Speaker 1: I'm inde Caroline Had.
Speaker 2: We're at Bloomberg's world headquarters in New York at Ludlow.
Speaker 2: He's live in company in California. Because it is Apple's WWDC.
Speaker 2: This is Bloomberg Technology coming up. Full coverage of that
Speaker 2: very event. As Apple prepares to debut is long await
Speaker 2: to mix reality headset, and as the company nears, of
Speaker 2: course a three trillion dollar market cap. Much more ahead,
Speaker 2: Plus we'll get perspective on virtual and augmented reality gaming
Speaker 2: in today's Venture Capital Spotlights. That's with Abba Atherton of
Speaker 2: Patron and Twitter. The US AD sales plunging, we understand.
Speaker 2: We'll discuss the woes facing the incoming CEO, Linda Yakarina.
Speaker 1: It's her first day on the job. This is the
Speaker 1: company forecast.
Speaker 2: Small declines ahead, all that and so much more. First,
Speaker 2: let's check in on these markets, because while is still
Speaker 2: technology managing to power through some of the warriores, when
Speaker 2: it comes to the macro front, we've got the services
Speaker 2: data showing actually some weakness there.
Speaker 1: Maybe that's actually pulling back some of the yields that
Speaker 1: we see on the two year yield.
Speaker 2: Maybe people thinking the FED really can't hike into this
Speaker 2: sort of environment quite to the anticipation that previously done,
Speaker 2: but notable outperformance of technology on top. We'll dig into
Speaker 2: some of the micromovers, but NASDAC up almost half a
Speaker 2: percentage point.
Speaker 1: Not so though for bitcoin crypto.
Speaker 2: On the downside, this risk asset not liking some of
Speaker 2: the moon music around finance, of course, because it's exchange
Speaker 2: worldwide for crypto. They see the SEC ayer there, the
Speaker 2: SEC sewing both miinance and indeed its founder cz were
Speaker 2: of by four and a half percent, so accelerating some
Speaker 2: of that sell off on the back of that news.
Speaker 2: Let's move on to some of the key micromovers though,
Speaker 2: because look we.
Speaker 1: Have got some buoyancy, certainly in Tesla stock.
Speaker 2: We've just been looking all about things SpaceX, but Elon's
Speaker 2: other play at one point seven percent. Some of the
Speaker 2: Chinese data, the car sales looking at growth month on
Speaker 2: month and significant.
Speaker 1: Growth year on year.
Speaker 2: After we see that Shanghai gigafactory managing to come out
Speaker 2: post COVID. Meta actually on the upside, getting some rates
Speaker 2: from Oppenheimer, for example, saying big bet for AI. They
Speaker 2: see Meta outperforming and though the chicks so the chip
Speaker 2: stocks are lagging today we're seeing the socks currently off
Speaker 2: by one point two percent, so the Philadelphia se we
Speaker 2: conductor Inex on the downside.
Speaker 1: Basically, last time I checked.
Speaker 2: Every single chip name apart from AMD was on the downside.
Speaker 2: As we just see city group going negative on that
Speaker 2: particular outlook.
Speaker 1: But let's look at what.
Speaker 2: Really we are powering in terms of the outperformance in
Speaker 2: n tech today.
Speaker 1: It's going to be Apple. Look at its.
Speaker 2: Current market cap two point nine trillion, closing in on
Speaker 2: that three trillion row once we saw it just hit,
Speaker 2: but it never closed up that number back in twenty
Speaker 2: twenty two, and we see it just reprise up forty
Speaker 2: percent on the year to date for this particular stock.
Speaker 2: And of course we want to go out to Apple's
Speaker 2: at Worldwide Developers Conference or WWDC as it's known, kicking
Speaker 2: off running through June ninth, and look, tech giants, long
Speaker 2: awaited mixed reality headset is what we're all focused on.
Speaker 2: And ed you're on the ground, give us the latest.
Speaker 2: What's it feel like, what's their sense like? What's the
Speaker 2: goodie bag like?
Speaker 3: It feels like the biggest event for Apple in a decade? Right,
Speaker 3: Mark Goerman has set out what we expect through his
Speaker 3: Boomberg News reporting and Mixed reality headset. Three thousand dollars,
Speaker 3: price points sixteen gigabyte RAM memory, carbon fiber, aluminum glass.
Speaker 3: The question for this mixed VRAR headset is what is
Speaker 3: the slate of content?
Speaker 4: What are the apps that are ready to go?
Speaker 3: Because the price point's interesting, not even high enough for
Speaker 3: Apple to make high margin, but low enough to not
Speaker 3: price them out of the market. Cara, I find this
Speaker 3: dynamic so interesting. Go back to twenty fourteen when they
Speaker 3: unveiled the Apple Watch in September that year. This feels
Speaker 3: like the biggest move into a new category since that point,
Speaker 3: a historic moment for Apple.
Speaker 1: Yeah, let's look at all things Apple.
Speaker 2: Let's look at all things with your guest as well ed,
Speaker 2: because I mean, you're just saying, really, this is a
Speaker 2: price point that's going to be high. This is sales
Speaker 2: that actually isn't about margin, isn't about scale, but it's
Speaker 2: about reinventing what we think of.
Speaker 1: As virtual reality as AR as well. And you've got
Speaker 1: the perfect guest.
Speaker 3: Yeah, you asked me what it's like on the ground, Well,
Speaker 3: what it's like is seeing those familiar faces, the veterans
Speaker 3: of these Apple events, and one of them is Karell
Speaker 3: in a Millionaisy principal analysts that creative strategies. You heard
Speaker 3: my pream yeah about the mixed reality headset. What is
Speaker 3: this moment in Apple's history for you?
Speaker 1: I totally agree with you.
Speaker 5: That is the big moment for Tink Cook is the
Speaker 5: big announcement of a new era, a new market building
Speaker 5: vote of everything that he has done for of a
Speaker 5: company since he took over the leadership.
Speaker 3: Right.
Speaker 5: So, I think we are going to look at opportunity
Speaker 5: in enterprise as well as opportunity more opportunity in content.
Speaker 5: Those are, in my opinion, the two area where the
Speaker 5: var mixed reality heads it's going to play.
Speaker 3: The specifications three thousand dollars reported by Bloomberg News, sixteen
Speaker 3: gigabyte rand memory.
Speaker 4: You look at the materials that.
Speaker 3: Used to make it, but it really seems like the
Speaker 3: big question is what you can actually use it to do?
Speaker 5: Yeah, And I think that's exactly the right question to
Speaker 5: ask right now. To be honest with you, it doesn't
Speaker 5: really matter in term of you're looking at early adopters
Speaker 5: that will buy to figure out what you're going to
Speaker 5: do with it, even if it's three thousand dollars. You're
Speaker 5: looking at developers are looking at the opportunity to expand
Speaker 5: their iOS and mac os and iPad os market, and
Speaker 5: then you're going to look at time before the mass
Speaker 5: market is going to be ready for it. So there's
Speaker 5: a I think there's opportunity to create the ecosystem in
Speaker 5: the same way as app or you talked about Watch,
Speaker 5: but I think a good comparison is also the iPad,
Speaker 5: where at the beginning you were using iOS apps and
Speaker 5: then developers came with dedicated up. I wonder if we're
Speaker 5: going to see a similar thing here.
Speaker 3: I spent the morning going through the data from twenty
Speaker 3: twenty two for augmented reality and VR headsets three hundred
Speaker 3: thousand globally and augmented less than eight million for VR.
Speaker 3: How much of the catalyst will Apple's move be for
Speaker 3: what is a young product segments?
Speaker 5: Everybody's going to come, right, it's the classic building and
Speaker 5: they will come. Apple has done that time and time again,
Speaker 5: right coming into a market that hasn't quite taken off,
Speaker 5: or it was but then installed, and so they're able
Speaker 5: to re energize that. I think from a developer perspective,
Speaker 5: there's no question that these offer a huge opportunity and
Speaker 5: others who will come to the market and see what.
Speaker 1: Is available Carolina.
Speaker 2: Meanwhile, the rest of the market is just completely focused
Speaker 2: on artificial intelligence, it feels like, and there's a mixed
Speaker 2: viewpoint here from analysts that we're getting some like web Bush,
Speaker 2: I think we're going to hear a lot about AI
Speaker 2: from Apple today others, while our own Mark Gumman saying
Speaker 2: this is not the time or place and actually wait
Speaker 2: for it in a year or so.
Speaker 1: What do you make of Apple's AI play?
Speaker 5: I think that Apple has been talking about AI for
Speaker 5: a long time, but in a different way. You know,
Speaker 5: first it was Siri, and then the talk around Siri
Speaker 5: went away and became it became more about on device
Speaker 5: machine learning, which is still part of AI.
Speaker 1: Is what's still you need for AI?
Speaker 5: Apple is in a different place compared to say a
Speaker 5: Google or a Microsoft because they don't own their own
Speaker 5: cloud and so they are dependent on others to run
Speaker 5: big models. So they need to bring us back to
Speaker 5: what is the value of artificial intelligence on my device
Speaker 5: and link to that is the value of artificial intelligence
Speaker 5: to me as a user? And there's I would argue,
Speaker 5: no one else that knows their users as much as
Speaker 5: Apple does.
Speaker 2: To that end, anything that you're excited about from what
Speaker 2: else will be unveiled today. We know that they'll probably
Speaker 2: be having an update to on the financial offerings, and
Speaker 2: it feels as though it's not a particularly pleasant place
Speaker 2: to be right now if you're a fintech and seeing
Speaker 2: just how much more Apple can own that space. What
Speaker 2: are you thinking about in terms of the health area?
Speaker 2: What excites you?
Speaker 6: Yeah?
Speaker 5: Yeah, Obviously this is the developer conference, so I am
Speaker 5: really interested in seeing what other enhancements all of the
Speaker 5: platform from watch to iPad, to iOS and map will bring.
Speaker 5: But we also know that there's likely to be some
Speaker 5: new macs, and I think when I think about that
Speaker 5: in particular, is the opportunity that Apple is continuing to
Speaker 5: have in an enterprise environment. You know, Apple never talks
Speaker 5: about the enterprise business. It's always a consumer company. But
Speaker 5: the reality is that they're gaining enormous share in enterprise
Speaker 5: and if they are bringing to the market and MacBook
Speaker 5: are fifteen inch at an aggressive price point, then the
Speaker 5: share will grow strategically for them.
Speaker 3: The developers love WWDC. It is for them, Watch os,
Speaker 3: ten iOS, seventeen software.
Speaker 4: What are you most excited about that?
Speaker 5: I'm you know, I don't expect big things. I continue
Speaker 5: to expect personalized care if you like, the ability of
Speaker 5: really pushing especially the phone and watched to be more
Speaker 5: of the health and security device we saw last year.
Speaker 5: Some features those are the kind of things that I'm expecting.
Speaker 5: And then it'd be interesting to see what we see
Speaker 5: around messaging and FaceTime. Whether you know this this little
Speaker 5: fight with Android and r CS will end this time
Speaker 5: around or not.
Speaker 4: Well, were you at Google Io? I was not well.
Speaker 3: Reason I bring that up is at Google I they
Speaker 3: reference this fight in a sort of hint, hint, way,
Speaker 3: go back to the headset. I'm sorry we have to
Speaker 3: mixal But those developers in the audience, what is it
Speaker 3: that they'll want to hear? Because ultimately we've reported the
Speaker 3: Bloomberg that actually of Core Suite apps on iPhone and
Speaker 3: iPad will be available on the mixed reality headset, but
Speaker 3: they will develop its next generation functionality.
Speaker 5: Yeah. I think for the developers, all about the tools, right,
Speaker 5: is how easy is app or going to make it
Speaker 5: for them to take those up that are already available
Speaker 5: just you know, regularly ported onto the to make them
Speaker 5: better and to make other opportunity for them to monetize.
Speaker 5: You know, how much richer is that there's experience is
Speaker 5: going to be for their apps that allow them to
Speaker 5: monetize more from the app.
Speaker 3: Bloomberg is reporting that Apple hopes to sell nine hundred
Speaker 3: thousand units of the Mixed Reality headset in year one.
Speaker 3: What's your reaction to that low high?
Speaker 5: You know, it's hard to tell before seeing the headset
Speaker 5: and see what the value is. I think a lot
Speaker 5: of it will depend on how many different things can
Speaker 5: you do with it and from it, not just the
Speaker 5: app perspective, but from a content perspective. We've seen Apple
Speaker 5: really doubling down on sports.
Speaker 2: I do think that is interesting, isn't it where this
Speaker 2: makes the most sense? Ed's great reporting. Much has been
Speaker 2: said about sort of the Quest three that's just been
Speaker 2: coming on the mark. We understand it's going to be
Speaker 2: had a well five hundred bucks versus the three thousand
Speaker 2: price point that we're getting from Apple. But really where
Speaker 2: the penetration needs to be felt is in the office productivity,
Speaker 2: not just sort.
Speaker 1: Of gaming and health. Is this going to be.
Speaker 2: A productivity kind of a use case? Immediately or is
Speaker 2: this ultimately just showing off that is an aspirational good
Speaker 2: and you've got it.
Speaker 5: I do think that there's an angle that is productivity related.
Speaker 5: We obviously see Microsoft to play with Olo lens but
Speaker 5: then walk away from it. So there's definitely an opportunity there,
Speaker 5: and that's why I was talking about the mark earlier
Speaker 5: that Apple is now creating that space for them in
Speaker 5: business to be taken seriously.
Speaker 4: I was looking at the history of WWDC.
Speaker 3: It wasn't called that then, but nineteen eighty three at
Speaker 3: a hotel and San Mateo was the first kind of
Speaker 3: developers conference. What does this event mean to you when
Speaker 3: you sit there in the audience, it's pre recorded, You
Speaker 3: listen to it, share with us your experiences and what
Speaker 3: you get from it.
Speaker 5: I always remember my first one, which was after the
Speaker 5: iPhone in two thousand and seven, and it was a
Speaker 5: Moscone and I came out asking if the coffee was
Speaker 5: spiked in the morning, because the buzz that you feel
Speaker 5: is honestly something that I always compare only two Nokia
Speaker 5: events I date myself yet rip back in. You know,
Speaker 5: when Nokia was the leader in smartphone business, there's nothing
Speaker 5: else quite like it.
Speaker 2: Absolutely fascinating when it comes to all things ed Nokia
Speaker 2: one old school viewpoint to be bringing.
Speaker 1: But as you said, Rip and thanks so much.
Speaker 2: Carna melanis as well, President Principal Analyst Ever Creative Strategies.
Speaker 2: Apple touching that record high today, nearing a three trillion
Speaker 2: dollar market capitalization. It's all ahead of the WWDC event
Speaker 2: that's kicking off in but an hour or so's time.
Speaker 2: Tech AI stocks, of course have been your main driver
Speaker 2: for the markets this year.
Speaker 1: Well, they continue to be.
Speaker 2: Nancy does with us CEO and financial advisor at Opus
Speaker 2: Advice First, a private wealth advisory practice of Amerorprise Financial Services.
Speaker 2: Always great having you with us, Nanci, and we sort
Speaker 2: of continue to run on fumes here or the fumes
Speaker 2: reality for you when it comes to AI or indeed
Speaker 2: big tech being a safe harbor but also a growth
Speaker 2: play as well.
Speaker 7: Yeah, well, you know, I'm always very excited about the
Speaker 7: technology sector. Even when it was tanking last year, I
Speaker 7: kept saying, how what a great opportunity it is, especially
Speaker 7: if you're in it for the longer term, of course,
Speaker 7: because the day to day swings can be a little daunting.
Speaker 7: But of course, you know, technology is the way of
Speaker 7: the world, and there's more of it coming, especially with AI,
Speaker 7: where we're going to have another transformation of our lives
Speaker 7: in the entire world. So it is very exciting. Indeed,
Speaker 7: just have to have a little bit more information. There's
Speaker 7: a lot of unknowns at this time.
Speaker 2: There are, and it means therefore for some like cities
Speaker 2: saying this has gone too far, we're likely to now
Speaker 2: see a downward trajectory perhaps. And as these AI ultificion
Speaker 2: intelligence headlines become steeped within business models, do you think
Speaker 2: we've run up too far for what ultimately gets painted
Speaker 2: as the clear picture of what AI does to these companies?
Speaker 7: Well, you know, when it comes to buying stocks, the
Speaker 7: math has to rule, and clearly the valuations. I'm sorry,
Speaker 7: the earnings are just not living up to the valuations
Speaker 7: at this time, and unfortunately that's what counts when you're
Speaker 7: buying stocks. And so, yes, there's a little bit too
Speaker 7: much excitement going on here, and that will account for
Speaker 7: a great deal of ups and downs and significant volatility.
Speaker 7: I mean, when you have eye popping returns of over
Speaker 7: one hundred percent year to date and then you look
Speaker 7: at last year and down fifty percent, those are pretty
Speaker 7: big swings, and an investor would have to have pretty
Speaker 7: strong stomach lining to be able to put up with that.
Speaker 2: I mean, I'm just looking at the forward looking the
Speaker 2: price to forward earnings on Apple currently trading it in
Speaker 2: excess of thirty times.
Speaker 1: This is a company that's going to.
Speaker 2: Post actually a decline in revenue for this fiscal year.
Speaker 2: Is though, a company that has just got that shaer
Speaker 2: market waiting.
Speaker 1: Can you fight against what have been.
Speaker 2: Sort of well, many are turning them sort of the
Speaker 2: super seven or the Magnificent seven key stocks that are
Speaker 2: just driven the upperformance.
Speaker 1: Across the S and p AN and DY the course
Speaker 1: the NASDAI this year.
Speaker 7: Well, we're still in the business of meeting clients' long
Speaker 7: term goals, so we tend to take a little more
Speaker 7: prudent approach and maybe buy companies there engage in AI
Speaker 7: and all of the ex but not necessarily depends solely
Speaker 7: on that revenue. They have to be more diversified and
Speaker 7: have earnings and revenue from.
Speaker 8: Other sources as well.
Speaker 7: I think that's probably the most prudent way to enter
Speaker 7: this arena. But for the most part, we're going to
Speaker 7: be a bit more weight and see because we still
Speaker 7: quite frankly, don't know the good, the bad and the
Speaker 7: ugly of what AI has to give to us or
Speaker 7: bring to us in the next few years.
Speaker 2: I'm therefore the good, the bad, the ugly when it
Speaker 2: comes to macro picture as well. Today we see services
Speaker 2: weakening overall. We're worried about whether the Federals of Pike's
Speaker 2: interest rates further actually is forced to start cutting them.
Speaker 2: How does that guide you as to whether technology is
Speaker 2: a sector as a place you want.
Speaker 6: To be.
Speaker 8: Well.
Speaker 7: I do believe that the Fed will pause, just as
Speaker 7: mister Powell indicated, and I don't believe there will be
Speaker 7: any rate cuts at least not anytime soon and certainly
Speaker 7: not this year. The technology is a sector that is
Speaker 7: here to stay. I mean, this is clearly something that
Speaker 7: we live with and is involved in every aspect.
Speaker 8: Of our lives.
Speaker 7: So it's not going anywhere, and in fact it's going
Speaker 7: to evolve even more and faster. So it certainly is
Speaker 7: the longer term outlook. But again, longer term is the emphasis,
Speaker 7: because the day to day swings can be extremely volatile
Speaker 7: and it's not for the faint at heart. You do
Speaker 7: have to have it in a longer term perspective across usset.
Speaker 2: Are you thinking long or getting into technology stocks that
Speaker 2: of course are diversified, or is it more about the
Speaker 2: bomb market different parts of their overall capital structure. Where
Speaker 2: do you think is the right place to be allocating
Speaker 2: at this moment?
Speaker 7: Well, for the longer term, certainly technology stocks are, the
Speaker 7: entire tech sector will be terrific. However, shorter term we
Speaker 7: are taking a much more defensive approach and going on
Speaker 7: the fixed income side or thee the structured note side.
Speaker 7: I think that that can create a little bit of
Speaker 7: an offset for all of that up and down, the
Speaker 7: daily up and down, and the crazes and then the downfalls.
Speaker 1: And to that point, this is a global narrative.
Speaker 2: We've seen AI sort of take wind, whether it's in
Speaker 2: Asian names or whether it's being traded here in the
Speaker 2: United States, even some European ship stocks getting caught up
Speaker 2: in it. But do you allocate primarily to the United States, Nancy?
Speaker 2: Do you think about diversification globally.
Speaker 8: At this time? We have stuck mostly with US.
Speaker 7: We have not ventured into outside of the US too
Speaker 7: much as of yet. I don't believe the valuations there
Speaker 7: are going to be as profitable as US. There's many,
Speaker 7: many more problems outside the US than what we have here.
Speaker 7: And also the currency exchange plays a very big part
Speaker 7: of it still unfortunately, and when the dollar is still
Speaker 7: this strong, it's very hard to bring alpha into the
Speaker 7: portfolio of investors.
Speaker 2: How many of your private wealth clients are still interested
Speaker 2: in crypto?
Speaker 8: Well, all of them are? They all are.
Speaker 7: They all ask questions about it, But I'm fascinated by
Speaker 7: how little they actually.
Speaker 8: Know about it.
Speaker 7: It's fascinating, and I think every new craze or every
Speaker 7: new headline jujuor really indicates how little people actually know
Speaker 7: about what everybody's jumping into. And then that's pretty fearful,
Speaker 7: in my opinion, we have to be very fearful when
Speaker 7: that happens.
Speaker 2: Nancying great test in time with the Nazi David of
Speaker 2: America Price.
Speaker 1: We thank you me.
Speaker 2: While coming up, look, we're going to be discussing steps
Speaker 2: of Microsoft is currently taking to get through at sixty
Speaker 2: nine billion dollar takeover of Activision Blizzard as in Talking Tech.
Speaker 1: But we just talked about it with Nancy. Let's get
Speaker 1: back to it. Crypto. What don't we know? What do
Speaker 1: we know?
Speaker 2: What we do understand that the US sec is filing
Speaker 2: charges against finance. That's certainly leading perhaps some of the
Speaker 2: negative feeling and sentiment around the OG today. We're currently
Speaker 2: off by five and almost quarter of percent, let's call
Speaker 2: it for bitcoin. At the moment, Wall Street's main regulator
Speaker 2: accusing Binance An Indy its chief executive officer, that's cz
Speaker 2: of breaking US securities rules. It's a major escalation in
Speaker 2: those legal woes that continue to face what is the
Speaker 2: global biggest crypto exchange.
Speaker 1: This is a bloomberg time now for Talking tech.
Speaker 2: First Up India's by Jews is looking to IPOs tutoring
Speaker 2: unit next year as the education technology company is seeking
Speaker 2: to shore up much needed cash. The initial public offering
Speaker 2: of the unit it's said to take place in the
Speaker 2: middle of next year. By Jus said Monday in a statement. Meanwhile,
Speaker 2: in the most valuable startup that's what it is, it's
Speaker 2: planning to make a quarterly interest payment of about forty
Speaker 2: million dollars on a loan that has really been at
Speaker 2: the center of the firm's financial troubles. Meanwhile, to look
Speaker 2: abroad and look at Beijing's ban and Micron, it continues
Speaker 2: to attract calls for retaliation from Washington. GOP lawmakers have
Speaker 2: asked Commerce Secretary Junia Romando to counter China's ban by
Speaker 2: sanctioning a Chinese semiconductor company.
Speaker 1: Chang Shin Memory.
Speaker 2: The lawmakers are also urging Romando to work with Tokyo
Speaker 2: and Seol to ensure that they don't take advantage of
Speaker 2: the market share left by.
Speaker 1: China's Micron blockade.
Speaker 2: Plus, let's look at an up update in Microsoft's sixty
Speaker 2: nine billion dollar takeover Activision Blizzard.
Speaker 1: Microsoft's president Brad Smith, he's actually going to.
Speaker 2: Be meeting with UK Chancellor Jeremy Hunt that's next week,
Speaker 2: to really voice its frustration over the decision by Britain's
Speaker 2: competition regulator to block that takeover. Smith is expected to
Speaker 2: point to the benefits of the acquisition, for example, for gamers,
Speaker 2: a pushback against the move that blot the industry's largest merger,
Speaker 2: and a decision that will kind of soon play out
Speaker 2: in the special UK Antitrust Court.
Speaker 1: Welcome back to their technology. I'm karenin Hide in New York.
Speaker 1: We want to get a.
Speaker 2: Quick check on these markets on the important day of WWDC.
Speaker 2: Then as that trades high because Apple pushes on higher
Speaker 2: up sevent tens of percent then as like one hundred.
Speaker 2: The big tech juggernaut is what I focus in on.
Speaker 1: Even as we see perhaps some muted.
Speaker 2: Trading in the rest of the day and the rest
Speaker 2: of the benchmarks, we're worried more about some of the
Speaker 2: macro picture coming in terms of services on the decline.
Speaker 2: We saw New York CREWD actually up one and a
Speaker 2: half percent, interesting moves coming from OPEC plus actually a
Speaker 2: cut to production from Saudi Arabia. Up goes oil, but
Speaker 2: pulling off of those highs as well. Bitcoin under pressure
Speaker 2: after we see the SEC take steps against cz the
Speaker 2: founder of b Finance and indeed against finance itself or
Speaker 2: off by five percent. Just the moon music changing on
Speaker 2: that particular risk asset and it's moving on.
Speaker 1: And look at some of the individual.
Speaker 2: Movers though, So those forever to chemicals that were so
Speaker 2: affecting three M, we understand there's going to be a
Speaker 2: postponement to that particular trial. Maybe some sort of deal
Speaker 2: can be struck, a global deal on how to basically
Speaker 2: settle on what is These forever chemicals are concerned that
Speaker 2: it's indeed affecting supplies down two point six percent from
Speaker 2: three M but power Auto networks managing to power ahead
Speaker 2: on the day. Why because they're getting included in the
Speaker 2: S and P five hundred. So we're up almost five percent.
Speaker 2: We understanding on the change in those benchmarks. But as
Speaker 2: we say, today is a notable day because it is
Speaker 2: WWDC all about developers, all about Apple, all about well,
Speaker 2: the changing of the guard is to a new kind
Speaker 2: of product. We're up almost two percent on Apple. We're
Speaker 2: near two point nine trillion dollars basically in terms of
Speaker 2: market capitalization, record high in the share price ed can
Speaker 2: we hold onto it? And you're in covera Tino and
Speaker 2: it feels as though the energy is there, The excitement
Speaker 2: must be brewing.
Speaker 3: Yeah, it depends if we get what we're expecting, a
Speaker 3: three thousand dollars mixed reality headset mix because outward facing
Speaker 3: cameras give us the augmented reality functionality through video feed
Speaker 3: through next generation screen giving us the virtual reality component.
Speaker 3: A mix of carbon, fiber, aluminum and glass, sixteen gigabytes
Speaker 3: of memory. Mark German and of Bloomberg News is reporting
Speaker 3: it's going to be able to carry the core suite
Speaker 3: of apps that you and I know from I on
Speaker 3: iPhone and iPad. What's really interesting, though, the question is
Speaker 3: on the killer app, what is going to be that
Speaker 3: big thing that justifies a three thousand dollars price point
Speaker 3: of functionality? Interesting the work that Mark's reported around fitness
Speaker 3: and tech. You and I big health tech users. Can
Speaker 3: you imagine working out caro using a mixed reality headset?
Speaker 2: And that's the point is the stumbling blocks that basically
Speaker 2: these headsets have had is that they kind of make
Speaker 2: you feel a bit sick.
Speaker 1: They're just too heavy.
Speaker 2: It's why in many ways this has been delayed and
Speaker 2: a different vision from what Tim Cook first had for
Speaker 2: the product, which was going to be far like to wait,
Speaker 2: far easier to wear throughout the day.
Speaker 3: Well, what's really interesting is that we think that this
Speaker 3: mixed reality headset will be akin to something like ski goggles, right,
Speaker 3: but it means there's no space for glasses. Where is
Speaker 3: like myself, Oh, I got my spare contact lenses in
Speaker 3: my bag just in case. But you know, I think
Speaker 3: the other big question is let's remember what Apple WWDC
Speaker 3: is right, Worldwide Developers Conference, big emphasis on software. A
Speaker 3: big part of that audience will be building the next
Speaker 3: generation of functionality for mixed reality headsets this one, but
Speaker 3: also the more Ford of all future generations. Going to
Speaker 3: get some interesting updates on OS as well, not just
Speaker 3: on mac and iOS, but watchOS ten is something we
Speaker 3: think is coming. According to Mark German's reporting, Yeah.
Speaker 2: Still a lot to be talked about, particularly the Max
Speaker 2: as well. We think are going to be a lot
Speaker 2: of time dedicated there. We're pleased to have Ed joining
Speaker 2: us right now.
Speaker 1: We are so global.
Speaker 2: I'm here in New York, you're there, well covered in California,
Speaker 2: and right now very long is with us.
Speaker 1: He's joining the conversation.
Speaker 2: Who sat there in Taipei late at night joining us
Speaker 2: principal analyst and founeral Constellation Research. You could a turn
Speaker 2: of thirty dollars price target, I believe on Apple. You
Speaker 2: feel is vr AR. Is this an area that Apple's
Speaker 2: just going to dominate and make it well the product
Speaker 2: and the ecosystem We've all been waiting.
Speaker 6: For, you know, we've actually waited almost twelve to thirteen
Speaker 6: years for this. It started with the first acquisition of
Speaker 6: Mattio by Apple, which was one of the leaders in
Speaker 6: augmented reality and virtual reality. And so when you read
Speaker 6: into the code New World's theme, they've been cryptic about
Speaker 6: the future worlds in a mixed reality world, and this
Speaker 6: is probably the start of what we're going to see
Speaker 6: that move from two D to three D, they move
Speaker 6: from typing to gestures and eye tracking. It can actually
Speaker 6: change where we go, but we're still at the very beginning.
Speaker 6: But it's a big market cap that we're looking at here.
Speaker 6: We're looking at about four hundred and fifty one billion
Speaker 6: by twenty thirty with a kager thirty seven point two
Speaker 6: percent that are about to head there. But the real
Speaker 6: thing is how do we take device plus content plus
Speaker 6: distribution networks to get there? And that's where Apple will
Speaker 6: have the magic sauce.
Speaker 3: Ray Bloomberg's reporting that Apple intends to sell nine hundred
Speaker 3: thousand units of the mixed reality headset in year one.
Speaker 3: What does that tell you about their confidence for uptake
Speaker 3: and demand at that price point.
Speaker 6: I think that's a price point that's not for the
Speaker 6: mass market, but a price point that's designed for the experts,
Speaker 6: the developers, and the content creators that are dying to
Speaker 6: get their hands on something to make this metaverse world
Speaker 6: work and make that move from X reality augmented reality
Speaker 6: to where they can get to a point where we
Speaker 6: can actually see apps for both the B to B
Speaker 6: mart and the B two C market, And I think
Speaker 6: that's what they're counting on. But that number itself, nine
Speaker 6: hundred thousand is still a pretty big number, which means
Speaker 6: that they've gotten their manufacturing capacity to be able to
Speaker 6: do that. So I'm going to be curious to see
Speaker 6: how they put this all together.
Speaker 1: Yeah, I mean, you're sat there in Taipei at the moment.
Speaker 2: Is this a supply chain question that has to depend
Speaker 2: on China at the moment.
Speaker 6: Actually, there's a supply chain question that's going to happen
Speaker 6: on multiple forces for where you actually get the glass,
Speaker 6: the lead, all the stuff here Taipei, Taiwan, as you
Speaker 6: know as one of the leaders in providing supplies to
Speaker 6: Apple from a various number of companies from fox Con
Speaker 6: down Line to the L two L three suppliers and
Speaker 6: having conversations with them over the past few weeks and
Speaker 6: over the weekend, it sounds like the supply chains are
Speaker 6: getting ready to ramp up for a very very different
Speaker 6: type of approach.
Speaker 2: Yeah, I really think that we're focusing in on supply chain,
Speaker 2: We're focusing in on actually.
Speaker 1: Ed as well.
Speaker 2: When this becomes available, we're going to be talking about it,
Speaker 2: hearing a price point.
Speaker 1: Right, When will it go on sale?
Speaker 4: Yeah?
Speaker 3: You and I had that Twitter space is Friday with
Speaker 3: Mark German, right, And that was such a big question
Speaker 3: for so much of the audience. What Bloomberg's reported is
Speaker 3: that A, this is a product that's been delayed several times,
Speaker 3: Apple would hope to unveil it much sooner. Could we
Speaker 3: see this in December, for example? And what the roadmap
Speaker 3: is for shipping. I find Ray's answer on nine hundred
Speaker 3: thousand being good evidence that they've got their supply chain
Speaker 3: together really interesting. My question to you, Ray is how
Speaker 3: quickly do they need to move on to a lower
Speaker 3: price point model in order to give this segment some momentum.
Speaker 6: Yeah, that's a great question, and I believe that's going
Speaker 6: to be something in the next twelve to eighteen months. Right.
Speaker 6: You've got to get the content in place, you've got
Speaker 6: to get the developers and managing what's next, and they've
Speaker 6: got to get another iteration to what their new operating
Speaker 6: system is for whatever this headset will be called. And
Speaker 6: so whatever that OS is going to be is really
Speaker 6: how we're going to figure out where we get to
Speaker 6: in terms of the right type of content, the right mix,
Speaker 6: the right type of use cases. I believe they've got
Speaker 6: a sense of what those use cases and scenarios are
Speaker 6: on the enterprise side as well as on the consumer side,
Speaker 6: and that's what makes us exciting, and of course that's
Speaker 6: what makes WWDC exciting.
Speaker 3: Ray I reported earlier this year that the real reason
Speaker 3: Meta cut prices on questpro was because the enterprise demand
Speaker 3: just wasn't there. There was no appetite to bring a
Speaker 3: higher end headset into the workspace. Do you think Apple
Speaker 3: can crack that problem?
Speaker 6: We definitely think so, and I think the use cases
Speaker 6: around field service have been important. I think the use
Speaker 6: cases around training, the use cases around B to B interviews,
Speaker 6: the use cases that are happening around helping people on board,
Speaker 6: those all real use cases. But at the price point
Speaker 6: that Metal was putting it at, and the lack of
Speaker 6: content and the lack of developer interest, I think that
Speaker 6: was the challenge and I think that's where Apple may
Speaker 6: crack this, especially when they talk about coding new worlds.
Speaker 6: I think your listener to see the updates. When we
Speaker 6: look at air Kid seven and Reality Kit two, they're
Speaker 6: going to show some of those updates that actually will
Speaker 6: help you understand how they're evolving. And of course, if
Speaker 6: you think of this is the unifying force of bringing
Speaker 6: all of Apple's os is together, this could be the
Speaker 6: first step where we see iOS, iPad os, tvOS, watchOS
Speaker 6: maybe come together. And I think that would be the
Speaker 6: interesting development to see the software platforms all unify against
Speaker 6: this new medium.
Speaker 2: Kind of a power of the ecosystem. Ultimately, Ray and
Speaker 2: I'm interested in your take of what is an elephant
Speaker 2: in the room, because every other company is talking about
Speaker 2: it every earning call and.
Speaker 1: Statement had it artificial intelligence.
Speaker 2: Do you think Apple's going to go their talking much
Speaker 2: because ultimately it's sort of already thought that the market
Speaker 2: understood its power in that area, in that arena.
Speaker 6: Well, living in Coupertino, California, I can tell you that
Speaker 6: they are definitely wrapping up on AIML team members. They've
Speaker 6: been definitely wrapping up on AI engines engineers. But this
Speaker 6: has been going on for the last five years. So
Speaker 6: for Apple, AI isn't like oh, cool, shiny new object,
Speaker 6: you know, It's more like AI is embedded in almost
Speaker 6: everything we do. And by the way, here are the
Speaker 6: applications that makes your life better. And I think that's
Speaker 6: the difference between Apple talks about AI versus this little
Speaker 6: weird battle between Microsoft and Google trying to outdo each
Speaker 6: other on the AI.
Speaker 1: Wars, little weird battle that we love to talk about.
Speaker 1: Ray Wang, great to have some time with you.
Speaker 2: Thanks for staying up late, principal analyst and founder at
Speaker 2: Constellation Research. And really just keep on banging that drum
Speaker 2: over there in Kubertina, California. He's going to be much
Speaker 2: more coming up from him at any moment. Meanwhile, coming up,
Speaker 2: We've got some interesting conversations we having with amba Atherton,
Speaker 2: ed partner at Patra about the fund's broader thesis for
Speaker 2: the future.
Speaker 1: Of gaming as a blooming.
Speaker 2: Time now for our VC spotlight from education to shopping games.
Speaker 2: Apparently they're going to shape the next Internet. It's the
Speaker 2: early stage venture capital firm Patron Believe as it invest
Speaker 2: in what it calls a broader gaming thesis. Joining us
Speaker 2: now from San Francisco is a Matherton partner at Patron,
Speaker 2: also out with a book titled The Rise of Virtual Communities.
Speaker 2: On a day where we look across to Covitino, we
Speaker 2: look across to Apple and the making of maybe VRAR
Speaker 2: to the masses. How much does virtual reality augmented reality
Speaker 2: bring to bear your future analysis and thesis on gaming?
Speaker 9: Well, I think it's great that Apple is getting into
Speaker 9: the game. You know, they had the best when it
Speaker 9: comes to computing hardware. So for gaming, this could be
Speaker 9: a Palm pilot to iPhone moment. You know, for gaming,
Speaker 9: the iPhone was a critical catalyst for that industry. So
Speaker 9: I think it's going to be really exciting to see
Speaker 9: what developers do with this new device and you know
Speaker 9: what venture outcomes and opportunities could be there.
Speaker 2: Ultimately, you think about the gamification of everything, So how
Speaker 2: much is the RAR going to end up being the
Speaker 2: way in which we work? How much does that become gamified?
Speaker 2: How much does our finances become game of filed? I
Speaker 2: mean already you're thinking about the gamification of many of
Speaker 2: these sorts of areas.
Speaker 9: Yeah, I mean, so a patron reinvest in what we
Speaker 9: call the spectrum of play. So on one end, you know,
Speaker 9: that's actual game studios, and then on the other end
Speaker 9: that's game like experiences. For example, Kudos, which is a
Speaker 9: smart wallet which is gamifying the shopping experience or Tonic,
Speaker 9: which is helping musicians practice in a more game like
Speaker 9: way with a virtual studio with avatars. So I think
Speaker 9: if Apple can solve the form function problems and honestly
Speaker 9: just the comfort of having a device on for that long,
Speaker 9: there are going to be a lot of opportunities for
Speaker 9: this generation to be continuing to live and play in
Speaker 9: virtual worlds. I mean, you can't forget that half of
Speaker 9: us kids play roadblocks every single day. So I think
Speaker 9: for a new generation of consumers, it doesn't feel like gaming.
Speaker 9: This is just where they hang out with their friends.
Speaker 2: And it's interesting that when we were previously thinking about
Speaker 2: Web three avatars, when we were thinking about gamification, many
Speaker 2: would put meta there. Ultimately, how much does VR and
Speaker 2: AR or Web three depend on VRAR becoming reality or not?
Speaker 1: Really? From your perspective, I don't think the two are intertwined.
Speaker 9: I think that, you know, particularly what I learned in
Speaker 9: my book is that while technology evolves, some of the
Speaker 9: fundamental challenges still remain the same. So I think what
Speaker 9: we're looking at is founders who are building with whether
Speaker 9: that is blockchain, whether it is AR.
Speaker 1: VR, whether it's AI.
Speaker 9: You know, we want sustainable businesses and founders who are
Speaker 9: going to think about the challenges alongside the opportunities.
Speaker 2: Okay, how many of those founders are currently seeing opportunities
Speaker 2: in artificial intelligence?
Speaker 1: In your world? How are you able to sort the
Speaker 1: week from the chatter?
Speaker 9: I mean, I think it is impossible to ignore. If
Speaker 9: you are a founder today, you have to embrace the
Speaker 9: fact that this is a huge landscape shift and presents
Speaker 9: a huge amount of opportunity. I think that in game
Speaker 9: play specifically, you know AI for NPCs world creation, there's
Speaker 9: so much that can accelerate the founded journey there. So
Speaker 9: we're excited about the portfolio companies that are experimenting across
Speaker 9: the board with how this will help them accelerate their
Speaker 9: roadmap and also allow players to have a more sort
Speaker 9: of interactive, personalized experience.
Speaker 2: And when you're looking to write checks and you're in
Speaker 2: seed in very early sort of stage, sort of one
Speaker 2: person with an idea helping them build that around that,
Speaker 2: I understand. Is it competitive out there at the moment?
Speaker 2: Are lots of checks still being written? What sort of
Speaker 2: valuations are you looking at?
Speaker 9: Yeah, I mean, look, I think this is a great
Speaker 9: time to build. You know, when economic times are tough,
Speaker 9: some of the best companies get built.
Speaker 1: So we're seeing a lot.
Speaker 9: Of very very interesting talent coming out of companies across
Speaker 9: Silicon Valley who are looking to.
Speaker 1: Ride this AI AI wave. But also just realize that where.
Speaker 9: We said as patron is in between you know, gaming
Speaker 9: consumer culture, and it's so difficult to ignore that gaming
Speaker 9: has such a fundamental impact on culture broadly. So I
Speaker 9: think we're seeing a lot of exciting talent come out
Speaker 9: of you know, bigger companies across the board who are
Speaker 9: looking to take advantage of this opportunity and the environment
Speaker 9: right now.
Speaker 2: What's interesting, of course about your journey is you were
Speaker 2: a founder YC Combinator and then came out and was
Speaker 2: what your companies I feelt was bought by Discord. How
Speaker 2: you how are you thinking about the landscape of ultimately
Speaker 2: companies either being bought at an early stage, or whether
Speaker 2: we can see companies that we're currently hoping, like a
Speaker 2: Discord to eventually go public, even though.
Speaker 1: You have to wait that a little bit longer.
Speaker 9: Yeah, I mean, I think, you know, everyone's waiting for
Speaker 9: the IPO market to pick back up, and that could
Speaker 9: be towards the end of this year. But I think
Speaker 9: you know, M and A activity is still very very
Speaker 9: vibrant right now. But I think that you know, the
Speaker 9: challenges with virtual world and online communities remain the same.
Speaker 9: You know, you're thinking about moderation, You're thinking about, you know,
Speaker 9: the tremendous scale that you need to truly monetize with
Speaker 9: ads moderation. So I think there's still despite technology evolving
Speaker 9: in this sort of mixed reality world, there are still
Speaker 9: fundamental challenges ahead.
Speaker 2: Monetization key for so many Patron and Atherton, thank you
Speaker 2: very much indeed for joining us today. Look, we've been
Speaker 2: talking about it all show what's going viral right here?
Speaker 1: Right now it's Apple's WWDC.
Speaker 2: Tim Cook moments away from starting his keynote where we
Speaker 2: expect the launch of the company's mixed reality headset, joining
Speaker 2: us now the one the only very busy Mark Gumman
Speaker 2: and Mark how much detail will we actually get when
Speaker 2: we can put these things on our faces or when
Speaker 2: we might even splash up to three thousand.
Speaker 10: Dollars Here today is going to focus on the headset,
Speaker 10: the hardware itself, the software demos, what it's going to
Speaker 10: be able to do. This headset is probably four to
Speaker 10: seven months away from going on sale. They have not
Speaker 10: started mass production yet. They're only starting very early test production.
Speaker 10: It's still in its stage called V which is a
Speaker 10: development cycle. It's not at that final hardware yet. It's
Speaker 10: still a prototype, so probably won't gone sale until December
Speaker 10: January at the earliest. In terms of the price, it's
Speaker 10: possible they'll announce the price Today's possible. They won't announce
Speaker 10: the price today, but we believe it's going to come
Speaker 10: in a three thousand dollars range, give or take a
Speaker 10: few hundred dollars on either end.
Speaker 4: But the important thing.
Speaker 10: Today is drumming up interest, getting developers on board, showing
Speaker 10: the world what they've got here so they can move
Speaker 10: forward and get this thing to market at the end
Speaker 10: of the year early next year.
Speaker 2: We were just talking about monetization and how difficult that
Speaker 2: still is in kind of online communities and social But ultimately,
Speaker 2: what's this about monetization for Apple and launching such an
Speaker 2: expensive vaar.
Speaker 1: Is it about the rest of the ecosystem. It's about the.
Speaker 10: Rest of the ecosystem. There's gonna be plenty of content
Speaker 10: to buy for this device. There's the app store. Obviously,
Speaker 10: they take their App store share the app Store is
Speaker 10: going to be a very big part of the launch
Speaker 10: itself as well, So clearly this is a hardware and
Speaker 10: services play.
Speaker 4: Long term, I think.
Speaker 10: They're going to make some pretty good money on this thing,
Speaker 10: and it is going to be probably a you know,
Speaker 10: maybe a flop at the beginning. It's going to start
Speaker 10: very slow, but over time it's going to turn into
Speaker 10: one of the company's most crucial products and potentially even
Speaker 10: a bridge to a future after the iPhone.
Speaker 2: Marm German, you're going to be busy all day. We
Speaker 2: thank you for spending some time with us as always. Meanwhile,
Speaker 2: well let's also go viral. In another matter, let's look
Speaker 2: at Twitter. A New York Times report showing that ad
Speaker 2: sales as the platform slumped fifty nine percent from April
Speaker 2: to May compared to this time last year.
Speaker 1: For more, let's bringing in Bloomberg's Asia counts.
Speaker 2: And really, I thought we heard from en or Must
Speaker 2: that all advertisers are coming back.
Speaker 1: Doesn't look like it.
Speaker 11: Yeah, that's what he said, But I mean, advertisers continue
Speaker 11: to be really hesitant because a lot of the challenges
Speaker 11: with the platform have not really gotten better. There's still
Speaker 11: a rise and hate speech, there's misinformation. There is the
Speaker 11: whole verification blue checkmark debacle. Elon Musk himself has made
Speaker 11: a lot of problematic tweets, and so advertisers are just
Speaker 11: really concerned about brand safety, what is my ad going
Speaker 11: to appear next to? And so it's not super surprising,
Speaker 11: but it's continuing to be a struggle for Twitter.
Speaker 2: Probably not a delightful report for Linda Yakarino to read
Speaker 2: on her first day at the job.
Speaker 11: Ryan not delightful at all, But I imagine she kind
Speaker 11: of had some expectations going into this, like she's probably aware,
Speaker 11: right Musk as vocal we said advertising revenue was zound
Speaker 11: fifty percent. He said that at the end of March,
Speaker 11: So the struggles have been out there and they've been known.
Speaker 11: So I imagined she knew what she was coming into
Speaker 11: and just plans to use her relationships and her deep
Speaker 11: industry experience that maybe help bridge the gap.
Speaker 2: Ultimately, we're not expecting things to change overnight. Are we
Speaker 2: expecting them hiring at least to be occurring some sort
Speaker 2: of shoring up because they've seen some key exits, particularly
Speaker 2: around trust and safety, which it seems to me is
Speaker 2: exactly what well brands and advertisers are missing right now.
Speaker 11: Yeah, you would expect Linda to bring in some people.
Speaker 11: I know he's bringing a person that used to work
Speaker 11: with her in comms from NBCUSA. I imagine that she'll
Speaker 11: be involved in hiring additional people. Musk has talked about
Speaker 11: probably needing to rehire and maybe even some of the
Speaker 11: people that will let go in some of the initial
Speaker 11: rounds of cuts. So I absolutely think that they will
Speaker 11: have to do that and just sort of befoop their
Speaker 11: team in order to be able to handle some of
Speaker 11: the expectations that advertisers have around brand safety and as
Speaker 11: you mentioned, trust and safety and what kind of content
Speaker 11: appears on the platform.
Speaker 2: Bloommeg's Asha counts with a breakdown on all things Twitter.
Speaker 1: We thank you so much. Well.
Speaker 2: Meanwhile, that does it for this edition of Blueleg Technology.
Speaker 2: You've got so much more to be digesting there. Of course,
Speaker 2: WWDC is about to unfold.
Speaker 1: What are you going to hear in.
Speaker 2: Terms of virtual reality, aug mented reality, what's the price point,
Speaker 2: what's the application, what's the hearing.
Speaker 1: In terms of health overall?
Speaker 2: In terms of also your finances, We've got plenty to
Speaker 2: be hearing as well in terms of operating system upgrades
Speaker 2: and remember the MAX are going to be front and
Speaker 2: center for many in terms of a sophisticated suite of PCs,
Speaker 2: whether you're working or playing, we think about the future
Speaker 2: of technology when it comes to Apple any moment now
Speaker 2: from Kupertino, you've got to let Ed Ludlow run into
Speaker 2: that event and be hearing what Tim Cook is going
Speaker 2: to be saying is he takes to the stage alongside
Speaker 2: many executives. Meanwhile, of course, you can go to one
Speaker 2: of Apple's products, which is Apple Podcasts, and listen to
Speaker 2: the Bloomberg Technology Podcast. If you haven't managed to listen
Speaker 2: to us live, there's also Spotify and iHeart from New
Speaker 2: York from San Francisco.
Speaker 1: Stay with us throughout the day for updates. This is
Speaker 1: Bloomberg