I love the week before Macworld almost as much as I love the keynote itself. Anything is possible. What will Apple CEO Steve Jobs announce? A new really thin laptop? New iPhones? A revamped Apple TV? New iPods?

As it turns out, he announced all of those and more.

In the days since the keynote, Apple's stock has taken a beating. I think it's because Wall Street doesn't understand that Apple is changing the way we think about new products the same way that they changed our idea of what a computer could do, what a music player should feel like, and what a phone could be. Now you can have a new iPhone with a software update.

For many, this keynote was all about the new laptop and what it was missing. But again, Apple has often blazed the path to the future by choosing what to leave out. They led the way in discarding the floppy drive and modem from their laptops and the keyboard from a smart phone. What goes away is often as important as what stays.

You can feel the embodiment of this "less is more" message at this year's Apple booth. It is not packed with rows of tables filled with a wide variety of machines. In years past it was tough to walk through the Apple area. This year there were a few highly focused areas. Up front you can come touch the new laptops. In the middle there is the traditional demonstration stage. But Apple has pared down their displays on either side of the booth. It feels uncluttered like the new laptops themselves.

Looking back

There are times that Jobs has to explicitly remind investors of what Apple has shipped. Jobs began the keynote by looking back at 2007, repeatedly referring to it as "an extraordinary year for Apple." He mentioned, almost in passing, that Apple had shipped a new iMac, new iPods, and introduced the iPhone. He added, "on top of that Leopard and all of the great software we shipped."

The mention went by so fast that you almost didn't have time to take it all in. Apple launched the iPhone in June and has since sold more than four million units. Apple revamped the iPod line so that all but the iPod shuffle include video. Just when you think you know what an iPod looks like, Apple introduces the iPod touch and at the other end of the spectrum, the nano is now wide enough to host video as well. Jobs didn't even mention minor refreshes to the laptop nor the new Apple TV and Airport base stations introduced at last year's Macworld keynote.

Leopard was delayed, but in the three months since the latest version of Mac OS X was released, Jobs reports that Apple has delivered more than five million copies and represents one fifth of the Mac install base. Of course, it's easy to forget that Apple released a second operating system last year. The OS X that runs on the iPhone is a significant effort and in the first three months that the iPhone shipped it represented nearly twenty percent of US smart phone sales. Other software releases included iLife, iWork with the new Numbers application, and new versions of Final Cut and Logic.

CEOs may be prone to hyperbole and perhaps you wouldn't use the word "extraordinary", but it seems that the analysts are off in the balcony looking for clever ways to dismiss all of these new products the way Statler and Waldorf heckled the rest of the Muppets.

Jobs transitioned from his look back to his first device announcement: a backup appliance called Time Capsule. It is essentially an airport base station with a large server-grade hard drive. The idea is that all of your Leopard boxes can use Time Machine to back up wirelessly to Time Capsule. It's the next step in making automatic backups "set it and forget it." There is a 500 GB version for $299 and a 1 TB version for $499 scheduled to ship in February. Hopefully by then 10.5.2 will have been released and the promised ability to back up to your own disk connected to your existing Airport base station will be enabled.

MacBook Air sign captured at Macworld Expo 2008 in San Francisco. Photo by Derrick Story.

The new iPhones are here

There were rumors of new iPhones to be announced at Macworld. There were leaks of the 3G phones in the works. Pundits who discounted an announcement of those phones at Macworld were still predicting that we'd see a bump in the storage capacity. We got none of that.

Take the iPhone out of your pocket and sync it to your computer. There's your new iPhone.

The new iPhone doesn't have GPS but, at least here in San Francisco, it has a very accurate locator. Go to the new version of the Maps application and click on the round icon in the bottom left corner and the map shows you where it thinks you are right now. It uses a combination of Google's triangulation off of cell towers and using GPS information from WiFi locations mapped by Skyhook Wireless.

The new iPhone doesn't have third party apps yet. Those are coming soon enough. Jobs reminded the audience that developers would be getting the iPhone Software Development Kit at the end of February. In the meantime, you can start to customize your iPhone. Just as the videos of the leaked update show, you can customize your home page by clicking and holding any of the icons. They all shake and you can drag the icons around the screen or even to one of eight other screens. You can also drag icons to or from the dock at the bottom.

None of that would matter or make sense if there weren't additional icons available in this new release. You can now bookmark pages in Safari and generate an icon that you can put alongside the applications on the home screen. In other words, you now have a customizable desktop for your iPhone.

So it's not exactly a new iPhone but it's a great message to send out to existing customers. Apple is treating their phones the same way they treat their computers. You can install Leopard on that computer you bought that ran Tiger and it feels like a whole new machine. The software updates for the phone are enhancing your phone in natural ways. But in the case of the computer operating system, Apple is often willing to draw the line in what existing hardware they will support. Not all future updates should be expected to work on your existing phone. Also, as with Mac OS X, minor releases are free but major releases will cost you money.