Armani, Andy And Apple

Steve Jobs and New York's SoHo district are a natural fit. Both are icons in the nexus where taste, art and commerce all meet. Like SoHo, Apple CEO Jobs has evolved from scruffy beginnings to prosperity while maintaining a quietly hip edge.

So it's no wonder that when Apple opened its first store in New York City, Jobs chose the place where Giorgio Armani and the Keith Haring shop

coexist. At its unveiling last Wednesday, Jobs was greeting media and muck-a-mucks at his 32d Apple retail store, a former Restoration Hardware outlet in a 100-year-old former post office. "I love the neighborhood," Jobs gushes.

Jobs is celebrating five years since his triumphant return to the company. He's still triumphant and, surprising even himself, he's still there. And he's still foiling skeptics by insisting--and, so far, proving--that Apple is a survivor. Earlier in the day, dressed in trademark long-sleeved black T and jeans, he wove his spell before thousands of the faithful who attended the semiannual Macworld Expo. There were no big surprises in the nearly two-hour presentation, but an abundance of encouraging updates and intriguing new additions to the Mac selection. A new version of the desk-lamp-like iMac sports an impressive 17-inch screen. The iPod music player was downpriced and upgraded, and Jobs announced a Windows version. Jobs spent a lot of time on Jaguar, the update to OS X, which includes improved mail, calendar and search programs.

Almost lost in the blizzard of announcements was the introduction of Rendezvous, software that instantly links people in wireless networks. For instance, when several people who have laptops equipped with iTunes music software gather together, a superlibrary instantly forms, combining all the songs on everybody's computer. Normally, such an advance would be news in itself, but in Apple's high-powered innovation factory, it's just one more spoke in the "digital hub" that supposedly makes Macintosh a platform that will lure "switchers" from the dominant Windows system.

Not that it's an easy road for Apple, which earlier in the week was reporting drab financial results. Jobs blames the economy. "I'd rather be us than some of the other guys out there," he says. "It's only us and Dell making money [among computermakers]. They're making money because they're Wal-Mart, we're making it because we're innovating." Jobs also shrugs off fears that Microsoft, expressing unhappiness at sales of its Mac version of Office, might abandon the platform. "It's just a spat," he says, predicting that new versions of Office will keep appearing on the Mac.

But while Apple puts the focus on switchers from Windows to Mac (and, by the way, while those commercials were charming at first, don't the endless repeats make you want to choke those weirdos by now?), there's also a constant temptation for Mac users to defect to the Dark Side. This problem might get worse as Apple follows the industry in trying to convert its customer base from just buyers to subscribers. During the keynote, Jobs makes the unwelcome announcement that Apple is changing its iTools service--which had provided free, easy-to-use Web hosting, e-mail and data storage to Mac users--to a $100-a-year program called .Mac. "We were the last people providing that for free," says Jobs, "and it's growing so fast that we can't continue to do it [without charging]." But that means there's one fewer advantage to being a Mac owner. Just as the existence of a Windows-based iPod removes another edge for the Mac crowd. "We debated that," he says. "And we ended up feeling that getting an Apple product in front of Windows users en masse will get more people interested in switching."

Jobs says the best part of his five-year stint is working with his team at Apple. Though talk like this often rings of false modesty, the fact is that Apple under Jobs has been remarkably free of reorgs and confusion. "I know if I got run over by a bus tomorrow, Apple's going to keep on going," says Jobs. "Because the engines have been put in place and cultures have been put in place to keep innovating, to keep doing things at this level of quality." Does that mean that in five years there will be no more of the iconically hip CEO in black shirt and jeans? Jobs laughs. "I'm taking a vacation next week. That's as far ahead as I can think."