Jobs: Flat-panel iMacs on the way

"This is the official death of the CRT today," Jobs said of cathode-ray tubes during his two-hour speech.

The new model bears some resemblance to a desktop lamp, with the flat panel attached to the dome-shaped base via a pivoting arm. Jobs described it as the "ultimate digital hub." The company took two years to develop the product.

"This is the best thing we have ever done," Jobs said.

Three all-white models will be available, at $1,299, $1,499 and $1,799. None are available now, although Apple expects to ship the top-of-the-line iMac by the end of the month. The midrange model is expected to be available in February and the entry-level iMac in March.

At those prices, the new iMac is still relatively expensive. Although it is roughly in the same ballpark in price as rivals PCs with Intel Pentium 4 chips and flat-panel monitors, consumers currently can pick up a fully loaded PC with a Pentium 4 and a CRT for below $800. In addition, with the exception of the original iMac, all-in-one computers have not been big sellers.

The new iMac features include 700MHz and 800MHz PowerPC G4 processors, 32MB Nvidia GeForce2 MX graphics cards, five USB ports, two FireWire ports and, on some models, DVD-recording drives.

The base, which holds the CPU and the optical drive, measures 10.5 inches in diameter, Jobs said. The optical drive--either a DVD-recording, CD-rewritable/DVD-playing, or CD-RW drive--is accessed from the front and has connectors in the back, so that the cables are out of the way.

The high-end iMac will feature an 800MHz G4 processor, 256MB of RAM, a 60GB hard drive and a DVD-recording drive. The midrange model comes with a 700MHz G4 processor, 256MB of memory, a 40GB hard drive and a combo CD-RW/DVD-playing drive. The starter system ships with a 700MHz G4 processor, 128MB of RAM, a 20GB hard drive and a CD-RW drive.

At 22 pounds, the new iMac isn't lightweight. However, the new machine is designed to be carried by the neck that joins that flat panel to the base.

The keyboard and mouse are white to match the new iMac. The two higher-end models also come with Apple Pro speakers.

Jobs said Apple has sold six million iMacs since their introduction more than three years ago.

Apple is keeping two existing iMac models with cathode-ray tubes for the retail and education markets. The $799 model will remain as is, while a $1,299 model will drop to $999, effective Monday.

"We still think this is the beginning of the end of the CRT," Phil Schiller, Apple vice president of worldwide marketing, told CNET News.com after Jobs' speech. But "there are customers who need those $799 and $999 price points."

The crowd at Jobs' speech was raucous, typified by one attendee who had the Roman numeral X shaved into his hair. Everyone who attended Jobs' speech received a copy of the latest edition of Time magazine, which features the new iMac on the cover.

In an interview with CNET News.com after the speech, Jobs didn't shy away from promoting his company.

"Pretty much, us and Dell are the only ones in this industry making money. They make it by being Wal-Mart. We make it by innovation," he said.

The "digital hub"
Before unveiling the new flat-panel iMacs, Jobs used his speech to announce new photo-editing software and updated iBook laptops.

He started the product announcements by recapping the company's "digital hub" message introduced during Macworld a year ago.

Under that strategy, Macs are becoming a hub for connecting and using digital devices such as camcorders and music players. He reviewed some of Apple's software releases, such as iMovie 2, iDVD 2 and iTunes 2. Apple has distributed eight million copies of the latter product.

"But what about digital cameras?" Jobs said. "Today, we are introducing our fourth digital hub application, iPhoto, and it's killer."

Consumers can use iPhoto to retrieve photos from digital cameras, edit images and print them. "All of the magic is under the hood," Jobs said of the product's ease of use.

Banners at the show quipped: "Shoot like Ansel. Organize like Martha."

As expected, Jobs also introduced new consumer iBooks. Apple lowered the price of the entry-level computer to $1,199 from $1,299 and added a combination CD-rewritable/DVD drive to the $1,499 model. The company upgraded the $1,799 iBook's display to 14 inches from 12.1 inches. The other two models sport 12-inch displays.

Jobs described the new model, with a 600MHz PowerPC G3 processor, 256MB of RAM, a 20GB hard drive and a combo CD-RW/DVD drive, as "a big brother" to the others.

As for iPhoto, Jobs discussed the problem of film prints collecting dust or digital images disorganized on a hard drive. Apple's vision is that through iPhoto consumers can create a "digital shoebox." To accomplish this, iPhoto organizes images into "rolls" for easy retrieval. People also can create photo albums that Jobs described as "playlists for pictures."

Adding a feature already available on Microsoft's rival Windows XP operating system, Apple's iPhoto now lets consumers order prints of their digital images.

"I can order Kodak prints right off the server," said Jobs, who touted the feature's integration with Apple's iTools.

Another feature of iPhoto lets consumers create layouts for ordering hardbound books with their pictures from Apple. Six book designs are available, and the 10-page bound books can be delivered in about a week.

Jobs said the books will cost $29.95 for 10 pages and $3 for each page thereafter.

Mac OS X users can download iPhoto for free starting Monday. Other features include slide show creation and a simple method of building a photo Web page.

"We now have the complete digital hub for the new digital lifestyle," Jobs said.

First, a look back
Jobs began his speech by recapping sales highlights of the past year, starting with the iPod digital music player.

"We have been thrilled with the success of iPod," Jobs said. The company sold 125,000 from the product's Nov. 10 release to the end of the year.

Jobs also touted Apple's 27 retail stores, promising more this year. He said that 800,000 people visited the stores in December.

The CEO noted that "the great state of Maine" has ordered 36,000 iBook portables for seventh- and eighth-graders. "We look at this as one down, 49 to go," Jobs said. He joked that Texas would be a challenge.

Jobs also talked up the Mac OS X operating system.

"There are 2,500 OS X apps today," said Jobs, who added that the number of new applications increased dramatically since the release of OS X 10.1 in September. In November, Microsoft, the largest Mac developer, released Office v. X for Mac OS X.

"Microsoft did a great job on this, and I would like to give them a round of applause," Jobs said.

Jobs said most of the 2,500 OS X applications shipped in the last 90 days.

"It's time," he said, for Mac OS X to displace OS 9 as the main operating system on Macs. "All new Macs will boot up into OS X," Jobs said. He expected it to take until the end of the month for this to trickle down to all new Macs.

Apple shipped Mac OS X in March 2001, putting it on new systems starting in May. But because of a lack of OS X applications, OS 9 was the default on all new Macs until Monday.

Jobs also invited Adobe Systems executives on stage to discuss new products.

Adobe on Monday announced Adobe Go Live 6, its Web authoring client and LiveMotion 2 animation software for Mac OS X. During the keynote address the company committed to bring all its products, including Photoshop, to Mac OS X.

"Our strategy is to innovate," Jobs said in closing his two-hour keynote. "The future is the digital hub...We believe the digital hub is the future of the PC."

News.com's Ian Fried and Michael Kanellos contributed to this report.