WEBVTT - Bloomberg Businessweek Weekend - May 2nd, 2025 0:00:00.880 --> 0:00:05.199 This is Bloomberg Business Week Daily, reporting from the magazine 0:00:05.240 --> 0:00:09.840 that helps global leaders stay ahead with insight on the people, companies, 0:00:09.880 --> 0:00:14.760 and trends shaping today's complex economy. Plus global business finance 0:00:14.800 --> 0:00:18.360 and tech news as it happens. Bloomberg Business Week Daily 0:00:18.680 --> 0:00:23.079 with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:23.280 --> 0:00:26.200 Hi, everyone, welcome to the weekend edition of Bloomberg Business Week. 0:00:26.440 --> 0:00:28.920 This week mark the first one hundred days of President 0:00:28.920 --> 0:00:32.480 Trump in office his second term, something we dig into 0:00:32.640 --> 0:00:35.040 along with his tough talk and actions on tariffs and 0:00:35.080 --> 0:00:36.680 the uncertainty that ensued. 0:00:37.200 --> 0:00:41.400 Also, most of the remaining mag savit, including Microsoft, Meta, Apple, 0:00:41.440 --> 0:00:44.919 and Amazon, all reporting earninggs. We highlight Apple and its 0:00:45.040 --> 0:00:47.720 legendary supply chain that may get a big reboot. 0:00:47.840 --> 0:00:50.879 Plus the Saudi Prince who's back in the spotlight and 0:00:50.920 --> 0:00:53.640 also happens to be friends with President Trump's first buddy. 0:00:54.280 --> 0:00:57.480 And from Grand American resorts to lux cruzes offering up 0:00:57.520 --> 0:01:01.200 diamond dust facials and bottomless caveat are in Champagne, the 0:01:01.240 --> 0:01:04.959 Bloomberg Pursuits team on the travel guide to Maximize your Summer. 0:01:05.120 --> 0:01:06.640 That's pretty good to be I was going to say 0:01:06.680 --> 0:01:08.480 sign you up right totally totally. 0:01:08.720 --> 0:01:08.880 Hey. 0:01:08.920 --> 0:01:11.399 First up, As we mentioned, this week mark President Trump's 0:01:11.400 --> 0:01:14.000 first one hundred days in office. It's a period that 0:01:14.040 --> 0:01:17.280 has included an avalanche of executive orders that started on 0:01:17.400 --> 0:01:21.160 inauguration day, letting go of federal workers, hiring back some, 0:01:21.640 --> 0:01:25.679 scaling back departments, then kind of beefing them up again 0:01:25.840 --> 0:01:29.080 kind of, I guess, introducing tariffs, then dropping back on some, 0:01:29.240 --> 0:01:33.319 and just generally taking actions that are potentially reshaping the 0:01:33.480 --> 0:01:36.840 US government and how it's viewed around the world. 0:01:37.200 --> 0:01:40.120 We broke down President Trump's second term so far with 0:01:40.160 --> 0:01:44.880 Bloomberg News national politics reporter Hadrianna Loenkron and Beth Fuey, 0:01:45.000 --> 0:01:49.640 partner at FGS Global. She's in the company's strategic communications division, 0:01:49.800 --> 0:01:52.760 where she advises clients on messaging and media strategy and 0:01:52.800 --> 0:01:56.400 reported on politics for years at many outlets, including CNN 0:01:56.680 --> 0:01:57.880 and The Associated Press. 0:01:57.960 --> 0:02:00.600 You know, Beth, I wonder what's more important, meaning whether 0:02:00.720 --> 0:02:04.400 or not he has had the president that is, successes 0:02:04.440 --> 0:02:06.600 are failures in the first one hundred days, or whether 0:02:06.720 --> 0:02:09.239 or not we look at the first one hundred days 0:02:09.320 --> 0:02:11.320 as an indicator of what's to come in the next 0:02:11.360 --> 0:02:12.959 three and a half or more than three and a 0:02:13.000 --> 0:02:16.040 half years of what's left in the Trump White House. 0:02:17.320 --> 0:02:21.120 Well, look, most of the success of a presidential administration 0:02:21.280 --> 0:02:24.560 really is in the early part of the administration, when 0:02:24.560 --> 0:02:28.440 the president typically has the highest job approval. Congress is 0:02:29.000 --> 0:02:32.120 more than willing, especially Congress like this a fully Republican 0:02:32.160 --> 0:02:35.200 the president's own party, willing to let the president's agenda 0:02:36.320 --> 0:02:39.800 take precedence. It typically slows down after the early days 0:02:39.840 --> 0:02:43.440 of the first part of the administration. President Trump, as 0:02:43.440 --> 0:02:46.560 we've all discussed, has done more than probably any other 0:02:46.600 --> 0:02:49.120 president in one hundred days to make his mark. The 0:02:49.200 --> 0:02:52.079 question is how long is that going to last. Much 0:02:52.080 --> 0:02:54.679 of it's being challenged in court. We've seen poll after 0:02:54.720 --> 0:02:58.880 poll after poll showing President Trump is losing popularity quickly, 0:02:59.160 --> 0:03:00.960 that many of the things that he has undertaken in 0:03:00.960 --> 0:03:03.840 this first hundred days have been met by skepticism and 0:03:04.160 --> 0:03:07.640 frankly fear by a lot of Americans. So it's unclear 0:03:07.680 --> 0:03:09.200 whether he's going to be able to keep this up 0:03:09.240 --> 0:03:09.880 for much longer. 0:03:09.919 --> 0:03:11.680 Heyron to give us, as we do reflect on these 0:03:11.720 --> 0:03:14.519 first one hundred days, give us what you see as 0:03:14.560 --> 0:03:18.000 some of the successes, some of the wins, but also 0:03:18.680 --> 0:03:21.760 areas where the president really has not succeeded some of 0:03:21.760 --> 0:03:23.440 those losses in the first one hundred days. 0:03:23.560 --> 0:03:26.160 Absolutely, and as someone I mean I covered him very 0:03:26.160 --> 0:03:28.919 closely on the campaign trail, and I think that there 0:03:28.960 --> 0:03:30.920 are some things that he said he would do that 0:03:30.960 --> 0:03:33.960 he has headed in that direction of the border is 0:03:33.960 --> 0:03:35.400 the first thing that comes to mind, and that was 0:03:35.440 --> 0:03:38.520 something where even when I was talking to people and voters, 0:03:38.640 --> 0:03:41.440 it was often ranked above the economy for them, whether 0:03:41.480 --> 0:03:44.880 they were in Iowa or they were in Phoenix. And 0:03:44.920 --> 0:03:47.480 so this was something where we can see the border 0:03:47.600 --> 0:03:51.560 crossings have gone down. On the deportation front, those numbers 0:03:51.560 --> 0:03:54.360 appeared to have also gone down. And so you know, 0:03:54.480 --> 0:03:57.160 has he hit the millions and millions of numbers that 0:03:57.200 --> 0:04:00.880 he's touted that has not yet happened happened, but his 0:04:00.960 --> 0:04:04.960 administration has pointed to the border crossings as an area 0:04:05.040 --> 0:04:07.960 of success. And then, as we all know, the tariffs, 0:04:08.000 --> 0:04:10.160 tariffs or something that he has said he would do 0:04:10.240 --> 0:04:14.200 on the campaign trail, and he has done them in 0:04:14.240 --> 0:04:16.000 a sense that you know, he has put in some 0:04:16.040 --> 0:04:19.200 of those terraffs and he's flip flopped and taken some back. 0:04:19.240 --> 0:04:22.480 He's offered pauses for some exemptions, and really that's offered 0:04:22.520 --> 0:04:25.359 a lot of confusion for the markets as we all know. 0:04:26.240 --> 0:04:29.200 And more importantly then the question is what does that 0:04:29.320 --> 0:04:33.720 mean going forward? Does that suggest to other industries that 0:04:33.760 --> 0:04:36.760 they can come in and you know, have meetings and 0:04:36.800 --> 0:04:39.880 then they can get some of the same reductions that 0:04:39.920 --> 0:04:43.040 people just recently in the auto industry received. 0:04:43.400 --> 0:04:46.520 When you advise your firm's clients and policy and messaging 0:04:47.279 --> 0:04:50.040 around White House moves and actions, I am curious what's 0:04:50.120 --> 0:04:53.039 top of mind and is there an expectations that things 0:04:53.080 --> 0:04:56.440 will settle down in a bit or not necessarily? 0:04:56.760 --> 0:05:00.000 Sure. Well, we advise a lot of different types of clients, 0:04:59.600 --> 0:05:01.760 and of course many of them are concerned about the 0:05:01.800 --> 0:05:05.160 impact of tariffs on their consumers and their customers. 0:05:05.560 --> 0:05:05.640 UH. 0:05:05.720 --> 0:05:08.040 The issue of DEI, of course, is a is a 0:05:08.080 --> 0:05:11.560 major factor for a lot of companies in the United States. 0:05:11.600 --> 0:05:14.920 There was an effort to really push DEI and and 0:05:14.920 --> 0:05:19.400 and and embrace the ethos of diversity, equity and inclusion. UH. 0:05:19.760 --> 0:05:21.920 Just in the last few years, that of course has 0:05:21.960 --> 0:05:25.080 has changed the Trump administration and many companies are trying 0:05:25.080 --> 0:05:27.800 to figure out how to embrace the value that they 0:05:27.839 --> 0:05:31.599 place on on diversity while not sort of advertising that 0:05:31.680 --> 0:05:33.719 this is something that's important to them as a company, 0:05:34.080 --> 0:05:37.480 for fear of retribution from the administration. There's a lot 0:05:37.480 --> 0:05:39.640 of fear out there. Generally, I would say, it's it's 0:05:39.640 --> 0:05:41.720 a it's a it's a very different atmosphere than we've 0:05:41.720 --> 0:05:44.839 seen under other presidencies, where you might like the president 0:05:44.960 --> 0:05:48.000 or not, or approve of his policies or not. The 0:05:48.080 --> 0:05:51.200 sense of fear of not knowing what's coming and and 0:05:51.520 --> 0:05:54.880 trying to prepare but not ever one hundred percent sure 0:05:54.920 --> 0:05:57.560 of what you're preparing for leaves a lot of a 0:05:57.560 --> 0:06:00.000 lot of consumers, a lot of companies off balance. 0:06:00.400 --> 0:06:03.960 Hadriana on that, just just advise us a little bit 0:06:04.040 --> 0:06:06.480 about what you're what you've been reporting on at the 0:06:06.520 --> 0:06:09.080 White House. To BET's point about the way, and I 0:06:09.120 --> 0:06:10.800 think a lot of people would say, we kind of 0:06:10.800 --> 0:06:13.359 see that on display when it comes to cabinet meetings, 0:06:14.120 --> 0:06:17.520 when we see really the way that these cabinet officials 0:06:17.839 --> 0:06:20.800 talk so much about the serving at the pleasure of 0:06:20.839 --> 0:06:21.360 the president. 0:06:21.640 --> 0:06:24.680 I mean, it was very complimentary. I would say, just 0:06:24.880 --> 0:06:29.080 listening to the past marathon of a cabinet meeting, and 0:06:29.400 --> 0:06:33.159 they definitely are seeking his approval, and you know, he 0:06:33.400 --> 0:06:38.880 has been complimentary toward them as well, shouting out a 0:06:38.880 --> 0:06:41.240 couple of people, and you know, even someone who not 0:06:41.360 --> 0:06:45.279 in the room, Tom Homan, the kind of appointed borders 0:06:45.320 --> 0:06:49.440 are with someone who you know, the President has has 0:06:49.480 --> 0:06:52.160 given praise sword and so yes, we we are seeing that. 0:06:52.320 --> 0:06:54.920 And you know a lot of the reporting that I've 0:06:54.960 --> 0:06:59.160 done has also looked at the different people in industry 0:06:59.200 --> 0:07:03.440 and and those who have been you know, the you know, 0:07:03.560 --> 0:07:05.800 victims of some of the that has been done. And 0:07:05.839 --> 0:07:06.960 you can see that as well. 0:07:07.040 --> 0:07:10.560 Thanks to Bloomberg News National politics reporter Adrianna lowen Kron 0:07:10.640 --> 0:07:13.320 and Beth Fouey, partner at FGS Global. 0:07:12.920 --> 0:07:15.560 We're going to continue our coverage of President Trump's second term. 0:07:15.640 --> 0:07:19.040 So far, one notable impact is on energy policy. His 0:07:19.160 --> 0:07:22.200 desire to quote drill baby, drill and amp up fossil 0:07:22.280 --> 0:07:25.320 fuel exploration in the United States that we've certainly seen, 0:07:25.360 --> 0:07:28.640 along with rolling back support for clean energy initiatives and 0:07:28.640 --> 0:07:31.600 programs and climate change. And our next guest is a 0:07:31.640 --> 0:07:35.160 former administrator of the EPA, the Environmental Protection Agency. She's 0:07:35.200 --> 0:07:38.240 quote in The New York Times saying, quote this is 0:07:38.320 --> 0:07:41.520 worse than any previous administration and that President Trump quote 0:07:41.560 --> 0:07:43.920 can do a lot of damage to the agency. When 0:07:43.960 --> 0:07:46.920 he leaves, he will have left devastation in his way. 0:07:47.360 --> 0:07:49.480 We got back with us Gina McCarthy. She's a former 0:07:49.520 --> 0:07:51.800 EPA administrator in the US and the first White House 0:07:51.880 --> 0:07:55.840 National Climate Advisor. She's also managing co chair of America 0:07:55.960 --> 0:07:58.320 Is All In Coalition. This is a group of leaders 0:07:58.320 --> 0:08:00.920 from all over the US that supports climate It is 0:08:00.920 --> 0:08:03.680 supported by Michael R. Bloomberg and Bloomberg Philanthropies. She and 0:08:03.760 --> 0:08:07.400 also Senior advisor at Bloomberg Philanthropy, the philanthropic arm of 0:08:07.440 --> 0:08:10.320 Bloomberg LP, the parent company at Bloomberg TV, and at 0:08:10.360 --> 0:08:13.080 Bloomberg Radio. She joins us from Boston. Gina, good to 0:08:13.080 --> 0:08:16.840 have you back with us. What specific presidential actions, in 0:08:16.880 --> 0:08:20.640 your view, would or have already had the biggest impact 0:08:20.720 --> 0:08:21.440 on our environment. 0:08:22.040 --> 0:08:24.560 Well, I think that on the whole, we see this 0:08:24.800 --> 0:08:30.080 entire administration trying to benefit fossil fuels at the expense 0:08:30.160 --> 0:08:34.440 of low cost plan energy, and I think that's the 0:08:34.480 --> 0:08:38.000 big takeaway. Look, I know that right now the economy 0:08:38.040 --> 0:08:40.920 is not going great, and it doesn't surprise me given 0:08:41.120 --> 0:08:45.600 Trump's policies. But from my small perspective. I'm looking at 0:08:45.800 --> 0:08:50.600 USPA and they're dismantling the agency. They're finding a way 0:08:50.600 --> 0:08:54.320 to get rid of everyone that's ever talked about environmental 0:08:54.480 --> 0:08:57.920 justice before. The research is the scientists. So what we 0:08:58.080 --> 0:09:01.960 have here is a tremendous cha challenge ahead to basically 0:09:02.080 --> 0:09:05.760 make sure that our communities are protected, our economy can 0:09:05.800 --> 0:09:11.800 continue to thrive, that we have healthy kids living long lives. 0:09:12.240 --> 0:09:17.439 This is definitely for me, not just the dismantling of EPA, 0:09:17.920 --> 0:09:22.160 but it is a potential to dismantle the entire federal government. 0:09:22.760 --> 0:09:24.760 And so we have to all step up. 0:09:24.800 --> 0:09:25.280 We have to. 0:09:25.280 --> 0:09:28.839 Recognize the challenges of today, and we have to look 0:09:28.880 --> 0:09:33.320 at how we can stop these rollbacks of rulemakings every 0:09:33.440 --> 0:09:37.400 single week that we're seeing from this administration that threatens 0:09:37.400 --> 0:09:40.920 our lives and livelihoods all across the United States and 0:09:41.360 --> 0:09:45.720 threatens our ability to have allies we can count on internationally. 0:09:46.000 --> 0:09:50.320 Gina, remind the world, Remind our audience about kind of 0:09:50.320 --> 0:09:53.440 what the EPA does, and not just for the United States, 0:09:53.480 --> 0:09:55.480 but on a global scale. Just give us just a 0:09:55.559 --> 0:09:58.800 quick quick overview of the things that I think, you know, 0:09:58.800 --> 0:10:00.600 we just assume things are going to be here We're 0:10:00.600 --> 0:10:02.880 gonna have clean water, We're gonna have electricity, we're gonna 0:10:02.880 --> 0:10:04.840 have highways and all that good stuff. I'm just talking 0:10:04.840 --> 0:10:08.120 about general of how the US works, but the EPA 0:10:08.240 --> 0:10:12.640 specifically what that does for every American citizen, our hopes 0:10:12.679 --> 0:10:14.040 to do for every American citizen. 0:10:14.520 --> 0:10:19.400 Well, EPA does have a very focused mission. It's to 0:10:19.480 --> 0:10:23.080 protect our health in the environment. That's its mission. 0:10:23.440 --> 0:10:23.600 Now. 0:10:23.640 --> 0:10:27.040 I know there are folks like Liezelden, who's running the agency, 0:10:27.440 --> 0:10:29.800 who wants to shift it to fossil fuels, but that's 0:10:29.960 --> 0:10:33.240 essentially what it is, and for decades, what it's been 0:10:33.280 --> 0:10:36.760 focused on is actually looking at how we keep our 0:10:36.800 --> 0:10:40.200 water plane, how we keep our EA clean, how we 0:10:40.280 --> 0:10:44.520 look Internationally. A challenge is like the ozone layer. A 0:10:44.640 --> 0:10:50.360 challenge is like hydrofluoricobbins. All these challenges plus FLIM These 0:10:50.400 --> 0:10:55.600 are international efforts that EPA has been participating in for decades. 0:10:56.080 --> 0:11:00.840 And EPA is really the most well respected environmental agency, 0:11:01.400 --> 0:11:05.000 and our sole goal is to protect people, not just 0:11:05.120 --> 0:11:08.160 in the United States for sure, that's where our major 0:11:08.280 --> 0:11:12.280 focus is, but internationally they understand the global challenges we're 0:11:12.320 --> 0:11:16.160 faithing and to work hand in hand with communities and 0:11:16.240 --> 0:11:19.600 countries all across the world, so that we can learn 0:11:19.800 --> 0:11:23.839 how best to keep our mission, which is protecting the 0:11:23.880 --> 0:11:28.720 health of our communities, in restoring and engaging in our 0:11:28.960 --> 0:11:33.400 environmental efforts so that we have the ability to live long. 0:11:33.240 --> 0:11:34.160 Healthy lives. 0:11:34.400 --> 0:11:37.280 That's what it does every single day. 0:11:37.480 --> 0:11:40.760 Thanks to Gina McCarthy, former EPA administrator in the US 0:11:40.800 --> 0:11:44.040 and the first White House National Climate Advisor. She's also 0:11:44.160 --> 0:11:47.080 managing co chair of America is All In Coalition. It's 0:11:47.120 --> 0:11:49.360 a group of leaders from all over the US that 0:11:49.400 --> 0:11:52.559 supports climate action and it's supported by Michael R. Bloomberg 0:11:52.679 --> 0:11:55.880 and Bloomberg Philanthropies. Gina is also a senior advisor at 0:11:55.920 --> 0:11:58.920 Bloomberg Philanthropy is the philanthropic arm of Bloomberg LP, the 0:11:58.960 --> 0:12:00.839 parent company Bloomberg Radio. 0:12:01.120 --> 0:12:03.560 Coming up, Apple reported earnings this week. It was one 0:12:03.600 --> 0:12:06.000 of the big ones. All eyes on a lot when 0:12:06.000 --> 0:12:08.920 it comes to Apple, including its supply chain and AI. 0:12:09.120 --> 0:12:11.480 We talk about all of it with Bloomberg's Mark German. 0:12:11.760 --> 0:12:14.200 Changes need to be made, so they're breaking up their 0:12:14.200 --> 0:12:18.080 AI team. They are moving the robotics units of hardware engineering. 0:12:18.280 --> 0:12:20.160 They can't miss on robotics now, that's going to be 0:12:20.160 --> 0:12:22.520 a big deal down the road maybe five ten years. 0:12:22.720 --> 0:12:26.440 They moved Siri, which is emblematic, right and something a 0:12:26.480 --> 0:12:29.120 tangible way to see how behind there are INNAI. To 0:12:29.160 --> 0:12:31.960 Tim's example, they're moving that to their software engineering department, 0:12:32.200 --> 0:12:34.480 and now their AI department is basically just focused on 0:12:34.559 --> 0:12:35.640 models and improvement. 0:12:35.679 --> 0:12:38.480 You're listening to Bloomberg BusinessWeek. This is Bloomberg. 0:12:42.320 --> 0:12:46.520 This is Bloomberg Business Week Daily with Carol Masser and 0:12:46.600 --> 0:12:49.120 Tim Stenovek on Bloomberg Radio. 0:12:50.120 --> 0:12:53.000 Apple's much awaited quarterly earnings report failed to soothe investor 0:12:53.000 --> 0:12:56.800 concerns about its biggest challenges, including escalating tariff costs and 0:12:56.880 --> 0:12:59.960 a slowdown in China. Now the iPhone maker warned the 0:13:00.120 --> 0:13:03.400 tariffs will increase costs this quarter. It is something CEO 0:13:03.440 --> 0:13:05.920 Tim Cook spoke about on the earnings call, saying he 0:13:06.160 --> 0:13:09.640 estimates the impact could quote add nine hundred million dollars 0:13:09.880 --> 0:13:13.079 to the company's costs. Once the numbers broke out on Thursday, 0:13:13.080 --> 0:13:15.800 we got instant reaction from our in house Apple expert 0:13:16.040 --> 0:13:16.679 Mark Germitt. 0:13:17.080 --> 0:13:19.920 I mean, overall revenue is up five percent over a year, 0:13:19.960 --> 0:13:23.800 so obviously that's a good thing. You saw iPhone sales 0:13:23.840 --> 0:13:27.160 beat slightly expectations from Wall Street, so that's a good thing. 0:13:27.360 --> 0:13:30.640 Shows some solid momentum for the iPhone sixteen E. Notice 0:13:30.679 --> 0:13:34.120 that Tim Cook mentioned the sixteen e in particular versus 0:13:34.200 --> 0:13:37.440 the pro models, which generate the most amount of revenue 0:13:37.440 --> 0:13:40.920 for Apple. Obviously, Mac did a little bit better than expected, 0:13:41.040 --> 0:13:44.040 iPad better than expected, but we saw some softness on 0:13:44.280 --> 0:13:49.360 China services as well as wearables, Home and Accessories, wearable's 0:13:49.400 --> 0:13:52.560 Home and Accessories. The softness there continues. It's been this 0:13:52.600 --> 0:13:56.599 way for several quarters. That's sort of surprising given the 0:13:56.640 --> 0:13:58.559 momentum that we've seen in the past on the Apple 0:13:58.600 --> 0:14:02.160 Watch and the AirPods and some of those peripheral products. 0:14:02.200 --> 0:14:05.800 Services still pretty considerable double digit growth, but not at 0:14:05.840 --> 0:14:10.160 the same level that Wall Street was anticipating. Services in 0:14:10.200 --> 0:14:12.640 particular is quite interesting because that's going to probably be 0:14:12.679 --> 0:14:15.000 a real headwind for Apple in the coming years now 0:14:15.000 --> 0:14:16.839 that they're needing to adjust some of their app store 0:14:16.840 --> 0:14:20.040 policies in relation to commissions. And then, of course we 0:14:20.120 --> 0:14:23.320 have the Google Search deal overhanging all of this stuff. 0:14:23.320 --> 0:14:27.480 That's a double digit billion dollar annual revenue stream for 0:14:27.520 --> 0:14:30.560 Apple that may also go away depending on where the 0:14:30.640 --> 0:14:33.560 US government goes with this trial against Google. 0:14:33.640 --> 0:14:36.960 That's Mark German, Bloomberg News Managing editor for Global Consumer Tech. 0:14:37.320 --> 0:14:39.960 Before Apple's earnings, though, we spoke with Mark about his 0:14:40.040 --> 0:14:42.600 reporting that Apple is seeking to import most of the 0:14:42.640 --> 0:14:45.400 iPhones it sells in the United States from India by 0:14:45.440 --> 0:14:46.480 the end of next year. 0:14:46.760 --> 0:14:48.880 Mark, the India shift is huge. The goal means that 0:14:48.880 --> 0:14:52.320 Apple would roughly double its annual iPhone output in India 0:14:52.360 --> 0:14:55.080 to more than eighty million units, people familiar with the 0:14:55.120 --> 0:14:58.040 matter said, asking not to be identified discussing internal plans. 0:14:58.040 --> 0:15:01.080 You and the team reported that lately last week. Still, 0:15:01.080 --> 0:15:05.840 that is not the United States, it's India. So would 0:15:05.920 --> 0:15:08.200 President Trump and your view be happy with iPhones coming 0:15:08.200 --> 0:15:09.560 from anywhere if it's not the US. 0:15:10.200 --> 0:15:12.400 Yeah, So this has been a plan in action for 0:15:12.440 --> 0:15:15.320 the last several weeks, now, even before we knew the 0:15:15.320 --> 0:15:18.800 finite detail what the tariffs would be on China that 0:15:18.840 --> 0:15:23.880 Trump introduced in early April, reprioritizing production happening in India. 0:15:24.280 --> 0:15:26.080 Right for the US market. 0:15:26.120 --> 0:15:29.400 Now, the US market requires about a third a little 0:15:29.400 --> 0:15:31.960 bit more than that of the overall iPhone production. They 0:15:31.960 --> 0:15:34.240 can easily make that in China. But today they've been 0:15:34.280 --> 0:15:37.200 able to fulfill you know, roughly half of what you're 0:15:37.240 --> 0:15:39.560 able to get out of India for the US, right, 0:15:39.680 --> 0:15:42.200 so half of what the US needs they can make 0:15:42.200 --> 0:15:44.560 in India. So they're going to accelerate that over the 0:15:44.640 --> 0:15:46.560 next several months, and they're hoping to be able to 0:15:46.600 --> 0:15:50.920 do the majority of iPhone production now in India. Now, 0:15:51.000 --> 0:15:53.280 when I say the majority, that's important. They're not going 0:15:53.320 --> 0:15:54.400 to be able to do everything. 0:15:55.080 --> 0:15:56.440 Apple has not shipped. 0:15:56.160 --> 0:15:59.040 An entirely new design phone out of India to date, 0:15:59.400 --> 0:16:02.120 so that's something that eventually is going to probably have 0:16:02.200 --> 0:16:03.000 to change. 0:16:03.200 --> 0:16:04.200 So what they're going to. 0:16:04.120 --> 0:16:07.320 Probably do is for these more intricate models coming out 0:16:07.400 --> 0:16:10.480 end of next year twenty twenty seven, they're still going 0:16:10.520 --> 0:16:11.480 to have to rely on China. 0:16:11.600 --> 0:16:14.080 But for the most part, the flagship. 0:16:13.600 --> 0:16:16.480 Phones, the lower end phones for the US market at least, 0:16:16.520 --> 0:16:17.800 that's going to be India made. 0:16:18.400 --> 0:16:20.440 The rest of the world, that's going to be China. 0:16:21.200 --> 0:16:23.760 Okay, So it's not like Mark they're turning their back 0:16:23.800 --> 0:16:26.640 on China, not in any fashion. 0:16:27.920 --> 0:16:30.120 Well, in some fashion, right, they're going to take out 0:16:30.440 --> 0:16:35.880 probably twenty to thirty billion dollars a year of inventory. 0:16:35.640 --> 0:16:38.000 Out out of China and move that to India. 0:16:38.080 --> 0:16:40.960 But this is part of something they've been doing already, right, 0:16:41.040 --> 0:16:44.760 So China is not disappearing, they're simply accelerating it. But 0:16:45.240 --> 0:16:46.600 you know, you're in a bit of a of a 0:16:46.640 --> 0:16:50.000 pickle here, right, because you never know what the administration 0:16:50.160 --> 0:16:53.480 is going to do. They could change the tear percentage 0:16:53.640 --> 0:16:57.680 on India tomorrow in response to a new policy like 0:16:57.720 --> 0:17:00.560 this from Apple, right, So I kind of have to 0:17:00.560 --> 0:17:02.400 be on your toes a little bit. That's why I 0:17:02.440 --> 0:17:06.320 think that this globalization approach to production is something that 0:17:06.359 --> 0:17:08.679 Apple is eventually going to have to move to. And 0:17:08.760 --> 0:17:12.680 what I mean by that is producing locally for every 0:17:12.800 --> 0:17:14.360 GEO that you're in, right. 0:17:14.240 --> 0:17:15.880 Something similar to what Tesla does. 0:17:15.920 --> 0:17:18.680 Tesla makes cars for the US, and the US makes 0:17:18.720 --> 0:17:22.520 cars for China in China, right, they have cars made 0:17:22.600 --> 0:17:24.240 in Europe for the European market. 0:17:24.520 --> 0:17:26.600 Eventually Apple's gonna have to get there too. If this, 0:17:26.720 --> 0:17:28.640 if this TEARFF situation sticks around long. 0:17:28.600 --> 0:17:32.240 Term, does this, you know, spreading out and maybe further 0:17:32.280 --> 0:17:38.480 into indiamark complicate Apple's relationship with Chinese officials in China 0:17:38.520 --> 0:17:40.400 in general? Or is it that they're going to still 0:17:40.400 --> 0:17:44.520 have a huge footprint there and so things will be okay? 0:17:44.560 --> 0:17:47.240 I just I just think about the optics, the visualtics 0:17:47.280 --> 0:17:47.600 on this. 0:17:48.640 --> 0:17:50.679 We'll see, yeah, right, we'll see. 0:17:50.840 --> 0:17:54.360 It's very possible that China's upset about this and retaliates 0:17:54.359 --> 0:17:58.000 against Apple. Don't forget, China holds all the cars cards here. 0:17:58.440 --> 0:18:01.320 They can shut off Apples network access. They can shut 0:18:01.359 --> 0:18:04.280 down its ability to sell from the retail stores. They 0:18:04.320 --> 0:18:08.600 can slow roll Apple's ability to import components into the 0:18:08.600 --> 0:18:13.399 supply chain for final production. They can slow roll visas, 0:18:13.480 --> 0:18:15.800 they can slow roll the ability for Apple engineers to 0:18:15.800 --> 0:18:18.720 get into the country. There's so many things that China 0:18:18.760 --> 0:18:22.280 can do here to just absolutely disrupt Apple. So they 0:18:22.320 --> 0:18:24.760 are playing a fine line here, and I'm sure Apple 0:18:24.880 --> 0:18:27.640 denying this to whoever they work with in the Chinese government. 0:18:28.240 --> 0:18:30.840 But this is something that's happening. I don't think it's 0:18:30.840 --> 0:18:33.600 as full bore as some have made it seem. I 0:18:33.680 --> 0:18:37.520 don't think that there's a full steam ahead effort to 0:18:37.560 --> 0:18:39.280 pull the iPhone out of China. 0:18:39.359 --> 0:18:42.960 Right, And don't forget rest of world. Right, that is 0:18:43.000 --> 0:18:43.960 a significant amount. 0:18:44.080 --> 0:18:47.680 That's still mult five hundreds of billions of dollars of devices, right, Yeah, 0:18:47.800 --> 0:18:49.640 And so that's how it's going to be, at least 0:18:49.640 --> 0:18:53.399 for now India, for the US, by for elsewhere, except 0:18:53.400 --> 0:18:56.040 when it comes to new super high end foldable models 0:18:56.040 --> 0:18:59.200 and other new designs they're doing at least from the get. 0:18:58.960 --> 0:18:59.960 Go, And when would we see that? 0:19:00.880 --> 0:19:03.560 Just based on your reporting, there is twenty end of 0:19:03.640 --> 0:19:06.920 twenty six, end of twenty seven within that twelve month period. 0:19:07.080 --> 0:19:09.159 Is that I just want to follow because Tim and 0:19:09.160 --> 0:19:11.440 I have been talking a lot with the EV space 0:19:11.520 --> 0:19:17.240 and just the sophisticated manufacturing that China has on just 0:19:17.280 --> 0:19:19.840 so many different levels. Is that why Apple would have 0:19:19.880 --> 0:19:22.360 to do a more advanced phone. They'd have to continue 0:19:22.359 --> 0:19:25.919 doing it out of China because they had the capabilities. 0:19:26.280 --> 0:19:32.440 The capabilities, the engineering talent, the availability of certain components, 0:19:32.480 --> 0:19:37.480 the availability of special machinery, the expertise that fox Con 0:19:37.680 --> 0:19:41.160 has shown, particularly in China to produce at the volumes 0:19:41.160 --> 0:19:43.800 and at the quality that Apple needs. There's a level 0:19:43.840 --> 0:19:46.119 of intricacy that goes into some of these products that 0:19:46.160 --> 0:19:49.720 can just not be replicated outside of China at this point. 0:19:49.800 --> 0:19:51.720 That's why you see things like the Apple Vision bro 0:19:51.880 --> 0:19:52.960 that's only made in China. 0:19:53.359 --> 0:19:55.679 That's in part because of how intricate that device is. 0:19:55.680 --> 0:19:58.040 Now, say what you will about its commercial success but 0:19:58.240 --> 0:20:01.840 from intricacy and technology standpoint, it's up there with anything 0:20:02.160 --> 0:20:04.120 on the market, and I think you'll find the same 0:20:04.200 --> 0:20:06.520 to be the true unfold the bulls and the like 0:20:06.560 --> 0:20:07.080 from Apple. 0:20:07.880 --> 0:20:09.560 Okay, Mark, I want to shift a little bit. We 0:20:09.600 --> 0:20:10.920 got a few minutes left with you. I want to 0:20:10.920 --> 0:20:14.720 talk a little bit about AI. Carol and I've been 0:20:14.760 --> 0:20:18.960 playing with chat GPT quite a bit. You have documented 0:20:19.240 --> 0:20:22.320 the struggles that Apple has faced when it comes to AI. 0:20:22.400 --> 0:20:24.080 This came out in full force over the weekend. 0:20:24.080 --> 0:20:24.320 For me. 0:20:24.880 --> 0:20:26.680 My son asked me a question. I couldn't answer it. 0:20:26.760 --> 0:20:28.320 I was cooking, so I couldn't grab my phone. So 0:20:28.359 --> 0:20:32.040 I asked Siri, like a basic question that chat GBT 0:20:32.080 --> 0:20:35.000 would have been able to answer in a second, and 0:20:35.119 --> 0:20:37.359 all it did. I asked the question and all Siri 0:20:37.440 --> 0:20:40.120 did was open a web page. And I was thinking 0:20:40.119 --> 0:20:43.000