2001 International Consumer Electronics Show

Craig Barrett
Las Vegas, Nev., USA
January 5, 2001

GARY SHAPIRO: Thank you. I'm Gary Shapiro and I'm president of the Consumer Electronics Association. That is the organization that produces and sponsors the International CES, and on behalf of CEA and its executive board, I want to welcome you to the first big official event of the CES for this year.

In terms of CES, this record setting CES, the biggest in history, it is very appropriate that Craig Barrett helps us kick it off because Intel is a company that truly fits the theme of work style and lifestyle technology.

Best known for its "Intel Inside®" logo, there is much more to Intel than just computer chips. This technology leader has been at the heart of the computer and Internet revolution and is the leading manufacturer of computer networking and communications products.

Intel's technology can be found in products and services throughout the entire CES floor. And now Intel is moving further into the consumer electronics market.

Craig offers a very unique prospective on the convergence of computer and consumer electronics industries.

I think we will all be very intrigued by what he has to say.

So lets kick it off by bringing out a few bald guys and a few gallons of paint.

(at this time there was a show by the Blue Man Group that ended with Craig Barrett coming out of the Blue Man Group's Jello mold on the stage)

CRAIG BARRETT: Aren't those guys good? Another big hand.

The only way they got me in the box was that they told me the last living human being in the United States who wanted to buy a PC was in that box. I got in there and found out I was the only person.

I want to welcome you all this evening. We have a great way to kick off the consumer show here. We want to talk a little bit about the personal computer tonight. Where it is going. What the opportunities are with the PC. I think if you look at the big picture, there is a very, very bright future for it.

If you look around the planet today, not just in the United States, but everywhere, you are seeing the same thing happen. The world is digitizing, whether it is communication or information or Internet. We are getting more and more digital information.

It is a big digital universe. And if you look at the center of that digital universe, the central focal point for the big bang, it really is the core of the PC.

And what we really have is that the PC is at the center of this, and we are getting lots and lots of devices attached to the PC.

And it is not just the center of personal productivity, as it has been for a long time, but it is really, truly becoming where you work, learn and play. And lots and lots of different products are associated with the PC--really the Extended PC-- and it is a phenomenon not only happening in the United States, but it is everywhere. I visit about 35 a year in my job trying to promote the Internet, communications and computing. And if you look at those 5 or 6 hundred million PCs around the world in operation, over half of them, probably upwards to 400 million are connected to the Internet. And that is wonderful in its own right.

It allows people to communicate with each other and allows access to the world's information from a desktop with a keyboard and a mouse.

But it's a lot more than that. The PC is really at the center of the Internet, the main client. But what we are seeing today is more and more devices attached around the PC. Extending the PCs influence.

And these extended devices or this expansion is what is really exciting today.

PC is a wonderful device for personal productivity, for computing, for accessing information, but when you attach other devices, you give the end user more excitement and capability, more opportunity to do things.

Whether it is audio things or video things or communication things.

But the key is really to have a very powerful central processing unit to get the best consumer experience.

We want to talk about this Extended PC Era.

What is happening as we go away from just personal productivity to expand the PC's influence and put more and more consumer devices in contact with it?

We will give you an example of a few scenarios of how consumers use PCs and then we will get to the best part, my favorite part. We will bring a few young people out on the stage. I call them the "Internet Generation." Those folks who were born after the PC was invented. It was only 20 years ago that the first IBM came out, so all of those in the audience who are under 20 can associate with what it is like to always have had the PC here.

The PC helps produce this digital universe but the digital universe is really happening as more and more analog devices go digital.

Whether it is audio or video or still images or animation, whatever it is. More and more of these devices are going digital and more and more of them are getting connected to the PC.

But if you look at the excitement of these devices-- I want to go through a number of these very briefly for you--digital camera. Millions of these are sold each year from simple personal, low resolution digital cameras to professional cameras, still and motion photography capable. Able to take photographs instantly, download them onto a PC, manipulate them and send them to people. So the PC is there for showing them, sharing them, editing and printing and even to put video streaming in the PC. Lots of excitement in that space.

If you look at audio, you have music players, MP3 systems. We are about to introduce the Intel® Pocket Concert™ Audio Player.

These devices hold music for a couple of hours, up to 20 hours of high quality music.

They don't have any moving parts, it is all encoded in flash memory. They are absolutely random access, but the PC is there for encoding these tracks from CDs onto these devices and for organizing, storing and uploading that information to the audio player.

If you look at digital video cameras, this is high quality video or audio, connecting those devices, and millions of these are sold each year, we can download their contents directly to a PC for editing with a simple high speed FireWire 1394 connection and you can edit on the PC and send the information off for viewing on another consumer electronic device, viewing on the PC or posting on the web for other people to see. Lots of excitement there.

If you look at the possibility and concept of electronic books or e-books where you have all that content on the PC and you can download onto a simple display device and carry that with you for the demonstration and viewing of that rich digital content.

It really extends the portability of the PC. Extends that ability to take that information that is stored on the PC anywhere with you at any time. Obviously eliminates the need for paper. But a very exciting extension to the PC is the productivity device.

We have wireless peripherals and all sorts of new and exciting wireless peripherals.

One the most exciting is a chat pad, which is a wireless Internet instant messaging device. It basically enables wireless connectivity to your PC for instant messages over the Internet so basically wireless connection from the chat pad to the PC to your ISP to the Internet.

Lots of devices like this. We have worked over the last couple of years, initially with Mattel and now on our own, to produce toys for young children, extension devices for the PC.

One of my favorites is Intel® QX3™ Microscope. Basically a very simple microscope, with a USB connection to a PC, it enables you to capture the image under the microscope, store it, forward it, put it in a report, whatever you want.

I happened to give one of these to my grandson a year ago for Christmas. It was the best Christmas present he ever got--at least that is what he told me. He had his two sisters collecting insects the entire Christmas day, bringing them in and putting them on the microscope and capturing images of them.

Not only can you capture that image, but you can store and manipulate and send it and put it in a report.

Another one of these toys is something called a Sound Morpher. This is a digital sound recording device that enables young children to capture sounds or their voice. (voice of young child heard over the speaker)

That is pretty cool that they can capture their voice in an audio file and send that or play with it. But the best part is what you can then do is edit or filter it or change that voice.

(changed voice of young child heard over the speaker)

Maybe I ought to change my voice for the rest the presentation.

Another device that is an extension of the PC and really enables the PC to do more and more things is the Portable Digital Assistant. And we have one behind us which is the Compaq Ipac PDA.

These are digital assistants with color displays that organize personal information, but their real value is they are adjuncts to the PC. They are peripherals to the PC.

They can have wireless connectivity, they can be synchronized to the PC, they play music or video. But it is the synchronization that allows easy management of information whether it is resident on your PC or information that you can take with you any place any time.

If you add up all of these devices you are seeing, the center of each one of these activities is a PC. That is where the processing power is. That is where the action is. But these other devices extend the range, extend the user interface.

And there is lots of excitement going on in this space. Obviously Intel is providing more processing power. Microsoft is improving the human interface, the user interface. Improving the operating system. Thousands of companies are providing application software or devices of the type we are talking about. Every one of these companies participates in expanding the universe around the PC.

And it is almost as if we are compounding the importance or the capability of the PC in this process. We have lots of examples of when you have things connected on a network or things connected to each other, that the value of that network is more than just the individual parts.

Metcalf's law, which was really proven out with the Internet, is that the value of a network equals the square of the number of nodes on the network. I think increasingly the value of the PC is really associated with the number of these consumer interface devices we have attached to the PC. And you can talk about it as PC to the Power of X or Extended PC, but it really says that the value of the PC to the user grows exponentially as we have more capabilities attached to the PC.

And I think that is the tenor of the presentation that I want to make tonight. This concept of the Extended PC. The PC to the power of X.

How people will use this in the future. How they will use this processing power. And it has been a lot of fun for the last ten or 15 years talking about increasing the speed of microprocessors and making PCs run faster, and they will do Excel spreadsheets faster, and they will do word processing and graphics faster.

But I think it is increasingly important to look at the processing power and the advances of the processing power when it is attached to these other devices that deal with rich media. Rich audio and rich video. Animation. Voice recognition.

All of the sort of devices that we want to talk about tonight. And what we are going to do is give you an example. But the first way to do this is think about what is going to happen in the future.

And it is interesting to look at the future in two respects.

The concept. The number of PCs in the future and also the concept of the number of cellular phones in the future.

But if you look very simply out about three years to 2003, this is forecast that there will be over a billion cell phones. And if you look at the forecast of 2004, it is forecasted there will be a billion users on the Internet. A billion PCs connected to the Internet.

There has been lots of talk in the press and different companies about, well are these two things really in competition with one another? Is the PC going to be replaced by the cell phone? And when we get to the 2.5 generation or the third generation of cell phone users, we get high digital bandwidth to the cell phone. Are we going to surf the Internet on that four by six centimeter screen on the cell phone? I think not. I think the value of the highbandwidth to the cell phone, high bandwidth to the PC, and connectivity between the PC and cell phone is what the end user wants.

That sort of extension of the PC and its capabilities, the Internet and its capability really is going to bring the end user more capability.

So it is the combination of these two devices which is going to be exciting.

So what I want to do is talk about this seamless access of information on PC and wireless devices and we will do this in the form of a little demo.

SPEAKER: Hi, Craig. I'd like to show you where hand held technology is going. I have a device called the PC e-phone. It is an integrated high end PDA with a cell phone built in. So, this is a really cool device.

CRAIG BARRETT: This is wireless connectivity back to a PC, right?

SPEAKER: Yes, it does. Let me show you something even cooler that I am carrying around here. The stylus uses Bluetooth™ technology as well and connects into the PC e-phone and now I have a wireless hand set that you can use to make phone calls via the cell phone built into the device.

CRAIG BARRETT: So we are really talking about expansion of PC to PDA to cell phone or e-phone. Synched together wirelessly and we can probably demonstrate that to the audience.

SPEAKER: That is correct. And what we are going to show here, this has Bluetooth technology, we have a couple of steps over here to the PC. As long as I bring it within range of this Bluetooth PC, we are seeing that it is automatically synching up to the PC. My text and voice messages are automatically transferred up to the PC and available to me in one easy to use place. The PC. Truly showing the concept of the Extended PC.

CRAIG BARRETT: So, that sort of hot synching would happen walking around your house, if you get within 30 feet, ten meters of your PC, hot synched, automatically downloads, synchronizes the messages back and forth.

SPEAKER: Without any user intervention. And in the future, many devices, practically all devices will synch up with a PC in this fashion.

CRAIG BARRETT: Super, thanks.
That is a simple example and that is available technology and that is when you are bringing your PDA and cell phone and PC together. And I think we are going to see the continued convergence of that type of technology. Not competition, but convergence of the technology of bringing the end user a lot more excitement about what is going on. That was how you combine wireless and the PC.

There is another aspect which I think is very important. That is browsing on the Internet in a wireless fashion.

Imagine that you went up to the PC and launched your browser and what you wanted to do was just pick that browser off the screen and carry it with you anywhere in the house so that you can access the Internet.

Wouldn't that be a cool device? And a cool consumer use and bring more value to the user. Watch the demo we want to show you now. And Andre is going to help me with that. He is lounging on his couch watching television.

ANDRE: Ever since the holidays, my little boy has been hogging our Pentium® 4 processor-based system

CRAIG BARRETT: Your little boy doesn't have much hair, by the way.

ANDRE: So we have a major problem at home. So at Intel we have developed this product that is a "web tablet" that is live on the web right now. And wireless. And connected to that Pentium 4-based system via any point wireless home network. So I can be within 150 feet of that PC, and use the PC's existing Internet connection and PC's resources such as a printer, all linked in to my lap

CRAIG BARRETT: Even while he is playing games over there?

ANDRE: Yes, in fact even while he is on the web, we are sharing the connection.

Sitting here on the sofa like this, we have developed a product to be an extension of the PC. And one thing I like to do at home is watch racing and cruise the web while I'm doing it. It is a great way to look up information relevant to the broadcast.

CRAIG BARRETT: This is called "tele-webbing"

ANDRE: Yes, people call in tele-webbing. In fact Dataquest believes 44 million people engaged in this alone just this past year, even though it is kind of hard to do because you have to move your PC and your TV together.

CRAIG BARRETT: Show us how to do this.

ANDRE: One of my favorite drivers is Michael Schumacher. I can get on the web, enter his name, execute a search and I get a search result with all kinds of neat information about him.

CRAIG BARRETT: He is a European, right?

ANDRE: Yes. He is a great driver. In fact he has a great book out. Why don't we go to Barnes & Noble here and see what they have to offer. I hear he has a new book out. Here it comes from Barnes & Noble, live, wirelessly.

CRAIG BARRETT: How much is the book?

ANDRE: $23.96, do you want me to buy you a copy?

CRAIG BARRETT: Yes, buy me a copy, I should learn about Schumacher.

ANDRE: We will add him to the cart here. One, two, done. If I hit the print button, I will get the receipt printed out right now. With the Extended PC concept, you can just spool right off that printer at home.

CRAIG BARRETT: Fantastic. Those are the devices that will be hitting the market soon. Again wireless connectivity, extension of the PC, multi-user aspect. Someone can be doing whatever they want on the PC, wireless connectivity to the PC and out to the Internet and really full connectivity to do that extending capability and reach And value of the central digital nervous system of the PC to the consumer.

If you follow the theme with the Blue Man Group, and we look out into the blue and things that are coming in the future, one of those is peer-to-peer computing.

Most of you are familiar with peer-to-peer computing, at least an aspect of that which is the concept of Napster. They have 40 million users now.

Basically, it is a directed form of peer-to-peer computing where you go through a server but you are accessing information stored on someone else's hard drive.

It is possible to do that without a central directory server, but just going directly over the Internet from one PC to another.

That has great consumer applications, and other exciting applications. For example, SETI, the Search for Extra-Terrestrial Intelligence has been ganging together the processing power of hundreds of thousands of computers to analyze data coming in from outer space.

People are looking to do the same sort of thing to do global weather mapping capability and global warming calculations when they are looking to have millions of computers hooked up together.

Many companies use this technique today to take the processing power and storage capability of their workstations.

We at Intel have our 10,000 design engineers and all of their computers work together in a peer-to-peer network where one engineer can get access to the computer power of the other 10,000.

There are lots of exciting consumer applications here. Don't think of this as just a Napster-like device. Think of it as--we have a computer with information rich information, rich multimedia information and we want to share that with other people. We don't want to post it on the web, but we want to share that information.

We are going to do a quick demo and Diane will show you what we are going to do.

DIANE: Today I'd like to show you a peer-to-peer application called "Popster" that allows you to do personal video broadcasting.

You are familiar with the pocket PC. All you need is a camera like this, any digital video camera, and a powerful PC. If you would like to come over hear I'll start it up and give you a better idea of what I'm talking about.

On this machine we have a video of a recent wedding, and it is going to be broadcast to a couple of computers over here. Shortly you should see this video on the screens over there.

This wedding is a good example of a Popster application because it took place in Hawaii. Since it is in Hawaii, it allows the bride and groom to broadcast the ceremony live to friends and family who could not attend. I mentioned that it is peer-to-peer application and that is important because that means that content stays on your PC, under your control and you decide who gets to see it. It is not like putting it out on a web site that the whole world can look at. It goes directly from you to whomever you want to see it.

CRAIG BARRETT: This is truly a peer-to-peer, computer-to- computer, basically over the Internet but there is no intermediary server that is storing the data.

DIANE: I should mention--you are probably interested in how the Pentium 4 processor can help in this situation.

CRAIG BARRETT: It did cross my mind, yes.

DIANE: Well, I'm happy to tell you that using the Pentium 4 processor, it allows you to increase the number of viewers that can watch your wedding video and greatly increase the quality of the video as well.

CRAIG BARRETT: There is lots of work in the industry on peer-to-peer and there are a lot of exciting applications of this type and many others coming forward.

Another one that is forthcoming is to use the PC, which is really at the center of the digital universe to be the purveyor of the rich information that comes into the home.

As we get increasingly high bandwidth into the home where you have the ability to bring in lots of rich digital information, you have the ability to manipulate, separate, redirect and store that information on your PC, using the PC as the central nervous system for the entertainment capability of the home. I think that is increasingly important.

This is not, "I'm going to watch movies on my PC." You may want to do that in your den, but you may all want to watch content which is stored or being trafficked by your PC on your TV in your living room or any place.

So the concept of the PC as a media center, obviously the PC is able to store more and more rich information each year, we have 20-Gig hard drives, 40-Gig hard drives and the only thing that is growing faster than processing power is memory storage density on hard drives.

Ability to store immense amounts of rich information on your hard drive and being able to use that PC to move that content out of the study and into the living room is important as a concept. Patty will do a demo and we will acknowledge that Warner Home Video has given us content to use here, but Patty show us yours.

PATTY: If I had to guess-- and you are living in a typical household, in your living room you probably have a collection of CDs and movies. On your PC you might have MP3 or some Internet content that you have stored. And digital photos that have been e-mailed to you. And maybe you have a box full of photos stored in the closet or cabinet.

CRAIG BARRETT: It is not just a box but an entire closet.

PATTY: Like you said, it can all be stored on your PC, but it would be nice to store it in your living room. And in the living room of the future, you can. With a device like the media center, which is a concept demo we would like to show you today.

CRAIG BARRETT: Let's show the audience.

PATTY: Here are my vacation photos.

CRAIG BARRETT: I see you went to the UK.

PATTY: As you can see my photos are not stored in the box, they are on the PC. But enough of my vacation because there is a lot more stuff that you can do.

Imagine your entire family collection of content stored in one place but easily enjoyed anywhere in the home because your Extended PC can wirelessly deliver that content on demand to whatever room you are in with devices like the media center.

Now I have a great selection of movies. Any time I want to watch a movie, all I have to do is select the movie, and then the movie streams from the PC over to the media center where it provides a full DVD quality.

I have selected a particularly exciting scene from "the Perfect Storm" just for you. Are you ready?

CRAIG BARRETT: I'm ready.

(showing clip from "the Perfect Storm")

PATTY: That is so cool.

CRAIG BARRETT: That guy looks like he is ready to catch about 25 marshmallows.

PATTY: Thanks, Craig.

CRAIG BARRETT: The message we are trying to get across here is that the personal computer is at the center of all of these activities. The digital brain that is handling, storing, distributing, manipulating this information. Helping to capture it in some places and helping to replay it in others.

We have architected the latest generation of our microprocessor, the Pentium 4 processor, specifically for this. It was architected not to run word faster, because you cannot type any faster than you type today and the processor puts those words on your letter or memo and puts the numbers on your spreadsheet faster than you can type them in.

We did it to handle rich multi-media information. Whether it is for voice recognition, or animation or for gaming. Whether it is for showing video or capturing video or images.

Whatever it may be to deal with rich information that was what processor was targeted for. Trying to put more performance and processing power into these PCs for a purpose. And that purpose is to give the end user greater benefit, greater user experience.

And if we think as the Internet continues to evolve, we see more peer-to-peer processing, more communication, more rich information in the home, more bandwidth. All of these new capabilities require new processing power. More processing power for a rich user experience.

All these new ways of using information, seeing information, manipulating information, and accessing the Internet, all of this is increasingly important. And it is really the powerful PC which we think will play an increasing role in this Extended PC of the future.

So we are trying to design capability that the end user can benefit from. Put the performance where you need it the most.

Now, what I want to do is run through a quick series of about six demos showing you the sort of things that you can do to give you a flavor of each one of these things that I think you will see.

MICHELLE: I'm not going to geek out on you, because as consumers we don't really care. I want to know how my Extended PC can add to my experience.

I have Canon's EJ. I love to rip CDs. Put them in MP3 through formats.

CRAIG BARRETT: You love to legally copy CDs and not violate copyrights, right? Rip is the wrong word.

MICHELLE: Not rip off.

CRAIG BARRETT: Encode, copy.

MICHELLE: Well, what I've done is I have chilling-out music. I have put the CD in, and I'm ready to put this over to MP3 format.

It is as simple as right clicking and putting in MP3 format. Now, what used to happen is the encoding or baking process took a long time. You used to be able to get up and get coffee. Not any more. In a matter of seconds, it is here.

CRAIG BARRETT: I love it and if we made the processor run even faster, it would happen even faster?

MICHELLE: That is right. And another thing is once it is done with the MP3, you can put it instantly into-- here I have the Intel Pocket Concert Audio Player and it works quite well.

CRAIG BARRETT: What else have you got there?

MICHELLE: Do you know what an LP is?

CRAIG BARRETT: It looks like a big hard drive. I bet someone in the audience has one.

MICHELLE: That is " clean " by Steinberg and it looks a little hard to use but it really is not. And you put it in the back of your computer, and put in your record player or tape deck or even your eight-track player and it digitizes these things.

Now what I've done is I'm going to play a file and you can listen to it now. Do you hear the cracks and pops?

CRAIG BARRETT: That sounds like my old stereo.

MICHELLE: I'm going to stop it, we will restart it in the same area and I'm going to play it, and it is adding these effects here. These have been optimized through the Pentium 4 processor, so it is encoding and taking advantage of that power.

CRAIG BARRETT: So, you are encoding real-time and filtering out bad stuff?

MICHELLE: That is right? And you can digitize it.

CRAIG BARRETT: What else?

MICHELLE: Instead of making people watch long hours of snow boarding, I have edited it down to a 30 second clip. This was very cumbersome in the past. That is not the case anymore.

What I have is MGI video wave 4. I'm going to go ahead and pull out a clip, and I've looped it and watch as I throw these effects over there. This is happening on the fly in real time. It is not chunking along.

CRAIG BARRETT: So this is real time editing of a video clip and it is the processor doing all the work in the background?

MICHELLE: Right. When I have done the special effects, the musical overlay, the transitions here, I went ahead and encoded it, and I put it on my friend Chad's web site.

This is a 30 second clip, taken from a digital camera. You can take it from your old school camera as well. There we have a good example of how you can use this on your Pentium 4 processor.

CRAIG BARRETT: We are just getting started. Let's look at a couple more and show the audience what you can do.

MICHELLE: There is one cool thing that you can put it on the web but we have other things on the web. We have the "On2 filter" utility - - basically that is a plug in. Once you go to a site that contains plug in it recognizes your system and puts this on. When you stream content-- it is pixilated.

CRAIG BARRETT: All the time. There is not enough bandwidth. You are probably going to tell me that you are going to use the Pentium 4 processor to clean up those pixels?

MICHELLE: Yes, I am. This is not high bandwidth. You can use a low bandwidth connection and it smoothes it out as you can see. It is not pixilated like over here.

So, I'm going to bring up an example of what is going to be on the market soon. This is an example of the low bandwidth.

CRAIG BARRETT: That processing power compensates and fools you into thinking you have a high bandwidth. Better user experience.

MICHELLE: I have a great example of power here. Power with a purpose besides just games.

This is skyline. What I'm going to do is--as you can see we have a texture map and I'm going to take us in. What this is doing is 3D rendering in real time. Taking satellite pictures and overlaying them. And as you can see we are flying into a listing. This is good for real estate development planning or if you are going to go on vacation.

CRAIG BARRETT: It even filtered out all the smog in L.A.

MICHELLE: And it is going to stop at the neighborhood so you can see what is going on, and how far it is to the local tennis club.

CRAIG BARRETT: This is rendering a great amount of detail and information on the fly.

MICHELLE: You really need the power for this. As you can see it is instantly doing it and trying to smooth it out. It is a good example of what is in the future.

CRAIG BARRETT: You are doing great. What else do you have?

MICHELLE: We have a great--we have the Pentium 4 processor based system with a high-end graphics card. You can see what we have here. I'm going to move it around, we have the Blue Men and a nice looking pond.

Now this is a good example of what is going to be in the future of how to interact with your computer besides using a mouse. It extends the PC a little more.

CRAIG BARRETT: And again, this is a lot of processing power because you have a lot of ray traces and a lot of pixels to get all those reflections real time. Can I touch it?

MICHELLE: Sure, go ahead. It takes that into account and calculated that for you.

CRAIG BARRETT: Thank you.

MICHELLE: Thank you.

CRAIG BARRETT: Just want to show you that quick collection of applications as examples - - some are available today. But they all give the end user more capability. More opportunity to bring rich digital information in, handle it in an intelligent fashion and display it however.

This is what we think the concept of the Extended PC is all about.

We know it is a personal productivity device and Internet access device but we are going to see it as the center of a lot of electronic devices.

It is the center the digital universe, and that is what is really exciting.

Now most of us in the room, I apologize that you are not as old as me, the Internet generation, that is the teenagers of the world are the most efficient and excited users in the digital universe. The PC and Extended PC have been integrated in to their lifestyles.

It is exciting to talk to these young people and to see what they do and to see how they take advantage of the PC.

We want to show you a video, but I want to make a comment. One of the things that we are doing is making the Extended PC available to teenagers. Especially in economically depressed areas. Not to learn how to use the PC but to learn how to use the Extended PC to extend their futures. How to use the PC to do something that they are really interested in. If they are interested in sports, how do you set up a web page on sports? If they are interested in music, what do you do with digital music? Or how do you do animations and get the software?

We want to show you a video of this concept of Computer Clubhouse where young teenagers can get together and with mentors do this sort of thing. And then we will bring a few of them out and let them tell it to you in your own words.

(playing video about Computer Clubhouse)

CRAIG BARRETT: I want you to welcome three representatives of the Computer Clubhouse in Boston. Shawn, Maria and Ruby. Come on out here.

How are you doing?

Where is your big mascot that always comes out?

SPEAKER: Oh, Sinbad?

CRAIG BARRETT: Sinbad is always late.

SINBAD: This is the cool stuff.

You left me hanging in the back. We could have got the MP3 if you would have all just stuck with me, man.

CRAIG BARRETT: This guy right here, we joke around a lot, he is a computer nerd.

SINBAD: You are going to mess up my cool. I am a funk technologist.

CRAIG BARRETT: Funk technologist. He has been an integral part of our kicking off this Computer Clubhouse along with some of these other sponsors you see on the screens behind us. But he has been a strong instigator of this whole deal. Catalytic agent, right?

SINBAD: I'm just hanging, before they make money I want to steal this talent, before they realize how good they are.

CRAIG BARRETT: You want to be their agent?

SINBAD: I just want to do movies with them and then when they realize I used them, I can write a book.

CRAIG BARRETT: I think you better stick to comedy.

SINBAD: Cool, man.

CRAIG BARRETT: You guys have something to show us tonight?

SPEAKER: We have a small clip. We had a video camera that we filmed around Las Vegas and we put it together to show it to you.

CRAIG BARRETT: All right. A good example of Extended PC. Give young people a video camera and a computer.

(showing video)

CRAIG BARRETT: This concept of a Computer Clubhouse and the concept of education in the IT industry, teaching kids how to use computers. I think it is very important. I know Sinbad believes it is.

SINBAD: I think it is cool that people normally left on the outside, because all the technology doesn't mean anything if it is not available for everyone. Which you guys are doing, the Clubhouse is making it available for everybody to go into the future.

CRAIG BARRETT: What do you guys think of it?

SPEAKER: I think they are slammin'.

CRAIG BARRETT: Slammin'?

SPEAKER: I think it is like "whoa."

CRAIG BARRETT: Whoa?

STUDENT: Athletes, it is off the hook.

CRAIG BARRETT: Off the hook? I know about that in fly fishing, but computers?

SPEAKER: It is pretty diesel.

CRAIG BARRETT: I need a translator here, Sinbad.

SINBAD: I think they are trying to say it is all cool. Everything is nice and lovely. It is okay.

CRAIG BARRETT: Let me see if I can get into this. I think it is phat.

SINBAD: That is okay. Phat is okay.

CRAIG BARRETT: Phat, with a "ph" is a good word, right? Not an "f"?

SINBAD: Right.

CRAIG BARRETT: Phat, man, phat. I may catch on to this before I retire. Anyway, these three youngsters here are the measure of the future and they get into this computer technology, they get into the Extended PC. They can express themselves and they leverage this all to their future. Not just how to turn a PC on, but what to do with it. Right?

SPEAKER: Right.

CRAIG BARRETT: Phat, man, phat.

Great to have you guys out here.

SPEAKER: Thanks.

SINBAD: We are leaving now.

CRAIG BARRETT: He is never late leaving, it is getting here that he is late.

We have been trying to express to you that PC is at the center of this digital universe. And the universe is getting bigger all the time. And it is really this concept of extending this universe with all these other devices. You know they are not in competition with the PC, they are peripheral to it. They are adjunct to it. They enhance it. They expand its power.

Just as we talked about networking, the more connections you have, the more valuable the network. The more connections you have to your PC, the more valuable the PC.

Everybody wants to be there with the center of this digital universe. And we can say it is diesel or whoa or slammin' or phat. PC to the power X is phat.

If you remember nothing tonight, just go home and repeat that to yourself.

The reason we are here is we want to bring some excitement back. I won't hide it, I want to sell a lot of microprocessors. So, I want those PC guys to sell a lot of PCs. And I want everyone that sells software or hardware attachments to PCs to sell a lot of that stuff. We have the capability and technology to bring the end user a lot of fun. A lot of value.

So, what we are going to do is put our muscle behind that. We have obviously just introduced the Pentium 4 microprocessor family. Products are coming out now in the sub $2,000 range. We think they are super for the sort of demos that we have been showing you today. We are going to continue to push those branded products and consumer branded products like MP3 players and tablets to enhance the value of the PC. Make it more important. More user friendly. More capable to the end user.

We will do that with promotions. Stores. We really want the people who are selling consumer electronics to be at the center of the action here. To be the center of the digital universe. Not only to be selling PCs, but to be selling all these peripheral devices attached to them.

Strong retail support. Strong Intel Inside branding campaign. Lots of fun moving forward.

Now, you have been a pretty good audience. You laughed when you were supposed to laugh.

Did you enjoy the Blue Man Group?

Would you like to have them back? I have just the way to do this. First, we have to set the stage. Who can open their mouth?

No, we are not going to do that. But we are going to use some of the capabilities of the Pentium 4 processor based system up here to really set the stage and have the Blue Man Group come back out here. All I have to do is take my little blue marshmallow and tap this screen a few times, and like magic we get off the Pentium 4 processor and into the Blue Man Group and here they come.

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