WEBVTT - Apple Slashes Headset Production Forecast & Tesla's Electrifying  Sales

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<v Speaker 1>Good morning. It's Monday, the third of July in London.

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<v Speaker 1>This is Bloomberg Daybreak in Europe's podcast with Caroline Hepga

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<v Speaker 1>and Stephen Carroll.

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<v Speaker 2>Coming up today, we'll have news from Apple about the

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<v Speaker 2>production of their mixed reality headset and.

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<v Speaker 1>Tesla sets a delivery record for electric cars.

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<v Speaker 2>Plus we'll have the latest on the riots in France

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<v Speaker 2>and what it means for President Emmanuel Macran. But first

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<v Speaker 2>our top stories.

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<v Speaker 1>Apple is reported to be making major cuts to its

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<v Speaker 1>Vision Pro headset production plans. Bloomberg's Un Potts reports it.

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<v Speaker 3>Was seven years in development, hailed as the most significant

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<v Speaker 3>product launch since the iPhone, But now, according to the

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<v Speaker 3>Financial Times, Apple is making drastic cuts to production forecasts

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<v Speaker 3>for its mixed reality Vision Pro headset. The paper says

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<v Speaker 3>the complexity of the three and a half thousand dollars

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<v Speaker 3>headsets design and difficulties in production have forced the move.

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<v Speaker 3>It says fewer than four hundred thousand units are likely

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<v Speaker 3>to be made next year. Internal targets were for sales

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<v Speaker 3>of a million. The report, which Apple hasn't commented on,

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<v Speaker 3>comes in the wake of the tech giant hite a

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<v Speaker 3>three trillion dollar valuation on Friday seventy its place as

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<v Speaker 3>the world's most valuable company in London Immunepotsi BIM Big

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<v Speaker 3>day Break Europe.

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<v Speaker 2>Tasla has delivered a record of more than four hundred

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<v Speaker 2>and sixty six thousand cars worldwide in the second quarter,

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<v Speaker 2>outpacing Wall Street estimates. More from Dembrick's Charlie Palace.

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<v Speaker 4>The deliveries are the most ever in a quarter for

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<v Speaker 4>Austin based Tesla and an eighty three percent increase from

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<v Speaker 4>a year ago. The results demonstrate that CEO Elon Musk's

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<v Speaker 4>vowed to chase volume by cutting prices have had their

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<v Speaker 4>intended effect. Analysts survey by Bloomberg had expected Tesla to

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<v Speaker 4>ship four hundred forty eight three hundred and fifty cars

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<v Speaker 4>in the quarter. The company also managed to trim the

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<v Speaker 4>gap between production and deliveries, a number closely watched by analysts,

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<v Speaker 4>to thirteen thousand, five hundred and sixty units in the

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<v Speaker 4>second quarter. In New York, Charlie Pale, Bloomberg Daybreak Europe.

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<v Speaker 1>French President Emanuel Macon will meet the leaders of the

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<v Speaker 1>National Assembly and send it today to discuss the spate

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<v Speaker 1>of riots that have swept the country. The number of

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<v Speaker 1>arrests fell to one hundred and fifty seven overnight, according

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<v Speaker 1>to the Interior Ministry. Macar held another crisis meeting with

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<v Speaker 1>ministers on Sunday evening, as forty five thousand police and

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<v Speaker 1>special forces were deployed for a third night. Meanwhile, the

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<v Speaker 1>grandmother of the teenager Nail, whose killing sparked the unrest

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<v Speaker 1>in France, is calling for an end to the violence.

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<v Speaker 5>The people who are pillaging stop. Stop they're using Nile

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<v Speaker 5>as a pretext. No, they must stop destroying the shops,

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<v Speaker 5>the schools, the buses. The mothers take the buses, We

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<v Speaker 5>take the buses.

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<v Speaker 1>Tomorrow, I man who in Macall will meet mayors from

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<v Speaker 1>the two hundred and twenty areas most affected by almost

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<v Speaker 1>a week of rioting. A first estimate by insurance has

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<v Speaker 1>put the cost of the damage from the violence at

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<v Speaker 1>more than one hundred million euros, a number that is

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<v Speaker 1>expected to rise.

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<v Speaker 2>The corruption trial of ECB Governing Council member Peter Kasimir

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<v Speaker 2>begins today. The serving Central Bank policymaker is accused of

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<v Speaker 2>offering a forty eight thousand euro bribe to speed up

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<v Speaker 2>tax procedures against several companies during his term as finance minister.

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<v Speaker 2>The Slovak Central Bank governor who denies wrongdoing faces up

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<v Speaker 2>to five years in prison if found guilty.

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<v Speaker 1>Chinese President Shijingping has elevated a long serving technocrat to

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<v Speaker 1>the Central Bank's top Communist party role. Pang Goong Sheng

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<v Speaker 1>was named as the pboc's party chief over the weekend.

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<v Speaker 1>Bloomberg Economics's chief Asia economist Chang Shu says that one

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<v Speaker 1>key sector of the economy could now see a change

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<v Speaker 1>in approach.

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<v Speaker 6>Pango San has been the pointer person, as it were,

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<v Speaker 6>for devising property market, and we know the word is

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<v Speaker 6>that he has a more hawky stancer and the property

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<v Speaker 6>regulation going forward, we do see him taking a more

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<v Speaker 6>practical approach in dealing with the property market.

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<v Speaker 1>Despite that, Shi that, Chang Shu says, the appointment is

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<v Speaker 1>broadly seen as an indication of policy continuity. Reaction in

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<v Speaker 1>China's equity and credit markets was muted well.

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<v Speaker 2>US Treasury Secretary Janet Yellen will travel to Beijing later

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<v Speaker 2>this week. She becomes the second member of Biden's cabinet

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<v Speaker 2>to visit, after Secretary of State Anthony Blincoln's trip three

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<v Speaker 2>weeks ago. The US Treasury Department it says Yellen will

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<v Speaker 2>meet with senior Chinese government officials, without naming exactly who,

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<v Speaker 2>but that Yellen would not meet President she Jingping as

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<v Speaker 2>for a bilateral summers. President Joe Biden said in mid

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<v Speaker 2>June that he anticipates meeting she in the next several months.

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<v Speaker 1>Okay, those are a few of our top stories for

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<v Speaker 1>you this morning. A bit lighter though, of course. It's

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<v Speaker 1>the start of summer in the UK. Wimbledon begins today.

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<v Speaker 1>Absolutely tons of the expected to be eaten and Novak Djokovic,

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<v Speaker 1>of course, the Serb is won twenty three Grand Slam titles.

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<v Speaker 1>It's seen widely is the favorite in terms of Wimbledon. Yeah,

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<v Speaker 1>it begins today.

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<v Speaker 2>Well, lots of interest to and Andy Murray and what's

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<v Speaker 2>going to happen to him? Could this be his last tournament?

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<v Speaker 1>Yeah?

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<v Speaker 2>Poor man, so many helps pen in them every year.

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<v Speaker 1>Yeah, absolutely, and he has had an incredible career. And yet,

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<v Speaker 1>of course with the replacements that he's had in the

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<v Speaker 1>surgery meantly difficult. But then these champions are fighters, they

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<v Speaker 1>are battlers. And Venus Williams is going to be at

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<v Speaker 1>the tournament. She is forty three and playing. I mean,

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<v Speaker 1>what a remarkable career.

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<v Speaker 2>Yeah, amazing. All right, Well, let's turn back to our

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<v Speaker 2>top story this morning. Apple reportedly slashing production targets for

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<v Speaker 2>its Vision Pro because manufacturers are struggling with the novel

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<v Speaker 2>gadget's complex design. The Financial Time says the tech giant

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<v Speaker 2>is now preparing to make fewer than four hundred thousand

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<v Speaker 2>versions of the headsets, joining us to discuss as Bimber

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<v Speaker 2>Quick takes Alex web Alex, good morning to you. What

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<v Speaker 2>is the reported problem that Apple is facing here?

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<v Speaker 7>So, according to the FT's reporting, it's to do with

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<v Speaker 7>the micro led displays, which are essentially inside the headset,

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<v Speaker 7>that they have some issues with the yields. Something you

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<v Speaker 7>quite often see with new technologies that of the number

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<v Speaker 7>that come off the production line, a lower percentage of

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<v Speaker 7>those are actually usable than Apple would like. It's what

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<v Speaker 7>we saw actually with face ID when that was first

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<v Speaker 7>wrought to market a few years ago. So it's probably

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<v Speaker 7>a relief in a sense that they weren't going for

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<v Speaker 7>a massive you know, trying to ship fifteen million units

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<v Speaker 7>in the first year. When you're just dealing with a

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<v Speaker 7>few hundred thousand, the stakes a little bit lower. That's

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<v Speaker 7>also perhaps one reason why they might have done it

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<v Speaker 7>on that sort of scale.

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<v Speaker 1>Yeah, absolutely, So then is it a big blow for

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<v Speaker 1>a kind of flagship product, Does it increase the anticipation

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<v Speaker 1>the excitement about it, or how can we judge?

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<v Speaker 7>I mean, you might find actually that it kind of

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<v Speaker 7>helps them because of scarcity sometimes is beneficial. And at

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<v Speaker 7>this stage it wasn't likely to make any meaningful difference

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<v Speaker 7>to the bottom warranteed the top line. In fact, it's

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<v Speaker 7>probably going to be it's a good chance to be

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<v Speaker 7>loss making in the first year. This is a flagship

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<v Speaker 7>product in the sense of flagship announcement, but the iPhone

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<v Speaker 7>is still the flagship product, right that is still the

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<v Speaker 7>thing that drives more than fifty percent of revenue. This

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<v Speaker 7>probably the sales are like to be more than a

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<v Speaker 7>rounding error. When it comes to Apples overall learnings, it's

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<v Speaker 7>about laying the groundwork for what might be to come.

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<v Speaker 7>And if you can get these devices into the hands

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<v Speaker 7>of developers, that means they can start building the apps

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<v Speaker 7>and services that would run on Vision Pro or perhaps

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<v Speaker 7>Vision which might be the second generation at a slight

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<v Speaker 7>lower price, so that when it does, in Apple's hope,

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<v Speaker 7>become a mass market product. There is a slew as

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<v Speaker 7>a bevy of really compelling use cases that then drive

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<v Speaker 7>a more widespread adoption.

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<v Speaker 2>This, of course, I was coming after Apple have that

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<v Speaker 2>market milestone hitting three trillion dollar valuation last week.

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<v Speaker 7>Yeah, it's fascinating. The Apple machine just kind of churns

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<v Speaker 7>on sort of no matter what. I feel as though

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<v Speaker 7>that number was perhaps less directly to do with the

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<v Speaker 7>vision pro than it was just Apple's ability to continue

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<v Speaker 7>layering on services to the iPhone that not only give

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<v Speaker 7>users and another opportunity to spend their money with Apple,

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<v Speaker 7>but also ensure they have to keep returning and buy

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<v Speaker 7>the iPhone. If you've got an Apple card, if you've

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<v Speaker 7>got an Apple Watch, if you've got AirPods, you know,

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<v Speaker 7>if you spend all the money on those things, you're

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<v Speaker 7>way less likely to be able to trade it in

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<v Speaker 7>for an Android because you're so deeply tied into it.

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<v Speaker 7>And that's really been the story of Apple under Tim

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<v Speaker 7>Cook over the past few years. Yeah.

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<v Speaker 1>Absolutely, the wearable's business is husually important to them. Alex,

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<v Speaker 1>thank you so much for being with us. Bloomberg quick

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<v Speaker 1>takes Alex.

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<v Speaker 2>Web up next. Pimco's CEO warns of a harder landing

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<v Speaker 2>and banks told to uphold free speech after accounts blacklisted.

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<v Speaker 3>Now the paper review on blue Bird Daybreak Europe. The

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<v Speaker 3>news you need to know from today's papers.

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<v Speaker 2>I'm bloom Berkley and Goerren's is the studio with the

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<v Speaker 2>details of those stories. Good morning to you, Leanne. Let's

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<v Speaker 2>start with the Financial Times. The headline there bond fund

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<v Speaker 2>giant Pimco prepares for harder landing for global economy.

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<v Speaker 8>Yes, indeed, Stephen, good morning to you. Pimco says markets

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<v Speaker 8>are far too optimistic about central bank's ability to dodge

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<v Speaker 8>a recession and this comes as a really battle inflation

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<v Speaker 8>in the US and also in Europe. So speaking to

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<v Speaker 8>the FT over the weekend was a CEO and he

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<v Speaker 8>said he's preparing for a harder landing than other investors,

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<v Speaker 8>while top central banked chiefs really continue their campaign of

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<v Speaker 8>interest rate rises and we've obviously seen that here in

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<v Speaker 8>the UK the Bank of England raising rates. However, speaking

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<v Speaker 8>to the newspaper, the CEO thinks of soft landing is

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<v Speaker 8>actually most likely for the US economy. So predicting that

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<v Speaker 8>the firm owned by Germany's alliances favoring high quality government

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<v Speaker 8>and corporate bonds right now at the moment, and Pimco's

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<v Speaker 8>moved to safer bonds as really part of an industry

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<v Speaker 8>shift that we're seeing towards higher quality fixed income assets,

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<v Speaker 8>but really a warning their Carol line that we are

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<v Speaker 8>too optimistic about the central bank's ability to dodge a

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<v Speaker 8>recession and get inflation down. And this is all according

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<v Speaker 8>to the CEO of Pimco. Yeah.

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<v Speaker 1>Of course, Bloomberg was speaking to the CEO of Alians

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<v Speaker 1>on Friday. Alians owns PIMCO, and so his comments to

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<v Speaker 1>us were also pretty fascinating to layer in because he

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<v Speaker 1>was talking about, yes, bonds are back, but it's all

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<v Speaker 1>about flows. We've got a guess actually all on the program.

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<v Speaker 1>He's going to be able to talk to us a

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<v Speaker 1>little bit more about that a little bit later on.

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<v Speaker 1>But the question is how much of the flows into

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<v Speaker 1>bonds go into passive strategies or active strategies, you know,

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<v Speaker 1>how much into ETF, how much into active managers. But yeah,

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<v Speaker 1>and so the soft landing idea sort of plays into that.

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<v Speaker 1>But yeah, and very interesting conversation.

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<v Speaker 2>Let's go to the telegraph next. Lee and banks tolls

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<v Speaker 2>to uphold free speech after accounts blacklusters.

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<v Speaker 8>Yes, indeed, Steve, And there was a lot about this

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<v Speaker 8>over the weekend in the newspaper and the Chancellor, Jeremy

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<v Speaker 8>Hunter said to be deeply concerned about bands on customers

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<v Speaker 8>who hold controversial views. He's actually called on the City Minister,

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<v Speaker 8>who's Andrew Griffith, to actually investigate the whole issue that

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<v Speaker 8>is currently swirling around at the moment. White All sources

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<v Speaker 8>say to the newspaper that the results of a consultation

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<v Speaker 8>on the whole subject matter is to be published within

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<v Speaker 8>weeks now. This comes after it was launched earlier this

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<v Speaker 8>year in the wake of PayPal blocking accounts of free

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<v Speaker 8>speech groups. So consultation due in and the controversial really

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<v Speaker 8>actually flared up again last week, and that was after

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<v Speaker 8>the leading brexityer Nigel Farage revealed his account had been

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<v Speaker 8>closed by his bank, saying he wasn't sure why this

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<v Speaker 8>had happened and he had gone to many other high

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<v Speaker 8>street lenders and couldn't seem to open another bank account.

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<v Speaker 8>Vica was also dropped as a customer after criticizing his

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<v Speaker 8>lenders stance on LGBTQ plus issues. So there we are

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<v Speaker 8>two people and the Treasury is poised to recommend a

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<v Speaker 8>more rigid notice period if payment providers, including high street lenders,

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<v Speaker 8>actually want to close a customer's bank account, as well

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<v Speaker 8>as requiring banks to provide more information about why they

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<v Speaker 8>have decided to close these accounts. And that is something

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<v Speaker 8>that Alex Wickham has written on the Bloomberg terminal about

0:12:34.320 --> 0:12:38.480
<v Speaker 8>Nigel Farage and the controversy surrounding these closed bank accounts.

0:12:38.559 --> 0:12:40.559
<v Speaker 1>Yeah, I mean Faraj has been on television to talk

0:12:40.559 --> 0:12:43.720
<v Speaker 1>about how this is serious political persecution at the very

0:12:43.920 --> 0:12:46.880
<v Speaker 1>highest level of our system. So that's the sort of

0:12:47.000 --> 0:12:51.679
<v Speaker 1>language that he's using. The bank apparently though, contacted him

0:12:51.679 --> 0:12:55.000
<v Speaker 1>and it's about actually the fact that it is his

0:12:55.280 --> 0:12:57.760
<v Speaker 1>business account that is being closed, that he still has

0:12:57.800 --> 0:13:02.160
<v Speaker 1>the option of opening a personal personal bank account. So

0:13:02.679 --> 0:13:05.040
<v Speaker 1>it's a little bit I think more complicated than this,

0:13:06.120 --> 0:13:11.120
<v Speaker 1>and also sort of around the bank's decisions around how

0:13:11.160 --> 0:13:13.320
<v Speaker 1>they make those decisions around business accounts.

0:13:13.360 --> 0:13:17.680
<v Speaker 2>Actually, yeah, certainly an interesting story to monitor. Leanne The

0:13:17.840 --> 0:13:21.199
<v Speaker 2>Times next warnings of summer travel chaos in Europe as

0:13:21.240 --> 0:13:24.360
<v Speaker 2>air traffic controls expected to be overloaded.

0:13:24.679 --> 0:13:28.800
<v Speaker 8>Sounds familiar, Yes, very familiar flying to Europe this summer. Well,

0:13:29.040 --> 0:13:32.240
<v Speaker 8>maybe you might be held up on the runway or

0:13:32.240 --> 0:13:36.600
<v Speaker 8>you might face delays, and Eurocontrol warned passengers of a

0:13:36.760 --> 0:13:41.520
<v Speaker 8>challenging period ahead, with high overloads of air traffic seen

0:13:41.600 --> 0:13:47.079
<v Speaker 8>on most days in many important regions, including Marseille, Athens

0:13:47.080 --> 0:13:50.680
<v Speaker 8>and Budapest. Now the Times is reporting this and this

0:13:50.760 --> 0:13:54.640
<v Speaker 8>can result in delays and aircraft's being forced to take

0:13:55.000 --> 0:13:58.679
<v Speaker 8>these longer routes. And I can't believe there's but twenty

0:13:58.679 --> 0:14:03.680
<v Speaker 8>five million Brits are expected to head overseas between right

0:14:03.720 --> 0:14:07.040
<v Speaker 8>now and September, mostly by airs we get away on

0:14:07.080 --> 0:14:11.600
<v Speaker 8>those summer holidays. Now, the director General of Eurocontrol, which

0:14:11.640 --> 0:14:15.840
<v Speaker 8>does manage European air space, says this summer in Europe

0:14:15.880 --> 0:14:19.520
<v Speaker 8>it's particularly challenging because there's less air space because of

0:14:19.600 --> 0:14:24.960
<v Speaker 8>the war in Ukraine and the military needs aviation. Bosses,

0:14:25.000 --> 0:14:30.120
<v Speaker 8>including Michael O'Leary, the chief executive of Ryanair, also says

0:14:30.160 --> 0:14:33.840
<v Speaker 8>there's a series of strikes by controllers in France, which

0:14:33.960 --> 0:14:37.000
<v Speaker 8>remains one of the biggest threats to summer air travel.

0:14:37.360 --> 0:14:40.119
<v Speaker 8>But I feel like every year we do get these warnings,

0:14:40.480 --> 0:14:43.960
<v Speaker 8>so always arrive early, kind of expect to be delayed,

0:14:44.000 --> 0:14:46.160
<v Speaker 8>which is annoying because I went away and I was

0:14:46.240 --> 0:14:49.360
<v Speaker 8>delayed because of NATO training in the air space. But

0:14:49.440 --> 0:14:52.600
<v Speaker 8>these are things that happen, Caroline, so we've all be prepared.

0:14:53.920 --> 0:14:56.640
<v Speaker 2>This is Bloomberg Daybreak Europe, your morning brief on the

0:14:56.720 --> 0:14:59.760
<v Speaker 2>stories making news from London to Wall Street and beyond.

0:15:00.080 --> 0:15:04.000
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0:15:06.120 --> 0:15:09.120
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0:15:09.160 --> 0:15:11.880
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0:15:11.920 --> 0:15:14.680
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0:15:19.640 --> 0:15:20.960
<v Speaker 1>I'm Caroline Hepka and.

0:15:20.880 --> 0:15:23.560
<v Speaker 2>I'm Stephen Carroll. Join us again tomorrow morning for all

0:15:23.600 --> 0:15:26.000
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0:15:26.040 --> 0:15:31.280
<v Speaker 2>on Bloomberg Daybreak Europe