WEBVTT - Did Apple Sleep Through the AI Revolution?

0:00:02.800 --> 0:00:09.680
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. When Apple released the

0:00:09.720 --> 0:00:12.800
<v Speaker 1>iPhone sixteen last year, the company put out a series

0:00:12.840 --> 0:00:17.279
<v Speaker 1>of TV ads promising shiny new AI tools. One of

0:00:17.320 --> 0:00:21.000
<v Speaker 1>those ads featured Bellow Ramsey, the star of HBO's The

0:00:21.079 --> 0:00:24.440
<v Speaker 1>Last of Us, trying to remember someone's name at a party.

0:00:24.960 --> 0:00:26.520
<v Speaker 2>Sirih, what's the name of the guy I had a

0:00:26.560 --> 0:00:28.800
<v Speaker 2>meeting with a couple of months ago at Cafe Grenell.

0:00:29.440 --> 0:00:32.480
<v Speaker 1>Siri scans their calendar and answers, you.

0:00:32.440 --> 0:00:34.400
<v Speaker 2>Met Zach Wingate at Cafe.

0:00:34.240 --> 0:00:39.000
<v Speaker 1>Grenelle, And when Zach approaches Bella, they nail his name.

0:00:39.440 --> 0:00:43.720
<v Speaker 2>Hey, Sach eh wow, I think that you don't remember me? Yeah. Push.

0:00:43.800 --> 0:00:45.800
<v Speaker 1>It was a promise of what was to come with

0:00:45.920 --> 0:00:50.080
<v Speaker 1>Apple and its AI ambitions, but Mark German, who edits

0:00:50.080 --> 0:00:53.880
<v Speaker 1>Bloomberg's consumer tech coverage and has been covering Apple for years,

0:00:54.200 --> 0:00:57.880
<v Speaker 1>says it hasn't quite gone. According to Plant.

0:00:58.920 --> 0:01:01.240
<v Speaker 2>They advertised I was going to do that in order

0:01:01.280 --> 0:01:04.200
<v Speaker 2>to sell the new phones, but that feature never came out.

0:01:04.440 --> 0:01:08.000
<v Speaker 2>A complete disconnect between Apple engineering and Apple marketing.

0:01:08.440 --> 0:01:11.080
<v Speaker 1>How rare is that for Apple to do something like that,

0:01:11.160 --> 0:01:14.959
<v Speaker 1>to promise something, to advertise it, and then not actually deliver.

0:01:14.760 --> 0:01:17.960
<v Speaker 2>It, this is AI, this is Siri. This is at

0:01:17.959 --> 0:01:21.680
<v Speaker 2>the very core of this major technological revolution. So to

0:01:21.760 --> 0:01:26.120
<v Speaker 2>the scale that this happened with the importance of these features,

0:01:27.200 --> 0:01:29.280
<v Speaker 2>nothing like that has happened in modern Apple history, and

0:01:29.280 --> 0:01:31.839
<v Speaker 2>I consider modern Apple history to be the last twenty

0:01:31.959 --> 0:01:32.560
<v Speaker 2>or so years.

0:01:33.160 --> 0:01:36.319
<v Speaker 1>Apple ended up taking the Seri add down, but that

0:01:36.480 --> 0:01:41.400
<v Speaker 1>disconnect led customers to file class action lawsuits alleging false advertising.

0:01:41.520 --> 0:01:45.000
<v Speaker 1>In March. Apple declined to comment on the lawsuits. The

0:01:45.040 --> 0:01:48.240
<v Speaker 1>company also declined to comment on Mark's story or on

0:01:48.320 --> 0:01:52.520
<v Speaker 1>behalf of the executives mentioned. Mark spoke with several employees

0:01:52.520 --> 0:01:55.080
<v Speaker 1>and people close to the company, some of whom requested

0:01:55.120 --> 0:01:58.880
<v Speaker 1>anonymity to discuss sensitive matters, and he says, based on

0:01:58.920 --> 0:02:03.000
<v Speaker 1>his reporting, those missing features on the iPhone sixteen point

0:02:03.040 --> 0:02:05.840
<v Speaker 1>to a much bigger issue for Apple that when it

0:02:05.840 --> 0:02:09.440
<v Speaker 1>comes to the AI race, the company known for delivering

0:02:09.560 --> 0:02:13.880
<v Speaker 1>on revolutionary tech, is way behind. This is the big

0:02:13.919 --> 0:02:17.040
<v Speaker 1>take from Bloomberg News. I'm Sarah Holder today on the

0:02:17.080 --> 0:02:20.840
<v Speaker 1>show inside Apple's efforts to catch up on AI, the

0:02:20.960 --> 0:02:24.080
<v Speaker 1>challenges the company faces to keep its status as a

0:02:24.120 --> 0:02:27.040
<v Speaker 1>tech pioneer, and the pitfalls of getting in the game

0:02:27.240 --> 0:02:32.079
<v Speaker 1>too late. Mark, I want to start by getting a

0:02:32.120 --> 0:02:34.720
<v Speaker 1>sense of your reporting process here. What made you want

0:02:34.760 --> 0:02:37.480
<v Speaker 1>to dig into Apple's artificial intelligence efforts?

0:02:38.000 --> 0:02:41.800
<v Speaker 2>You know, AI has always been an important topic, but

0:02:41.919 --> 0:02:44.359
<v Speaker 2>until chet GPT launch at the end of twenty twenty two,

0:02:44.720 --> 0:02:47.560
<v Speaker 2>it really didn't come into the mainstream. It really wasn't

0:02:47.560 --> 0:02:50.919
<v Speaker 2>the center of the technology world. And it's so interesting

0:02:50.960 --> 0:02:54.600
<v Speaker 2>because over the years, Apple has dominated so many categories

0:02:54.639 --> 0:02:56.920
<v Speaker 2>that it wasn't first two the MP three player with

0:02:56.960 --> 0:02:59.640
<v Speaker 2>the iPod, the smartphone with the iPhone, the table with

0:02:59.639 --> 0:03:03.800
<v Speaker 2>the iPad, earbuds with the AirPods, smart watches with the

0:03:03.800 --> 0:03:07.079
<v Speaker 2>Apple Watch. What was different this time around is not

0:03:07.200 --> 0:03:11.280
<v Speaker 2>only was Apple late to AI or generative AI, this

0:03:11.520 --> 0:03:15.880
<v Speaker 2>modern technology that we know from Chat, GPT and Gemini, Anthropic,

0:03:15.919 --> 0:03:18.880
<v Speaker 2>you name it, but they also weren't the best. There

0:03:19.000 --> 0:03:23.600
<v Speaker 2>was no Apple iPhone or Apple iPad moment for AI

0:03:23.800 --> 0:03:27.280
<v Speaker 2>where they took something that people didn't really understand and

0:03:27.360 --> 0:03:31.200
<v Speaker 2>made it mainstream into some beautiful, fully functional product. Right.

0:03:31.880 --> 0:03:35.240
<v Speaker 2>That just didn't happen, And so for me that was fascinating.

0:03:35.440 --> 0:03:38.200
<v Speaker 2>That was a c change for Apple. And then over

0:03:38.280 --> 0:03:40.760
<v Speaker 2>time you start hearing from people working at Apple, people

0:03:40.800 --> 0:03:43.080
<v Speaker 2>in the industry that there's a problem there.

0:03:43.600 --> 0:03:47.040
<v Speaker 1>What products does Apple have that do use AI today?

0:03:47.200 --> 0:03:49.560
<v Speaker 1>Like when you go on your phone, is AI there?

0:03:50.240 --> 0:03:53.240
<v Speaker 2>Touch ID face ID the way you unlock your phone

0:03:53.280 --> 0:03:56.880
<v Speaker 2>with biometrics, that is a form of artificial intelligence. The

0:03:56.920 --> 0:03:59.640
<v Speaker 2>ability for the phone to say you have a meeting

0:03:59.680 --> 0:04:02.720
<v Speaker 2>and for five minutes, there's forty minutes of traffic, you

0:04:02.760 --> 0:04:04.720
<v Speaker 2>should probably leave right about now in order to get

0:04:04.720 --> 0:04:08.520
<v Speaker 2>there on time. That's artificial intelligence. They've been really good

0:04:08.520 --> 0:04:11.800
<v Speaker 2>at heavily integrated AI. Where they missed was this new

0:04:11.840 --> 0:04:15.680
<v Speaker 2>topic of generative AI. And so there's a big disconnect

0:04:15.720 --> 0:04:18.760
<v Speaker 2>between the AI that Apple has long offered and the

0:04:18.839 --> 0:04:21.719
<v Speaker 2>AI that both Wall Street and consumers are clamoring for.

0:04:22.160 --> 0:04:25.800
<v Speaker 2>And Apple knew that. That's why they spun together Apple Intelligence.

0:04:26.320 --> 0:04:29.120
<v Speaker 2>They called it AI for the rest of us, just

0:04:29.160 --> 0:04:31.120
<v Speaker 2>like they called the original Mac the computer for the

0:04:31.120 --> 0:04:34.560
<v Speaker 2>rest of us. Expectations for sky high the presentation looked

0:04:34.600 --> 0:04:41.400
<v Speaker 2>pretty good. In reality, it fell extraordinarily flat. I used

0:04:41.440 --> 0:04:44.240
<v Speaker 2>the first beta version of Apple Intelligence back at the

0:04:44.320 --> 0:04:46.919
<v Speaker 2>end of July early August of last year, and I

0:04:46.960 --> 0:04:51.080
<v Speaker 2>wrote a column about this, saying, this is kind of unbelievable.

0:04:51.080 --> 0:04:52.680
<v Speaker 2>They've hyped it and hyped it and hyped it. It

0:04:52.680 --> 0:04:55.400
<v Speaker 2>has basically nothing. People are going to start using this

0:04:55.440 --> 0:04:57.840
<v Speaker 2>thing and be like, that's it, right, and people were

0:04:57.880 --> 0:04:58.680
<v Speaker 2>shocked at the time.

0:04:59.120 --> 0:05:00.760
<v Speaker 1>This is where you get a couple of texts from

0:05:00.760 --> 0:05:02.560
<v Speaker 1>your friends and then they give you basically an AI

0:05:02.640 --> 0:05:03.800
<v Speaker 1>summary of what was said.

0:05:04.680 --> 0:05:06.320
<v Speaker 2>That is one of the futures. So you have the

0:05:06.360 --> 0:05:09.159
<v Speaker 2>summaries and it can summarize, you know, a slew of

0:05:09.200 --> 0:05:13.640
<v Speaker 2>text messages. It was able to summarize news headlines right,

0:05:13.960 --> 0:05:16.719
<v Speaker 2>but they had to pull the news headline's feature because

0:05:16.720 --> 0:05:20.640
<v Speaker 2>the BBC complained. They sent a headline out about Luigi

0:05:20.720 --> 0:05:23.920
<v Speaker 2>Maggioni and the headline actually spit out after going through

0:05:23.920 --> 0:05:26.560
<v Speaker 2>the Apple system that he had shot himself and so

0:05:27.000 --> 0:05:29.039
<v Speaker 2>that was a sign the system was quite broken. So

0:05:29.080 --> 0:05:32.960
<v Speaker 2>they pulled that months ago and that's still not back. Actually,

0:05:33.480 --> 0:05:35.880
<v Speaker 2>there's the gen moji's feature where you can create your

0:05:35.880 --> 0:05:38.239
<v Speaker 2>own emoji of that one. That is a cool feature.

0:05:38.279 --> 0:05:42.440
<v Speaker 2>There's writing tools which allows you to summarize text synthesized

0:05:42.480 --> 0:05:46.200
<v Speaker 2>text into bullet points, but the Generative AI to create

0:05:46.360 --> 0:05:51.160
<v Speaker 2>something that actually uses OpenAI chat GPT, which is also

0:05:51.320 --> 0:05:55.560
<v Speaker 2>integrated into iOS eighteen. So there's a slew of these

0:05:55.600 --> 0:05:59.760
<v Speaker 2>little features throughout, but many of them have also been delayed,

0:06:00.040 --> 0:06:02.360
<v Speaker 2>many of them don't work as intended, many of them

0:06:02.360 --> 0:06:05.280
<v Speaker 2>don't work as it's been marketed. And what we have

0:06:05.320 --> 0:06:08.400
<v Speaker 2>today is really a far cry from the vision Apple presented,

0:06:08.680 --> 0:06:11.000
<v Speaker 2>and it's an even farther cry from what you're seeing

0:06:11.000 --> 0:06:11.920
<v Speaker 2>from competitors.

0:06:12.240 --> 0:06:14.120
<v Speaker 1>Well, benefit of the doubt for a second, being a

0:06:14.160 --> 0:06:17.000
<v Speaker 1>little late to the game isn't exactly new for Apple.

0:06:17.040 --> 0:06:21.320
<v Speaker 1>They've historically sat back while their competitors developed riskier new products.

0:06:21.560 --> 0:06:23.520
<v Speaker 1>They've entered the ring when the bumps and the kinks

0:06:23.720 --> 0:06:27.359
<v Speaker 1>are kind of smoothed out. Is Apple lagging behind now

0:06:27.640 --> 0:06:30.320
<v Speaker 1>as a strategy to work more on the tech, or

0:06:30.360 --> 0:06:32.360
<v Speaker 1>is it really struggling to keep up?

0:06:32.800 --> 0:06:36.000
<v Speaker 2>Well, I think it's all of those things. Right. One,

0:06:36.080 --> 0:06:39.520
<v Speaker 2>they're struggling to keep up. They have fewer AI engineers

0:06:39.560 --> 0:06:43.640
<v Speaker 2>than other companies like Amazon at this point. The other

0:06:43.800 --> 0:06:47.039
<v Speaker 2>issue is that they don't have the vision for exactly

0:06:47.040 --> 0:06:49.120
<v Speaker 2>how they can be different and how they can implement

0:06:49.160 --> 0:06:52.440
<v Speaker 2>these things. But also AI is something that the company

0:06:52.480 --> 0:06:56.760
<v Speaker 2>is not necessarily built to produce. AI is messy. There's

0:06:56.839 --> 0:07:01.360
<v Speaker 2>a frequent problem called hallucinations, right hallucinations could be you

0:07:01.400 --> 0:07:05.800
<v Speaker 2>ask chat GPT or claud or Perplexity a question and

0:07:05.880 --> 0:07:08.520
<v Speaker 2>it's so confident that it knows the answer the AI

0:07:08.839 --> 0:07:11.800
<v Speaker 2>and it'll give you an answer, but it's complete nonsense

0:07:11.880 --> 0:07:15.239
<v Speaker 2>based on nothing, and it's completely wrong. And so Apple

0:07:15.560 --> 0:07:18.240
<v Speaker 2>as a company with two point three to five billion

0:07:18.240 --> 0:07:21.200
<v Speaker 2>devices out there, they want to avoid those types of issues.

0:07:21.280 --> 0:07:24.080
<v Speaker 2>So there is a bit of approach to go slow.

0:07:24.720 --> 0:07:28.040
<v Speaker 2>There are the technical challenges that they've had trouble overcoming,

0:07:28.440 --> 0:07:31.280
<v Speaker 2>but then there's also the true reality that this stuff

0:07:31.320 --> 0:07:33.720
<v Speaker 2>takes a lot of time in the oven in order

0:07:33.760 --> 0:07:36.360
<v Speaker 2>to be a great place for consumers, and they put

0:07:36.360 --> 0:07:37.520
<v Speaker 2>it in the oven quite late.

0:07:38.200 --> 0:07:40.080
<v Speaker 1>Well, let's talk about when they put it in the oven,

0:07:40.080 --> 0:07:43.480
<v Speaker 1>because part of that beginning of the baking process of AI,

0:07:43.520 --> 0:07:48.640
<v Speaker 1>if you will, started with poaching John Andrea from Google

0:07:48.760 --> 0:07:50.800
<v Speaker 1>back in twenty eighteen. They wanted him to kind of

0:07:50.880 --> 0:07:54.160
<v Speaker 1>kickstart the AI program at Apple. How was he supposed

0:07:54.200 --> 0:07:54.960
<v Speaker 1>to change the game.

0:07:55.360 --> 0:07:58.400
<v Speaker 2>So that was a big coup for Apple. That was

0:07:58.600 --> 0:08:01.280
<v Speaker 2>one of the most dramatic at caires at the time.

0:08:01.800 --> 0:08:05.360
<v Speaker 2>JG as he's known, was probably the second most important

0:08:05.360 --> 0:08:07.440
<v Speaker 2>person at Google. He ran all Google Search and all

0:08:07.440 --> 0:08:10.160
<v Speaker 2>of Google AI and don't forget back in twenty eighteen.

0:08:10.440 --> 0:08:12.720
<v Speaker 2>Google is really at the forefront of AI, putting it

0:08:12.720 --> 0:08:16.920
<v Speaker 2>into Gmail Translate photos. They were really a pioneer and

0:08:17.040 --> 0:08:21.320
<v Speaker 2>JG was supposed to come in and take everything AI related, serelated,

0:08:21.360 --> 0:08:24.160
<v Speaker 2>put it under his own umbrella. Before you had Siri

0:08:24.240 --> 0:08:28.440
<v Speaker 2>and different AI teams scattered throughout the corporation. Apple executives

0:08:28.480 --> 0:08:30.680
<v Speaker 2>at the time felt like the scattered nature of the

0:08:30.720 --> 0:08:33.400
<v Speaker 2>AI work made it more difficult for them to get

0:08:33.440 --> 0:08:36.880
<v Speaker 2>things working properly. They brought it under one roof. He

0:08:36.960 --> 0:08:39.120
<v Speaker 2>did a lot of analysis of what features people were

0:08:39.200 --> 0:08:41.400
<v Speaker 2>using and not using in Syria and proposed killing a

0:08:41.400 --> 0:08:44.240
<v Speaker 2>lot of those features. He brought in his own people

0:08:44.280 --> 0:08:46.679
<v Speaker 2>from Google and elsewhere, some of the top scholars and

0:08:46.720 --> 0:08:50.160
<v Speaker 2>AI researchers in the world. But then everything sort of

0:08:50.440 --> 0:08:55.040
<v Speaker 2>fell flat since he came to Apple. There wasn't a

0:08:55.080 --> 0:08:58.000
<v Speaker 2>lot of change that we've seen in Siri or Apple's

0:08:58.040 --> 0:09:01.400
<v Speaker 2>machine learning. Artificial intelligence were a lot of the AI

0:09:01.520 --> 0:09:05.760
<v Speaker 2>work in the years before Apple Intelligence went to development

0:09:05.760 --> 0:09:09.959
<v Speaker 2>of a self driving car. They spent billions billions on that.

0:09:10.679 --> 0:09:14.160
<v Speaker 2>They never launched the car. That AI didn't go entirely

0:09:14.200 --> 0:09:16.160
<v Speaker 2>to waste because they were able to use some of

0:09:16.200 --> 0:09:18.880
<v Speaker 2>that technology towards the generative models that they're putting on

0:09:18.920 --> 0:09:20.800
<v Speaker 2>the iPhone, iPad and Mac at this point.

0:09:22.000 --> 0:09:26.800
<v Speaker 1>But not a lot happened until November twenty twenty two,

0:09:27.240 --> 0:09:31.320
<v Speaker 1>when open ai released chat gpt to the public. According

0:09:31.320 --> 0:09:33.760
<v Speaker 1>to people familiar with the events who spoke with Mark,

0:09:34.240 --> 0:09:37.720
<v Speaker 1>that set off a flurry of activity at the company and.

0:09:37.679 --> 0:09:41.080
<v Speaker 2>Craig Federigi, who runs software engineering for Apple. He and

0:09:41.200 --> 0:09:44.040
<v Speaker 2>JG and other people at Apple. They started meeting with

0:09:44.080 --> 0:09:48.840
<v Speaker 2>open Ai, met with Anthropic, met with other smaller AI players,

0:09:48.840 --> 0:09:51.640
<v Speaker 2>and determined they need to figure out these AI models

0:09:51.679 --> 0:09:53.600
<v Speaker 2>and they need to make the twenty twenty four release

0:09:53.640 --> 0:09:57.400
<v Speaker 2>of iOS very much an AI driven release with AI

0:09:57.440 --> 0:10:01.079
<v Speaker 2>features throughout. The edict get is many AI features into

0:10:01.080 --> 0:10:02.520
<v Speaker 2>the operating system as possible.

0:10:03.360 --> 0:10:07.200
<v Speaker 1>So three years and several delayed AI products later, the

0:10:07.280 --> 0:10:12.280
<v Speaker 1>question is when will Apple catch up? Can it? That's

0:10:12.320 --> 0:10:25.240
<v Speaker 1>after the break mark. Your reporting shows that internally Apple

0:10:25.360 --> 0:10:28.960
<v Speaker 1>is really worried that falling behind on AI could be

0:10:29.160 --> 0:10:33.080
<v Speaker 1>a critical error. But why couldn't Apple just be content

0:10:33.280 --> 0:10:36.120
<v Speaker 1>to be a good hardware and software company without being

0:10:36.360 --> 0:10:37.400
<v Speaker 1>a leader in AI.

0:10:38.000 --> 0:10:40.559
<v Speaker 2>That's a good question. So, really, there's this predicament inside

0:10:40.559 --> 0:10:42.800
<v Speaker 2>Apple right now, how much of this stuff should we

0:10:42.840 --> 0:10:44.959
<v Speaker 2>be building versus how much of this stuff should we

0:10:45.000 --> 0:10:48.800
<v Speaker 2>be licensing? And already you have OpenAI chat GPT integration

0:10:49.360 --> 0:10:52.880
<v Speaker 2>into siriy in writing tools for those generative use cases

0:10:52.920 --> 0:10:55.600
<v Speaker 2>like writing an essay and whatnot. They're going to add

0:10:55.640 --> 0:10:59.000
<v Speaker 2>Google Gemini as an alternative to CHET GPT inside of

0:10:59.040 --> 0:11:02.480
<v Speaker 2>Siri and writing tools as well. They're also working to

0:11:02.559 --> 0:11:06.880
<v Speaker 2>redo the search engine in their browser Safari to integrate

0:11:07.440 --> 0:11:10.120
<v Speaker 2>AI engines. That's still to come. So you have this

0:11:10.200 --> 0:11:14.480
<v Speaker 2>question internal versus external partnerships, Like you said, why do

0:11:14.520 --> 0:11:16.640
<v Speaker 2>we need to be an AI expert? Why can't we

0:11:16.679 --> 0:11:19.320
<v Speaker 2>just license? That's what Samsung does, right, Samsung uses Google

0:11:19.400 --> 0:11:20.600
<v Speaker 2>Gemini to power there ALAI.

0:11:20.760 --> 0:11:22.520
<v Speaker 1>Right, and all these other companies are putting so many

0:11:22.559 --> 0:11:24.920
<v Speaker 1>resources and energy into developing this AI.

0:11:25.160 --> 0:11:30.079
<v Speaker 2>They're ahead correct Sitting here today, AI is the most

0:11:30.120 --> 0:11:35.000
<v Speaker 2>core fundamental technology that you can get. It's equivalent to

0:11:35.120 --> 0:11:39.760
<v Speaker 2>the processors that go into their devices. Throughout Apple's history,

0:11:39.880 --> 0:11:43.320
<v Speaker 2>it has been core technologies that have enabled their new

0:11:43.320 --> 0:11:47.679
<v Speaker 2>types of products. The iPhone only was created because they

0:11:47.840 --> 0:11:50.720
<v Speaker 2>owned a core technology known as multi touch we take

0:11:50.720 --> 0:11:53.240
<v Speaker 2>it for granted today, but that touchscreen interface to the

0:11:53.280 --> 0:11:57.920
<v Speaker 2>original iPhone on the iPad is enabled by very intense,

0:11:58.240 --> 0:12:02.160
<v Speaker 2>expensive to develop multi touch technology. All the macs, the

0:12:02.200 --> 0:12:05.920
<v Speaker 2>one you're using now, the iPad, those products, AirPods were

0:12:06.040 --> 0:12:09.800
<v Speaker 2>enabled by these very advanced processors. But Apple needs to

0:12:09.800 --> 0:12:13.600
<v Speaker 2>think about the next wave of technology. They already killed

0:12:13.600 --> 0:12:15.840
<v Speaker 2>the self driving car, but let's just put that in there.

0:12:16.240 --> 0:12:18.960
<v Speaker 2>So the next wave of hardware in the technology industry,

0:12:19.640 --> 0:12:25.880
<v Speaker 2>autonomous cars, advanced augmented reality glasses, glasses that can scan

0:12:25.960 --> 0:12:31.800
<v Speaker 2>your surrounding environment, robots, whether that's humanoids, whether that's roaming robots,

0:12:32.160 --> 0:12:38.040
<v Speaker 2>whether that's tabletop robots. The only way to enable those

0:12:38.040 --> 0:12:41.720
<v Speaker 2>products is by owning the core technology of AI, and

0:12:41.760 --> 0:12:44.320
<v Speaker 2>we've already seen Apple's AI was not up to snuff

0:12:44.400 --> 0:12:47.199
<v Speaker 2>enough to produce the autonomous car. But they're going to

0:12:47.240 --> 0:12:49.240
<v Speaker 2>be doomed on the next phase of hardware if they

0:12:49.240 --> 0:12:52.840
<v Speaker 2>don't get the AI working. And you cannot rely on

0:12:52.960 --> 0:12:56.839
<v Speaker 2>third parties for technology as cores artificial intelligence. So that's

0:12:56.880 --> 0:13:00.160
<v Speaker 2>why they need to keep digging in and building their

0:13:00.200 --> 0:13:02.040
<v Speaker 2>own AI to enable the next way of a hardwork,

0:13:02.040 --> 0:13:03.400
<v Speaker 2>because don't forget the end of the day they're a

0:13:03.440 --> 0:13:04.120
<v Speaker 2>hardware company.

0:13:04.160 --> 0:13:07.000
<v Speaker 1>Are these things that customers are actually, like, really really

0:13:07.080 --> 0:13:07.560
<v Speaker 1>asking for?

0:13:08.320 --> 0:13:11.920
<v Speaker 2>I mean it's hard to say. I think there is

0:13:12.160 --> 0:13:15.719
<v Speaker 2>demand for augmented reality glasses. I think the meta ray

0:13:15.760 --> 0:13:19.600
<v Speaker 2>bands have been somewhat popular, and so I think glasses

0:13:19.640 --> 0:13:22.160
<v Speaker 2>are going to become a real category. I think there

0:13:22.200 --> 0:13:24.280
<v Speaker 2>is going to be a time when pointing your watch

0:13:24.280 --> 0:13:27.320
<v Speaker 2>at something or pointing your earbuds at something to get

0:13:27.320 --> 0:13:29.680
<v Speaker 2>more data based on AI is going to be commonplace.

0:13:30.080 --> 0:13:31.720
<v Speaker 2>I think there is going to be a market for

0:13:31.760 --> 0:13:36.080
<v Speaker 2>different robotics devices, and certainly the ship has sailed. Autonomy

0:13:36.120 --> 0:13:39.559
<v Speaker 2>and self driven cars is a real thing, so I

0:13:39.640 --> 0:13:43.320
<v Speaker 2>think yes. Now, is it ever going to be as

0:13:43.360 --> 0:13:46.000
<v Speaker 2>popular as the iPhone has been over the last twenty years?

0:13:46.040 --> 0:13:48.760
<v Speaker 2>Probably not, but it is certainly the future.

0:13:49.280 --> 0:13:51.720
<v Speaker 1>What does Apple actually need to change about its culture,

0:13:51.720 --> 0:13:54.240
<v Speaker 1>its processes, it's core business model in order to actually

0:13:54.280 --> 0:13:57.719
<v Speaker 1>compete in the AI space? And is it doing it?

0:13:58.200 --> 0:14:00.520
<v Speaker 2>Apple needs to get a lot faster. They need to

0:14:00.559 --> 0:14:04.240
<v Speaker 2>get a little messier. They need to make boulder bets.

0:14:04.720 --> 0:14:07.559
<v Speaker 2>They need to be less afraid to launch things. They

0:14:07.600 --> 0:14:10.000
<v Speaker 2>need to go back to that ethos of move fast

0:14:10.040 --> 0:14:13.080
<v Speaker 2>and break things. There's going to be a new entrant

0:14:13.320 --> 0:14:16.640
<v Speaker 2>that potentially could knock Apple off the top of the

0:14:16.640 --> 0:14:20.240
<v Speaker 2>technology mountain right in in order for Apple to avoid that,

0:14:20.480 --> 0:14:22.400
<v Speaker 2>they're going to have to beat out those new entrants

0:14:22.440 --> 0:14:25.120
<v Speaker 2>time and time again. And AI is the big thing

0:14:25.200 --> 0:14:27.880
<v Speaker 2>right now, and they have so far very much failed

0:14:27.880 --> 0:14:31.120
<v Speaker 2>to do so. Because of their large user base, because

0:14:31.120 --> 0:14:33.920
<v Speaker 2>of their design, because of their marketing, and the love

0:14:33.960 --> 0:14:35.800
<v Speaker 2>that people have for Apple products. I mean, we're all

0:14:35.920 --> 0:14:39.440
<v Speaker 2>using them right. They have a very big chance of

0:14:39.480 --> 0:14:42.200
<v Speaker 2>turning things around, but they're only going to have so

0:14:42.280 --> 0:14:46.800
<v Speaker 2>many chances and only so much time to break through

0:14:47.080 --> 0:14:52.760
<v Speaker 2>these new, faster, cheaper competitors. Well, thank you so much, Mark,

0:14:53.120 --> 0:14:53.840
<v Speaker 2>thanks for having me.

0:14:59.040 --> 0:15:01.800
<v Speaker 1>This is the Big Take from Bloomberg News. I'm Sarah Holder.

0:15:02.640 --> 0:15:05.680
<v Speaker 1>This episode was produced by Julia Press. It was edited

0:15:05.680 --> 0:15:10.120
<v Speaker 1>by Aaron Edwards, Tracy Samuelson, and Jeremy Keene. Additional reporting

0:15:10.160 --> 0:15:13.280
<v Speaker 1>by Drake Bennett. It was fact checked by our editorial

0:15:13.320 --> 0:15:16.960
<v Speaker 1>team and mixed and sound designed by Julian Weller. Our

0:15:17.000 --> 0:15:20.760
<v Speaker 1>senior producer is Naomi Shavin. Our senior editor is Elizabeth Ponso.

0:15:21.320 --> 0:15:25.280
<v Speaker 1>Our deputy executive producer is Julia Weaver. Our executive producer

0:15:25.320 --> 0:15:29.320
<v Speaker 1>is Nicolled Beamster Boord. Sage Bauman is Bloomberg's head of podcasts.

0:15:29.880 --> 0:15:32.440
<v Speaker 1>If you liked this episode, make sure to subscribe and

0:15:32.480 --> 0:15:35.520
<v Speaker 1>review The Big Take wherever you listen to podcasts. It

0:15:35.520 --> 0:15:39.520
<v Speaker 1>helps people find the show. Thanks for listening, We'll be

0:15:39.560 --> 0:15:40.160
<v Speaker 1>back tomorrow