Steve Jobs talk at the 1983 International Design Conference in Aspen

[Applause] Morning introductions are really funny. They paid me $60, so I wore a tie. Um, how many people—how many of you are 36 years older than 36 years old? Yeah, all you were born pre-computer. The computer's uh, 36 years old and there's something sort of— I think that there's going to be a little slice in the timeline of history as we look back, pretty meaningful slice right there.

Um, a lot of you are products of the television generation. Uh, I'm pretty much a product of the television generation, but to some extent starting to be a product of the computer generation. The kids growing up now are definitely products of the computer generation, and uh, in their lifetimes, the computer will become the predominant medium of communication just as the television took over from the radio, uh, took over from even the book.

Um, boy, I'll talk about anything you want to talk about today. I have about 15 or 20 minutes of stuff that I just wanted to cover really quickly, and then whatever you want to talk about we can talk about. How's that? Yeah. How many of you own an Apple or just any personal computer? Uhoh! How many of you have used one or seen one? Anything like that? Good! Okay, okay.

Uh, let's start off with what is a computer. What is a computer? It's really simple! It's just a simple machine, but it's a new type of machine. Uh, the gears and the pistons have been replaced with electrons. How many of you ever seen an electron? That's the problem with computers is that you can't get your hands on the actual things that are moving around. You can't see them, and so they tend to be very intimidating because in a very small space, there's billions of electrons running around, and we can't really get a hold on exactly what they look like.

Computers are very adaptive. It's a very adaptive machine. We can move the electrons around differently to different places depending upon the current state of affairs, the results of the last time we moved the electrons around. So if you were here last night and you heard about the brain and how it's very adaptive, a computer is in the same way very, very adaptive.

The second thing about a computer, it's very new. It was invented 36 years ago in 1947. The world's first degree in computer science was offered by a university, which was University of California at Berkeley, and it was a master's degree offered in 1968. Which means, uh, the oldest person that has a degree in computer science is 39 years old, and the average age of professionals at Apple is under 30. So it's a field that's dominated by fairly young people.

The third thing about computers—they're really dumb. They're exceptionally simple, but they're really fast. The raw instructions that we have to feed these little microprocessors—the even the raw instructions that we have to feed these giant Cray-1 supercomputers are the most trivial of instructions. They're get some data from here, get a number from here, fetch a number, add two numbers together, test to see if it's bigger than zero, go put it over there.

It's the most mundane thing you could ever imagine, but the key thing about it is, let’s say I could move 100 times faster than anyone in here. In the blink of your eye, I could run out there and I could grab a bouquet of fresh spring flowers or something, and I could run back in here and I could snap my fingers, and you'd all think I was a magician or something. And yet I was basically doing a series of really simple instructions: moving, running out there, grabbing some flowers, running back, snapping my fingers. But I could just do them so fast that you would think that there was something magical going on.

It's the exact same way with the computer. It can go grab these numbers and add them together and throw them over here at the rate of about a million instructions per second. And so we tend to think there's something magical going on when in reality there's just a series of these simple instructions.

Now what we do is we take these very, very simple instructions and we—by building a collection of these things—build a higher level instruction. So instead of saying "turn right, left foot, right foot, left foot, right foot, extend hand, grab flowers, run back," I can say, "could you go get some flowers? Could you pour a cup of coffee?" We start, we have started in the last 20 years to deal with computers in higher and higher levels of abstraction, but ultimately these levels of abstraction get translated down into these stupid instructions that run really fast.

Let's look at the brief history of computers. The best way to understand it is probably an analogy. Uh, take the electric motor. The electric motor was first invented in the late 1800s, and when it was first invented, it was only possible to build a very, very large one, which meant that it could only be cost justified for very large applications. Therefore, electric motors did not proliferate very fast at all. But the next breakthrough was when somebody took one of these large electric motors and they ran a shaft through the middle of a factory, and through a series of belts and pulleys brought shared this horsepower of this one large electric motor on 15 or 20 medium-sized workstations, thereby allowing one electric motor to be cost justified on some medium-scale tasks.

And electric motors proliferated even further then, but the real breakthrough was the invention of the fractional horsepower electric motor. We could then bring the horsepower directly to where it was needed and cost justified on a totally individual application. And I think there's about 55 or so fractional horsepower motors now in every household.

If we look at the development of computers, we see a real parallel. We look—the first computer was called the ENIAC in 1947. It was developed particularly for ballistic military calculations. It was giant; hardly anyone got a chance to use it. The real breakthrough, the next real breakthrough was in the 60s with the invention of what was called time-sharing. What we did was we took one of these very large computers and we shared it. Since it could execute so many instructions so quickly, we'd run some of Fred's job over here and then we'd run some on Sally's job and we'd run some on Don's job, and we'd run some on Susie's job. And we'd share this thing, and it was so fast that everyone would think they had the whole computer to themselves.

Time-sharing was what really started to proliferate computers in the 60s. Most of you, if you've used computer terminals connected with some umbilical cord to some large computer somewhere else— that's time-sharing. That's what got computers on college campuses in large numbers. The reason Apple exists is because we stumbled onto fractional horsepower computing five years before anybody else. That's the reason we exist.

We took these microprocessor chips, which is sort of a computer on a chip, and we surrounded it with all the other stuff you need to interact with a computer. We made a computer that was about 13 pounds, and people would look at it and they'd say, "Well where's the computer? This is just the terminal." We'd say, "No, that is the computer." And after about five minutes of repeating this, they'd finally— a light bulb would go on in their minds, and they'd decide if they didn't like it they could throw it out the window or run over it with their car, but that this was the entire computer. That's why we exist: fractional horsepower computing.

This fractional horsepower computing created a revolution. It was invented in 1976. The first personal computer—this year, in 1983, the industry is going to ship over 3 million of the little buggers. 3 million! By 1986, we're going to ship more computers than automobiles in this country. And let me digress for a minute. One of the reasons I'm here is because I need your help. If you've looked at computers, they look like garbage. All the great product designers are off designing automobiles or they're off designing buildings, but hardly any of them were designing computers.

And if we take a look— we're going to sell those 3 million computers this year, we're going to sell those 10 million computers in '86, whether they look like a piece of junk or they look great, it doesn't really matter because people are going to just suck this stuff up so fast that they're going to do it no matter what it looks like. And it doesn't cost any more money to make it look great.

There are going to be these objects, this new object that's going to be in everyone's working environment, and it's going to be in everyone's educational environment, and it's going to be in everyone's home environment. And we have a shot at putting a great object there, or if we don't, we're going to put one more piece of junk object there. By, you know, by '86, '87, pick a year, people are going to be spending more time interacting with these machines than they do interacting with their big automobile machines today.

People are going to be spending two, three hours a day sometimes interacting with these machines longer than they spend in a car. And so the industrial design, the software design, and how people interact with these things certainly must be given the consideration that we give automobiles today, if not a lot more. And if you take a look, what we've got is we've got a situation where most of the automobiles are not being designed in the United States, Europe, Japan. Televisions, audio electronics, watches, cameras, bicycles, calculators—you name it, most of the objects of our life are not designed in America.

We've blown it. We've blown it from an industrial point of view because we've lost the markets to the foreign competitors. We've also blown it in a design point of view. And I think we have a chance focusing on this new computing technology, meeting people in the 80s—the fact that computers in society are out on a first date in the 80s— we have a chance to make these things beautiful, and we have a chance to communicate something through the design of the objects themselves.

In addition to that, we're going to spend over $100 million in the next 12 months on media advertising. Apple alone, IBM will spend at least an equivalent amount, and we generate tens of millions of dollars worth of brochures, posters—more than the auto industry again as a comparison. And this stuff can either be great or it can be lousy, and we need help. We really, really need your help.

Okay, let's go back to this revolution. What is happening? What's happening is the personal computer is a new medium of communication, one of the media. And so what's a medium? It's a technology of communication. A book is a medium, telephone, radio, television—these are mediums of communication, and each medium has pitfalls to it, has shortcomings, has boundaries which you can't cross, but it also generally has some new unique opportunities.

The neat thing is that each medium shapes not only the communication that goes through it, but it shapes the process of communication. A perfect example: if you compare the telephone to what we're seeing now in electronic mail, where we link a bunch of computers together and we can send messages to an electronic mailbox, which people can then receive at their leisure, we see that indeed, in one sense, we're sending voice through these wires, and in another sense, we're sending ones and zeros through these wires.

So the content that's traveling through the medium is certainly different, but the most interesting thing that's different is the process of communication. When I talk on a telephone with anyone, we both have to be on the phone at the same time. When I'm working or when I want to send something to somebody with a computer terminal, I want to do a drawing and zip it over and put it in their mailbox—they don't need to be there. They can retrieve it at 12 a.m. in the morning, they can retrieve it 3 days later, they can be in New York and retrieve it. One of these days, when we have portable computers with radio links, they can be walking around Aspen and retrieve it.

And so the process of communication itself changes as the mediums evolve. So what I'm claiming is that computers are a medium and that personal computers are a new and different medium from large computers. What happens when a new medium enters the scene is that we tend to fall back into old media habits.

And let's look at a few transitions from one medium to another: radio to television, television to this incredible new interactive medium of the video disc. If you go back and you look at the first television shows, they're basically radio shows with a television camera pointed at them. It took us the better part of the 50s to really understand how television was going to come into its own as its own medium.

And I really think the first time that a lot of people were shook into realizing television had come of age was the JFK funeral. The nation, a lot of the world experienced the JFK funeral in their living room at a level of intensity that wouldn't have been possible with radio. I think another, more upbeat example, was the Apollo landing. That experience was not possible with the previous medium, and it took us the better part of 20 years for that one to really evolve.

Let's look at the next transition. We have this optical video disc, which can store 55,000 images on a side or an hour of video, randomly accessible. What are we using it for? Movies! We're dropping back into the old media habits. And there's a few experiments though that are starting to happen, and you start to believe that 5 years, 10 years from now, that's going to come into its own.

A neat experiment happened right here in Aspen. Uh, MIT came out to Aspen about four or five years ago, I think about four years ago, and they had this truck with this camera on it, and they went down every single street, photographed every single intersection in every single street in Aspen. They photographed all the buildings, and they've got this computer and this video disc hooked up together.

And on the screen, you see yourself looking down a street, and you can touch the screen, and there's some arrows on the screen, and you can touch "walk forward," and all of a sudden, it's just like you're walking forward in the street. And you get to an intersection, and you can stop and you can look right, and you can look straight, and you can look left, and you can decide which way you want to go. You can even go in some of the shops. It's an electronic map that gives you the feeling you're walking through Aspen.

Then there's four little buttons in the corner because they came back and they did exactly the same thing for all four seasons. So you can be looking down a street, hit "winter," and all of a sudden you get the same street with three feet of snow on it. It's really amazing. That's not incredibly useful, but it points to some of the interactive nature of this new medium, which is just starting to break out from movies and is going to take another 5 to 10 years to evolve.

Okay, let's go back to computers. We're in the I Love Lucy stage right now in our medium development. What we did was microcomputers, personal computers first come on the scene. What do we do? We fall back into old media habits. We run these weird languages like COBOL. We do business accounting on them. That's the kind of stuff we have been doing on them historically.

It took us about four years before we started breaking out of that, and we're just starting to break out of it now. When you look at Lisa, Lisa enables a person like me—I’m not an artist in the sense that many of you are. I can sit down and I can draw artistic pictures with that thing because there's a program called Lisa Draw. And if I don't like what I've just drawn, I can erase it, I can move it, I can shrink it, I can grow it, I can change its texture.

There's a little airbrush—the more I scrub, the darker it gets. I can put soft edges on things, hard edges on things. And so I have no talent at drawing at all—I can make neat drawings. And then I can cut them out and I can paste them into my documents so that I can combine pictures and words, and then I can send it onto the electronic mailbox so somebody else that's living here in Aspen can dial up a phone number and get their mail and see this drawing that I made.

So we're starting to break out, and you can just see it now, and it's really exciting. So where we are is that the personal computer is a new medium, and that society and computers are really meeting for the first time in the 80s. In 15 years, it's going to be all over in terms of this first phase, getting these tools out into society in large numbers. But during the next 15 years, if we really—we have an opportunity to do it great or to do it so-so. And uh, what a lot of us at Apple are working on is trying to do it great.

I want to look at one last thing, then we can talk about whatever you want to talk about. Um, what is a computer program? Do you know what a computer program is? Anybody? No? Sort of, sort of. It's an odd thing. It's really an odd thing; you can't—if I mean you've never seen an electron, but computer programs have no physical manifestation at all. They're simply ideas expressed on paper.

Computer programs are archetypal. What do I mean by that? Let's compare computer programming to television programming again. If you go back and you look at the tapes of the JFK funeral in 1963, I guess you’ll start to cry. You will feel a lot of the same feelings you felt when you were watching that 20 years ago. Why? Because through the art of television programming, we are very good at capturing a set of experiences—experiences, two experiences, twenty experiences—and being able to recreate them.

We're very good at that. It takes a lot of money and it's somewhat limited, but we can do a pretty good job of that. You can really feel the excitement of Neil Armstrong landing on the moon. Computer programming does something a little different. What computer programming does is it captures the underlying principles of an experience—not the experience itself, but the underlying principles of the experience—and those principles can enable thousands of different experiences that all follow those laws, if you will.

The perfect example is the video game. What does the video game do? It follows the laws of gravity, of angular momentum, and it sets up this stupid little Pong game, but the ball always follows these laws. No two Pong games are ever the same, and yet every single Pong game follows these underlying principles. Give you another example: there's a neat program called "Hamurabi," and in "Hamurabi," there's seven-year-old kids playing this, and it's a game. It comes up on the screen:

"Ah, King Hamurabi." You get to be King Hamurabi of the ancient kingdom of Sumeria for 10 years. It comes up: "Oh King Hamurabi, this is year one. You have a thousand bushels of wheat in storage. You have 100 people, and you have 100 acres of land. Land is trading at 24 bushels an acre. Would you like to sell any land?" No. "Would you like to buy any land?" No. "How much would you like to plant or feed? How much would you like to plant?"

And it turns out that if you don't plant enough, some of your people will starve the next year, and if you plant a lot, then people will come from the surrounding villages because you've got a hot village to live in and you feed them well. So you plant a certain amount, but you need a—then it says, "Um, how much? Oh, I'm sorry, so you feed your people a certain amount."

Then it asks you how much would you like to plant, and you have to plant so much as well in order to get the grain the next year, but you can't plant more acres than you have people to plant the acres. And so if you go on a land buying spree at the beginning and you don't feed your people well because you've spent all your grain buying land, then you don't have the people to plant the land. So it doesn't do any good if you don't plant the land and you feed your people a ton. All these other people come from the surrounding villages, but they starve the next year.

And there are these seven-year-old— and it goes on year two, year three, and every once in a while it throws in, "The rats ate some of the grain," and you're in deep trouble. What are you going to do? Kill some people or sell some land or whatever? And it's crude, but basically there are these seven-year-old kids playing with this macroeconomic model. You can argue about the content of the model, but one thing you can't argue about: they will sit there for hours and play that and learn. And we've got to get our models better and better and more sophisticated, but that is an interactive way of learning that none of us ever had when we were growing up.

And again, thousands of individual experiences, but all based on that one set of underlying principles. When I was, um, going to school, I, um, had a few great teachers and a lot of mediocre teachers. And the thing that probably kept me out of jail was books because I could go read what Aristotle wrote or what Plato wrote, and uh, I didn't have to have an intermediary in the way, and a book was a phenomenal thing. It got right from the source to the destination without anything in the middle.

The problem was, you can't ask Aristotle a question. And I think as we look towards the next 50 to 100 years, if we really can come up with these machines that can capture an underlying spirit or an underlying set of principles or an underlying way of looking at the world, then when the next Aristotle comes around, maybe if he carries around one of these machines with him, his whole life, his or her whole life, and types in all this stuff, then maybe someday after the person's dead and gone we can ask this machine, "Hey, what would Aristotle have said about this?" And maybe we won't get the right answer, but maybe we will, and that's really exciting to me, and that's one of the reasons I'm doing what I'm doing.

So what do you want to talk [Applause] about? Yeah, yeah, it's a mess. Okay, okay. How are these computers all going to work together? Um, they're going to probably work together a lot like people. Sometimes they're going to work together really well, and other times they're not going to work together so well.

What we've got now is we are putting a lot of computers out that are made to be used pretty much in a what we call a standalone mode—one person, one computer. But it isn't very long before you get a community of users using these things that really want to hook them all together because ultimately a computer is going to be a tool for communication. So they want to hook them together and communicate, and over the next five years, the standards for doing this are going to evolve.

They all speak different languages right now, and there's—oh man, I heard a funny story. We've talked a lot with AT&T, um, American Bell etc. And there's a funny story—this is a true story—when the old—to this old guy who was about 80 years old, and he was one of the original telephone installers, and he would go out and he'd install telephones in people's farmhouses, and they had never seen anything like this.

And, uh, it takes two wires—he'd run the two wires down, and he'd hook up the phone, and he was out installing this phone for this Italian family in this farm. And he finished installing the phone, and the guy asked him, “Well, can I speak Italian on this phone?” And he said, “Why didn't you tell me? I’ve got to run a third wire; it'll be $50 extra!” So that's where we are today.

And what happened? There's been a few installations where people have hooked these things together. The one installation that stands out is Xerox did at a place called Palo Alto Research Center, or PARC for short, and they hooked about 100 computers together on a what's called a local area network, which is just a cable that carries all this information back and forth.

And an interesting thing happened when they did that. What happened was you'd have a distribution list, so you'd want to send a memo to all the people in this group. And so you'd say, “Okay, you'd write a memo, and you'd send it to the distribution list for all the people interested in the November 4th or a new product, Delta, or whatever you're working on.”

But then an interesting thing happened: there were 20 people, and they were interested in volleyball. So a volleyball distribution list evolved. And when there was a—the volleyball game next week was changed, you'd write a quick memo and send it to the volleyball distribution list. Then there was a Chinese food cooking list, and before long there were more lists than people. And it was a very, very interesting phenomenon because I think that that's exactly what's going to happen: as we start to tie these things together, they're going to facilitate communication and facilitate bringing people together in the special interests that they have.

We're about five years away from really solving the problems of hooking these computers together in the office, and we're about 10 to 15 years away from solving the problems of hooking them together in the home. A lot of people are working on it, but it's a pretty fierce problem.

Now Apple’s strategy is really simple. What we want to do is we want to put an incredibly great computer in a book that you can carry around with you and that you can learn how to use in 20 minutes. That's what we want to do. We want to do it this decade, and we really want to do it with a radio link in it, so you don't have to hook up to anything; you're in communication with all these larger databases and other computers.

We don't know how to do that now; it's impossible technically. So we had three options. One was to do nothing, and as I mentioned, we're all pretty young and impatient, so that was not a good option. The second one was to put a piece of garbage computer in a book, and we can do that—but our competitors are doing that, and so we don't need to do that.

The third option was to design the computer that we want to put into the book eventually, even though we can't put it into the book now. Right now it fits in a bread box, and it's $10,000, and it's called Lisa. And it just so turns out that fortunately there is a giant office market out there that is buying these things a lot faster than we can make them.

We're sold out for the next year, and we'll sell over $100 million of those things the first year. So fortunately, there is an office marketplace where enhancing personal productivity is absolutely worth $10,000 a person, and they're gobbling these things up, and they will pay for the development of this new technology.

The next thing we will do is we will find a way to put it in a shoebox and sell it for like $2,500, and that'll be the next step. Finally, we'll find a way to get it in a book and sell it for under $1,000, and we will be there within five to seven years, and that's what we're working pretty singularly on.

Yeah, yeah, it is a little crude, right? Okay, uh, let me tell you that what we're planning to do to sort of be able to provide tools for graphic design—that'll never be our forte. Um, our forte is going to be PE, just people. And relative to nothing, what we can give them in the next five years is a lot.

Eventually, we'll get to the point where people can create images that are as good as they could create any other way, but it's going to take the better part of this decade to be able to get it down to a price level that people can afford. But we're doing some things now. Every computer to date has used a weird type on the screen, as you know—the "eyes" are just as wide as the "W's." They're non-proportionally spaced fonts, we call them.

And, um, it's really been impossible to use multiple fonts on the screen at any given time. As a matter of fact, the fonts have been just garbage, and it's really been impossible to embed any kind of graphics with text. If you take a look at Lisa, it is totally proportionally spaced text. We have 30, 40 fonts on the screen that come out at approximately 80 dots per inch resolution on the screen, approximately up to 300 dots per inch resolution on a laser printer.

And that's where we are today. And what you're saying is we really want to go to 600, 800 dots per inch on a laser film printer. We're not there yet, but we're solving the problems of injecting some liberal arts into these computers—that's what we're trying to do right now. Let's get proportionally spaced fonts in there. Let's get multiple fonts in there. Let's get graphics in there so that we can deal in pictures, and let's get to the point where three years from now, when somebody—there is going to be no college student three or four years from now that's ever going to think of writing a paper without one of these things, just like they will not think of going to a science class without a calculator today.

And where we've got to get to is where people, three, four years from now, are using these things. They go, "Wasn't this the way it always was?" That's where we're trying to get to. Now, once we get to there, then we can look at some of the other stuff.

Yeah, yeah, I only heard part of— which part? You're talking about the people having these big databases about your life? Oh, the privacy issue? Okay, um, I guess what I see now is um an incredible amount of information but not a very great ability to distill any sort of knowledge or wisdom out of that information. We are all bombarded with information every day, and there is so much information in data banks, um, in Congressional budgets, in testimony, in books, journal articles being published every day, and our ability to turn all that information, to filter it to what we're interested in and to turn it into something useful to us, into some knowledge, is very low.

So I think if we're really interested in a distributed society where the ability to understand things and the ability to distill information—knowledge from information is possessed by everyone, that the first thing we've got to do is give tools to people to help them do that, because right now those tools are centralized. Do you see what I'm saying?

So I think the first step towards ensuring that we don't get a concentration of something that you don't want is to distribute that intelligence, if you will, that can turn all this information into some sort of knowledge for us so that we can get on, and we can look at any Congressional testimony that has to do with gun control, any journal articles published, any newspaper articles published, so that I can come home and on a weekend, peruse the weekly outpouring of information, but put a filter on it, because I'm only interested in gun control.

And I can find out that my congressman gave some testimony last week about gun control that I didn't agree with, so I can get on and write a pretty nasty letter and zing it on the email system and make sure that at least one of his aides will read it tomorrow. And I think that that probably is a lot more important than worrying about these global databases.

Um, I don't think that you're going to find—we're moving rapidly into an era of electronic funds transfer, and I think that's probably the thing that people are most concerned about right now, because you could keep a history of our whereabouts and things like that just based on financial transactions. And I think that's the thing people are most concerned about right now, but I haven't heard a ton of issues concerning these giant databases knowing everything about us that had much substance to them.

The thing I'm most concerned with is the ability to turn all this stuff into something we can do something about. Does that make any sense? I didn't get my sleep last night, so I'm a little fuzzy.

Yeah, mention what is computer doing in this area as a public service? Ah, public service? Um, we don't do things because we think they're public services; we do them because we think they ought to be done, I guess we do them because we want to do them.

Um, we're doing a few things. The first thing we're doing—uh, is there's a situation that's occurring in schools right now. This all started a governor—the former Governor of California, Governor Brown, started this thing called the California Commission on Industrial Innovation in 1980. It turns out, you know, we're a—we'll do about a billion dollars this year, and we have a business plan that looks out five years. It's not always accurate, but it shows us the trends, shows us the general directions, shows us some of the pitfalls.

California is, um, oh, 22, I think $300 billion economy G&P basically is associated with California, and uh, California doesn't have anything. There isn't one scrap of paper—there didn't used to be one scrap of paper written down. So Governor Brown got all these people together and said, "We got to figure out where we're going, because we don't want to have a planned economy, but we need the infrastructure to support it."

And infrastructure takes time to build, so we have to at least understand the trends. If you want to be turning out more engineers next year, you can't start this year; you have to have started five years ago. You have to train the teachers, etc., etc. So what infrastructure are we going to need to support the growth? Well, the first thing we looked at was employment, jobs. And what we found was that about 44% of the new jobs in California in the 1980s came directly and indirectly from high technology.

And we looked at that and we said, "And what are we going to do to further that, and what's going to hinder that?" And there were three things that came up, but the biggest one was education by a long shot. We looked at the education systems, and we are turning out almost as many welders in California as we are computer scientists. And these welders are coming out of school, and there ain't any jobs for them.

And this is just a minute example of the problem, and so one of the things that Apple decided to do—this is not going to make a giant difference, but it could be a catalyst to get something started—is we decided we wanted to give a computer to every school in America. And there's 100,000 schools in America, and we figured if there was just one there, at least the kids that were interested would somehow find a way to get to it, and possibly they would start to understand a little bit about what computers were, maybe integrate them into one or two classes.

And so we figured that that would cost approximately $50 million, and we'd go broke. So we went to Congress and we said, "Look, we'll pay 10% of this if you pay 40% of it." That's 10% right out of our bank account, and just to give you a perspective on it, uh, in 1981, Apple made $40 million total after working our butts off for a year, and so we were willing to spend 25% of our '81 profits to do that.

And, uh, we got very close to getting this passed, but Bob Dole in the Senate killed it because he didn’t really understand it. But California, being the bellwether state, it passed the same law because we pay California tax. And so we call the program "The Kids Can't Wait." The kids can't wait for educational bureaucracy to get around to it; the kids can't wait for their parents to understand about it, buy them one.

So we're just going to get one in there right now, and we are—the law got passed in California. We've got there—there are 10,000 schools in California. The program was announced, uh, 60 days ago, and starting next month we roll out 10,000 computers—one free to every school in California. And, and I guess the important thing though, to restate, this isn't going to fundamentally change the problem, but at least it's going to get one computer in there so that if there is a student, especially in one of the schools that can't afford these things—which is another thing that concerns us, this computer have-computer have-not split—at least they'll get exposure to one.

So, yeah, constantly told by 285% of people—well, how do you feel? Oh, um, well over half of the gross national product is contributed by companies and people that are already in the information business today, and that's true. Um, most of the people that got laid off from General Motors are never going to go back to work at General Motors—ever, ever, ever.

And unless we retrain them and give them skills, they're going to burn the cities down, and that's one of the biggest problems facing us right now. It's real easy to talk high-tech; it's real hard to take all these guys that have been putting fenders on for 15 years, you know, servicing computers—it's going to be really, really hard, and we're not paying enough attention to it right now—but we're already in the information age. We're ready there now! Most of us manipulate information for a living.

Yeah, right, that's right. Here's a challenge for you: you want to just make a great contribution, have fun, make zillions of dollars all at the same time? Um, there is—there are about 20,000 programs for the Apple II. There's—for the IBM PC, which is the second most popular one now, there's about maybe 2,000 programs—that's a lot!

And you go to buy one of these things, and you don't know what to buy. So you go ask the computer dealer, “Which one should I buy?” And that person doesn't know—they're out selling computers; they're not looking at software. And so they give you a guess, and you buy it, and maybe you're happy, and maybe you're not.

Now compare that to records. Most people walking into a record store know exactly what record they want to buy. They don't go up and say, “What record should I buy?” They know exactly what record they want to buy because there is the phenomenon of the radio station—a free sample! So that we make our decisions before we go into the distribution center for the records.

We need the equivalent in the software business: we need a software radio station, quote unquote. And what's going to happen is that I think right now, software is information, and the information is expressed with a bunch of ones and zeros. And what we do now is we take those ones and zeros and we encode them magnetically on this piece of mylar with a bunch of G's on the surface of it that remembers the ones and zeros.

We take it, we put it in a package with a manual, we take that and we put it on a truck, we ship it to a dealer, they take it out of the truck, they put it on the shelf, it sits there for a while costing money, a customer comes in, peruses them, and picks one out, takes it home, shoves it in their computer, and it translates it back to electrical impulses of ones and zeros.

Now, I mean that's a pretty long path. Where we'll be going is transmitting this stuff electronically over the phone lines to where when you want to buy a piece of software, we take our ones and zeros and you never—you ever push a touch-tone phone in your life? We'll send tones over the phone that the computers will understand and go directly from computer to computer. That's what we'll be doing.

Once we do that, maybe it's possible to say, "Well, we'll give you 30 seconds of this program for free, or we'll give you five screenshots. We'll let you play with it for a day, and if you want to buy it, just type in your Visa number, and you've got it." I don't know how we're going to do it, but we need a radio station.

Yeah, right, okay. Um, there are two things to do to get people and computers together. One thing is to make computers easier to use, and the other thing is for people to get more and more familiar with the concepts. Um, how many people here own a Hewlett-Packard calculator? Yeah, not a lot. How many people know about them? Right? Do you know the difference between reverse Polish notation and the way the TI ones work? How the HP ones sort of work backwards, right?

Do you know about that? No, some of you do though, right? Probably maybe a quarter of you, maybe. Um, if you had like tried to explain that to somebody 10 years ago, it would have been just like computers are now. And yet in 10 years, um, you know, the HP35 was first introduced in 1972. Uh, in 10 years, people gradually understand some of these concepts.

If you'd given one of these Casio watches, which has 18 alarms and plays music for you and everything else, to somebody 10 years ago and tried to explain to them how to set the alarm and stuff like that, uh, it wouldn't have been possible. Automatic banking machines, etc., etc. So gradually the level of technical literacy is rising. The problem is we're educating people on these garbage devices, you know?

Setting a CIO watch is really a pain still. So even though we have products like Lisa, we are still going to need to educate people about what computers are and what they do. But where we're trying to get is we're trying to get away from programming. We've got to get away from programming because people don't want to program computers; people want to use computers.

And so our strategy right now is let's write some programs that are generic, that sort of will write 90% of the program and you fill in the last 10% of the blanks. A perfect example of that's a word processor. A word processor can be used to write a business letter, a report for a college exam. It can be used to write a correspondence letter to your friend—same word processor.

Uh, we write it once, millions of people use it. Another program, you know, there's a lot of database programs; there's some spreadsheet modeling programs where we do 90% of the work, you do the other 10%. Where we're moving in the future though is programming with graphics, connecting the dots, if you will. And, uh, that's what you'll be seeing more of over the next five years.

What's really exciting though, let me give you a little—some of the finest people are going into software right now, and matter of fact, about a year ago, I met this little kid in, um, Chicago who had started this company called Aristotle Software, and he was 13. He started it with his more mature 14-year-old friend, and a year ago they were making about $44,000 a week off selling three game programs.

Now let me give you an example of how this can work. We have a million Apple IIs out there—a million—and people have paid about $22,000 for them. So if they can buy a new program, one of these new disks, for $100 that lets their computer do something totally new that it never could do before, that's a good deal!

So let's say, uh, let's say your girlfriend is in the real estate business, right? You know a little about computers, and she comes home and she's filling out all these crazy forms and going through all these calculations trying to do some creative financing.

Well, I could write a program for that, and you write a program that's not that hard to use, and over the next few months, she goes, "Well, can it do this?" "Oh sure, that's easy. Can it do this?" "No, that's hard." You refine this program to where it's really great, and all of a sudden she shows it to all the other people she works with. She brings it into the office, or she brings them over one day, and they go, "They just go, ‘Wow! I got to have this! This is worth $2,000 to me right there just for that one application!’"

Okay, let's say that you put that program on the market and sell it for $100. Well, the dealer is going to take $50 of it, so you'll see $50 per copy. And let's say it costs $25 to make it; you're going to make $25 profit per copy. If you sell that to just 10% of the Apple II owners the first year—not including any new Apple II owners—because we're shipping almost a million computers a year, so it'll double the next year, but forget about that; even the previous owners of a million, you'll sell 100,000 copies times $25 profit per copy, or $25 million profit the first year selling to just 10% of the people.

And you can write that program with under $10,000 worth of computer equipment. That's what's happening! That's why there are Aristotle software companies, and um, and so you're seeing a flurry of activity there right now.

Yeah, how did you manage to particularly—the ones were their origin? Okay, um, the actual turnover at Apple has been very, very low since inception. It's been under 5% since inception, actually. Um, okay, we do it in a few ways. The first thing we do is what's happening is the definition of an American corporation is evolving, and it's evolving in a almost semi-socialistic dimension, which is very interesting.

100% of the professionals at Apple own stock in the company—100%! Everybody owns stock in the company. And, uh, what that means is these traditional barriers—I’ve never heard the word labor or management mentioned at Apple, ever, in my life. We have no unions or anything. People say, "God, the electronics industry doesn't have unions," and that's true in one way, but in the other way, we've got like one of the best unions of everybody going towards the same exact goals and objectives that I've ever seen in my life.

It's on sort of an economic scale, for sure, because it's in everybody's best interest to see the stock go up. But more importantly, we feel that for some crazy reason we're in the right place at the right time to put something back. And what I mean by that is most of us didn't make the clothes we're wearing, and we didn't cook or grow the food that we eat, and we're speaking a language that was developed by other people. We use a mathematics that was developed by other people.

You're constantly taking, and the ability to put something back into that pool of human experience is extremely neat, and I think that that—everyone knows that in the next 10 years, that's we have the chance to really do that. And we can look back while we're doing it; it's pretty fun too, but I mean we can look back and say, “God, we were a part of that.” And so everyone is working 18 hours a day right now.

Now on the people side, we believe in the phenomenon of great people. And what I mean by that is we think there are people that are so good that they can run circles around five pretty good people, okay? And those are the kind of people that we want at Apple.

They're hard to—I mean they’re all idiosyncratic, but they're the fun people of the world; they're the artists of the world. And so what we have is sort of a very small company in terms of people for our revenue. We are going to cross a billion in sales very shortly with under 5,000 people worldwide, and that's phenomenal.

And, um, I think our feeling has been that what we want to do is keep the number of people down so that we can spend time with them. You started with two or three people, right? Years 5,000—the assumption is a lot of manufacturing people? No, not very many—under 2,000 are.

How did you grow that fast? And man, that people—they were all buddy-buddies? Yeah, we do a few things. Um, we—right. It's exactly right. The first thing we do is we've always tried to hire people that were much better than we needed for the current job, because within six months they’d be fighting to keep up with it.

The second thing though is we've always tried to hire people—the reason we hire people is to tell us what to do. And so at Apple, when you get hired, some people survive, and some don't, but in general it's, "Hey, this is the general thing we think we need done; go figure out what we need, come back and tell us," and tell us how much it's going to cost and go do it.

And so we've got an incredible group of entrepreneurs, and we're always arguing with each other and things like that, but that's just fine. And so the 5,000 people we've got—most of those people are very independent thinkers, and what they really want is they know what to do. What they want is the environment where they don't have to convince 30 other people that it's the right thing to do.

Does that make any sense? And, and it's harder as we get older. Um, it's harder to spend time with everyone and to pull everyone together. But we really make an attempt to do that, and I guess our feeling is is that the day that somebody working in Apple decides that they can't make a difference anymore is the day we've lost you.

You know, we have the standard stuff—I mean anyone can come see myself or John Sculley or anyone else anytime they want. I mean it might take a day or two to schedule it, but, uh, we've got people at all levels floating around, you know, coming to see us.

The other thing we've observed, of course, is that the oldest and largest organization in the world has only four layers of management—that’s the Catholic Church—and, uh, five if you count the highest order, I suppose. But, and so we see no reason why we need over four layers of management, and indeed we have usually about three.

That's, you know, the president, we maybe have a division manager, and then maybe under that a marketing or engineering manager, and that's really about it. So that's what we're trying to do.

Yeah, what's really interesting is that people a lot of times—I mean what's been—we have good people, and what they've been able to do over the last five years is pretty awesome, but what's even neater is that what we can do in the next five years. I mean we are going to—we're in a position now where we're selling a billion dollars of stuff a year, and we've got one of the most recognized consumer brand names in the country.

And so if we get it together, we can turn out these incredibly great products with incredibly great advertising, with incredibly great software, and um, and so what we want to do is just get great people to come help us do that because that’s a pretty giant thing to try to do.

But that's what we're going for—we started with nothing. So whenever you start with nothing, you always can shoot for the moon; you have nothing to lose. And the thing that happens is when you sort of get something, it's very easy to go into cover-your-ass mode, and then you become conservative and vote for Ronnie, so what we're trying to do is to realize the very amazing time that we're in and not go into that mode.

And I think Lisa is a reflection of that. I mean we gambled the company on Lisa. If Lisa had bombed, Apple would be just one more computer company, and we gambled everything on that. We had no backup to it; everything went into that for three and a half years. The best and the brightest at Apple worked on this product.

Now how come they came to Apple to work on this? We hired these people from other companies, and the reason they came to Apple was because they knew what to do, but the companies they were working for wouldn't take the risk and do it. And we said, "Come to Apple and build this," and they said, "Well, who do I have to convince to do that?" "Nobody! Just go do it!"

And we got a collection of the—I think some of the finest computer scientists in the world that just went and did it. And that's why I go to work in the morning is to hang around these types of people. They're fun—they play in punk rock bands on the weekends and all sorts of stuff. Computer people aren't—you read all this computer nerd stuff; it's not really true anymore. They're a lot closer to artists than they are to anything else.

They come in to work at about, I don't know, anytime they want, but usually about 11:00 in the morning, 12:00 in the morning. Play a few rounds of ping pong, work really hard. They work really hard, but they'll work, and generally about 4:00, we go out and maybe play a game of volleyball somewhere or something like that, and then in the evening we work, and then they’ll have dinner.

We'll go out to a Japanese restaurant for dinner or something, come back, and they’ll work till about 2:00 or 3:00 in the morning, and then go home and wake up at 11:00 the next morning, come to work.

Yeah, yeah, you sure! Why not? How we be tied those SK us actual that for those of us who invested thousands already. Uh, oh, can you teach skiing? Um, voice recognition is about—it's going to be the better part of the decade away. We can do toy voice recognition now.

The problem is it just isn't—it isn't just recognizing the voice. When you talk to somebody, it's in understanding language. It's much harder than understanding voice. We can sort of sort out the words, but what do they all mean? And most language is exceptionally contextually driven. In other words, one word means something in this context; it means something entirely different in another context.

And when you're talking to somebody, people interact—it's not a one-way communication. It's going "Yep, yep, yep, yep," or—and they gracefully interact. They go in and out of levels of detail, and boy, this stuff's hard. So I think you're really looking at the better part of a decade before we get close—even close to that.

I don’t know how much time we have; I think I'm about to get—thank you very much! I've enjoyed it. Great! [Applause]