Apple says could move to Intel, but happy with IBM

"It's perfectly technically feasible to port Panther to any processor," Jobs said at a meeting with financial analysts. But Jobs said the company is happy with IBM's PowerPC family of chips and feels the performance is "quite competitive."

"Right now we don't see a compelling need to switch processor families," Jobs said. "We have all the options in the world, but the PowerPC road map looks very strong."

Asked about Apple's interest in selling Macs that could serve up the video recording abilities Microsoft offers with its Windows XP Media Center Edition, Jobs joked that Apple was instead focused on melding the computer with a toaster.

"I never get mine quite brown," said Phil Schiller, vice president of marketing. "We can do an up-sell for bagels."

Jobs said that he doesn't see such products creating a big market.

"We're not going to go that direction," Jobs said. "There is a small audience that likes this."

Jobs said there are several problems with the Media Center concept, in particular the wide divergence in the way people want to watch television as compared with how they use a computer. "Generally what they want to view on television has to do with turning their mind off," he said.

Jobs said that video recording is processor intensive and is best left to a device that is not doing other things such as playing games or running spreadsheets. "When I want to record 'The West Wing,' I want to make damn sure it records 'The West Wing,'" he said.

Separately, Jobs rebuffed the idea that the iTunes music store should work with MP3 players other than the iPod, or conversely, that Apple's iPod should work with other music download services.

"Why should we work with another music store when we are working with the Microsoft of music stores?" Jobs said. "I'd rather spend our engineering dollars on enhancing the iPod and the iTunes music store."

Asked about whether consumers care about 64-bit computing, Jobs said people don't pay attention to what type of chip they're using, they look at what it can do.

"Consumers don't care about 64-bit computing per se," Jobs said. At the same time, he said they will care a great deal if faster processors can speed the time it takes to encode a DVD, or if it is possible to make a clear picture out of what was once a blurry photo.

"It's mathematically possible to unblur that photo," Jobs said. "It's computationally ferocious--64-bit computing will one day possibly help that."

As for how the company can boost sales, Jobs said that while Apple will continue to woo Windows customers, it will be most focused on selling to existing Mac customers who have not upgraded recently, noting that there are a lot of professional customers with Power Mac G3 systems or early Power Mac G4s.

"It's a great time for our pro customers to upgrade," Jobs said. "That's the No. 1 thing we're focused on; that's the lowest-hanging fruit."

The company is also making money in new areas, such as its .Mac Internet service, which just went through its first renewal period, in which customers had to pay the full $99 price. Jobs pointed out that critics said Apple would never get customers to pay $99 after selling the first year at $49.

"Our renewal rate was 86 (percent) to 87 percent," Jobs said, adding that that is "unheard of, higher than almost anybody's. We've built ourselves the beginnings of a pretty good Internet services business."

Jobs also took a few shots at Microsoft, saying that Apple is out-innovating its larger rival, which has years of work ahead of it with Longhorn, the next version of Windows. "They're hoping to be in 2006 where we were with Jaguar," Jobs said, adding, "We're going to have a few more releases by then."