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Jan. 14, 2006 - Steve Jobs foiled the rumormongers once more at last week’s Macworld Expo. Most observers expected that Apple would announce the first Macintosh computers that partake of powerful and efficient Intel Core Duo microprocessors, the same used by top-notch Windows machines. (Jobs had previously promised to make the shift over his whole computer line by this time next year.) But almost no one thought that the first of these machines would be the most popular Macs that Apple makes—the elegant desktop iMac and the workhorse PowerBook laptop (now renamed the MacBook Pro).

Jobs got huge ovations when he announced that when running native code (written to work directly with the Intel chip), the new iMac runs up to two times faster than its predecessor and the MacBook is up to four times as speedy as a PowerBook. He also did some bragging on Apple’s performance during the holiday season, reporting a record-breaking $5.7 billion in revenues and an astounding 14 million iPods sold in the last quarter. After his keynote, he spoke to NEWSWEEK’s Steven Levy, between sips of tea. Excerpts:

NEWSWEEK: Will the new machines boost Apple’s market share?
Steve Jobs: Our market share has already increased this last year by almost a point [approaching 5 percent], according to the sources. We’d certainly like to keep that trend going and we’ll find out. All we have to do is just convince four percent of the Windows customers to buy a Mac and we’ll double our market share.

You have two new machines now—a new iMac and a new PowerBook, now called the MacBook. They have the Intel chips in them but they look exactly the same.
The form factors [the physical design] are perfect, we don’t know how to make them any better. And now we’ve got Intel processors in them so obviously they run a lot faster.

Was it always your plan to introduce the Intel machines earlier than you promised?
We wanted to try to beat the developer conference [in June], obviously, but as we got going we thought, “You know, we may be able to pull this off in January.” We worked really hard, and I’m extremely pleased with how the products came out.

You announced your first billion-dollar quarter for business in the Apple stores. Are you reaching a saturation point with stores?
We tend to build 30 to 40 stores a year. We know we can control the quality that way, both in terms of the real estate selection and in terms of the build-outs. We have many years to go at that rate.

You mentioned that Apple’s 30th anniversary will be celebrated on April 1 this year. Isn’t it ironic that this is the first time that Apple runs on Intel chips?
Things change in 30 years! I actually thought that the [original Apple’s] 6502 was the best processor [in 1976]. That’s not why we used it—we used it because [Apple cofounder Steve Wozniak] got one for free. I have to say I think Intel has really pulled ahead. This dual-core chip [inside the new Macs] is just a screamer and yet we can build it into a notebook.

How is battery life with the MacBook?
About the same—this with a dual processor [chip]! Each processor is as fast as a G5, and the battery life will be the same as [the previous PowerBook’s] G4.

How will the speed of these machines compare to Windows machines?
You’re asking a very interesting question, a software question. On the same hardware, what is the performance of Mac OS X plus Safari [Apple’s browser] compared to Windows XP, plus Internet Explorer? You need to get the apps in native code [to judge], so I can’t say definitively. But I think people will be surprised at how fast OS X is.

Your heavy-duty professional machine is the PowerMac, and it hasn’t gotten its Intel transplant yet. Won’t this kill sales in the meantime?
Yes and no. If you’re an individual that’s probably true, but if you’re a business, you’re thinking, “I’ve got someone who’s going to use this four hours a day with PhotoShop. Photoshop might not be available [in native code] until the spring or summer, and I need Photoshop native. So I better get one of those quad PowerMacs while they’re still around.”

You also announced that you sold 14 million iPods during the final quarter of 2005.
Isn’t that incredible? And that wasn’t enough. We couldn’t get enough flash memory, we couldn’t get enough of everything [to meet all the demand]. We had to call the numbers six months in advance. So we sat around and had some meaningful discussions about what that number should be, and we ended up picking the highest of the numbers. You’ve got to admit, picking 14 million in the spring of last year, when the most you’ve ever sold was four and half million, was a pretty big bet. But it turned out that that number was too low.

At the Consumer Electronics Show last week, there didn’t seem to be any iPod killers.
The problem is, the PC model doesn’t work in the consumer electronics industry, where you’ve got all these companies and some does one thing and another does another thing. It just doesn’t work. What’s going to happen is that Microsoft is going to have to get into the hardware business of making MP3 players. This year. X-player, or whatever.

Your new iLife software has a blogging application. When will you start your own blog?
(Laughs.) After I get a few days of rest.