[UPDATE Youtube on Apple TV. More Below]

12:15 We're at the fluffy intro
12:21 WM When you made the change to Apple from Apple Computer, people wondered if it was the exit. Are you committed to computers?
SJ Totally. WWDC is big. Leopard is coming in October. we love it.

12:22 WM Are you planning a big iPod change?
SJ You mean since last Sept?
WM Yes
SJ Fast-moving business!
WM Well, it wasn't completely new.
SJ....
WM I wasn't taking your feelings into account.
SJ We're working on the best iPod ever and its awesome.

WM You have a phone?
SJ Yes (whips it out) best iPod we've ever made. Best phone we've ever made!
WM Coming out end of June, last day?
SJ Uh, yeah. I'll send you one. (giggles)

12:26 WM Selling it through the stores and Cingular?
SJ Yes, Cingular, which is the new AT&T.
WM Just like the old AT&T. You're a lot nicer to the phone companies now.
SJ Well, yes, We haven't sold one yet but they broke a lot of rules. And we did the same. We wouldn't show it to them. And we took a gamble on each other. I will never forget that.

12:27 WM Why did this work? They wanted your brand to go along with their new brand?

SJ So far, music's not doing well on phones. On phones, you have 3G, but not good ways to use it. You get the baby Internet and the mini Internet, but nothing real. We're doing that in an entirely new way. We'll see.

12:28 WM Any feature in the iPhone you'd like to announce that you haven't yet shared?

SJ Uh, no.

[iTunes Plus Songs now]

SJ [Pretty simple UI, you can upgrade old music as long as its available.]

WM Any other movement on the record labels?

SJ Well you know that record labels sell 90% of their stuff online (goes into the details in the open letter to music industry)...

WM Was that letter you wrote something you thought up or was it a thing already in movement? [We reported that EMI sent the letter first.]

SJ People say iPod locks down music. But we never said that.

WM The iPod is your business, and your music is a little bit of that.

SJ There's 3 pieces to it. There's iTunes, which is free, there's the iPod, and there's the online store in the cloud.

WM But the iPod is the biggest part.

SJ it makes the most money...but most of the music money goes to the music company.

WM Do you risk that money as you break the DRM tie?

SJ The iPod wins because its the best music player, and we have to keep doing that.

WM Is the iPhone a phone with an iPod inside or is it the iPod with a phone inside?

SJ It's 3 things. It's the best iPod, a remarkable phone, and the Internet in your pocket.

12:34 WM how much back and forth is there inside, developing. I assume its like the UN where you have a veto.

SJ It's not like that. If you want to keep talented people you can't tell them what to do all the time...much.

WM How much debate about a physical keyboard?

SJ None.

WM Really? In ALL of Cupertino?

SJ. Yep.

SJ [Makes comment about the photographer that sounds like a machine gun in the audience.]

SJ I'll bet you dinner, after a few days, after you get one, you'll think its great.
Once you learn to trust it, you fly. And the screen UI can change as you come up with new ideas.

SJ Cingular said we need this button. They hadn't seen it yet. Oh, I said that we'll do that after we ship. They said, huh?

SJ Why is Apple popular? Because the preeminent Japanese gadget companies couldn't do software.

The iPhone is software wrapped in a beautiful package. And the companies couldn't make that leap. And that's why Apple has that success with the iPod.

If you look at hardware manufacturers for handsets, they haven't been able to make the leap.

The usual suspects will try to copy the hardware. But the software is hard to do; 5 years ahead of anything we've seen. We started with an OS we've been working on for well over a decade and a browser, Safari, which is regarded by many as the best.

12.41 WM But it doesn't have the entire OS X software inside, or Safari.

SJ Yes, it does. A lot of it is data. Desktop patterns, audio files. It has real desktop email, Safari, OS X. And we took all that, and put a new UI on it. It's an amazing amount of software.

WM On the technical side, could an OS X app run on the iPhone?

SJ We don't think that's a good idea. The phone has its own UI.

12:43 WM One of the holy grails is to have the Internet in your pocket. And TV in the living room. Microsoft does this. Why do you describe the living room as a hobby?

The living room might be the peas on the side. The entree might be the things that you'd get on the Internet.

I brought something to show you...[something new for Apple TV?]

[Showing Apple TV now, movie trailers for Ratatouille]

WM Works on a regular home network? [Snowball questions, if you ask me.]

WM The device won't do high-def?

SJ No HD, for the trade-offs in download time and quality.

[BTW, Steve jobs is wearing gray New Balance shoes and a black turtleneck.]

[And showing TVs now...The Office, and more old stuff. He's playing with old stuff, described as Peas. Where is the entree yet to come?]

SJ But we're going to introduce today is...

12;51 Wouldn't it be great if you could see YouTube in your living room. YOUTUBE ON APPLE TV

12:54 SJ I would have waited a few weeks for this announcement, but you know...
WM But This is D.

SJ Shows related videos when you're done.

[ Robot Dance Video playing]
WM Did you ever think that after you started Apple, you'd be associating with the robot guy?
SJ It's funny, we've been watching a lot of these vids.
WM Does that mean Leopard is slipping again?!
SJ *Chuckles....[in a sinister way.]
[Showing search, fumbling]

12:54 WM Oh yeah, you're not very good at public speaking [sarcasm]
[Showing human slingshot video.]

WM How about other stuff on the Internet?
SJ Sure, that's a great idea?
WM When?
SJ Over time.

SJ People don't want a normal browser in the living room.

WM Even with the human slingshot...

SJ That's my species!

WM But you're committed to the living room with this set-top?

1:00 SJ It's not a set-top box. Once you get into that space, you get into a whole 'nother thing. There's a lot more DVD players out there than DVD players. We don't have to be replacing the set-top box. We're replacing the DVD player. It's the DVD player for the Internet.

WM How many copies of iTunes [which is what you need for Apple TV]?
SJ Lots. Several times.
WM 100 million ipods, so 300 million?
SJ That, or more.
WM So you're a huge Windows developer?
SJ That's right. People have written us saying iTunes is their favorite app on Windows.

SJ It's like giving a glass of ice water to someone in hell.

SJ We never though we'd ship 100 million.
WM Even you, with your humility?
SJ 100 million is a lot.

WM You said at one point, people didn't want portable video. Even after shipping.

1:05 SJ I was more skeptical than the customers, and they've proved us wrong. Video has been the first or second reason why people have bought it.
WM On iTunes or iPods?
SJ Can't find out unless we ask, and its both. This will grow.
WM But you don't have a video service that allows you to natively download, over the air, to an iPhone.
SJ No.
WM Why not? It's a big deal, carriers are trying it.
SJ It's failed. The phone is not the best UI to discover media, and it costs more. Then you have to sync it back to your PC, so its backed up so you don't lose a few hundred dollars of media. You can do it from your PC with a big screen.

WM So no store plans for the iPhone? iTunes store on a phone?
SJ Certainly nothing we have to do today.

Questions: What do you look for in talent?
SJ: That's a long question. We don't build four billion semiconductor factories. All we are are people. And all we have is the people, and recruiting is the heart and soul of what we do.

1:10 Question: This is a 2.5G device. You said that there aren't any 3G Apps. Can you comment?

Sure. Our phone switches to Wi-Fi automatically, if you've joined it before. But when you're in a new place, it lets you know if there's a new signal around. There're everywhere. Some of personal ones you can ride on. It's everywhere. Fifty signals in Palo Alto. And there's 10x points out there than I thought.

Some weird comment about orifices.
1:14 Question: We'd love to write apps. Will it open up?
SJ This is a very important trade-off between security and openness. We want both. We've got good ideas, and sometime later this year, we can open it up to third-party apps, and keep security.

1:16 Question: I work with Japanese companies, and they ask us to help with battery life.
SJ When you talk about anything portable, like an iPod or a phone, it's all about battery life. We have experience with this making notebooks. We brought that tech into the phone. That's one of the key problems with portable devices.

1:18 Question: You had a bad time a two years ago. How are you now?

SJ I'm still vertical! Thank you.

Question: [Some guy asking wonky question about AAC being a limited form of DRM.]
SJ First of all, MP3 plays fine on iPods. Secondly, AAC is a better file format as far as quality. We don't own it, people license it from it.

Question: I work for a camcorder company. Are you entering the field? [More or less]
SJ We don't plan on entering the camcorder industry.

1:24 Question: I was going to ask if you read the Fake Steve Jobs blog.

SJ I have read a lot of the Fake Steve Jobs posts, and I think they're funny. But I don't know who it is.

Question person: I don't write it.

[He asked a real question, but it was not as interesting as his fake one. ]

Done! More Steve Jobs tonight, along with Gates, Mossy, and Swisher.

– Brian Lam

All Things D at Giz [Gizmodo]