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interview: Apple Guy: Pete Mortensen

Pete Mortensen is an Apple fanatic. He writes for Wired News' 'Cult of Mac' blog, and keeps tabs on just about everything that Apple does. Mstation was able to talk to him two days before the Showtime media event on September 12th where many of his predictions, including the iTV and an improved video iPod were announced. Nicholas Erber asks the questions ...

Nick: How do you think the switch to Intel processors will effect the quality of Macintosh computers?

Pete:I think short term there's some potential for some reliability issues just because Apple's core competence for about twelve years has been strictly with Motorola and IBM technology with the PowerPC. But I think long-term, the biggest gain that switching to Intel provides to Apple is the ability to stay more current and timely with their processor updates. There's definitely issues with both Motorola and IBM as far as refreshing their processor lines fast enough so Apple was quite often in a situation where they were bringing out updates to their processors that were still putting them on a purely clock speed basis way behind what was available on the PC side, and in a lot of cases real performance way behind what was available on the other side of the fence.

So without any question the biggest benefit that the switch to Intel is going to provide is that Apple is going to be stay competitive in its hardware offerings. As I said, there's some short term reliability issues. A lot was made earlier this year out of amount of heat that was generated by the early Macbook Pros, some weird things like buzzing and processor whines and it was called "mooing" on the first generation of Macbooks, but I think on the whole it's been a very good move for Apple, and it's been a move that has continued to improve.

They started out with the first generation Core Duos and now they've already been managed to bring out a second generation of Intel based iMac, based on the Core 2 Duo and it seems pretty likely they'll be able to do the same with the Macbook Pro line before all that long as well.

Nick: There have been some rumors going around Digg and other sites about Macintoshes being sold in Circuit City stores in the near future. Do you think this will negatively effect the image that Apple puts such a high premium on?

Pete: No. I think that their move into retail outlets where they haven't had much success such as Best Buy, such as Circuit City, can only at this point really be good for Apple, and there's a very specific reason why it's different today than it was, say, 10 years ago when Apple was carried at Best Buy, Circuit City, Comp USA, etc. But having them there was actually bad for Apple's image because what you'd find there is that they'd have exactly one Mac in the entire store, it had some very minor software problem that was preventing it from booting, there was no software, no compatible accessories, and the people who worked there were all PC users and would just use this one demo Mac actually as a selling point for why you wanted a PC instead of a Mac.

Literally is was the worst situation you could possibly imagine. And now, Apple has gone out and shown people what retail for Macs should look like. If you're a computer seller... If you're selling anything, if you own a store, you know, the gold standard at this point for excellence in retail is the Apple Store model. It's clean, they have lots of machines for people to play with, it's just this gigantic setup that empowers people to really experiment with Macs and find out where their interests fit in. There's a really knowledgeable staff that really is there to help you solve the kind of needs you have on computers. So I think that Apple has sort of taken themselves out of the big box retail, showed what it needed to look like and all of the sudden they want them back is an indication that they're going to be more careful this time and they're going to sell it properly or Apple's going to pull their stuff off the shelves and that's an entire section of the customer base that won't go into Best Buy or Circuit City.

Apple's found a great way to, I would say, monotize their customer loyalty and use that as sort of a weapon for keeping the big box retailers in shape. Because they can honestly say, "If it doesn't work out for us, we'll tell our customers not to go to Circuit City or Best Buy they'll shop at the Apple Store, and you'll lose more of your sales than you did before" Because the fact remains that Best Buy and Circuit city more than anything else are really dependent on the iPod and they're dependent on getting a good price on the iPod so that they make a lot of money on them and Apple could, if they wanted to, wield as a weapon their operational costs or wholesale rates for iPods to get further in-roads for Macs. I'm not sure that that's the exact strategy they've adopted, but it's definitely something in the realm of possibilities that's opening up wide doors for them.

Nick: With Apple branching out into big box retailers do you think that more people will be using Windows XP instead of OS X because of Boot Camp or do you think that it will be more of an advertisement of OS X?

Pete: Yeah, I think it's much more the latter. I think that there are a lot of people that are very interested in Macs especially for the use of the iLife software; they've used iTunes under Windows, they like it a lot, they've read that Apple's done the same thing for photos and for making movies and they really want to be a part of that because to be honest, there is a huge voice for a great photo organization, sharing and printing tool in Windows. And I think someone's going to step in and fill that void, but for the time being there is nothing comparable to iPhoto that is widely available for free on Windows.

Nick: What about Picasa?

Pete: Well, Picasa just doesn't have the mind share. It is a Google owned product, the people who use it are really into it, I like Picasa just fine, but at the moment a lot of people have the photo software that come with their cameras, they have the photo software that comes with their computers, they have the photo software that came with their printer and there's just a lot of confusion in that entire realm.

And so, people look at iLife which is "Here are all the things you can do with digital media: Apple's found a good way to do it" and a lot of people are really attracted to that. I think things like viruses and stuff, that play a role for some people, but it's much more about the software and the things that people have heard are just easier on a Mac. So: A lot of people want to try a Mac are under the impression that they can't live without Windows and in some cases they really can't. There's some piece of software that is used at their office that is only available for Windows or the only way they can get on the network to work through Windows and so there are all these reasons that people really need Windows as a security blanket and Boot Camp basically just opens the door to say "That's fine. When you need to use Windows, use Windows but you wanted to get a Mac for these reasons, go right ahead and do it and it won't be any more expensive."

And that's why is technically a really good advertising tool for the Mac because when someone gets a Mac just so they can run Windows on it specifically for productivity work-type stuff I think they're going to find most of the time ,web-browsing, writing letters to people, especially manipulating photos, audio, and video they're going to want to be on the Mac. And I think they're going to find that especially for Boot Camp which requires you to physically restart the computer, they're going to spend more time in OS X, and as much time as possible in OS X, and spend less and less time in Windows until maybe it goes away altogether. And I think that's a big part of why Apple went with a dual boot solution for their Windows compatibility on Macs as opposed to something like virtualization software as exists from this company, Parallels... Which is literally a program that will let you run Windows inside of Mac OS X and do it at basically full speed. A lot of people look at that with suspicion, they remember how slow Virtual PC was and other virtualization programs but honestly, Parallels is basically the same speed as running Windows normally on a native Intel computer. It's kind of a crazy program, but I have a brother who does translation work and there's one particular translation program that his job uses that's Windows only, and so he just bought a Macbook and he bought Parallels and installed Windows on it and it actually runs the Windows program a lot faster than his previous computer did under Windows. Now, whether if it's as fast as it would if you were to reboot into Windows and run it there, that really doesn't matter because this isn't really a resource intensive program. It's not a 3-D rendering thing. It's just basically a word processor and for that sort of thing, people want to live in OS X and go into Windows whenever they truly have to. And the more Apple can emphasize, in a subtle way, because they don't want to overplay this, but if Apple can make time spent in Windows feel like a burden, the better it becomes for OS X to offer Windows compatibility. Because that sets up this entire paradigm where people are thinking "Oh man, I've actually gotta go into Windows for a while." And Microsoft has nowhere else for you to go when people are in that mindset. Whereas Apple has OS X for people.

Nick: Alright, moving on, how do you think Google's CEO joining Apple's board of directors will effect the company? Do you think it's pointing to a merger or just something against Microsoft or what?

Pete: I don't think it's pointing towards a merger. I just think that... Well it's hard for me to say... I was just going to say that I think Steve Jobs is too proud to let someone else control something that he's created, but that's definitely not true, I mean Apple got out of his control, he sold NeXT to Apple, and he's now sold Pixar to Disney so I guess he doesn't have a problem with strategic alliances and mergers that really make sense to him and that leave him with a lot of power but I would be surprised if Google and Apple were to merge, largely because the businesses are so different. Google is all about web-based software. In one way or another everything that they've ever done is a piece of software that lives on the Internet, or communicates directly through it, and Apple, though they've moved in a strong way into a software space, a lot of it is software that stays on your hard drive, a lot of it is strictly in service of hardware.

You know, the iTunes Music Store exists to underwrite and support sales of the iPod, rather than the other way around. I mean, Apple makes money from iTunes, but they make the big money off of the iPod. So I fundamentally see a big difference just in terms of the model. Apple is still really a hardware company that creates software to spotlight and improve their hardware and Google is strictly a software company. But I do think there is a strategic alliance between Google and Apple already, and that's been apparent for a little while. Whenever Steve Jobs has talked about innovative companies he refers to two companies, Apple and Google, but he won't bring up anyone else and when he talks about boring, uncreative companies, he talks about Microsoft, and Google and Apple definitely have a common enemy, a common rival in Microsoft.

What's been interesting is that in the last five years it's been in a way that Microsoft really doesn't have an answer for. So, Microsoft still doesn't have a good answer for the iPod. Apple continues to dominate despite Microsoft throwing all of their strength behind a bunch of rivals to the iPod. iTunes takes market share away from Windows Media Player and whatever other initiatives they've been a part of, the MTV one, et-cetera and Google, despite Microsoft's best efforts continues to dominate between searching and advertising in a way that Microsoft would dream of. You know, Microsoft threw billions of dollars into developing a search engine for MSN that would be better than Google and people can debate the merits of whether it's a better search engine or not, but it certainly hasn't taken away any market share, and in the meantime Google has moved into areas that have been traditional strengths of Microsoft.

I mean Gmail has taken away from the market share of both MSN and Hotmail since its introduction two and a half, three years ago. Just completely eaten Microsoft's lunch in that space and is probably making more money per user because everyone who buys into Google's AdWords program. They trust that that will make them more money than any other advertising model on the Internet, which is why Google is just blowing away Microsoft in search. So I think that Google and Apple have recognized that they have a lot of things in common, a lot of interests that they share and as a result have started to make that alliance a little more formal by putting Google's CEO on the board.

Apple's probably trying in some way to make sure that Google won't turn on them at some point because Google is going to be the power broker of all things computer in the future, and for the time being virtually all of their software is accessible through a web browser, works on any platform, whether be it Windows, Mac OS X or the various Unix derivatives, but they have the piece of the kingdom where if they wanted to alienate a platform they could. So I think part of it is Apple covering their butt and making sure that Google feels appreciated by Apple and will continue to support Apple. Another part of it, is maybe exploring some kind of bigger initiative down the road. I don't know what that looks like. Maybe the digital media portions really align and you would have Google and Apple supplying media to a common platform, or whether Google itself will start offering the iPod, whether there's going to be an exchange of intellectual property, I really don't have a clue right now but right now more than anything it's an acknowledgment that they're both fighting Microsoft and in certain fields they're beating Microsoft.

Nick: What do you think will happen when Steve Jobs retires?

Pete: There's been a lot of talk about Tim Cook lately. I forget his exact title is, he might be Chief Operating Officer. He was brought in as a Vice President and has risen very quickly and is sort of known to be Steve's right hand man at this point. He's a very smart guy, but I really don't know all that much about him. He has not ever presented during a keynote, which either means that he's being kept off in the wings as a surprise at some point, or it means that he's less comfortable with those sorts of things which would be an interesting problem for the way Apple likes to have their CEO operate. You know, as a charismatic center of attention, introducing new products and having fun on stage. So I don't know if that's something he's comfortable with or not, and if it's not it might show negative signs about his prospects to be the next CEO of Apple.

Then that leads me to wonder about all the people that helped Steve present in this year's keynote speech. Some of them were quite interesting, none of them as charismatic, except for the guy... I can't remember his name, but he came from Apple France and I thought he was very funny and very comfortable on stage in a way that all of the other people up there other than Steve were not. But I think there's a bigger question there besides who takes over when Steve leaves, it's "What happens to Apple when Steve leaves?" and I really think Apple will be good and Apple will be OK. I think that this time around Steve has more than anything worked to build an organization that will be sustaining and growing once he steps away from his day-to-day role. He's been infamous and famous for being an extremely hands-on manager in both the best and worst possible ways. There are all kinds of rumors from his early days at Apple just firing random people he ran into in the elevator who didn't impress him in the time that it took to get from one floor to the next, so he definitely stepped away from that and he's been regarded as much more mature and a much better manager this time around, and I think that along with that entire notion, he's been doing his best to really make things operate on their own where he's giving approval but people are making the right business decisions without his direction and I think that part of that has been really establishing what the core branches of Apple's business model are and one of them is definitely digital entertainment as represented by the iPod, and the other is computer hardware and software, and he has both of those divisions running under very capable hands and has Jonathan Ive on the design end to give every Apple produce a consistent look and feel from the very smallest iPod shuffle on up to the Mac Pro.

So I think that Apple will not fall into chaos when Steve steps away, which is a question that a lot of people have on their minds. I've certainly thought a lot about it. because the company is extremely healthy right now. It made tons of money over the last several years, they're dominating the market, but does that start to evaporate when Steve's gone? And I think the answer, which is a great one for him and for the company is that he has structured this thing so that he won't be the most important part of it. He's an important part: Nobody sells Apple products better than Steve does, but they're going to continue to sell and continue to innovate and continue to be a great company when he steps down. All that being said, I hope that he sticks around for a really long time because he does provide that special sauce that takes Apple that far beyond even the quality of its own products and offerings.

Nick: .Mac hasn't been updated in quite a while and most everything it provides is available from Google for free. What do you think is going to happen with this service?

Pete: .Mac is a troubling thing. It was originally iTools, and when it was iTools it was free. It became .Mac and remained free and that was cool and then they started charging a hundred dollars a year for it without significantly upgrading it in any meaningful way. In the meantime Google, as you said, has brought out a lot of free products that are significantly better than .Mac. They offer more storage, a better interface, more consistent access, and more power, period. And especially more power accessible across multiple platforms. It's a pain in the neck to get into your iDisk from Windows and sometimes you really need to do that.

I guess it was a great idea but at this point its execution is very unsatisfactory. I was a .Mac member into the first year that it cost money and I did not subscribe the next time around. It was fine for what it was if it were free, but for a hundred dollars a year I expected a lot more. I've been following it to a certain degree though I haven't used in for a while and it just doesn't seem that Apple's done anything meaningful to make it better since last I checked.

So it does lead to a very soul searching moment which is to say "What's the one thing that .Mac give to Mac users that none of these free services can?" And the only thing that Apple can offer is that .Mac will play better with its software than any other program. So there'll be better integration between the iDisk and iPhoto than any other internet based storage solution, or you can sync you calendar between one computer and the next, you can sync your email, all of these are connectivity things. And in my experience this hasn't been enough and certainly not enough to justify the hundred dollars.

I think without any question Apple either needs to make .Mac free or significantly cheaper, and by significantly cheaper I mean no more than fifteen, twenty dollars a year, or they just need to pack it in. At this point it's beginning to feel a bit too much like the sort of thing that Microsoft includes which is not a good thing at all. The last thing that .Mac should feel like is the MSN program that comes with Microsoft Windows. It needs to feel like a Mac, it needs to feel like iLife and it needs to feel totally essential, and it totally doesn't. And I think that Apple needs to recognize that if they want to continue the Mac experience on to the internet they have to make it free, but they might just decide that that's not a worthwhile endeavor and just pack it in.

Nick: What other features do you see coming with the new build of the OS?

Pete: I don't know what is coming for Mac OS X Leopard, but I will tell you what I hope is coming. The feature that I want more than anything else is a totally overhauled Finder. The Finder is kind of in a weird position in as far as its user interface right now. It's becoming inconsistent which really bothers me. I always prefer to browse in sort of the three column format in the Finder where I click on my hard drive and in a tab to the right it drops down and goes through all of the contents and it just goes to the right. I like that view, I never use icons, I almost never use the normal list although there's an exception that I'll explain in one second. So I want them to overhaul the Finder with a consistent user interface I really hope taking cues for iLife '06 because I think it's beautiful, I mean it's the best refinement of the Mac OS X experience.

I think Aqua is tired, I don't like brushed metal at all and I just want them to go in the direction of iLife '06. So that's big thing on the Finder. I also want to see them provide a better way to sort files inside of folders without having to switch Finder views. So for example, I like the three column view, but sometimes I want to sort something by date or by file size or what have you and currently, to do that, to the best of my knowledge, I have to switch over to list view and do it there with the different columns. I just want a control click, a right click that resort the piece of metadata that I select. That's the biggest one on my mind. Other than that, I think the features already announced for Leopard are a great direction, fantastic extensions of what had already been with Tiger, specifically how they're updating Spotlight. I'm really excited to see how that goes because as soon as I used Spotlight I said "Wow if they tweak this a little it could be the greatest application launcher in human history." And that's the direction they're going.

Because I am the type of Mac user who is happiest doing everything with my keyboard. I don't like to grab the mouse unless the situation really calls for it. So the fact that I'm going to be able to hit Command-Space, type in a couple letters and pop up a text file, a video, an application, et-cetera, that I want to use is really exciting for me. That's what I want to do. I don't ever want to have to touch the dock and Apple is recognizing that and really catering their forthcoming offerings to those kinds of Mac users. So that's something I'm really happy about.

Nick: Do you think that Apple made the most competitive choice when it chose Intel processors over other, potentially more interesting processors such as the IBM cell processors?

Pete: That's an interesting question. I think for Apple's current business model, absolutely it's the most competitive chip and I stress Apple's model because Apple makes its money from portables at this point in the computer space. They make money on iMacs and Mac Pros, too, but the real money comes from their portable computer line and nobody at this point has more powerful microprocessors that are also really energy efficient than Intel. The initial Core Duo and the forthcoming Core 2 Duo for laptops is extraordinarily powerful and has great battery life. And sure, there's a possiblity that going with a AMD Opteron 64 in the desktop space would have been a good decision for Apple and I think they should be open to it, provided that their deal with Intel doesn't prevent it outright from happening, but I just don't think it would have been a good choice for the types of laptops that they want to build.

They want to make thin, light, extremely powerful laptops with great battery life and for those design principles going with Intel was the only path to take. I have a feeling that you're in part asked this question because as soon as Apple is announcing that they are ditching IBM because IBM hasn't been able to provide them with powerful enough processors, they bring out the triple core 3.2 gigahertz iteration of the G5 for the Xbox and they bring out the cell processor for Playstation 3.

A lot of people wondered why Apple didn't go in either of those directions and there are some very good, simple explanations. You're never going to get one of those chips into a laptop which means that the Powerbook and the iBook get less competitive by the day because they're still using G4's, and increasingly crappy looking G4's to be quite honest, and both the Xbox chip and even more so the cell processor in the Playstation 3 are optimized for gaming. They are not really set up for generalized computing in an optimized way to the point that whatever performance difference they have would probably be evaporated or miniscule when set against a really good chip that's optimized for traditional computing. Even if it's less absolutely powerful. Not to mention that the cell would be the most expensive chip in personal computing space if Apple had gone that direction. Sony is going to make it available in the Playstation 3 and it's going to cost $600 and I would guess Sony is going to lose $1000 on every one of those they sell if not more. Apple has to make money from the hardware, it can't be a loss there.

So I think that options like the cell and the processor for the Xbox were ultimately uneconomical options. They were options that could only have fit into Apple's professional desktop line and didn't have an answer in the iMac, the Mac Mini or portable line where the vast majority of Apple's revenue comes from. So that's why Intel was probably the superior choice. But that could change in the future. We'll see. The really interesting thing to note is that Apple isn't requiring people to make software that has Intel binaries, they're requiring people to make software with universal binaries.

So if PowerPC ever becomes the better place to go again, the software is still optimized for PowerPC. What universal binary has done more than anything is to give Apple stupendous flexibility for the future where if they want to make a professional workstation that runs on a cell processor or something else that IBM cooks up that's awesome in the PowerPC space, they actually could do it. I think they burned their relationship so that they'd be paying through the nose for that processor, but the software would already be in place.

Nick: Moving into iPods and the realm of digital entertainment, when do you think the iPhone or the iChat Mobile or whatever it is is going to come out and what do you think it's going to include?

Pete: It's so hard to guess. I go back and forth about if I really think the iPhone exists a lot. I think at this point it does largely because there was that acknowledgment at the last earnings call that Apple gave where a Vice President said "Right now we're not making a phone that's an MP3 player, but we're not just sitting on our hands either" is an indication that it might be coming really pretty soon. Who knows? It could be Tuesday. Apple's having a big media event on Tuesday and one of the announcements might be the iPhone but I would say that it's coming Tuesday or September 25th, or sometime next year, or maybe the year 2025.

The reason that I'm so skeptical of it is that Apple has been reluctant for a really long time to move into business spaces where people don't make a lot of money off hardware. This is why they've announced again and again that they don't want to make a competitor for the Palm Treo, they don't want to go after BlackBerry. These are things where the front end doesn't make you much money and the service makes you the money. I just can't think of a single Apple product where the revenue comes from the service rather than the object itself and that's why a phone would be a really interesting gamble on Apple's part.

Because to make a phone that's going to be competitive, it would not be as profitable as the iPod. That much is certain. Supposing they're going to make one I would say that the key differentiators for what the true Apple iTunes phone would be like as opposed to the Motorola ROKR, the RAZR V3, the various phones they've allowed to be put out there that can play iTunes music is basically going to come in the form of removing the limitations on the number of songs because those phones are limited to 100 songs unless you do a work-around hack and then providing a more consistent, true iPod experience and maybe making the phone part of it secondary. It's the only thing I can guess.

I would be shocked if Apple went so far as to provide, say, a personal organizer function, any great way to enter text, anything that would really put it in competition with the Blackberry or the Treo. I think it really would be just Apple's version of a phone with iTunes compatibility. Which is probably why my predictions on this point are totally off because if Apple's going to get into this business, they're going to do it because they have a unique take and what I'm talking about is not a unique take. I think it's the most discussed of all Apple rumors but also the one where the predictions are going to be the furthest off from what was initially stated. Um.. I'm trying to think of another example for one where everyone talked about it for a long time and when it came Apple did some things that really surprised people. I would say the iPod nano (note: 1st generation) was a real shocker for people.

There had been discussion of replacing the iPod shuffle with a device with enough of a screen so that you could see what the files were and it would just replace the shuffle but what instead happened with the nano is that it replaced the iPod mini. Really shocked a lot of people. Because the iPod mini was totally the love, it had much higher storage capabilities that the iPod nano, it was a really rugged product, you know people were using it for sports, you could drop it and not injure it, the battery life had just gotten fantastic, and then Apple throws it away and brings in the iPod nano. While every agreed that the nano was an unquestionably beautiful product, a lot of people were kind of skeptical that it was a great idea to get rid of the mini.

Time has told Apple's story, it's a year later, and the nano is the number one selling MP3 player on the whole market, no exceptions, it's beat all other iPod lines and I think people have difficulty remembering that they wanted the funky and less elegant iPod mini back. And I think this is where Apple's design focus really pushes them in the right direction because they are always anticipating where the market and tastes are going to go. They determined once again, people were going to want to go sleek, and instead of something that they were going to be able to carry in a hip pocket, people were going to want to put it in that little recessed pocket that is inside of your jeans pocket. And that's great form factor, but they also didn't want to sacrifice any functionality, they wanted great battery life and they wanted something that didn't skip, and those design principles dictated the iPod nano.

I think similarly, the iPhone, when it comes, is going to surprise a lot of people. It's not going to be what we think, it's not going to look like an iPod and then you fold it open and it's a phone. I just don't see that happening because it's in a lot of ways way too obvious and it won't necessarily meet a unique need. People are interested in carrying fewer devices which is why a convergence device like a phone that plays MP3's should be a natural, but people are also concerned about losing functionality and power when they combine two different devices. So the concern is that you'll end up with something like the LG Chocolate. It's a phone, it's an MP3 player, it plays videos, but everyone pretty much agrees that it's not really good at any of them.

And you've got to watch feature creep, and Apple's been really good about keeping their devices true to their core function for a long time. The question for them that they're going to answer before they bring it out is "How do keep this thing true to being a phone and true to being an iPod while also coming up with a way to keep them together in one device that's better than they were separately." That's the ongoing question that's going on with the iPod phone. I honestly do wonder if it's coming out this Tuesday. It could be

Nick: Speaking of this Tuesday, what would make the iTunes Movie Store practical and feasible for Apple?

Pete: I think that there are a couple of pieces of the infrastructure that need to be there. The biggest one is making it easier for people to connect their iPods and their TV's to their home entertainment system. I've talked to a lot of people, some of them are very tech-savvy, and have video iPods, buy TV shows off of iTunes and talk about how great it is, but they wish they had some way to watch it on their TV. And I say, "Well you do. There's a cable that you can get for your iPod, you might already have it, that will allow you to plug into the yellow video jack on your TV" I've done it and it looks pretty good. I bought The Office through the iTunes Music Store last year, and I would plug my Powerbook into the TV and it looked as good as just normal broadcast television. So I think in terms of video quality for people who don't own a high-def TV, the video quality is already there.

I think that people don't get the connectivity of how to go from the Internet, how to go from their computer and the iPod to their TV. So that's a question Apple needs to answer. There's a rumor, and I think it's a good rumor that I think Apple should act on that they're working on a successor to the Airport Express that would allow video to be transmitted and you could plug from this thing that would be a wireless broadband router. You could then plug a video signal out of that into your TV. I think if that exists that's a great tool that will allow to you stream video from one computer in the house to any TV in the house and that huge.

As far as making a product that people will want to watch a whole movie on, you have to look to the long-rumored and long hoped for true video iPod which would be the entire surface of the iPod is a screen, there is some sort of virtual touchwheel or the touchwheel's on the back, but either way it would be widescreen, and you could watch an entire movie on it and it's better than the current situation. I think that needs to be in place before most people can think about watching a movie, a feature length on the iPod. And I say most people because I know people who pirate their DVD's to iPod video format and watch complete movies on the airplane. And their real concern right now is battery life. I had a friend who bought a bunch of episodes or Project Runway off of iTunes and had a five hour flight and was planning to watch like six or seven of them and there was a point at which the iPod video went out after 3 hours. So I would say that for most people, once they actually try it on the existing iPod video is better experience than they might guess. Making one with a bigger screen is a huge step and especially making the connection from computer or iPod to television and improved battery life are absolutely critical for making whatever Apple's move into film is a success.

Nick: Thanks for talking to me today.