I-Innovation

The keynote was preceded by a sour note: the night before Apple CEO Steve Jobs took the stage to address the annual San Francisco Macworld show, a Merrill Lynch analyst issued a dire "sell" rating for the company's stock, charging that "the new product pipeline looks skimpy and we expect continued market share losses."

But Steve Jobs was singing a different tune. His 130-minute Macworld speech-north of Castro, he's the most indefatigable podium hog in the hemisphere-followed his classic structure: begin with an upbeat progress report (in this case, a claim that half of the customers in his surprisingly successful Apple retail stores are "switchers" from Bill Gates's evil empire), move to a variety of software announcements, then roll out the hardware, finishing with "one more thing"-usually a blockbuster computer rollout or an exotic digital device. Though speculation on this last one ranged from a tablet Macintosh to an iPhone (whatever that might be), Tuesday's climax was more pedestrian: a compact Mac Powerbook, which at just under five pounds, only tiptoes into the superlight realm.

Still, Jobs-in signature black long-sleeved T shirt and jeans-made a compelling case for Apple's vitality. From the get-go, the Stevester promised to introduce two Macworlds' worth of stuff, and to the delight of the Appleoids-a wildly biased crowd who greet the company's television commercials as if they were unannounced cameos by the Rolling Stones-he made good. His long-held strategy is to overcome low market share and a hostile economy by innovation that the rest of the industry can't match.

Where was the beef? Here's the list, from the goofy to the gorgeous.

iPod: If you dreamed of a successor to the MP3 age's answer to the Sony Walkman-maybe with even more storage or a means to display your digital photos-you were out of luck. But for $500, you can buy a Burton Amp Gore-Tex snowboarder's jacket that not only has a pouch to store your iPod (not included) but remote-control buttons on the sleeve. Act quickly, Steve warned, because supplies are limited.

iLife: Apple updated the applications of its "digital hub"-media stuff for movies, music, photos and DVD-cutting. Now, they all work together in the style of Microsoft Office. Jobs was right when he said that Apple increased its lead in this category-no one understands how to tame the baffling niceties of digital media more than Jobs's wizards.

Final Cut Express: Mac users who get auteur fever while making digital home movies have previously had to make a decision: stick with the slick but limited iMovie that comes free with the Mac or splurge for the $1,000 Final Cut Pro software used by the folks who do video for a living. Now, for $300 they can buy an only slightly disabled version of the pro model.

Safari: Here's where it gets interesting. For more than five years, Apple users have been stuck with Microsoft's full-featured but slow version of its Explorer browser. Jobs gleefully showed a brand new "turbobrowser" called Safari-available for free download immediately, which also introduces the kinds of innovations (like a useful "snap back" to instantly return to a URL address you enter) that Microsoft doesn't seem to be pursuing any more. Clearly, a shot at Redmond.

Keynote: Volley two at Bill Gates is Keynote, an all-new presentation software app that goes head to head with the Powerpoint component of Microsoft Office. (Jobs revealed that all the slides in his speeches last year utilized the new program.) Unavoidable presumption: Apple wants to liberate itself from its dependence on the industry-standard Office.

Airport Extreme. Apple pioneered the Wi-Fi (wireless Internet) movement with its Airport and now regains the lead with a lower-cost base station-still shaped like a flying saucer-that uses a more powerful (yet backward compatible) standard.

Powerbooks. The big news is a 17-inch screen-the most spacious display on any laptop. The new computer also boasts a spiffy shell of anodized aircraft aluminum, and it's only an inch thick. It's an open question, though, whether its bells and whistles will lead customers to pay $3,200 in a tough economy. A more sure winner is the compact 12-inch Powerbook, a full-powered machine under five pounds for a competitive price of $1,800.

By the way, the coolest feature of the day lives under the keyboard of the 17-inch PB. When light in the room is dim, the keys emit an eerie glow, with the letters clearly visible. Since you asked, the trick is done with ambient sensors and fiber-optic light. The backlighting is a classic Apple touch, in this case emerging from a suggestion from John Lassiter (the creative force of Pixar, which created "Toy Story"), who apparently uses computers in the dark all the time.

In an interview with NEWSWEEK after the speech, Jobs was ebullient, promising that this was only the opening salvo in a year of new-product introductions. (So much for the skimpy pipeline.) "Two thousand two was a hard year," he admits, in part because Apple had to move its users to its new OS X operating system-and of course because of the economy. Yet, he claims, "only two computer companies are making money-Dell and us. Dell is swooping up share from other companies, and we're doing it by making innovative products."

He denied that the introduction of Safari and Keynote was part of a grand plan to replace Microsoft's software on his platform. (And scoffed at my suggestion that users might run into problems when they try to export Keynote presentations into Powerpoint format.) He identified the iLife applications as existing "on the intersection of Apple and the humanities," gave an impromptu demo of Safari ("it's three times faster!") and turned off the lights in the room to show the big Powerbook's backlighting. And that Merrill Lynch "sell" rating? "Maybe we have to do a better job of educating Wall Street," Jobs said. He didn't sound too worried.