Differences between objects with and without instance variab

class1 obj;

'obj' is of course a variable of type class1 which (assuming it's a local variable) is currently undefined. However, storage for it (4 bytes on a 32-bit system or 8 bytes on a 64-bit system) has already been reserved for it within the method's stack frame.

class1 obj=new class1();

'obj' is again a local variable of type class1 which has a slot on the method's stack.

However, an instance (or object) of class1 has been created on the heap and a reference (or pointer) to it has been assigned to the variable. Consequently, the variable's slot contains a reference to that instance - it doesn't contain the instance itself.