Apple Keeps to the Program

The company doesn't offer up any huge surprises at its developers' conference.
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SAN FRANCISCO -- Steve Jobs' keynote speech at

Apple Computer's

(AAPL) - Get Report

developer conference here on Monday was short on surprises.

As the company had indicated -- and as might be expected, given the audience -- the bulk of the Apple CEO's presentation was devoted to the next iteration of the company's OS X operating system, which is expected next spring. And, as anticipated, the company also announced that it is completing its move to



, unveiling new professional desktops and server computers based on Intel's chips.

But that was about it. The company didn't update its iPod line, revealed no update for chips in its computer lines that are already running on Intel processors -- and didn't address perhaps its biggest potential problem: its discovery of "irregularities" in its past stock-options grants.

In fact, when asked after his presentation about his knowledge of the options problems, Jobs declined to comment.

Investors seemed unimpressed by the announcements Jobs did make. In recent trading, Apple's stock was off $1.50, or 2.2%, to $66.81.

That said, Jobs speech got a favorable reception from what is essentially Apple's hometown crowd.

Probably the most important part of Jobs' presentation, at least in the short term, is the announcement of the new Macs. Apple will begin shipping the new Mac Pro computers, which replace its PowerMac line of desktops, on Monday.

Targeted at users in creative professions such as advertising and graphic design, the computers will have one standard configuration, which costs $2,499. That model includes two Intel Xeon dual-core processors, one gigabyte of memory and a 250MB hard drive. However, users will be able to add faster CPUs and graphics processors and additional memory and hard drives.

While that's a hefty price, Phil Schiller, Apple's senior vice president of marketing, argued that it's a bargain, especially relative to what the competition is offering. A comparably configured computer from


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would run about $3,448, he said.

"I know what you're thinking, that Apple makes great computers, but they're expensive," said Schiller, who took center stage to debut the new Macs. "We're not only making great products, but busting that myth."

Apple also announced a more minor update to its computer lineup. The company will soon update its Xserve lineup with Intel chips as well. Apple has only a minor share of the server market, so the update will likely mean little to its overall sales or earnings.

But the company said the new Xserve systems, which will be available in October, are similarly competitive, speaking of price, with rivals' offerings. And along with the professional desktops, they represent the only machines that until now were still running on the company's former PowerPC architecture.

Schiller noted that the company completed its move from PowerPC to Intel in about 210 days -- from Macworld in January, when the company announced its first Intel-based Macs, to Monday.

"I'd like to thank our engineering team for doing the impossible that no one else has done," he said.

But the bulk of Jobs' presentation dealt with Leopard, a major update to the company's Mac operating system. Jobs announced that there are some important features in Leopard that Apple won't reveal just yet, for fear that


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would incorporate them into Windows Vista, its own upcoming operating system update.

"These days, all they seem to do is copy


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and Apple," Jobs said. "We don't want our friends

at Microsoft to start their photocopiers sooner than they have to."

Among the new features Jobs and company did reveal were an updated e-mail program that adds memo pad and to-do features; a feature called "spaces" that will allow users to organize different applications into different areas of their desktops both onscreen and off and easily toggle between them; and a new backup feature that will allow users to save and recover not only their entire hard drives, but individual documents and pictures from particular applications.

The company will also build into Leopard its software -- dubbed Boot Camp -- that will allow users to boot up in either Windows or Mac OS. Many analysts consider Boot Camp, which is currently available only as a downloadable test version, a key part of the company's strategy to lure new users to the Mac platform from the Windows world.

Further, the company plans to include in Leopard a number of programs that previously had only been available on new Macs, including its Front Row digital living room software and its Photo Booth self-portrait program.