can you get your hands on this? Today. and David We're going to get you all a developer beta today. And also today we're going to make something available to end users, which is the iTunes in the cloud portion. And it runs on iOS 4.3. It'll run on all the supported platforms when we ship it this fall.

But today we're going to put it out for 4.3 as a beta and everyone can get their hands on it and run it on their existing iPhone 4s. So we think this is going to be really exciting. And of course we ship iCloud concurrent with shipping iOS 5 this fall. So that is iCloud.

It pertains to iTunes in the Cloud. As you recall, iTunes in the Cloud is just for the music that you've purchased from the iTunes store. Now, at 14 billion songs, 15 billion, excuse me, that's a lot of songs out there that have been purchased from iTunes music store. But you may have some that you ripped yourself.

and there's three ways you can deal with that. One, you can sync your new devices over Wi-Fi or cable, and you only have to sync them once just to get that music on them, and then you can rely on iCloud to take care of getting all your new purchases off iTunes onto that device. Or, if it's just a few songs you love, you don't want to leave behind, you can buy those songs that you'll miss on iTunes.

We're going to offer a third way, which is called iTunes Match. What is iTunes Match? Well, iTunes Match uses the fact that we've got 18 million songs now in the iTunes Music Store. And the chances are awfully good that we've got the songs in our store that you've ripped. And so we wrote software to scan those CDs, the non-iTunes music, and match it up with those songs we have in the store.

Right? And so we can give that music the same benefits as music purchased from iTunes. and it takes just minutes, not weeks. If you have to upload your whole library into some locker in the sky, that literally takes weeks. This takes minutes because we're scanning and matching your library so we don't need to upload that. That large part of your library. And the few songs that remain, well, we'll upload them. But with 18 million songs, we're most likely to have what you've got. In addition, iTunes Match will upgrade those songs that match the 256 kilobits AAC.

and iTunes Match cost just $24.99 a year. So if you've got a bunch of music, If you've got a bunch of music that you didn't buy from iTunes, you can get all the benefits of the cloud service and more in terms of upgrading your music for $24.99 a year.

Now, if you look and compare that to some competitors, let's just look at Apple and Amazon and Google, you kind of get surprised. Because, again, the library and the cloud, we scan and match. The other guys, you've got to upload your whole music library. Again, it's going to take weeks.

Music apps on your Mac and PC? Well, you're stuck with a web app instead of iTunes. Upgrade to 256 kilobits per second. The other guys aren't upgrading you at all. The annual price for 5,000 songs were $24.99. Amazon charges you $50 for the storage, and Google hasn't announced their pricing yet. Even at 20,000 songs, we charge one flat price. Amazon's up to $200 for the storage, and Google hasn't announced their pricing yet.

Some of our customers won't need this because they bought a lot of their music on iTunes, but for those that do, it's an industry leading offering, let's put it that way. So that's iTunes Match and it goes along with free iTunes in the cloud and that's what it is.

If you don't think we're serious about this, you're wrong. This is our third data center that we just completed. It's in Maiden, North Carolina. This is what it looks like. It's rather large. It's as eco-friendly as you can make a data center with modern technology. and we're pretty proud of it. Just to give you a feel for its size, see those two little dots on the roof? Those are two people right there.

So it's a pretty large place and it's full of stuff. Full of expensive stuff. We are ready, we think, for our customers to start using iCloud, and we can't wait to get it in their hands. So iCloud is the third thing we want to talk about today. I hope you like all the three things that we've unveiled this morning.

And again, we've got a great week planned for you with... 5200 attendees, over 120 sessions, over 100 hands-on labs, and over a thousand Apple engineers here all week. So please ask us for any help you need. That's why we're here. So go at it, have a great week, and thank you very much for coming this morning.