12:09 PM - He's going to do the usual retail update. 26 million visitors to apple stores during the holiday quarter - as if everyone in New York state went. First billion dollar quarter for retail stores.

12:09 PM - Peter Oppenheimer CFO said he has to tell revenue for the whole company if he's going to do that. Last quarter it was $5.7 billion, a record.

12:12 PM - "How many [iPods] did we sell last quarter? Some of the estimates were getting astronomical - 8 million, 9 million. I'm really pleased to announce that last quarter we sold 14 million iPods .. that is over a hundred every minute, 24/7 throughout the quarter. And it still wasn't enough. We've now sold over 42 million iPods -- as you can see the curve is going up again"

12:14 PM - "We have sold on iTunes over 850 million songs. We are well on our way to hitting a billion in the next weeks. That is over a billion songs a year run rate. Our market share continues to be very strong - 83 percent. As you know one of the newest things on iPods is TV shows. Since we launched on October 12th we have sold over 8 million videos. For the first time last week we added some sports. For the first time with ABC and ESPN we put up some Bowl games."

12:15 PM - "The Rose Bowl is the #1 video now on iTunes. Today we're putting up some great new content, Saturday Night Live. This is some stuff that I've personally wanted to see from day one."

12:16 PM - Video: John Belushi in Samurai Delicatessen. The Coneheads At Home. (these are playing on an iPod screen.) The Blue Brothers get a round of cheers.

12:16 PM - "We're also introducing a new accessory for your iPod today, which is a remote control - it's also an FM tuner."

12:18 PM - "And last, I want to give an update on Chrysler. For those of you that missed it at the Detroit Auto Show, Chrysler is the first American manufacture to offer iPod integration on their models. In 2006 over 40% of the cars sold in 2006 will offer iPod integration."

12:19 PM - "The last thing I've got is a new ad I wanted to show you, a new iPod ad. At our December event we were so lucky to have Wynton Marsalis come and play for us ... " Marsalis ad plays -- a tasteful blue version of the Eminem-style ad. Huge applause from the oldsters in the house.

12:19PM - "That's what we're up to in music. BUT ... It's Macworld. So we're gonna spend the rest of the day talking about the Mac." He's recapping Aperture. Aperture promo video.

12:22 PM - Heinz Kluemeier onscreen now showing what he does with Aperture.

12:23 PM - A pro football photographer (missed his name) explains that for a game he shoots 1,000 pictures and will probably stop shooting JPEGs now. "Stanley Kubrick would be jealous."

12:25 PM - "Now another thing I want to talk about is widgets. There are now TONS of widgets. There are now over 1500 widgets available for OS X Tiger."

12:25 PM - "We've got a new Google widget so you don't have to go to Safari. We've got a new front end to Address Book. We've got a new widget just in time for ski season with snow conditions. We've got a new calendar ..." Also shows ESPN scoreboard.

12:25 PM - "We've got a new release of Mac OS X Tiger ... 10.4.4 ... you can download it today, it's got all these new widgets."

12:26 PM - "Now, I'd like to talk about iLife." He's recapping what iLife is. "Today, we're introducing the next revision, iLife '06, and it's a giant release."

12:27 PM - "Scrolls like butter" (laughter) Full-screen editing mode with slide-in and overlaid controls.

12:29 PM - 1-Click effects. One click to get back to original. Antique photo effect (color is faded.) "Hit the center button, boom, you're back to the original. The quality [of photo books] is dramatically better. We've added calendars, so you can make your own calendars."

12:30 PM - "Something incredibly new: Photocasting. This is Podcasting for photos."

12:31 PM - "Wouldn't it be great if every time I updated a photo album, people subscribed to it would get the latest photos?"

12:32 PM - It works through .Mac. You can set a password. "Whenever there's a change, those changes will get downloaded right into their subscription album. They can make their cards with them, they can set their desktop pictures with them... We use industry standard RSS, so anyone can subscribe - you don't even need a Mac."

12:33 PM - He's going to give a demo. One-line explanation: Imagine grandparents who have their screen saver set to be photos of the grandchildren. Every time the parents update the album, gramma's slide show automatically starts showing the new pix.

12:40 PM - "Next up is iMovie. Last year we added HD, and boy was that a good idea .. the prices of cameras are continuing to drop. For this year we're adding something called Animated Themes. I'll just show you." More important: Export to iPod, Video Podcasts.

12:41 PM - He's doing a demo of animated themes. Imagine iPhoto themes with the Ken Burns effect on them, etc.

12:43 PM - Video demo of the Ockenfels' Italian Vacation to the tune of the Italian pop song "Americano." We heartily recommend the Brian Setzer version.

12:45 PM - "Next up, iDVD. We've added Widescreen Menus now .. enough of us have widescreen TVs. We've got something new called Magic iDVD."

12:46 PM - "In the interest of time I'm not going to demo it today." But they support 3rd-party burners.

12:47 PM - "Garage Band: We have added a podcast authoring studio." It has: Artwork track, 200 royalty-free sound effects, 100 jingles, automatic ducking for audio (which lowers the background music whenever you're speaking and raises it whenever you stop,) and a speech enhancer. You can use iChat for remote interviews. Steve's going to create a podcast.

12:48 PM - "Hi, I'm Steve and welcome to my weekly podcast, Super-Secret Apple Rumors." (huge laughs)  "I've got some pretty good sources inside Apple, and the next iPod is going to be HUGE, an 8-pounder with a 10-inch screen ... See you next week."

12:54 PM - Demo done. "We want to share these things ... increasingly, we want to share them over the Internet ... increasingly, a lot of us want to build a web site. So today we are introducing a sixth app into the iLife suite to let us do exactly that. To share photos ... video podcasts ... music ... blogs ... we call this new app iWeb." Isn't that name, um, a bit recursive?

12:55 PM - Slide of a simple 2x2 matrix: "Easy/Hard" vs "Ugly/Beautiful" Hmm, what quadrant will iWeb be in? Features: Apple-designed templates, iLife media browser, online photo albums, blogs, podcasts, 1-click publishing. He shows sample pages than can be created in a few seconds.

12:56 PM - It's published through .Mac, natch. "Looks great in Firefox. Any RSS reader can subscribe to your blog."

12:59 PM - Demo. People laugh and clap when songs he posts to his site are auto-linked to the iTunes store.

1:01 PM - "Now I'm going to make a blog, so I'm going to pick a blog page. " The template has a big photo across the top with the title overlaid, like Scripting News.

1:02 PM - "I've got a podcast somebody made that I can drop right in ... Let me tell you something else that's really cool. I'm going to back to Garage Band ..."

1:03 PM - He clicks Send Podcast to iWeb and it gets auto-bundled. Dialog box: Do you want to put it into a blog or a podcast? Click. The blog is updated instantly with the right XML/HTML. He hits Publish. Taskbar "Uploading to Mac ... Photos ... About Me ... Podcasts ... " It takes about as long as booting OS X on our old 12-incher.

1:03 PM - He's selecting iPhotos in full-screen mode to a photocast. "Pretty cool." (Applause)

1:05 PM - "So, we built a website in a few minutes here that's got four pages, my photo album, podcasts, and my blog ... this is what iWeb is about.. Rich media to share with all of your family." Same $79 price as before. "In addition we have a $99 family pack that lets you put it onto 5 computers.

1:06 PM - "I'm pleased to report that we have crossed over a million subscribers to .Mac"

1:07 PM - "There's one other product i want to tell you about today, we have a new version of iWork" Features: 3D charts, advanced image editing - masking etc., reflections, freeform shapes, tables (with calculation), new themes and templates. "I don't have time to talk about it today, but go check it out."

1:08 PM - Also $79 or $99 for family pack. Free 30-day trial. "Now, let's talk about the computer systems themselves..."

1:07 PM - "The biggest news this year, of course, is we announced that we were going to shift to using Intel processors in Macs. We announced that by June of '06 we would be shipping ... "

1:09 PM - "I wanted to give you an update today - how are we doing?"

 1:10 PM - An Intel clean-room-suit guy walks out of a cloud of fog with a 12" silicon wafer and says, "Steve, I want to report that Intel's ready. " Takes off his his helmet -- it's Paul Otellini, Intel CEO.

1:10 PM - Steve: "Well, I can report that Apple's ready, too"

1:11 PM - "We've worked nights, weekends to make this happen in record time. [to Paul] I want to thank you..."

1:12 PM - Boilerplate keynote act here except for when Paul quotes Bob Noyes, the forgotten Intel co-founder, "Don't be encumbered by history." They shake hands. We've got the camera locked and loaded.

1:12 PM - "So ... today we are gonna roll out the first Mac with an Intel processor."

1:13 PM - "Without any more fanfare, it is the iMac."  It looks the same as it does now.

1:14 PM - He's recapping how great the iMac is. He's quoting future Engadget writer Walt Mossberg, "It's the gold standard of desktop PCs."

1:14 PM - "We're going to put an Intel processor inside an iMac. We're going to offer it in the same sizes, 17 and 20-inch. We're going to offer it in the same award winning design. We're going to offer it with the same features. We're going to offer it for the same prices. So what's different?"

1:14 PM - "We are building in ... the new Intel Core Duo. Each of these processors is faster than the G5, and there's two of 'em."

1:16 PM - Chart of specs: SPECint_rate2000 of 32.6, that's 3.2x faster than old iMac. SPECfp_rate2000: 27.1 for a 2.1x boost. Every iMac has now got dual processors.

1:17 PM - "Mac OS X Tiger 10.4.2 is running entirely natively - not just the operating system but all the applications." He's been using it for the entire demo all morning.

1:17 PM - Pro applications (Final Cut, Aperture, Logic Pro) will be available in March. If you've got a current version you can upgrade for $49.

1:19 PM - Roz Ho from Microsoft is coming on to say MS Office will be available, we presume.

1:20 PM - Microsoft has committed to a minimum 5 years of delivering Office for Macs.

1:23 PM - Steve is back onstage. "Rosetta is going to be a great bridge until all the apps are universal." Demo time. The iMac runs more like a G5 PowerMac. We're getting all buyer's remorseful about our year-old system at home, as we're sure are a few other peeps out there right now.

1:24 PM - Photoshop demo. "The Performance of Photoshop in Rosetta isn't going to be powerful enough for a professional ... it's fast enough for those of us who use it occasionally." He does some compositing on King Kong stills. Safari demo. It's a LOT faster, praise the gods.

1:26 PM - "They are shipping today. We are going to be transitioning our entire product line this year." This is huge.

1:28 PM - "We made an ad just to let people know what we're doing, and I'd like to premiere it for you now." Ad voiceover: "The Intel chip. For years it's been trapped inside PCs. Dutifully performing dull little tasks." Whoa, easy there Mr. Condescension!

1:28 PM - Video of Intel white-suiters inserting chip into Mac as if it were a big space launch.

1:28 PM - "One more thing..."

1:28 PM - "You know, there's been this pesky little problem with PowerBooks..."

1:29 PM - "We've been trying to shoehorn a G5 into a PowerBook. We've tried everything. We've consulted every [slide of the pope, huge laughs] ..." Steve's going to explain the enigmatic Performance per Watt metric.

1:30 PM - PowerPC: 0.23 rating for performance per watt. Core Duo: 1.05, more than four times better. "Today we are introducing ... the MacBook Pro"

1:31 PM - "It's a new name because we're kinda done with power, and we want the Mac name in our products." The same dual-processor as the iMac in every model. "This is hard to believe: 4-5x faster than the PowerBook G5. These things are screamers."

1:32 PM - SPECint_rate2000 leaps from 6.7 to 30.3 - SPECfp_rate2000 leaps above 5x.

1:33 PM - 15.4-inch display is as bright as Cinema Display and there's an iSight camera on top.

1:33 PM - He's going to demo "video conferencing to go."

1:34 PM - Apple's head of marketing and perpetual keynote fall guy Phil Schiller appears on iChat ... and he's standing in the aisle next to us! He does a 360 swoop of the audience, which looks great onscreen -- like he's on a merry-go-round.

1:35 PM - "We also got the IR sensor and the Apple remote .. we've got Front Row built right in ... Another really cool feature. We call this new feature MagSafe."

1:36 PM - "How many of you have ever had your notebook go flying off your desktop when someone caught the cord in their foot?" Millions of hands around the world just raised.

1:36 PM - "The power adapter is magnetically held in. When the cord gets yanked it just pulls right off. This will safe us a lot of hassle with having to fix your notebooks. Patent pending!" Always thinking of yourself, Steve, but reader J points out that fondue pots had something like this back in the Duo days.

1:36 PM - "One inch thin, 5.6 pounds." Backlit keyboard with ambient light sensor, scrolling trackpad, sudden motion sensor. DVI video out for 30-inch monitors.

1:38 PM - $1999 1.67 Code Duo, 512 MB RAM, 80GB, 4x superdrive, Aiprort Extreme. $2499 for the fully loaded model.

1:38 PM - Shipping in February. "If you want one I suggest you get your order in early."

1:39 PM - "If you'd like, I could show you that Intel ad one more time." It's been trapped inside PCs. Dutifully performing dull little tasks...

1:41 PM - Steve has us give a round of applause to Apple and Intel employees. Notes that it'll be Apple's anniversary this coming April Fool's Day.  "We thought that was funny at the time ... Thirty years making the best personal computers in the world."

Hey Jason, have you got more of those AOL supply requisition forms? We'll be right over!

Text: Paul Boutin
Photos: Peter Rojas and Patrick McGovern, Jr.
Editing: Ryan Block

[Big thanks to Marc Cherki from Le Figaro for giving us elbow room to work!]