The most compelling reason for most people to buy a computer for the home will be to link it to a nationwide communications network. We're just in the beginning stages of what will be a truly remarkable breakthrough for most people – as remarkable as the telephone.

My position coming back to Apple was that our industry was in a coma. It reminded me of Detroit in the 70s, when American cars were boats on wheels.

You can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.

When you're a carpenter making a beautiful chest of drawers, you're not going to use a piece of plywood on the back, even though it faces the wall and nobody will ever see it. You'll know it's there, so you're going to use a beautiful piece of wood on the back. For you to sleep well at night, the aesthetic, the quality, has to be carried all the way through.

You know, I was showing this to somebody -- I was giving a demo to somebody a while ago, who had never seen this before, inside Apple. And I finished the demo, and I said what do you think. They told me this, they said, You had me at scrolling. So, the iPhone with the most amazing iPod ever. You can now touch your music.

You know, it was just a year ago that I was up here and announced that we were going to switch to Intel processors. A huge, heart transplant to Intel microprocessors. And I said that we would do it over the coming 12 months. We did it in seven months, and it was the -- it's been the smoothest and most successful transition that we've ever seen in the history of our industry. And it was because we made a beautiful, seamless version of OSX for Intel processors. And our team created Rosetta software which lets you run PowerPC apps on top of OSX on Intel processors. Our hardware team got to cranking out a new Mac with Intel processors every month, and we completed this transition in seven months. But we didn't do this alone. We did this with the help of a lot of folks. Our new colleagues at Intel really helped us. Thank you very much. Our third-party developers rapidly moving their apps to universal versions to run at native speeds on Intel processors. Thank you very much. And most of all, our users. The minute you saw these lightning-fast machines, you bought 'em. And we've had an extremely successful year, and I want to thank our users very much.

So, I want to show you four things. I want to show you the phone app, photos, got a calendar, and SMS messaging. The kind of things you would find on a typical phone, but in a very untypical way. So let's go ahead and take a look. So let's go to our phone first. You see that icon in the lower left-hand corner, the phone? I just push it right here, and boom, I'm in the phone. And I've got five buttons across the bottom: favorites, recents, contacts, keypad and voice mail. I'm in contacts, right now, again. How do I move around my contacts? I just scroll through them. And so, let's say I want to make a call to Jony Ive. I can just push here, and I see Jony Ive's context, with all his information: his three phone numbers, his e-mail, whatever else, his address, whatever else I've got. It's all in one place. And if I want to call Jony, all I do is push his phone number. I'll call his mobile number right now. And now, we are calling Jony here.

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