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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: Hello and welcome to another episode of The Odd Lots podcast.

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Speaker 2: I'm Jolle Wisanal and.

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Speaker 3: I'm Tracy Alloway.

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Speaker 2: Tracy, do you know what iPhone you have and what

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Speaker 2: iOS you're currently on?

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Speaker 3: No, I have no idea. I will say I think

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Speaker 3: it might be like an iPhone eleven. It is definitely

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Speaker 3: on its last legs because in the past two days

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Speaker 3: I can only charge it when it's standing up and

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Speaker 3: plugged in like that, you know, And so I've been

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Speaker 3: creating elaborate like Jerry Riggs systems at my desk to

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Speaker 3: actually get this thing to charge. So I gotta get

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Speaker 3: a new one.

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Speaker 2: So, you know what, you don't have to get a

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Speaker 2: new one. If you go to like any one of

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Speaker 2: these like little random like sort of Apple fix it shops,

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Speaker 2: they can like take care of that in ten minutes.

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Speaker 3: And wait, I have the right to repair my iPhone?

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Speaker 3: Is that true?

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Speaker 2: They take put a little vacuum cleaner in there, that's

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Speaker 2: what you I don't.

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Speaker 3: Think that's it because I tried it already. I think

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Speaker 3: the batteries like legitimately dying. I've had it for like

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Speaker 3: eight years.

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Speaker 2: Well, I've had my Okay, so I think I have

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Speaker 2: no idea what what iPhone I'm on. I think I've

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Speaker 2: had it for about four years. I have no like,

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Speaker 2: I don't know anything. But there was a point in

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Speaker 2: my life in which I.

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Speaker 3: Could have answered, I said, you don't know anything.

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Speaker 2: I don't think about my phone. But there was a

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Speaker 2: point where I could have answered, right, like if you're like, yeah, sure,

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Speaker 2: if at some point in the early twenty tens, for sure,

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Speaker 2: if someone would say, like what app what iPhone do

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Speaker 2: you have, You're like, oh, I got the iPhone for

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Speaker 2: I got the iPhone whatever it is. And that was

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Speaker 2: just part of like I would say, pop culture, like

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Speaker 2: knowing like what generation is and it's been so long,

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Speaker 2: you know, those Apple presentations everybody would like tune in

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Speaker 2: like it's a World Cup game or something like that,

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Speaker 2: Like it's been so long since, like these were like

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Speaker 2: top of mind things people.

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Speaker 3: So I have never been an Apple watcher, as evidenced

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Speaker 3: by the state of my phone. But I think part

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Speaker 3: of the issue is also like the products got pretty good,

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Speaker 3: right to the point where you don't need to place

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Speaker 3: them literally every two years for the latest upgrade. Or

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Speaker 3: maybe it's just Apple can't think of the enticing upgrades

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Speaker 3: that people need to see in order to.

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Speaker 2: Buy something that I had forgotten about until someone I

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Speaker 2: think pointed out recently there was a period in which

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Speaker 2: was very common to see like people like very cracked

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Speaker 2: iPhone screens, right, that was just like and they was

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Speaker 2: just like really looked and but they were still usable.

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Speaker 2: When was the last time you saw like a badly

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Speaker 2: cracked iPhone screen? Yeah, they never and like you could

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Speaker 2: drop them now and they're very likely to remember.

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Speaker 3: I dropped this phone from the stands at the Jackson

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Speaker 3: Hole Rodeo.

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Speaker 2: Oh yeah, you were there, fall underneath.

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Speaker 3: It fell all the way down and it was fine. Yeah,

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Speaker 3: it was probably like fifteen fee years of the.

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Speaker 2: They work really well anyway. I think sitting aside the

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Speaker 2: fact that, okay, Apple is still a huge, huge, successful company,

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Speaker 2: but we should talk about Apple because it is actually

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Speaker 2: one of these things that it's at the intersection of

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Speaker 2: so much that we're interested in right now. It's at

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Speaker 2: the intersection of, you know, the future of manufacturing China.

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Speaker 2: It's at the intersection of memory costs and the degree

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Speaker 2: to which that's bleeding into consumer prices. It's the primary

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Speaker 2: ways so many people interact with computers of the Internet,

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Speaker 2: and yet it's not a major player like building AI models,

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Speaker 2: So like, how will AI change our relationship to just

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Speaker 2: like either like computing or there. It's it's like at

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Speaker 2: the center of so many like important topics right now.

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Speaker 2: So I sort of want to know, like what's going

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Speaker 2: on with Apple.

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Speaker 3: The thing I'm really interested in are the recent price increases, yes,

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Speaker 3: because you think, like the story in consumer tech for

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Speaker 3: decades now has been deflation. Ye, right, things get cheaper

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Speaker 3: to buy and at the same time, you know, it

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Speaker 3: becomes more expensive to live because food prices go up,

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Speaker 3: in healthcare or whatever. But the story in tech is

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Speaker 3: that prices have been going down and suddenly we have

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Speaker 3: this sea change announced by Apple I guess a few

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Speaker 3: weeks ago or a couple of weeks ago now saying

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Speaker 3: that the actually they're going to raise prices pretty much

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Speaker 3: for the first time ever. Yeah, on a bunch of

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Speaker 3: their products.

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Speaker 2: It's really wild, Like we think that there should just

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Speaker 2: be some like mechanical law that if it's like a gadget,

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Speaker 2: it goes down in price and for years and years,

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Speaker 2: I mean, it's just the thing. And so it's extraordinary

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Speaker 2: to see like this actually reversing. So I don't know,

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Speaker 2: I want to know what's up with Apple.

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Speaker 3: It's a good time to talk about Apple.

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Speaker 2: Well, I'm very excited to say we do literally have

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Speaker 2: the perfect guest. Someone outside of probably Tim Cook. There's

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Speaker 2: probably no person in the world, including employees at Apple,

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Speaker 2: There's probably no person outside of Tim Cook that knows

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Speaker 2: the company better. The ultimate Apple watcher, not Apple watches,

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Speaker 2: watch the Apple, the ultimate Apple observer, no or for

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Speaker 2: years and years, literally the man who watches Apple. And

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Speaker 2: he is a colleague of ours at Bloomberg. I don't

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Speaker 2: think we've ever had him on the podcast before, which

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Speaker 2: is a shame. But we are now going to be

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Speaker 2: speaking with Mark German. He is the managing editor of

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Speaker 2: Consumer Tech at Bloomberg. He's the author of the power

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Speaker 2: On newsletter, which everyone should subscribe to. So Mark, thank

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Speaker 2: you so much for coming on odd Lots.

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Speaker 4: Yeah, thank you both for having me. Really appreciate it.

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Speaker 4: Good to be here.

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Speaker 2: Wait, I noticed you have the Orange iPhone.

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Speaker 4: Yeah, and like it's what it's a tank.

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Speaker 2: It's a tank, But can you explain, like what is

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Speaker 2: it about the Orange iPhone specifically, because you know yeah,

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Speaker 2: it is. It is a thing because I noticed that,

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Speaker 2: like you know, in the old days, you get lots

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Speaker 2: of colors, but all the cool pupil and all the

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Speaker 2: people who like actually like have like regularly refreshed their phones,

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Speaker 2: they all have that orange I phone. There is something

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Speaker 2: special about it beyond just being one of the apple

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Speaker 2: colors that they've always had.

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Speaker 4: So here's the backstory. Right, for years, the iPhones they

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Speaker 4: came in black or white, and then back in twenty

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Speaker 4: thirteen they added gold for the iPhone five S. Why

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Speaker 4: did they do that? They were trying to break into China.

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Speaker 4: Everyone knows gold is a lot of color in China.

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Speaker 4: They were trying to break into, right, And then over

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Speaker 4: time they started coming out with new variations of the iPhones.

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Speaker 4: The cheaper phones you had the five C, you had

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Speaker 4: the ten R. Now the base phones like the fourteen, fifteen, sixteen,

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Speaker 4: those had a lot of fun colors, bright colors. You

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Speaker 4: had yellow, you had green, you had blue, purple, pink, whatever.

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Speaker 4: But the people who bought the top end phones, the prophones,

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Speaker 4: these are the thousand and fifteen hund dollars phones, they

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Speaker 4: were like, I'm kind of getting tired of just black

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Speaker 4: every year, white every year, gold every or silver, these

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Speaker 4: muted colors, and so people had started complaining to Apple,

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Speaker 4: we want more colors, and Apple said, what can we

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Speaker 4: do unique for the iPhone pros And it just so

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Speaker 4: happens that for the profhones, right the seventeen Pro and

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Speaker 4: Promac series, they needed to move to a new material. Okay,

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Speaker 4: so the big deal with the iPhone fifteen back in

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Speaker 4: twenty twenty three was they moved to titanium, and they

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Speaker 4: started this ad campaign around titanium that your phone is

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Speaker 4: using the same materials that they use on outer space.

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Speaker 4: They always come up with some interesting marketing to you.

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Speaker 4: But the pron with titanium, and they only seem to

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Speaker 4: realize this was such a big deal after the phone

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Speaker 4: ship was that titanium doesn't dissipate heat well. It dissipates

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Speaker 4: heat about a tenth as well as aluminum. And Apple

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Speaker 4: obviously was famous for aluminum products for many years, and

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Speaker 4: so for the seventeen series they ditched titanium went back

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Speaker 4: to aluminum. Aluminum not only dissipates heat much better, but

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Speaker 4: you're able to get color to stick to it much

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Speaker 4: better than you can on titanium. And so they wanted

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Speaker 4: to do a bunch of fun colors for this first

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Speaker 4: generation aluminum prophone, and so they've gotten orange. They have

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Speaker 4: classic silver, which I think really hot, and then you

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Speaker 4: have a dark blue.

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Speaker 2: Got it?

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Speaker 4: But orange to the hot color. To an all their

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Speaker 4: marketing material, everyone wants to show, hey, I have the

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Speaker 4: new one. The easiest way to know you have the

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Speaker 4: new one is to get this bold orange phone. They

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Speaker 4: call it cosmic orange. And then in China, the orange

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Speaker 4: in particular has been a hot cellar. The word on

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Speaker 4: the street is that's because the orange is kind of

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Speaker 4: like Ermez orange. To my eyes, I'm a little colorblind.

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Speaker 4: I don't think this orange looks anything like Ermez orange,

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Speaker 4: but it's close enough and close enough, close enough. And

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Speaker 4: then this year they're moving to a red from orange

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Speaker 4: to red or like a dark wine color. And why

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Speaker 4: is red important in China? The dragon right obviously very

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Speaker 4: popular there. So in other words, I think they know

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Speaker 4: what they're doing when it comes to color.

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Speaker 2: Wow, Ermez orange, iphund Sparks Apple come back in China.

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Speaker 2: According to a random post on Reddit, well.

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Speaker 3: Okay, since we're talking about China and pop culture to

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Speaker 3: some extent, the other big piece of Apple news recently

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Speaker 3: is that Tim Cook got a World Cup labooboo from

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Speaker 3: the PopMart CEO.

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Speaker 4: I saw that. I saw that this morning. Tim Cook's

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Speaker 4: not gonna have too many more of those opportunities to

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Speaker 4: have people come visit him at Apple Park and take

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Speaker 4: pictures with him. It's all about John Turnis, his successor.

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Speaker 4: Very soon were just a few weeks away from the

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Speaker 4: new CEO taking over, And this is something obviously I'm

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Speaker 4: watching very closely. If you had me on your podcast

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Speaker 4: two and a half years ago, I could have told

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Speaker 4: you this was the guy. No one else other than

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Speaker 4: me saw it coming.

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Speaker 3: But he did write some profile piece.

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Speaker 4: Yeah, well tried to do more than hint, but wrote

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Speaker 4: a few about him the last couple of years because

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Speaker 4: I knew he was the guy, and I think it's

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Speaker 4: going to be an interesting time at Apple the next

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Speaker 4: three years.

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Speaker 2: Well, this is another way that things have changed, which

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Speaker 2: is that Steve Jobs was a pop culture figure. Tim

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Speaker 2: Cook became a pop culture figure after taking on the

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Speaker 2: mantle of CEO. And I suspect that if you went

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Speaker 2: around and asked one hundred people, who's the person that

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Speaker 2: they named as the replacement, they wouldn't.

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Speaker 4: I am curious if you went onto the streets of

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Speaker 4: Manhattan you asked one hundred people who's the next CEO

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Speaker 4: of Apple? How many would know?

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Speaker 2: One that seems high.

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Speaker 4: One seems I yeah, maybe you ran into me.

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Speaker 2: If I ran into you. Okay, well, lit'sten. Maybe this

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Speaker 2: is a good because obviously frames like what is the

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Speaker 2: Apple that he is inheriting? But before we get to that,

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Speaker 2: what is it about him that either you recognize two

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Speaker 2: and a half years ago? And then the board and

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Speaker 2: the company decided like this is the man to take

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Speaker 2: Apple into it's next era.

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Speaker 4: Oh, it's actually quite simple, believe it or not. Two factors, Okay.

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Speaker 4: Factor one is the products. When you're doing your not monologue,

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Speaker 4: but your speech at the beginning of the show, Tracy,

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Speaker 4: you remark that you don't know which phone you have.

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Speaker 4: You know, you stop counting which number you're at. But

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Speaker 4: I think the big difference is is that there's nothing

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Speaker 4: remarkable about the new numbers anymore. The iPhone looked identical

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Speaker 4: for six years up until this big change with the

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Speaker 4: Orange phones and what have you. Right, So I think

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Speaker 4: the board recognized, certainly, consumers recognized people in the company

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Speaker 4: recognized that the product is just lacking in say sexiness,

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Speaker 4: right for lack of a better term, lack of victim success,

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Speaker 4: victim of its own success. But remember in the Steve

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Speaker 4: Jobs days, right in the early Tim Cook days, every

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Speaker 4: other year you were getting this breakthrough new phone. Like

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Speaker 4: when was the last time you went and picked up

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Speaker 4: a new Apple product and you were like, holy crap,

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Speaker 4: this thing is totally different, totally amazing. It's been a while,

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Speaker 4: and so I think Apple needed to resuscitate its product design.

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Speaker 4: It's hardware, it's product genes coming off innovative new things.

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Speaker 4: And John Turnas, he was the senior vice president of

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Speaker 4: hardware engineering. He was the guy actually in charge of

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Speaker 4: product development. And so for a company looking to shake

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Speaker 4: itself out of a product lull, putting you're new, he's

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Speaker 4: quite new in his senior VP role, your new product

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Speaker 4: person in charge of things. That makes a lot of sense.

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Speaker 4: You don't want another operational person, you don't want a

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Speaker 4: marketing person, you don't want another finance person. We've went

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Speaker 4: down that road now with Tim Cook for fifteen years,

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Speaker 4: hugely successful. Time for a new era. The simpler answer

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Speaker 4: is that John Turnas is fifty to fifty one years old.

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Speaker 4: Every other person on the Apple executive team who could

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Speaker 4: have theoretically replaced Tim Cook with their experience sixty plus, okay,

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Speaker 4: some of them sixty five plus. And Apple the way

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Speaker 4: they are run is their run for the long term.

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Speaker 4: They wanted to avoid Bob Eygert a Bob Jpek situation

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Speaker 4: where you're putting someone in who you know is going

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Speaker 4: to fail or you know is going to retire in

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Speaker 4: three to five years. The Verizon hiring Dan Schulman at

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Speaker 4: sixty seven years old to be their new CEO, that's

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Speaker 4: a one to three year thing. Apple does not operate

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Speaker 4: in the short term. They operate in the long term.

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Speaker 4: So who's the person we can appoint that's going to

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Speaker 4: be CEO for the next fifteen to twenty years. John

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Speaker 4: turnus the only option. I'm not saying that he's the

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Speaker 4: perfect choice in the world, but he's the perfect choice

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Speaker 4: for Apple because he really was the only choice, and

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Speaker 4: maybe they fell backwards into him being the only choice.

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Speaker 4: Maybe they didn't. Maybe this was all calculated years ago.

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Speaker 4: I don't think it was. But long st story short,

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Speaker 4: I think this is the man for the job at

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Speaker 4: the right time.

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Speaker 3: Well so I don't know anything about John Turnas other

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Speaker 3: than what you just said and some of your pieces

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Speaker 3: that I've read before. But do we have any evidence

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Speaker 3: that in terms of product design, like he can be

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Speaker 3: quite creative and he can come up with the sexy

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Speaker 3: new features that might get people interested in iPhones again,

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Speaker 3: Because if he's been doing it for a while, then

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Speaker 3: I would say maybe not.

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Speaker 4: He's not particularly known as an innovator, or hasn't been

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Speaker 4: particularly known as an innovator inside Apple. Some people call

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Speaker 4: him a treadmill runner, doing the same thing over and

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Speaker 4: over again. But he also has the awareness to know

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Speaker 4: that Apple needs to do things differently, and he has

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Speaker 4: the credibility and charisma to let Apple do things differently

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Speaker 4: and quietly. The last three to four to maybe five years,

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Speaker 4: Apple has been working on its most impressive and you

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Speaker 4: packed product lineup product overhaul in its history. The next

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Speaker 4: three years are to be the biggest three product years

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Speaker 4: in Apple's history. There is so much stuff coming. I'm

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Speaker 4: having a hard time wrapping my head around it. And

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Speaker 4: I've already removed my credit card from my wallet and

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Speaker 4: put it in my drawer, locked it and threw the

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Speaker 4: key out the window. Not really I'm gonna get all

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Speaker 4: of it, but point being, there's a lot coming. If

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Speaker 4: you're an Apple fanboy like myself, I'll admit it. If

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Speaker 4: you are a tech enthusiast like myself, this is so

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Speaker 4: freaking exciting.

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Speaker 2: All right, So we obviously have to talk about the

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Speaker 2: next three years what these products are. But just one

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Speaker 2: quick question before we get into that conversation. You know,

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Speaker 2: there was a time when I think everyone agreed that

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Speaker 2: from a smartphone perspective, the iPhone was unambiguously the best

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Speaker 2: product in the world. Other phones that like, maybe on

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Speaker 2: a price you know, adjusted standpoint, maybe we're better deals

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Speaker 2: or whatever, et cetera. They are really good phones now

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Speaker 2: being made by other companies, including Chinese manufacturers who like

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Speaker 2: I saw the foldable phones and things like that. They're

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Speaker 2: actually really cool and they're good, and I think in

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Speaker 2: some cases maybe the camera quality is better for some

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Speaker 2: of these others, though I'm not sure. If you take

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Speaker 2: by the most expensive iPhone that you can buy right now,

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Speaker 2: is it on ambiguously the best smartphone in the world,

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Speaker 2: and what is the gap between that and the next

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Speaker 2: biggest best.

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Speaker 4: In the Western world? The iPhone is unambiguously the best

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Speaker 4: smartphone when you factor it in totality. But they're not

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Speaker 4: the most creative phone. They don't have the best form factors,

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Speaker 4: they don't have the best screen technology. I would probably

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Speaker 4: give that to Samsung by a small margin. Don't forget

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Speaker 4: Samsung designs, develops, you know, all those components. Right from

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Speaker 4: a camera perspective in the Western world, you're talking about Google.

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Speaker 4: Google identified a decade ago that the magic to making

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Speaker 4: a better camera isn't necessarily the sensors and the hardware,

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Speaker 4: it's the AI. At Apple, as we've undoubtedly no has

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Speaker 4: not been exactly a leader in the AI space. But

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Speaker 4: when you're talking about the combination of design, hardware, accessibility,

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Speaker 4: right like a product that people understand, how to use, ecosystem,

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Speaker 4: customer service, the whole nine yards, Apple is certainly in

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Speaker 4: the lead. You go to China, it's a whole different world.

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Speaker 4: I don't think people understand that China is just literally

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Speaker 4: a different planet when it comes to technology. They have foldables,

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Speaker 4: they have trifolds, this, they have that, they have glasses,

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Speaker 4: they have bigger tablets. They have these tabletop robotic devices

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Speaker 4: on people's desks. The cameras on the phones in China

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Speaker 4: you're talking about Vivo, You're talking about shao Mi Huawei.

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Speaker 4: They will destroy Apple. It's a big, big difference, and

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Speaker 4: so Apple needs to step it up in China when

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Speaker 4: it comes to hardware. I think the iPhone Air and

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Speaker 4: the iPhone seventeen Promax were good steps in that direction.

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Speaker 4: But if you want to talk about the product roadmap,

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Speaker 4: can I can dive into that. I think the foldable phone,

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Speaker 4: I'm calling it the iPhone Ultra. Apple's coming out with

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Speaker 4: it in September October timeframe, is going to be really hot,

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Speaker 4: really successful in China. It's going to be a status symbol.

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Speaker 4: People are driven to status symbols in China. It's going

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Speaker 4: to be twenty five hundred dollars roughly, and so I

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Speaker 4: think it's going to be a big seller there. Given

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Speaker 4: how popular foldables are there. I'm certainly going to be

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Speaker 4: first in line because I have been waiting for a

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Speaker 4: foldable iPhone for a number of years. Samsung absolutely the

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Speaker 4: pioneer in the category. They've been working on them for

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Speaker 4: a long time now. They finally got really suitable for

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Speaker 4: daily use a year or two ago. Apple will be

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Speaker 4: there from day one. I would just not want a

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Speaker 4: non iOS phone. If I'm being honest with.

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Speaker 2: You, Yeah, right, that's still a huge thing.

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Speaker 3: I'm going to save the rest of the product launches

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Speaker 3: for the end of the podcast, so we entice people

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Speaker 3: tell all the way through. But you mentioned Apple and AI,

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Speaker 3: so I think we should talk about this. But like,

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Speaker 3: why does it seem that Apple has, in large part,

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Speaker 3: I guess missed the boat on AI.

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Speaker 4: Tim Cook his worst decision in his history at Apple

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Speaker 4: was who he hired to manage artificial intelligence at Apple.

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Speaker 4: Bless his soul, perfectly nice.

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Speaker 3: Guy, bless his heart.

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Speaker 4: Yes, yes, John by all accounts of a thought leader

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Speaker 4: and artificial intelligence, but also a skeptic of AI. And

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Speaker 4: so John G JG as he goes as inside of Apple.

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Speaker 4: He was the senior VP of AI at Apple. He

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Speaker 4: was hired in twenty eighteen. This was the guy who

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Speaker 4: was supposed to make sure that Apple became dominant in

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Speaker 4: AI and generative AI. Totally missed the boat. Apparently didn't

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Speaker 4: see it coming, or if he saw it coming, did

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Speaker 4: not put the right staff and resources on it. So

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Speaker 4: clearly that was a big miss and Apple should still

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Speaker 4: be embarrassed about it.

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Speaker 2: I think there's word noting by the way here, Apple

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Speaker 2: is trading an all time high, and actually some of

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Speaker 2: the other like some of the companies that are among

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Speaker 2: the really big tech companies that have invested more in

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Speaker 2: AI and are doing quite better, are not necessarily.

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Speaker 4: Yeah, but you know Apple, I would be happy for

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Speaker 4: them if this was a strategy.

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Speaker 2: No, No, they it. I'm totally I totally get it.

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Speaker 2: But what I'm saying is that the market has not

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Speaker 2: really penalized them for the fact that they're not really

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Speaker 2: a player in AI, whereas you have these companies that

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Speaker 2: are very serious players in AI, and I'm thinking like

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Speaker 2: Google and Microsoft, and they're like, the market has not

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Speaker 2: rewarded them for having technology that is near the AI frontier. Now,

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Speaker 2: when we talk about AI at Apple, I think there's

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Speaker 2: sort of like two different things that we could be

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Speaker 2: talking about. So one of them is what we'd say

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Speaker 2: like edge based AI. Is there AI that's like on

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Speaker 2: the chip that can make a photo render much better

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Speaker 2: than say like a traditional camera architecture. That's like one

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Speaker 2: kind of way we talk about AI. It does a

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Speaker 2: better job of capturing what the user wants to capture

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Speaker 2: using artificial intelligence. And then there is this other question

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Speaker 2: of like, well, is the company building something that we

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Speaker 2: call a large language model, which is a very separate conversation,

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Speaker 2: and it's a different way of like understanding what we're

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Speaker 2: talking about with AI right here, right now, twenty twenty six.

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Speaker 2: So it's like, Okay, inside Apple, we want to correct

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Speaker 2: our past ten years of like missing out on AI.

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Speaker 2: What do they want to achieve with AI?

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Speaker 4: Well, there's a lot here, and I think I'll take

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Speaker 4: it back to y Apples at an all time high.

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Speaker 4: I think investors are smart and they actually have a

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Speaker 4: good understanding of what kind of company Apple is. And

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Speaker 4: Apple is not an AI company. It's not a hardware company,

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Speaker 4: it's not a software company. It's a product company. The

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Speaker 4: magic of Apple, and this was Steve's big thing, is

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Speaker 4: bringing it all together in one package. Apple may not

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Speaker 4: have the best phone in terms of the technology or

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Speaker 4: the camera, but the complete package, unambiguously the best. I

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Speaker 4: think consumers realize that AI is going to shift into

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Speaker 4: products and products that combine hardware, software services, and AI,

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Speaker 4: and you're going to see some great stuff from them

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Speaker 4: coming in the future. We'll get back to it in

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Speaker 4: the roadmap section in the podcast, but I think that's

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Speaker 4: their goal to create products that merge all these things together,

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Speaker 4: where the AI disappears into the background. Now I want

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Speaker 4: to go back twelve years ago. Okay, twelve years ago,

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Speaker 4: Apple started this big project. The idea was to compete

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Speaker 4: with Tesla and build an autonomous car. And that project

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Speaker 4: was canceled in February of twenty twenty four, so two

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Speaker 4: and a half years ago. So they spent well over

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Speaker 4: ten billion on it, hired thousands of people, reorganized the

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Speaker 4: company around it, and closing a project of this magnitude

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Speaker 4: is not something that has a comparison in Apple history.

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Speaker 4: This was unprecedented. It was a complete disaster, a huge failure.

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Speaker 4: But there was one piece of the pie there that

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Speaker 4: is actually really interesting. It's called the Apple neural engine.

436
00:22:17,600 --> 00:22:20,479
Speaker 4: And so in order to do self driving cars, you

437
00:22:20,720 --> 00:22:23,640
Speaker 4: need to process a ton of data at very high

438
00:22:23,680 --> 00:22:27,400
Speaker 4: speeds in real time, see the world around you, process

439
00:22:27,440 --> 00:22:29,960
Speaker 4: it and so the car knows where it's going. And

440
00:22:30,000 --> 00:22:32,080
Speaker 4: the magic sauce that Apple was trying to create for

441
00:22:32,080 --> 00:22:35,960
Speaker 4: the Apple Car was the smartest onboard computer or chip

442
00:22:36,160 --> 00:22:39,600
Speaker 4: in order to do level five autonomous driving. That chip,

443
00:22:39,800 --> 00:22:43,600
Speaker 4: they started working on around twenty fourteen, eventually got shrunk

444
00:22:43,720 --> 00:22:46,399
Speaker 4: down into what they call the neural engine and the

445
00:22:46,440 --> 00:22:48,360
Speaker 4: A and E, and they put it in the iPhone

446
00:22:48,400 --> 00:22:51,560
Speaker 4: ten in twenty seventeen, and that's what allowed features like

447
00:22:51,560 --> 00:22:55,680
Speaker 4: face ID and animoji and augmented reality to work. So

448
00:22:55,720 --> 00:22:58,760
Speaker 4: the only reason that Apple has some of the more

449
00:22:58,760 --> 00:23:03,040
Speaker 4: sophisticated AI hardware on device processing in their phones and

450
00:23:03,080 --> 00:23:05,320
Speaker 4: computers and what have you is because of the Apple

451
00:23:05,320 --> 00:23:07,880
Speaker 4: Car project twelve years ago. And so that's a little

452
00:23:07,960 --> 00:23:10,800
Speaker 4: secret background. If it wasn't for the Apple Car, Apple

453
00:23:10,840 --> 00:23:13,480
Speaker 4: would be even in a more terrible place when it

454
00:23:13,520 --> 00:23:14,879
Speaker 4: came to artificial intelligence.

455
00:23:15,720 --> 00:23:18,400
Speaker 3: Okay, but it seems like that was kind of accidental, right.

456
00:23:18,480 --> 00:23:21,040
Speaker 4: Well, it's all accidental, yeah, right, Okay. It feels like

457
00:23:21,080 --> 00:23:23,399
Speaker 4: the common theme with Apple is that, yeah, they're lucking

458
00:23:23,440 --> 00:23:23,920
Speaker 4: out a lot.

459
00:23:24,119 --> 00:23:26,200
Speaker 3: Yeah okay, But would we expect that.

460
00:23:26,119 --> 00:23:28,760
Speaker 4: They would say that strategy? But I don't think so.

461
00:23:29,040 --> 00:23:30,800
Speaker 3: But do we have a sense of what they actually

462
00:23:30,800 --> 00:23:33,639
Speaker 3: want to achieve in AI, like or are they just

463
00:23:33,640 --> 00:23:35,800
Speaker 3: going to experiment with some stuff and maybe it'll stick,

464
00:23:35,840 --> 00:23:38,560
Speaker 3: maybe it won't, maybe it'll be useful ten years later, you.

465
00:23:38,480 --> 00:23:41,119
Speaker 4: Know, monetizing AI, you know, the jury is still out

466
00:23:41,160 --> 00:23:42,240
Speaker 4: on how exactly you do that.

467
00:23:42,320 --> 00:23:42,520
Speaker 1: Yeah.

468
00:23:42,520 --> 00:23:44,640
Speaker 4: I mean, you see the amount of money that open

469
00:23:44,680 --> 00:23:47,840
Speaker 4: Aye is making versus how much they're losing. It's not

470
00:23:48,000 --> 00:23:51,000
Speaker 4: entirely clear yet, but I think Apple has approven business model.

471
00:23:51,400 --> 00:23:54,520
Speaker 4: It is hardware with very high margins, right, and we

472
00:23:54,560 --> 00:23:56,439
Speaker 4: can talk about that with the price sikes later. But

473
00:23:56,880 --> 00:24:00,639
Speaker 4: Apple wants to roll out AI hardware products AirPods, cameras,

474
00:24:01,240 --> 00:24:07,119
Speaker 4: pendant with cameras, smart cameras, AirPods, AirPods, appendants, smart glasses.

475
00:24:07,240 --> 00:24:08,479
Speaker 2: Is not like a thing you'd put it like kind

476
00:24:08,480 --> 00:24:09,200
Speaker 2: of a necklace, a.

477
00:24:09,160 --> 00:24:12,600
Speaker 4: Necklace or put it on your pocket. Here, eyes and

478
00:24:12,680 --> 00:24:16,639
Speaker 4: ears for your phone, AI cloud processing in order to

479
00:24:16,680 --> 00:24:19,320
Speaker 4: feed context into your phone and your iCloud account to

480
00:24:19,359 --> 00:24:21,959
Speaker 4: do AI tasks. Those are going to sell and those

481
00:24:22,000 --> 00:24:23,600
Speaker 4: are going to make money. And so Apple has a

482
00:24:23,680 --> 00:24:25,840
Speaker 4: proven business model there. The other thing is they have

483
00:24:25,920 --> 00:24:28,360
Speaker 4: this new serie AI, and what they've done is they

484
00:24:28,400 --> 00:24:32,879
Speaker 4: took their artificial intelligence models. Those are called AFM or

485
00:24:33,000 --> 00:24:37,480
Speaker 4: Apple Foundation models. That whole team just basically got blown

486
00:24:37,560 --> 00:24:39,600
Speaker 4: up over the last year. A bunch of them went

487
00:24:39,640 --> 00:24:42,520
Speaker 4: to Meta for fifty million dollars pay packages, but of

488
00:24:42,560 --> 00:24:46,720
Speaker 4: them went to Google, Anthropic, Microsoft, you name it. So

489
00:24:46,760 --> 00:24:49,800
Speaker 4: Apple opened up the hood of their models. They're paying

490
00:24:49,800 --> 00:24:52,919
Speaker 4: billions of dollars to Google to have redeveloped the underpinnings

491
00:24:52,920 --> 00:24:56,360
Speaker 4: of their models. And so now Siri, now Serri is competent.

492
00:24:56,520 --> 00:24:58,720
Speaker 2: Wait wait so this is I mean, this is one

493
00:24:58,720 --> 00:25:02,040
Speaker 2: of the iron new is that Apple was truly one

494
00:25:02,040 --> 00:25:06,199
Speaker 2: of the pioneers and talking to computers in plain language.

495
00:25:06,280 --> 00:25:09,080
Speaker 4: Well, they launched Siri. Yeah, they launched Siri. They launched

496
00:25:09,080 --> 00:25:12,080
Speaker 4: Siri in twenty eleven. And I was on another show

497
00:25:12,080 --> 00:25:14,479
Speaker 4: here the other day and the host was telling me

498
00:25:14,720 --> 00:25:16,880
Speaker 4: that he asked Siri, he's got the old series still,

499
00:25:16,880 --> 00:25:18,600
Speaker 4: when is the next FED meeting? I know you guys

500
00:25:18,640 --> 00:25:21,119
Speaker 4: like talking about that in series. Response was, there are

501
00:25:21,160 --> 00:25:24,280
Speaker 4: no FED meetings in your calendar. Okay, I have the

502
00:25:24,320 --> 00:25:26,680
Speaker 4: new serie AI. And so I said, when's the next

503
00:25:26,680 --> 00:25:28,920
Speaker 4: FED meeting? The next FED meeting? Gave me the date?

504
00:25:29,000 --> 00:25:32,640
Speaker 2: Wait, so sorry, what powers serie AIS intelligence?

505
00:25:33,000 --> 00:25:36,520
Speaker 4: Today? It's Apple foundation models that have been rebuilt with

506
00:25:36,560 --> 00:25:41,320
Speaker 4: Google underpinnings. It's Gemini Okay, okay, got it?

507
00:25:41,440 --> 00:25:45,479
Speaker 2: Okay? So and going forward, is the idea that Siri

508
00:25:46,000 --> 00:25:49,800
Speaker 2: will just be a Gemini skin as they would say, like,

509
00:25:49,920 --> 00:25:53,840
Speaker 2: is that s more sort of just from the language

510
00:25:53,920 --> 00:25:56,080
Speaker 2: sort of the way we all talk about AI today

511
00:25:56,200 --> 00:25:58,480
Speaker 2: is like a model whatever this thing you talk it's like.

512
00:25:58,400 --> 00:26:01,879
Speaker 4: A reskinned Gemini, okay, that has access to your personal data,

513
00:26:01,960 --> 00:26:05,120
Speaker 4: so you can ask it about your text messages, your photos,

514
00:26:05,119 --> 00:26:07,399
Speaker 4: your emails. It's actually pretty nifty. You know. One thing

515
00:26:07,440 --> 00:26:09,960
Speaker 4: I've been doing, people send me calendar appointments on my

516
00:26:10,040 --> 00:26:10,639
Speaker 4: work computer.

517
00:26:10,840 --> 00:26:11,040
Speaker 2: Yeh.

518
00:26:11,160 --> 00:26:13,280
Speaker 4: I take a picture of my work screen with the

519
00:26:13,280 --> 00:26:14,879
Speaker 4: phone and then it just adds it to my calendar

520
00:26:14,920 --> 00:26:18,480
Speaker 4: through Siri. So you know how many people have that

521
00:26:18,560 --> 00:26:20,800
Speaker 4: use case. I don't know, but it does work. It's

522
00:26:20,840 --> 00:26:26,920
Speaker 4: extremely competent. I would say, you guys know video editing software, Okay,

523
00:26:26,960 --> 00:26:29,960
Speaker 4: you know iMovie yah yeah, okay, so there's like imomovie

524
00:26:30,080 --> 00:26:32,760
Speaker 4: versus Final Cup Pro. Yeah yeah, all right, So before

525
00:26:32,840 --> 00:26:36,600
Speaker 4: Serie AI, Apple had nothing. Now they've got iMovie, chat

526
00:26:36,600 --> 00:26:37,920
Speaker 4: GPT's Final Cup Pro.

527
00:26:39,359 --> 00:26:39,840
Speaker 2: Got it.

528
00:26:40,000 --> 00:26:42,560
Speaker 4: They've got a competent product that ninety five percent of

529
00:26:42,600 --> 00:26:45,280
Speaker 4: the world can use. But they don't got that step

530
00:26:45,359 --> 00:26:50,080
Speaker 4: up which allows you to do hardcore research, documents, drafting, editing,

531
00:26:50,200 --> 00:26:53,120
Speaker 4: et cetera, travel planning. Everything you want to use chat

532
00:26:53,119 --> 00:26:55,000
Speaker 4: GPT for can't do all of it.

533
00:27:10,760 --> 00:27:13,240
Speaker 3: Well, let's talk about the price hikes, because this was

534
00:27:13,240 --> 00:27:16,240
Speaker 3: a pretty big sea change both for Apple the company

535
00:27:16,280 --> 00:27:20,600
Speaker 3: and I guess in a macroeconomic sense. Right, So we're

536
00:27:20,640 --> 00:27:23,840
Speaker 3: told that the increases are because of memory shortages and

537
00:27:23,880 --> 00:27:27,800
Speaker 3: component shortages and competing with the hyperscalers for all these things.

538
00:27:28,240 --> 00:27:31,439
Speaker 3: How much of that is true of it? Okay?

539
00:27:31,680 --> 00:27:34,679
Speaker 4: I think that the other component of this, uh, speaking

540
00:27:34,680 --> 00:27:38,520
Speaker 4: of components, is that inflation real thing will last you know,

541
00:27:38,600 --> 00:27:42,200
Speaker 4: five seven years. Apple product prices really have not increased

542
00:27:42,240 --> 00:27:45,440
Speaker 4: over that time as other components got expensive, and as

543
00:27:45,520 --> 00:27:48,679
Speaker 4: you know, inflation has gone up. And so I'm not

544
00:27:48,720 --> 00:27:50,560
Speaker 4: one of those people who think this is a conspiracy

545
00:27:50,560 --> 00:27:53,600
Speaker 4: theory to finally, you know, raise prices in blame memory.

546
00:27:53,800 --> 00:27:55,760
Speaker 4: Memory is a real thing. If you look at the

547
00:27:55,840 --> 00:27:58,879
Speaker 4: price adjustments that they've made, it is entirely in line

548
00:27:59,200 --> 00:28:01,119
Speaker 4: with how much more they're paying for memory on a

549
00:28:01,119 --> 00:28:04,080
Speaker 4: product by product basis. For instance, the vision pro went

550
00:28:04,160 --> 00:28:07,600
Speaker 4: up by two hundred dollars, right six percent. Nobody's buying

551
00:28:07,600 --> 00:28:09,760
Speaker 4: the vision Pro. They're not going to do anything to

552
00:28:09,800 --> 00:28:12,959
Speaker 4: lose one percent of their margin. And so they probably

553
00:28:12,960 --> 00:28:15,680
Speaker 4: set date in the calendar several months ago and they said,

554
00:28:15,960 --> 00:28:18,080
Speaker 4: we're going to use our cash balance or whatever. We're

555
00:28:18,080 --> 00:28:20,600
Speaker 4: going to use our margins to eat the additional cost

556
00:28:20,600 --> 00:28:23,760
Speaker 4: and memory up until this date. The date hit they

557
00:28:23,760 --> 00:28:25,840
Speaker 4: flipped the switch, they did the price sikes, and you'll

558
00:28:25,840 --> 00:28:27,679
Speaker 4: see them do more price sikes in September for these

559
00:28:27,720 --> 00:28:28,200
Speaker 4: new phones.

560
00:28:28,960 --> 00:28:31,440
Speaker 2: It just occurs to me, just on the AI component,

561
00:28:31,640 --> 00:28:36,080
Speaker 2: It's like, you see these huge budgets that the Alphabets

562
00:28:36,080 --> 00:28:39,200
Speaker 2: and the Amazons and the Microsofts of the world are spending.

563
00:28:39,640 --> 00:28:43,680
Speaker 2: If there's one company that knows about why don't we

564
00:28:43,800 --> 00:28:47,320
Speaker 2: let someone else do the big capital expenditures, it's Apple.

565
00:28:47,400 --> 00:28:48,080
Speaker 4: That's what they're doing.

566
00:28:48,120 --> 00:28:51,640
Speaker 2: This is their but their core history from partnering with

567
00:28:51,720 --> 00:28:55,480
Speaker 2: fox Con is essentially, you know, there's this really expensive

568
00:28:55,560 --> 00:28:58,920
Speaker 2: aspect of the process where it's very physical. Let's just

569
00:28:58,920 --> 00:29:02,920
Speaker 2: get another company to do the really high capital expenditure.

570
00:29:02,960 --> 00:29:05,480
Speaker 4: You're spot on. It's straight out of that playbook. But

571
00:29:05,560 --> 00:29:09,320
Speaker 4: AI is pretty darn fundamental, and I think eventually they're

572
00:29:09,320 --> 00:29:12,000
Speaker 4: going to have to rebuild that AI research team and

573
00:29:12,040 --> 00:29:14,400
Speaker 4: spend the money to rebuild AI. Now I'm saying you

574
00:29:14,440 --> 00:29:19,160
Speaker 4: can do it without those hyperscaler expenses. Apple never wanted this.

575
00:29:19,320 --> 00:29:21,760
Speaker 4: Apple's vision for AI and they talked about this two

576
00:29:21,800 --> 00:29:25,040
Speaker 4: years ago. Was on device model processing. It was about

577
00:29:25,120 --> 00:29:28,000
Speaker 4: using Apple Mac chips in the cloud, not this whole

578
00:29:28,040 --> 00:29:31,280
Speaker 4: hyperscalar situation within video that you're seeing from Openingianthropic, Google,

579
00:29:31,320 --> 00:29:33,960
Speaker 4: you name it. And so the irony here is that

580
00:29:34,320 --> 00:29:36,520
Speaker 4: this is not a world that Apple was trying to push.

581
00:29:36,880 --> 00:29:38,800
Speaker 4: They want it all on the phone. And I think

582
00:29:38,800 --> 00:29:40,920
Speaker 4: eventually these lms are going to be able to shrink

583
00:29:40,920 --> 00:29:42,440
Speaker 4: to the point where you can put them on the phone.

584
00:29:42,760 --> 00:29:44,600
Speaker 4: But for right now, cloud is the game in town

585
00:29:44,680 --> 00:29:46,880
Speaker 4: to make better artificial intelligence.

586
00:29:47,040 --> 00:29:49,600
Speaker 3: And do they have other options for getting chips and components.

587
00:29:49,640 --> 00:29:51,560
Speaker 3: I know they've been trying to source out of China,

588
00:29:51,640 --> 00:29:52,240
Speaker 3: for instance.

589
00:29:52,600 --> 00:29:58,360
Speaker 4: So they are testing memory from CXMT and YMTC. Those

590
00:29:58,400 --> 00:30:01,800
Speaker 4: are two Chinese memory providers. There's actually that you can

591
00:30:01,840 --> 00:30:05,840
Speaker 4: count on your fingers, that's the number of memory suppliers

592
00:30:05,880 --> 00:30:07,920
Speaker 4: there are in the world. There's about five. Right, You've

593
00:30:07,920 --> 00:30:12,600
Speaker 4: got Micron, sk Heinix, Samsung and the two Chinese companies

594
00:30:12,600 --> 00:30:14,320
Speaker 4: I named. Did they already use the other three, the

595
00:30:14,400 --> 00:30:16,920
Speaker 4: Korean one and the American ones. They're gonna do this,

596
00:30:17,080 --> 00:30:19,160
Speaker 4: Like I'm convinced that they're going to start using Chinese

597
00:30:19,200 --> 00:30:22,840
Speaker 4: memory instead of Chinese iPhone skews. Apple already has a

598
00:30:22,920 --> 00:30:26,160
Speaker 4: unique skew for China, So being able to you know,

599
00:30:26,200 --> 00:30:28,160
Speaker 4: add the Chinese memory into that and carve that out

600
00:30:28,240 --> 00:30:29,920
Speaker 4: I think is not that big of a lift from

601
00:30:29,920 --> 00:30:33,000
Speaker 4: an operational standpoint. The bigger issue for them will be

602
00:30:33,040 --> 00:30:36,320
Speaker 4: the pr campaigns for Micron and Korea, you know, trying

603
00:30:36,360 --> 00:30:38,360
Speaker 4: to make Apple look bad for using Chinese memory. If

604
00:30:38,360 --> 00:30:40,720
Speaker 4: you're using Chinese memory and Chinese phones, I think people

605
00:30:40,760 --> 00:30:42,800
Speaker 4: in China know the deal there. I'm not really sure

606
00:30:42,840 --> 00:30:44,400
Speaker 4: why it's the problem of any other country.

607
00:30:44,960 --> 00:30:48,120
Speaker 2: If Siri is re skinned Gemini.

608
00:30:48,080 --> 00:30:49,080
Speaker 4: It's a little bit more than that.

609
00:30:49,120 --> 00:30:53,000
Speaker 2: Yeah, Okay, does that create issues for China in terms

610
00:30:53,000 --> 00:30:55,280
Speaker 2: of like using Siri in China?

611
00:30:55,760 --> 00:30:57,040
Speaker 4: And they do?

612
00:30:57,120 --> 00:30:59,000
Speaker 2: They are they going to have to use like deep

613
00:30:59,040 --> 00:31:01,040
Speaker 2: seek or something like that for the Chinese use. How

614
00:31:01,040 --> 00:31:01,800
Speaker 2: are they handling that?

615
00:31:01,960 --> 00:31:04,800
Speaker 4: Okay? And this is actually a timely question because earlier

616
00:31:04,800 --> 00:31:07,240
Speaker 4: this week, after a two year delay, Apple finally got

617
00:31:07,400 --> 00:31:10,440
Speaker 4: Chinese government approval to launch Siri in China. Now we're

618
00:31:10,440 --> 00:31:12,760
Speaker 4: talking about the old school Sirie, not the new SERIII.

619
00:31:13,320 --> 00:31:16,280
Speaker 4: But here's what they've done. So there's basically two components

620
00:31:16,320 --> 00:31:18,320
Speaker 4: to Siri that you can break down. You've got the

621
00:31:18,360 --> 00:31:22,120
Speaker 4: Apple models and then you have integration with Google and

622
00:31:22,160 --> 00:31:24,680
Speaker 4: you have integration with open Ai. That's the situation in

623
00:31:24,720 --> 00:31:28,000
Speaker 4: the United States. And so in China you've got Apple

624
00:31:28,040 --> 00:31:32,080
Speaker 4: models and then the outside partners by Do, they're the

625
00:31:32,120 --> 00:31:35,360
Speaker 4: big Google equivalent for search, and so that makes sense

626
00:31:35,360 --> 00:31:37,720
Speaker 4: to have them instead of open Ai in China, which

627
00:31:37,760 --> 00:31:41,120
Speaker 4: both don't work in the region. But there's also one

628
00:31:41,200 --> 00:31:43,600
Speaker 4: other player. It's a company you may have heard of

629
00:31:43,600 --> 00:31:46,360
Speaker 4: called Ali Baba. And so what Apple's doing with Ali

630
00:31:46,400 --> 00:31:49,400
Speaker 4: Baba is They've got Ali Baba models in the system

631
00:31:50,000 --> 00:31:54,000
Speaker 4: and it serves as what I call a censorship engine.

632
00:31:54,160 --> 00:31:58,280
Speaker 4: And this censorship engine is constantly calling back between Apple

633
00:31:58,440 --> 00:32:03,360
Speaker 4: and the Chinese government, getting Chinese government approval on updates

634
00:32:03,400 --> 00:32:04,880
Speaker 4: to the models on the phone.

635
00:32:05,280 --> 00:32:09,240
Speaker 3: Yeah, because the censorship announcements like get updated really really quickly, right,

636
00:32:09,560 --> 00:32:13,360
Speaker 3: like keywords are now problematic that weren't five minutes ago.

637
00:32:13,640 --> 00:32:17,920
Speaker 2: But that model from Ali Baba is essentially way of

638
00:32:18,080 --> 00:32:22,200
Speaker 2: keeping the by Do model in check and.

639
00:32:22,240 --> 00:32:25,000
Speaker 4: The Apple model okay, and the Apple model. But yes,

640
00:32:25,160 --> 00:32:28,960
Speaker 4: that is what's there to do is is a censorship engine.

641
00:32:29,000 --> 00:32:29,720
Speaker 4: Isn't that crazy.

642
00:32:30,280 --> 00:32:32,200
Speaker 2: Yeah, it's models on top of models.

643
00:32:32,320 --> 00:32:32,520
Speaker 4: Yeah.

644
00:32:32,560 --> 00:32:33,040
Speaker 3: Models all.

645
00:32:33,320 --> 00:32:36,320
Speaker 4: Well, that's the ultimate vision for Apple Intelligence and for

646
00:32:36,440 --> 00:32:40,120
Speaker 4: Siri is to make the model interchangeable. Now we haven't

647
00:32:40,120 --> 00:32:42,960
Speaker 4: even talked about this big war between Apple and Open Ai. Yeah,

648
00:32:43,200 --> 00:32:46,120
Speaker 4: but the phone, as you know it has Chat GPT

649
00:32:46,240 --> 00:32:49,840
Speaker 4: baked in as a serie extension. Basically, if you ask

650
00:32:50,000 --> 00:32:53,760
Speaker 4: Siri something that Siri doesn't know the answer to, it'll

651
00:32:53,800 --> 00:32:56,720
Speaker 4: fall back to Chat GIPT and grab the answer from there.

652
00:32:57,600 --> 00:33:00,920
Speaker 4: With the new SerII, it's going to know the answer

653
00:33:00,920 --> 00:33:03,520
Speaker 4: to basically everything you ask. You don't really need Chat Gypt.

654
00:33:04,120 --> 00:33:07,000
Speaker 4: These current iOS twenty seven betas have Chat Gypt still

655
00:33:07,040 --> 00:33:09,480
Speaker 4: as part of that system. But the ultimate goal, and

656
00:33:09,520 --> 00:33:11,800
Speaker 4: I think this is going to happen more quickly because

657
00:33:11,800 --> 00:33:15,160
Speaker 4: of the lawsuit. Apple's going to pull the Chat GPT

658
00:33:15,280 --> 00:33:18,120
Speaker 4: exclusivity in my opinion, and they're going to allow you

659
00:33:18,160 --> 00:33:23,440
Speaker 4: to install any third party LM onto your phone to

660
00:33:23,520 --> 00:33:24,160
Speaker 4: use through Siri.

661
00:33:24,440 --> 00:33:24,920
Speaker 2: Interesting.

662
00:33:25,720 --> 00:33:28,680
Speaker 3: Wait, okay, talk to us about the lawsuit because this

663
00:33:28,720 --> 00:33:30,920
Speaker 3: seems important, seems traumatic.

664
00:33:31,760 --> 00:33:35,320
Speaker 4: Two years ago, three years ago, Dude named tank Tan

665
00:33:36,080 --> 00:33:42,800
Speaker 4: vice president of iPhone product Design, Apple Watch, product Design, AirPods, Acoustics, successories,

666
00:33:42,880 --> 00:33:45,840
Speaker 4: all sorts of stuff. One of the most senior executives

667
00:33:45,880 --> 00:33:49,680
Speaker 4: at Apple and by all accounts the number two under

668
00:33:49,760 --> 00:33:53,240
Speaker 4: John Turnas and the hardware engineering organization comes to Turnus,

669
00:33:53,280 --> 00:33:55,480
Speaker 4: comes to Apple it he says, I'm out of here.

670
00:33:55,720 --> 00:33:59,000
Speaker 4: I'm going with startup. This is early December of twenty three.

671
00:34:00,480 --> 00:34:03,960
Speaker 4: They're like, okay, well, you have your tentacles tied up

672
00:34:04,000 --> 00:34:06,400
Speaker 4: in so many different areas. You can't leave immediately. So

673
00:34:06,440 --> 00:34:08,560
Speaker 4: they're like, okay, stick around till February. So he sticks

674
00:34:08,560 --> 00:34:10,840
Speaker 4: around till February. But in behind the scenes he's already

675
00:34:10,840 --> 00:34:14,080
Speaker 4: cooking up a new AI devices company with Johnny Ive,

676
00:34:14,120 --> 00:34:17,479
Speaker 4: the former Apple design chief, and Sam Altman, who runs

677
00:34:17,520 --> 00:34:20,520
Speaker 4: open Ai obviously at the time still does, and their

678
00:34:20,560 --> 00:34:23,719
Speaker 4: whole goal is to create a new range of devices

679
00:34:23,800 --> 00:34:27,560
Speaker 4: that will destroy the iPhone, combining the engineering and design

680
00:34:27,640 --> 00:34:29,600
Speaker 4: prowess of some of the best people who used to

681
00:34:29,600 --> 00:34:32,360
Speaker 4: work at Apple with what at the time was widely

682
00:34:32,400 --> 00:34:37,640
Speaker 4: considered the best AI lethal Combo and Tang Tan has

683
00:34:37,680 --> 00:34:40,719
Speaker 4: been hiring over the last year two years an exceptional

684
00:34:40,800 --> 00:34:44,200
Speaker 4: number of people from Apple. They've pillaged Apple's hardware engineering ranks.

685
00:34:44,360 --> 00:34:47,040
Speaker 4: They have four hundred former Apple employees in their hardware

686
00:34:47,040 --> 00:34:49,840
Speaker 4: division at Open Air right now, My guess that's between

687
00:34:49,840 --> 00:34:53,080
Speaker 4: five and eight percent of the total open employee pool

688
00:34:53,320 --> 00:34:57,840
Speaker 4: is a former Apple employee. Kind of nuts, okay. Apple

689
00:34:58,000 --> 00:35:00,880
Speaker 4: has been beside itself for two years about this, the hiring,

690
00:35:01,000 --> 00:35:03,200
Speaker 4: the poaching, the fact that they're trying to compete with

691
00:35:03,239 --> 00:35:06,160
Speaker 4: them using their best former people. Nothing you could really

692
00:35:06,200 --> 00:35:08,720
Speaker 4: do about it. Reverse the beginning of this year, Apple

693
00:35:08,760 --> 00:35:10,880
Speaker 4: finally had what they think is a smoking gun, an

694
00:35:10,960 --> 00:35:15,040
Speaker 4: engineer named Changlu. He allegedly breaks into Apple servers and

695
00:35:15,200 --> 00:35:18,480
Speaker 4: steals engineering presentations and such and gives them to Open AI.

696
00:35:19,000 --> 00:35:21,720
Speaker 4: And so Apple begins building a big case against Changlu

697
00:35:21,960 --> 00:35:26,120
Speaker 4: and Tang Tan, who they allege was bringing Apple employees

698
00:35:26,400 --> 00:35:29,839
Speaker 4: into open A offices with prospective job offers and asking

699
00:35:29,880 --> 00:35:32,000
Speaker 4: them to bring in Apple prototypes and other internal Apple

700
00:35:32,000 --> 00:35:34,879
Speaker 4: equipment to give them a look at what's coming down

701
00:35:34,920 --> 00:35:35,239
Speaker 4: the road.

702
00:35:35,680 --> 00:35:38,399
Speaker 3: What's the open AI's defence here, because when you read

703
00:35:38,440 --> 00:35:39,600
Speaker 3: the complaint.

704
00:35:39,400 --> 00:35:45,040
Speaker 4: It seems here's my take overall, the complaint is very thin,

705
00:35:45,200 --> 00:35:49,160
Speaker 4: really very thin. The stuff about Tang Tan very thin.

706
00:35:50,000 --> 00:35:52,960
Speaker 4: A lot of that is common practice in Silicon Valley

707
00:35:52,960 --> 00:35:56,680
Speaker 4: for recruiting and meetings with employees that they've drummed up

708
00:35:56,680 --> 00:36:00,360
Speaker 4: into a Netflix special. That's my take. The chang Lu stuff,

709
00:36:00,400 --> 00:36:02,840
Speaker 4: if true, is extremely serious and he's in trouble and

710
00:36:02,840 --> 00:36:06,080
Speaker 4: that's a big problem. Okay, So that is the delineation there.

711
00:36:06,080 --> 00:36:09,120
Speaker 4: Advice I say in terms of the recruiting and pillaging

712
00:36:09,160 --> 00:36:12,160
Speaker 4: apples harder engineering ranks. I don't know how kosher that is.

713
00:36:12,239 --> 00:36:14,919
Speaker 4: I'm sure there were some you know, funky stuff going on.

714
00:36:14,920 --> 00:36:18,719
Speaker 2: That strikes me as just business in California's business in California.

715
00:36:18,800 --> 00:36:20,880
Speaker 4: But we'll see where this lands. But the one thing

716
00:36:20,920 --> 00:36:23,120
Speaker 4: I'll say is if you read the Apple complaint, they

717
00:36:23,160 --> 00:36:25,000
Speaker 4: say so many times in that complaint we need to

718
00:36:25,040 --> 00:36:26,759
Speaker 4: do discovery to know what's going on.

719
00:36:27,320 --> 00:36:30,640
Speaker 2: This is a good say too, like the new form

720
00:36:30,719 --> 00:36:34,360
Speaker 2: factors that we might expect for gadget and there the

721
00:36:34,719 --> 00:36:38,760
Speaker 2: Google glasses like fifteen years ago and people hated them.

722
00:36:39,080 --> 00:36:40,239
Speaker 3: And people still hate them.

723
00:36:40,680 --> 00:36:43,760
Speaker 2: My old colleague and business insider, he like got beaten

724
00:36:43,840 --> 00:36:48,239
Speaker 2: up or like got yeah remember that story in California.

725
00:36:47,680 --> 00:36:49,480
Speaker 4: Because someone tried wanted to steal them.

726
00:36:49,560 --> 00:36:52,279
Speaker 2: No, he was wearing the Google glasses and people found it.

727
00:36:52,360 --> 00:36:54,920
Speaker 2: You know, it was just like very upset about people

728
00:36:55,000 --> 00:36:55,680
Speaker 2: really hate.

729
00:36:55,680 --> 00:36:58,919
Speaker 4: Yeah because of the recording yeah everything, Well, Apple has

730
00:36:58,960 --> 00:37:01,560
Speaker 4: a high bar to us there because their next big

731
00:37:01,600 --> 00:37:02,360
Speaker 4: thing is glasses.

732
00:37:02,440 --> 00:37:03,920
Speaker 2: So this is what I'm getting at, And there's a

733
00:37:03,960 --> 00:37:06,880
Speaker 2: lot of interest in this, and we know that Meta

734
00:37:06,960 --> 00:37:10,760
Speaker 2: obviously is like really pushing on this hard et cetera,

735
00:37:11,280 --> 00:37:15,360
Speaker 2: setting aside like market demand for some of these new

736
00:37:15,480 --> 00:37:18,720
Speaker 2: form factors. It feels to me like we are very

737
00:37:18,719 --> 00:37:23,879
Speaker 2: close to crossing a deeply uncomfortable cultural threshold with all

738
00:37:23,920 --> 00:37:26,880
Speaker 2: of this stuff, where it's like people do not want

739
00:37:27,000 --> 00:37:29,560
Speaker 2: you know, if you had a little pendant on in

740
00:37:29,600 --> 00:37:33,719
Speaker 2: your pocket, Yeah, your body can like right now recording

741
00:37:33,840 --> 00:37:35,799
Speaker 2: this and it's like, oh yeah, I have the like

742
00:37:36,040 --> 00:37:39,759
Speaker 2: people would be very uneasy. But yeah, they say the.

743
00:37:39,800 --> 00:37:41,399
Speaker 4: Least, there's a high bar, we think.

744
00:37:41,440 --> 00:37:43,880
Speaker 2: So when we think about the range of like quote

745
00:37:43,920 --> 00:37:48,680
Speaker 2: AI gadgets, setting aside even pure market demand, are we

746
00:37:48,760 --> 00:37:51,080
Speaker 2: going to be in this era where like we're really

747
00:37:51,080 --> 00:37:53,720
Speaker 2: going to have to like have some serious cultural fights

748
00:37:54,040 --> 00:37:57,920
Speaker 2: about what's acceptable for people to have on their person

749
00:37:57,960 --> 00:37:58,759
Speaker 2: at any given time.

750
00:37:58,920 --> 00:38:01,719
Speaker 4: I walked into a family member's house a couple of

751
00:38:01,719 --> 00:38:04,880
Speaker 4: weeks ago, I got the new Meta glasses for review

752
00:38:05,840 --> 00:38:09,000
Speaker 4: and They were very upset that I walked in with

753
00:38:09,200 --> 00:38:14,000
Speaker 4: the meta glasses, thinking that I'm recording them, right, and

754
00:38:14,040 --> 00:38:16,000
Speaker 4: how are they supposed to know I could be recording them.

755
00:38:16,000 --> 00:38:17,959
Speaker 4: I wasn't. I assured them of such.

756
00:38:18,160 --> 00:38:19,759
Speaker 3: But people like jail break the light.

757
00:38:20,080 --> 00:38:23,440
Speaker 4: Yes, it's it's uncomfortable, you know. They are people who, yeah,

758
00:38:24,040 --> 00:38:25,879
Speaker 4: use a black sharpie to cut out the light.

759
00:38:26,040 --> 00:38:29,279
Speaker 2: And if they and someone will sell a phone from

760
00:38:29,320 --> 00:38:32,799
Speaker 2: China that doesn't have any light or any outward India,

761
00:38:33,120 --> 00:38:36,719
Speaker 2: it's uncomfortable being looking like they will look. There's no doubt.

762
00:38:36,760 --> 00:38:40,040
Speaker 2: It's the short term. There will be glasses that are

763
00:38:40,239 --> 00:38:42,440
Speaker 2: absolutely indistinguishable from the normal glasses.

764
00:38:42,560 --> 00:38:44,800
Speaker 4: Yes, and then metas talking about what they call the

765
00:38:44,840 --> 00:38:48,080
Speaker 4: super sense glasses right now, which are recording at all

766
00:38:48,120 --> 00:38:51,239
Speaker 4: times versus the current ones where they record as you

767
00:38:51,280 --> 00:38:54,000
Speaker 4: snap or ask it to record. Yeah, I don't know.

768
00:38:55,360 --> 00:38:56,120
Speaker 4: From Apple, No.

769
00:38:56,200 --> 00:38:58,680
Speaker 2: From all there are gonna be a lot of these products.

770
00:38:58,960 --> 00:39:00,319
Speaker 4: You've got new ones on.

771
00:39:00,560 --> 00:39:02,880
Speaker 2: We will not know. We will have no idea who's

772
00:39:02,960 --> 00:39:04,320
Speaker 2: recording what's going well.

773
00:39:04,160 --> 00:39:06,759
Speaker 4: You know, Amazon's got new ones coming, Apple's got new

774
00:39:06,760 --> 00:39:10,080
Speaker 4: ones coming or their first ones coming. Google is working

775
00:39:10,120 --> 00:39:13,560
Speaker 4: on this, Samsung is about to launch theirs. Everyone's doing this,

776
00:39:13,760 --> 00:39:16,600
Speaker 4: and so you know, Meta has a lot of privacy

777
00:39:16,600 --> 00:39:19,880
Speaker 4: baggage and they've sort of, you know, soiled the market

778
00:39:20,040 --> 00:39:22,399
Speaker 4: for Apple and these other players ahead of time by

779
00:39:22,440 --> 00:39:25,080
Speaker 4: making people uncomfortable with this stuff. And I think Meta

780
00:39:25,160 --> 00:39:27,279
Speaker 4: gets a little bit too hard of a time, right.

781
00:39:27,320 --> 00:39:29,480
Speaker 4: I think people go a little bit harder on Meta

782
00:39:29,520 --> 00:39:32,880
Speaker 4: than they should. But there are serious privacy questions that

783
00:39:32,920 --> 00:39:35,400
Speaker 4: are being raised here, serious privacy questions that are being

784
00:39:35,480 --> 00:39:37,839
Speaker 4: raised here. And it's going to be a very high

785
00:39:37,880 --> 00:39:40,320
Speaker 4: bar for Apple to meet this moment and get people

786
00:39:40,760 --> 00:39:42,719
Speaker 4: using these things despite those concerns.

787
00:39:43,040 --> 00:39:45,640
Speaker 3: All right, Well, other than the glasses that everyone seems

788
00:39:45,680 --> 00:39:47,800
Speaker 3: to hate, talk to us about what we should actually

789
00:39:47,800 --> 00:39:50,120
Speaker 3: be saving up our money for. I guess in terms

790
00:39:50,120 --> 00:39:51,520
Speaker 3: of new product launches.

791
00:39:51,280 --> 00:39:54,080
Speaker 4: Yeah, well, this foldable phone, the Ultra is going to

792
00:39:54,160 --> 00:39:57,480
Speaker 4: be really fantastic. Open it up. It's like an iPad Mini.

793
00:39:57,680 --> 00:39:59,759
Speaker 4: Pretty excited about it. You know, it's not going to

794
00:39:59,760 --> 00:40:02,759
Speaker 4: be as durable or priced as well as like a

795
00:40:02,760 --> 00:40:04,680
Speaker 4: prophone or the one of the low end phones, but

796
00:40:04,760 --> 00:40:06,520
Speaker 4: I think it's going to be pretty exciting. I think

797
00:40:06,560 --> 00:40:09,000
Speaker 4: the AirPods, the pendant, the smart glasses are going to

798
00:40:09,000 --> 00:40:11,799
Speaker 4: be very exciting the smart home. So they're coming out

799
00:40:11,800 --> 00:40:13,920
Speaker 4: with three different smart home products, but one is an

800
00:40:13,920 --> 00:40:16,880
Speaker 4: in home security camera system tied to a new Apple

801
00:40:16,960 --> 00:40:18,880
Speaker 4: security system. I think they want to compete in some

802
00:40:18,960 --> 00:40:22,440
Speaker 4: fashion with ADT or some of the home security companies.

803
00:40:22,680 --> 00:40:25,640
Speaker 4: There's a Landmark smart home device, which you know, you

804
00:40:25,640 --> 00:40:28,000
Speaker 4: can put on your desk, put on your wall, and

805
00:40:28,040 --> 00:40:29,839
Speaker 4: you can walk up to it and it'll know who

806
00:40:29,920 --> 00:40:33,080
Speaker 4: it is. It'll basically bring Serie AI to life, pull

807
00:40:33,160 --> 00:40:35,319
Speaker 4: up your music, you can do video conferencing, you can

808
00:40:35,360 --> 00:40:38,359
Speaker 4: do apps, smart home appliances, etc. It's like a smart

809
00:40:38,360 --> 00:40:41,520
Speaker 4: home command center. And then there's another device. It's a

810
00:40:41,640 --> 00:40:43,719
Speaker 4: robotic version. So the one I just describe has a

811
00:40:43,719 --> 00:40:46,280
Speaker 4: seven inch screen. Then there's a nine inch screen version

812
00:40:46,600 --> 00:40:48,160
Speaker 4: and it's going to be on a robotic arm so

813
00:40:48,200 --> 00:40:50,279
Speaker 4: it can move around on your desk so you can

814
00:40:50,320 --> 00:40:52,719
Speaker 4: look at it, you can point it to look at

815
00:40:52,719 --> 00:40:55,080
Speaker 4: people on a video conference. It's kind of nifty. I

816
00:40:55,120 --> 00:40:57,160
Speaker 4: don't know how well that's going to do, but you

817
00:40:57,200 --> 00:41:00,440
Speaker 4: know what. They're trying things at least. And then tons

818
00:41:00,480 --> 00:41:05,960
Speaker 4: of new Macs, new MacBook NEOs, new Imax augmented reality glasses.

819
00:41:06,080 --> 00:41:09,280
Speaker 4: Is the Biggie probably end of decade, early next decade,

820
00:41:09,520 --> 00:41:13,000
Speaker 4: taking the glasses but being able to give you information. A.

821
00:41:13,760 --> 00:41:15,759
Speaker 2: Yeah, I was gonna say, so, you know people are

822
00:41:15,760 --> 00:41:18,719
Speaker 2: talking about AR ten years ago, fifteen years ago and

823
00:41:19,000 --> 00:41:21,960
Speaker 2: hadn't taken off. What is it going to be different

824
00:41:22,560 --> 00:41:26,279
Speaker 2: that it's like, Okay, now people actually like AR and

825
00:41:26,280 --> 00:41:27,120
Speaker 2: find use for it.

826
00:41:27,120 --> 00:41:29,600
Speaker 4: It's the visual fidelity, okay, it's the quality. Have you

827
00:41:29,680 --> 00:41:33,200
Speaker 4: used the vision Pro no? Okay, So if you use

828
00:41:33,239 --> 00:41:35,560
Speaker 4: the vision Pro, I would encourage you to borrow mine

829
00:41:35,640 --> 00:41:37,640
Speaker 4: or you can go to an Apple store. The visual

830
00:41:37,719 --> 00:41:40,680
Speaker 4: quality is amazing. It's the best movie watching experience once

831
00:41:40,760 --> 00:41:42,080
Speaker 4: your eyes see that quality.

832
00:41:42,280 --> 00:41:45,840
Speaker 2: Oh there, these are the glass A. Yeah, yeah, I

833
00:41:45,880 --> 00:41:49,200
Speaker 2: saw someone say recently they watched it in cane on

834
00:41:49,239 --> 00:41:49,839
Speaker 2: their Vision Pro.

835
00:41:49,880 --> 00:41:50,360
Speaker 4: It's amazing.

836
00:41:50,360 --> 00:41:50,880
Speaker 2: It's amazing.

837
00:41:50,960 --> 00:41:53,719
Speaker 4: Yeah, it's amazing. Anyways, it's a.

838
00:41:53,680 --> 00:41:56,880
Speaker 2: Better experience than watching a big screen TV on your couch.

839
00:41:56,680 --> 00:41:58,920
Speaker 3: If you don't have a family, if you Yeah, I

840
00:41:59,000 --> 00:42:01,680
Speaker 3: find something so just topian about like two people sitting

841
00:42:01,680 --> 00:42:03,440
Speaker 3: on a couch with their glasses on, and.

842
00:42:03,480 --> 00:42:05,680
Speaker 4: They have marketing around that, like and they're trying to

843
00:42:05,719 --> 00:42:08,000
Speaker 4: make two people bring a vision Pro have better interactivity

844
00:42:08,200 --> 00:42:08,960
Speaker 4: I think it's crazy.

845
00:42:08,960 --> 00:42:10,960
Speaker 3: I guess you can hold hands.

846
00:42:11,080 --> 00:42:15,239
Speaker 4: But long story short, the glasses of ten years ago,

847
00:42:15,280 --> 00:42:19,319
Speaker 4: when even today the ar glasses, the visual quality is garbage, right,

848
00:42:19,400 --> 00:42:22,399
Speaker 4: you can hardly see what's going on. Apple. Their goal

849
00:42:22,440 --> 00:42:24,560
Speaker 4: is to make a leap frog aur products. They're not

850
00:42:24,600 --> 00:42:26,919
Speaker 4: gonna get anywhere near the vision pro quality, but they're

851
00:42:26,920 --> 00:42:29,320
Speaker 4: gonna get to a you know, a high quality place.

852
00:42:29,960 --> 00:42:32,399
Speaker 2: Okay, So the next three years anything else. So it's

853
00:42:32,400 --> 00:42:33,440
Speaker 2: like foldable phones.

854
00:42:33,600 --> 00:42:36,360
Speaker 4: So we'll start off with the foldable phone and the

855
00:42:36,400 --> 00:42:39,160
Speaker 4: eighteen pro and pro Max. This fall, you're gonna get

856
00:42:39,160 --> 00:42:40,400
Speaker 4: a new oled iPad Mini.

857
00:42:41,280 --> 00:42:42,880
Speaker 3: I was gonna ask. No one even cares about the

858
00:42:43,280 --> 00:42:46,239
Speaker 3: new iPad Mini. It doesn't mention until now. Yeah, that's

859
00:42:46,280 --> 00:42:47,200
Speaker 3: what I'm excited about.

860
00:42:48,200 --> 00:42:49,799
Speaker 4: I wrote a story about it today. So you're gonna

861
00:42:49,840 --> 00:42:53,120
Speaker 4: get a new old display, so same visual clarity that

862
00:42:53,160 --> 00:42:55,200
Speaker 4: you get on an iPhone. The current ip admitte is

863
00:42:55,200 --> 00:42:58,239
Speaker 4: stuck on an old LCD. Next year, you're gonna get

864
00:42:58,600 --> 00:43:00,920
Speaker 4: some of the wearables, so you're gonna get that foldable

865
00:43:01,520 --> 00:43:03,600
Speaker 4: phone two actually in the fall, but you're also going

866
00:43:03,680 --> 00:43:06,279
Speaker 4: to get the AirPods with cameras, and you're going to

867
00:43:06,320 --> 00:43:08,759
Speaker 4: get the smart glasses. And then the other big one

868
00:43:08,760 --> 00:43:11,920
Speaker 4: next year is the twentieth anniversary iPhone, the iPhone twenty

869
00:43:12,200 --> 00:43:14,200
Speaker 4: or the iPhone xx, whatever you want to call it,

870
00:43:14,640 --> 00:43:17,200
Speaker 4: and that is going to be an all glass phone

871
00:43:17,600 --> 00:43:20,280
Speaker 4: that meshes well with the liquid glass. The new software

872
00:43:20,280 --> 00:43:22,880
Speaker 4: they rolled out last year and updated this year. The

873
00:43:22,960 --> 00:43:24,520
Speaker 4: year after that, you're going to get things like the

874
00:43:24,520 --> 00:43:28,239
Speaker 4: tabletop robot. I talked about the smart home appliances and

875
00:43:28,280 --> 00:43:31,320
Speaker 4: what have you. So it's a big next three years

876
00:43:31,360 --> 00:43:34,680
Speaker 4: for Apple and augmented reality glasses. Behind that, they've been

877
00:43:34,680 --> 00:43:38,400
Speaker 4: playing with this big tablet, foldable tablet, foldable iPad with

878
00:43:38,440 --> 00:43:41,600
Speaker 4: a twenty inm screen, and then that main smart home device.

879
00:43:41,640 --> 00:43:44,239
Speaker 4: I talked about the smart home hub that'll be in

880
00:43:44,280 --> 00:43:47,080
Speaker 4: the next few months. So that's an exciting one.

881
00:43:47,320 --> 00:43:49,600
Speaker 2: Mark German, thank you so much for coming on odd Lawns.

882
00:43:49,640 --> 00:43:51,480
Speaker 2: That was great. Oh quite a bit good.

883
00:43:51,560 --> 00:43:52,840
Speaker 4: Thanks for having me. This is awesome.

884
00:44:05,440 --> 00:44:07,880
Speaker 2: So Tracy, I thought that was very interesting. I needed

885
00:44:07,880 --> 00:44:11,319
Speaker 2: that catch up on this company that once like occupied

886
00:44:11,400 --> 00:44:13,040
Speaker 2: a little bit of my mind share, and now I

887
00:44:13,080 --> 00:44:15,800
Speaker 2: hardly ever think at all. I do think it's interesting,

888
00:44:15,960 --> 00:44:19,120
Speaker 2: like as a starting point for all of the like

889
00:44:19,480 --> 00:44:22,600
Speaker 2: they're not the best phones in the world, especially when

890
00:44:22,640 --> 00:44:25,720
Speaker 2: you bring China into it. They've been stumbling on AI

891
00:44:25,880 --> 00:44:28,080
Speaker 2: for over a decade that it's like the one big

892
00:44:28,120 --> 00:44:31,279
Speaker 2: tech stock that right now today July sixteenth is an

893
00:44:31,320 --> 00:44:32,000
Speaker 2: all time high.

894
00:44:32,040 --> 00:44:33,799
Speaker 3: Well, I thought it's interesting. I mean, to some extent

895
00:44:33,880 --> 00:44:36,000
Speaker 3: you can say, Okay, they missed the boat on AI.

896
00:44:36,520 --> 00:44:38,960
Speaker 3: But on the other hand, you know, they've sort of

897
00:44:39,040 --> 00:44:42,680
Speaker 3: stuck true to their ethos as a product company that

898
00:44:42,800 --> 00:44:45,839
Speaker 3: often I don't want to say leeches off the technology

899
00:44:45,840 --> 00:44:49,040
Speaker 3: of others, but like it's very good about sourcing techs

900
00:44:49,400 --> 00:44:51,040
Speaker 3: they from other companies, right.

901
00:44:51,239 --> 00:44:54,360
Speaker 2: Right, I would say, you know, Mark described it's a

902
00:44:54,400 --> 00:44:58,520
Speaker 2: product company, right, but the other thing is it's a

903
00:44:59,080 --> 00:45:02,879
Speaker 2: supply chain and creation story. Obviously that was like that's

904
00:45:02,920 --> 00:45:06,080
Speaker 2: what Tim Cook's expertise was, et cetera. You know, there's

905
00:45:06,080 --> 00:45:10,040
Speaker 2: an interesting episode we did remember with Sam Demico the

906
00:45:10,200 --> 00:45:11,280
Speaker 2: Impulse Labs.

907
00:45:11,600 --> 00:45:13,160
Speaker 3: Yeah, he was talking about it.

908
00:45:13,000 --> 00:45:15,480
Speaker 2: And he said that term and I guess it's actually

909
00:45:15,480 --> 00:45:18,880
Speaker 2: originally an Elon term, which is that the factory is

910
00:45:18,880 --> 00:45:21,120
Speaker 2: the product, right, which is really interesting, and so he

911
00:45:21,280 --> 00:45:24,040
Speaker 2: was like, why have they been this unified experience that

912
00:45:24,120 --> 00:45:28,640
Speaker 2: combines really good hardware with really good software. The product

913
00:45:28,960 --> 00:45:32,640
Speaker 2: is their ability to integrate. It's not like a that's

914
00:45:32,680 --> 00:45:35,359
Speaker 2: what they're good, that's their thing. They can integrate many

915
00:45:35,400 --> 00:45:38,320
Speaker 2: different things better than anyone else, and then people really

916
00:45:38,400 --> 00:45:39,399
Speaker 2: like the product. Yeah.

917
00:45:39,400 --> 00:45:41,480
Speaker 3: But then on the other hand, I guess the question

918
00:45:41,600 --> 00:45:44,080
Speaker 3: is if something like a camera, if the edge on

919
00:45:44,120 --> 00:45:46,920
Speaker 3: a camera now comes from AI, yeah yeah, versus like

920
00:45:46,960 --> 00:45:50,239
Speaker 3: the actual hardware components, then are you going to get

921
00:45:50,560 --> 00:45:53,440
Speaker 3: a big AI company, a hyperscaler that starts, you know,

922
00:45:53,560 --> 00:45:55,120
Speaker 3: becoming a product company.

923
00:45:55,680 --> 00:45:58,000
Speaker 2: Or you just have like one of these Chinese companies

924
00:45:58,320 --> 00:46:01,160
Speaker 2: where AI is like one and they do and even

925
00:46:01,239 --> 00:46:03,360
Speaker 2: that is ten times better than the you know what

926
00:46:03,400 --> 00:46:06,600
Speaker 2: I'm saying. And so I do think, like pretty clearly

927
00:46:06,640 --> 00:46:10,320
Speaker 2: from a pure product standpoint, there is probably a limit

928
00:46:10,680 --> 00:46:14,000
Speaker 2: to your point of like how far they'll go if

929
00:46:14,080 --> 00:46:18,279
Speaker 2: their core technology is just not frontier. And it's so

930
00:46:18,440 --> 00:46:21,040
Speaker 2: crazy to me that like there were years ahead of

931
00:46:21,120 --> 00:46:25,560
Speaker 2: everyone else in terms of conceiving of talking to your

932
00:46:25,560 --> 00:46:28,640
Speaker 2: computer with your voice and then they just like completely

933
00:46:29,080 --> 00:46:30,120
Speaker 2: drop the ball on that.

934
00:46:30,320 --> 00:46:32,160
Speaker 3: Well, I do also think the other thing, you know,

935
00:46:32,200 --> 00:46:35,839
Speaker 3: we talked about their ability to entice buyers for these

936
00:46:35,880 --> 00:46:38,000
Speaker 3: new products and a lot of the stuff. It sounds

937
00:46:38,040 --> 00:46:40,359
Speaker 3: cool a robotic arm that sits on your desk and

938
00:46:40,480 --> 00:46:43,439
Speaker 3: points at people, I guess. But on the other hand,

939
00:46:44,080 --> 00:46:47,200
Speaker 3: how much of it do people actually need? How much

940
00:46:47,280 --> 00:46:49,920
Speaker 3: is it going to cost? Given that, as we were discussing,

941
00:46:50,000 --> 00:46:53,440
Speaker 3: memory and components are in short supply at the moment,

942
00:46:54,000 --> 00:46:54,400
Speaker 3: I don't know.

943
00:46:54,640 --> 00:46:58,080
Speaker 2: I also think, who knows, I guess part of it.

944
00:46:58,160 --> 00:47:00,759
Speaker 2: Maybe you know. Other companies are all going to build

945
00:47:00,800 --> 00:47:05,560
Speaker 2: the similar gadgets et cetera. Like again the iPhone, bringing

946
00:47:05,640 --> 00:47:09,480
Speaker 2: together this entire ecosystem, Like what are the I just like,

947
00:47:09,840 --> 00:47:11,920
Speaker 2: I don't know, I guess. The The flip side is like,

948
00:47:12,200 --> 00:47:14,719
Speaker 2: we don't care at all anymore about what iOS were on,

949
00:47:14,840 --> 00:47:16,560
Speaker 2: et cetera, and it hasn't hurt the company.

950
00:47:16,600 --> 00:47:18,840
Speaker 3: Well, I was gonna say one question we should have

951
00:47:18,840 --> 00:47:21,040
Speaker 3: asked Mark, and I forgot, but how much of a

952
00:47:21,080 --> 00:47:22,439
Speaker 3: mote is iOS now?

953
00:47:22,520 --> 00:47:22,840
Speaker 1: Actually?

954
00:47:23,400 --> 00:47:25,080
Speaker 3: Because people will say, like, oh, I don't want a

955
00:47:25,120 --> 00:47:27,600
Speaker 3: non iOS phone. But on the other hand, you don't

956
00:47:27,640 --> 00:47:28,839
Speaker 3: know what iOS you're on.

957
00:47:29,200 --> 00:47:29,279
Speaker 1: No.

958
00:47:29,560 --> 00:47:31,520
Speaker 2: All I know is that if I didn't have one,

959
00:47:31,680 --> 00:47:33,719
Speaker 2: all my friends would make fun of me for being green.

960
00:47:33,800 --> 00:47:36,840
Speaker 2: Text in the group chats yea, who's that's the important

961
00:47:36,840 --> 00:47:40,560
Speaker 2: Who's the android person that's making the group text show

962
00:47:40,640 --> 00:47:43,359
Speaker 2: up in green chat? Expose yourself and so I don't

963
00:47:43,360 --> 00:47:44,160
Speaker 2: want to be that person?

964
00:47:44,200 --> 00:47:44,480
Speaker 4: All right?

965
00:47:44,480 --> 00:47:45,279
Speaker 3: Shall we leave it there?

966
00:47:45,480 --> 00:47:46,200
Speaker 2: Let's leave it there.

967
00:47:46,400 --> 00:47:48,960
Speaker 3: This has been another episode of the au Bots podcast.

968
00:47:49,040 --> 00:47:52,400
Speaker 3: I'm Tracy Alloway. You can follow me at Tracy Alloway.

969
00:47:52,160 --> 00:47:54,880
Speaker 2: And I'm Joe Wisenthal. You can follow me at the Stalwart.

970
00:47:55,120 --> 00:47:58,279
Speaker 2: Follow our producers Carmen Rodriguez at Kerman Arma, dash Ol

971
00:47:58,280 --> 00:48:01,840
Speaker 2: Bennett at Dashbot, kel Brooks at Kilbrooks and Kevin Lozano

972
00:48:01,960 --> 00:48:04,920
Speaker 2: at Kevin Lloyd Lisano. And for more odd Logs content,

973
00:48:04,960 --> 00:48:07,239
Speaker 2: go to Bloomberg dot com slash odd Lots or of

974
00:48:07,280 --> 00:48:09,680
Speaker 2: a daily newsletter and all of our episodes and you

975
00:48:09,719 --> 00:48:11,719
Speaker 2: can chet about all these topics twenty four to seven

976
00:48:11,800 --> 00:48:15,000
Speaker 2: in our discord Discord dot gg slash od Loots.

977
00:48:15,440 --> 00:48:17,440
Speaker 3: And if you enjoy odd Lots, if you like it

978
00:48:17,520 --> 00:48:20,040
Speaker 3: when we provide you with Apple updates, then please leave

979
00:48:20,120 --> 00:48:23,680
Speaker 3: us a positive review on your favorite podcast platform. And remember,

980
00:48:23,719 --> 00:48:26,239
Speaker 3: if you are a Bloomberg subscriber, you can listen to

981
00:48:26,360 --> 00:48:29,319
Speaker 3: all of our episodes absolutely ad free. All you need

982
00:48:29,400 --> 00:48:32,000
Speaker 3: to do is find the Bloomberg channel on Apple Podcasts

983
00:48:32,000 --> 00:49:00,680
Speaker 3: and follow the instructions there. Thanks for listening, Ey,