9:12 AM PST "It's going to be a great 20th anniversary year for the Macintosh."

9:14 AM PST 9.3 million active Mac OS X users. 40% in three years, the fasting operating system transition ever.

9:17 AM PST Jobs announces Final Cut Express 2. It's all about doing video editing in realtime. Demo shown. $299 for full version. $99 for upgrade.

9:20 AM PST Microsoft Office 2004 announced. Word is shown off showing a new way to add notes, along with improved searching and other additions. Next up we get shown the integration of Entourage with Word. Lots of cool transparency effects. Notes can now have associated audio files, so as to "not miss a thing". These notes will be mp4 encoded. Now Excel is shown off. New formatting options and better spreadsheet printing. Final feature being demoed is the "Project Center", which keeps track of all files associated with a project and is integrated with Office and is able to share over a server or iDisk.

9:34 AM PST Now showing a video from Virginia Tech about how much cheaper their supercomputer is than the others in the top ten. It's number three in the world and cost only "5.2 million dollars!"

9:38 AM PST G5 XServes! With slot loading optical drive. "Cooling these guys was no easy trick." "Just like Linux, you don't have to pay on a per client basis."

9:40 AM PST Jobs is now talking about the XServe RAID storage system.

9:42 AM PST Announces they've worked to make it work with XP and some Linux Operating systems. Prices are lower than anyone else for "this class of storage"

9:44 AM PST That's it for the G5 News (no PowerMac updates, no G5 Powerbooks). Now we're onto the iTunes music store, discussing sales, 30 million songs downloaded etc.

9:45 AM PST Now talking about the most recent marketshare data for iTunes Music Store is 70%. Who's the top customer? Someone shouted Bill Gates, but Steve says "no". But whoever it was, he spent "$29,50."

9:48 AM PST Showing the billboard hits part of iTunes. "Some fun things coming up." Announcing the Pepsi deal, which is for a 100 million song giveaway, running for 60 days from January to March. They're adding some classical music, making a total of 500,000 songs available (the largest on-line music store "in the world"). Notice jobs has mistakenly said "The World" as nowhere outside the U.S. has the iTunes music store.

9:51 AM PST iLife 04 "the Microsoft Office for the rest of your life" is announced!

9:53 AM PST New iPhoto announced: Steve is addressing the fact that these days everyone has thousands of digital pictures. As far as iPhoto was concerned, "we wanted this thing to scale". He's discussing further calendar integration as well. Rendezvous photo sharing. "It's really easy!" Now it is being demoing it. It looks much, much faster. Playlists, slideshows, ratings. Lots of new stuff.

10:04 AM PST New iMovie announced. They've built in alignment guides. You can make movies from an iSight camera and sharing movies is even easier. nondestructive trimming of videos, audioscrubbing. Showing how easy it easy to put iMovie "right on my .Mac homepage".

10:11 AM PST New iDVD announced. 20 new themes. Upped time to 2 hours. New transitions. And you can now make and archive DVDs on computers without superdrives.

10:16 AM PST Now it's time for the "pro-quality musical instrument recording studio". GarageBand is here! Over 50 instruments, 1000 professional audio loops. You can plug your guitar into your Mac. And live recording.  John Mayer says "it's the first time I've heard a guitar sound like a guitar on a keyboard". Now John Mayer is playing the guitar, showing different guitar sounds. That's live recording. "You get a band, you get a guitar, you hook up a microphone, you sound like this."

10:40 AM PST Now Steve is making fun of inferior "cheaper" Wintel products. "We're going be selling this for $49." And it's "free with every new Mac!" This is the whole iLife '04 suite, including GarageBand. Runs on Panther and Jaguar as well. It will be in stores on January 16th. There will be two companion products, JamPack with more instruments and loops for $99 and an entry level 49 key keyboard for only $99. Now he's showing an iLife video.

10:48 AM PST Elijah Wood is now on talking about iPhoto along with Tony Hawk and Sheryl Crow.

10:51 AM PST "Last up today, I'd like to talk about the iPod." Steve asks crowd how many of them have iPod. Says he is "thrilled" with success of iPod. Apple sold their 2 millionth iPod in December.

10:54 AM PST October and November numbers give them 30% market share in mp3 players. They expect December will show more. 10 GB model is going to 15 GBs today.

New iPod headphone, "in your ear" headphones for $39. New ad that will be debuting this month, he's running it. It starts with four sillouhettes in four corners, blue, orange, green and pink. Steve is looking at the market share pi chart and explaining about the other players they are "in the process of eliminating". He describes the under $100 flash based players, saying that they are usually put in a drawer and not used because they don't hold enough.