Live From Cupertino: Apple’s “Back To The Mac” Product Launch; iLife 11; FaceTime For Mac; Mac OS X Lion; Mac App Store; 2 New MacBook Airs Ship Today (Updated)

I’m back on Infinite Loop in Cupertino this morning to live blog today’s Apple (AAPL) “Back to the Mac” product launch event. The company has said it will give a sneak preview of the next version of OS X – the image with the media invitation shows a glimpse of a lion, in keeping with the feline-themed name of each generation of the software. There are also expectation the company will unveil a new version of the MacBook Air; and there is talk that a new version of iLife is coming. There are also rumblings that the company could talk about touch-screen Macs.

UPDATE: Summing up the live blog below: The company unveiled new 13.3 inch and 11.6 inch MacBook Air notebooks, which ship today; gave a preview of the next version of OS X Lion; detailed the coming Mac App Store; announced an upgrade of iLife; and unveiled FaceTime for Macs.

Here’s the live blog.

• 9:58 The event is in Town Hall, which is where the company always its on-campus launches. As per usual, the room is full. On the screen at the front of the room is a version of the logo above. The lights are dimming.
• 9:59 Here’s Steve Jobs.
• 10:00 Steve says thanks for coming. He says they have fun stuff to share. He says they will have some engineers demonstrating new stuff.
• 10:00 COO Tim Cook comes up to talk about the state of the Mac. A third of AAPL revenue last year – $22� billion. That would be #110 on Fortune 500 as a stand alone company – they have no plans to do that he adds quickly, to much laughing. 13.7 million Macs sold in the September 2010 fiscal year. That is 3x just five years earlier. Installed base is just shy of 50 million users. Last quarter, Macs grew 27%, versus 11% for the PC – 2.5x the PC growth rate. Mac has outgrown PCs for 18 quarters in a row, 4.5 years. U.S. consumer market share at retail is 20.7% - one in five PCs sold at retail in the U.S. (NPD data.) There are 600,000 registered Mac developers, growing 30,000 per month. Autodesk (ADSK) just said it will bring AutoCAD to the Mac – he says they have coveted it for a long time. He also says customer surveys find Mac is #1 in customer satisfaction. 7th year in a row in ACSI customer satisfaction index. Same in Consumer Reports. And others.
• 10:05 Cook says the retail stores have been a bid driver for Macs – 2.8 million in the last fiscal year. About 50% of those are new to the Mac. Now 318 stores in 11 countries. Had big openings lately in Paris, Shanghai, Beijing, Upper West Side of Manhattan, London. China stores have highest traffic of any Apple stores.
• 10:07 Back to Steve. Now, new products. Starting with iLife. He says some people buy the Mac specifically for iLife. New version announced today. iLife 11. Same apps. Today will look at 3.
• 10:08 Starts with iPhoto. New full screen modes. Enhanced ability to post on Facebook. Easier to e-mail without leaving iPhoto. New slideshows. Big leap in books. They print over 2 million books a year. Adding letterpress card. Phil Schiller, SVP of Worldwide Product Marketing will do a demo.
• 10:10 Schiller is on stage. Can work in full screen mode. Events view, organized chronologically. Or start with Faces. Also new full-screen places view. Another new feature: new slide show themes. He’s showing a Places them for photos in London. Behind photos is a drop-shadow map. The map appears between photos to show location. Nice. More themes: in Album view, can see photos from Facebook and Flickr automatically. He’s demonstrating a template called Reflections, which includes reflections of the photos at the bottom of the screen. One more theme: this time with a holiday theme. It’s called Holiday Mobile. The pictures look like they are on strings, as if hanging off a tree.
• 10:15 Maybe more valuable is a simple way to email photos. Click share, creates e-mail within iPhoto. You can move them around the email that is auto-created by the software. Another new thing: in the info panel for the photos, there is a sharing section, which tells you how you have shared it – including on Facebook, with comments from Facebook on the photo, and info on who you have emailed the photo to.
• 10:18 Schiller is moving on to demonstrate how to create books. New book carousel view to choose a theme; the software auto creates the book with your pictures. You can edit it, of course. If you rate photos highly, it will include larger versions. Photos from similar dates are grouped together. Another new view: Project View, which is a “wooden bookshelf” showing the projects you’ve created, with books, cards, etc.
• 10:22 Back to Steve. Next, he’s moving on to iMovie 11. He says it is a great release. Number one request was for better audio editing. Now strive for sophisticated editing really simply. Something called one-stop effects. People Finder. News and sports themes. And ability to construct movie trailers. Randy Ubillos, chief architect for video applications will do the demo.
• 10:25 Ubillos is showing how you can increase audio volume; also easy now to change segments of audio; to adjust levels for specified segments. Also, new: audio effects. Make everyone sound like Darth Vader. Or make them sound like them have been breathing helium. Next, using a single-step segment to edit in an instant replay. Or freeze final frames of clip with Ken Burn effect of still for transitions. Also new: 15 movie trailers. You can fill in titles, dates, cast. Can put in studio logo – there are five choices. Also can fill in credits. On story board tab, you can see pacing and timing of the clips for the trailers. Some of the original music offered for the trailers was actually recorded by the London Symphony Orchestra. The software can tell with Faces software if there are people in any given shot, which you can use to find group shots. Can apply slow motion. People are going to LOVE this. It really is impressive. (He demonstrated a couple of different trailers.
• 10:30 Steve is back. Next, Garage Band 11. Flex Time. Groove Matching. More guitar amps and effects. And new piano and guitar lessons. Xander Soren, product manager, is doing the demo.
• 10:40 Here’s Xander. He’s starting with a clip with various musicians playing out of sync with each other, showing how you can start with a groove track – and then apply that groove to all the other instruments, to keep them in sync on the song. Groove matching, he says, is like spell check for songs. Flex Time feature let’s you drag out the length of individual notes, to fixing timing of your songs. Another new thing: built in music lessons for both guitar and piano. Presented in full screen. Starts with HD video, with note by note breakdown of the entire piece. New How Did I Play feature. Attach USB music keyboard. Goal is to play the music as written. Screen shows where timing is off in yellow; accurate notes in green; misses in red. Can also keep history, to show your improvement playing the piece over time.
• 10:47 Steve is back. Free with new Macs. Upgrade for $49. And available today.
• 10:49 Next, FaceTime. There are 19 million devices with FaceTime so far. Number One request: tie to the Mac. Will add FaceTime for the Mac. This time, Steve is doing the Demo himself. He’s starting a call with Phil Schiller, who is on an iPhone 4. Simple. Nothing to configure. Just video chat with iPhone 4 and Touch users. Beta release today from Apple.com.
• 10:52 Next, the entree for today. A sneak peak for where they are going on Mac OS X. 7 releases in last decade: Cheetah, Puma, Jaguar, Panther, Tiger, Leopard, Snow Leopard; today a preview of eighth version, Lion. What we want to do, he says, is take some of the iPad and iPhone innovations “back to the Mac.” OS X meets the iPad, Steve says. Steve says they will show a few key features.
• 10:54 Steve is listing some key features of how people use the iPad and iPhone. Multi-touch gestures. App store. App Home screens. Full Screen apps. Auto save data. Apps resume where you left them.
• 10:56 He says touch screens on laptop displays are ergonomically terrible. For notebooks, focused on trackpads over the years. The best way to get multi-touch into a notebook. Also Magic Mouse, external track pads. (Ergo, no touch screen Macs today.)
• 10:57 On Mac app store, has revolutionized mobile applications. In Lion, there will be Mac app store. Best place to discover apps. One-click downloads. Free and paid apps. 70% of revenue for developers. Automatic installation. Automatic app updates like iPhone and iPad. Apps licensed use for all of your personal Macs.
• 10:58 Launch pad for your apps.
• 10:59 In Mac OS X, there are already Expose, Dashboard for widgets, full-screen apps, and Spaces, for more than one workspace. But he says they will unify those four apps in a new thing called Mission Control, to navigate to anything running on your Mac.
• 11:00 Craig Federighi, VP for Mac OS X, will do a demo.
• 11:00 He starts with Mac App Store. Start with icon on the dock. Can see lists of most popular apps. Categories. Updates. Much like iPhone, iPad. Customer ratings and review; buy with one click, with instant install.
• 11:02 Launch Pad is way to see all apps on the Mac. Displays full screen grid. They have iPad style pages to see more apps. Can organize the apps within the pages. Click and drag. Can also create folders like on iOS. Drop one app on another, create a folder.
• 11:03 Next, full-screen apps. In the full screen, can use gestures to move between pages. Can use simple flick gesture to switch from full screen to menu screens.
• 11:05 Also, he’s showing Mission Control, for surfing around to all the things that are running on the Macs – apps, dashboard, desktop, Web pages, iPhoto, whatever.
• 11:07 Steve is back, summing up the new functions in Lion. Plan is to release it summer 2011. We are on schedule for that, he says.
• 11:08 Back to the Mac App Store. Steve says he thinks it will be great for users. And they don’t want to wait. Will open it within 90 days. Developers can learn about it today. Will accept app submissions starting next month.
• 11:11 One more thing…
• 11:12 What would happen if MacBook met an iPad.…instant on. Great battery life. 30 day standdby time. Sold-state storage. Thinner and lighter. What would happen if a MacBook and an iPad hooked up? The result: the new MacBook Air.
• 11:13 The new Air is super thin. (Specs on the new models are now on the Web.) 0.68 inches at thickest point, tapering to 0.11 inches. Unibody construction. Weighs 2.9 pounds. 13.3 inch backlit display. 1440×900 display. Core 2 Duo processor. No optical drive. No hard drive. Up to 2x faster. More reliable. Instant on. 7 hours battery life. Standby 30 days.
• 11:17 inside, flash storage. 802.11n WiFi. Core 2 Duo. GeForce graphics processor. Speaker. Battery, which takes up more room than the electronics.
• 11:18 In addition to 13.3 inch, there will be an 11.6 inch version. 2.3 pounds. 5 hour battery life. 30 days standby.
• 11:20 Pricing: Jobs says all notebooks will be like this one. Start at $999 for 11.6 inch, 1.4 GHZ version with 64 GB; for 128 GB, $1199. 13.3 version, faster 1.86 GHz processor, 128 GB $1299. $1599 for 256 GB, 13.3 inch version, also with the 1.86 GHz processor. They are all available starting today.
• 11:21 They have a new ad for the Air, of course, which they showed.

And that’s it.

AAPL is up $2.41, or 0.8%, to $311.90.

Update: I’ve been in the demo room playing with the new Airs, and they are super light, and hugely appealing. In effect, Apple with the 11.6 -inch version has done what they said they never would – unveiled its own version of a Netbook. Not at the same price as those sub-$500 PC models, but equally convenient. And a whole lot better looking.