Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live
Speaker 1: from coast to coast with Caroline Hide in New York
Speaker 1: and Vlow in San Francisco.
Speaker 2: Live from New York, This is Bloomberg Technology Coming up.
Speaker 2: Apple kicks off its annual Developers conference in Coupatino. Will
Speaker 2: the event help ease or inflame? It struggles with artificial intelligence?
Speaker 2: Plus the US and China trade talks get underway, tariffs,
Speaker 2: rare earth minerals, and advanced technology topping the agenda, and
Speaker 2: Warner Brothers Discovery separates into two publicly traded companies, splitting
Speaker 2: its streaming and cable businesses. But first, what's happening over
Speaker 2: the course of Apple and we head straight out to Kopatino,
Speaker 2: of course, where.
Speaker 3: Our own led lud and Nudlow is standing by. We're
Speaker 3: up for tens of a percent.
Speaker 2: Look, there is a lot of anxiety on investors' minds
Speaker 2: at the moment, ed, and largely it's about AI.
Speaker 3: Will that get results today?
Speaker 4: Yeah, it's one of those situations where like expectations are
Speaker 4: high that Apple will tell us something about AI strategy,
Speaker 4: but actually it's highly unlikely to be the case. Right,
Speaker 4: That's not the point of WWDC. You know, the main
Speaker 4: thing with Mark Gumman's reporting in particular, I think, is
Speaker 4: about third party developer access to Apple's llms. Right, If
Speaker 4: you think about the work going on inside of open AI, Microsoft, Gemini,
Speaker 4: at Google, a lot of the innovation is built on
Speaker 4: that third party developer front. And for Apple it's critically important,
Speaker 4: just as you look at the history of the App
Speaker 4: Store and in its services offering, that's built on a
Speaker 4: history of developer innovation. And so right, the stocks down
Speaker 4: eighteen percent year today, it is underperforming its peers in
Speaker 4: that context. But that trading year today has largely been
Speaker 4: on the trade or tariff risk context, not about what's
Speaker 4: happening with AI.
Speaker 5: And I think the point our colleagues are making on the.
Speaker 4: Bloomberg terminal this morning is well, what if today's the
Speaker 4: day it changes? Because one year ago WWDC it was
Speaker 4: that same high expectation and people on the AI side
Speaker 4: didn't get.
Speaker 5: What they want. But Mark Gumman's good all the details right.
Speaker 2: He does at Ludlow hold on for a moment because
Speaker 2: Mark German, who has broken so much news ahead of
Speaker 2: what's expected from Apple today, joins us now in La
Speaker 2: and Mark just walk us through whether any of that
Speaker 2: AI well misstep can be walked back and can be
Speaker 2: indeed invigorated today.
Speaker 3: Do you think they're going.
Speaker 6: To try to tell a good story on AI? Right,
Speaker 6: They're going to come out full force, talk about how
Speaker 6: they're different, talk about how they're highly integrated, talk about privacy,
Speaker 6: talk about how the other companies are stealing your data. Right,
Speaker 6: But the reality is they're not going to show much
Speaker 6: of substance when it comes to AI. The big thing
Speaker 6: is they're going to open up their Apple Intelligence they're
Speaker 6: called the AFM or the Apple Foundation models to third
Speaker 6: party developers, so developers will able to use Apple's AI
Speaker 6: technology if they want to to build their apps and
Speaker 6: build their features. There's going to be an upgraded version
Speaker 6: of their shortcutsapp for con to allow customers end users
Speaker 6: on the iPhone, iPad and Mac to create shortcuts or
Speaker 6: little widgets and features themselves using AI. The biggest thing
Speaker 6: when it comes to AI is that translation.
Speaker 7: Right.
Speaker 6: This is something Google has had for a couple of
Speaker 6: decades now is now going to be a very core
Speaker 6: system element, so you'll be able to live translate a
Speaker 6: phone call you're speaking to someone in another language, you'll
Speaker 6: be able to hear that back in your native language. Likewise,
Speaker 6: in text messages, there's going to be changes in the
Speaker 6: messages app, new backgrounds and polls to better compete with WhatsApp.
Speaker 6: But the biggest announcements today will be around the user interface.
Speaker 6: They're coming out with a new liquid glass digital material,
Speaker 6: a new look for all of their operating systems across
Speaker 6: all of their devices, and then the iPad getting a
Speaker 6: big productivity lift to make it more usable like a Mac,
Speaker 6: particularly for things like multitasking and PDF management.
Speaker 4: I think it's seen lag you by out of a
Speaker 4: community right mark that the move from version to year
Speaker 4: version labeling for the operating systems.
Speaker 5: That's kind of helpful.
Speaker 4: But when I read you're reporting around liquid glass, it's
Speaker 4: almost as if there's a roadmap as well, down the
Speaker 4: road to future generations of hardware.
Speaker 5: Could you explain that bit?
Speaker 7: So?
Speaker 6: The new user interface is very glassy, lots of use
Speaker 6: of transparency, translucency throughout the operating system, letting your wallpaper
Speaker 6: and light shine through different user interface elements. It's very
Speaker 6: similar to the UI or seeing on the Vision Pro.
Speaker 6: Apple's working on a new mostly glass iPhone for twenty
Speaker 6: twenty seven, the iPhone twenty as I'm calling it, for
Speaker 6: the twentieth anniversary of the iPhone, and so you're going
Speaker 6: to see that hardware software really make it difficult to
Speaker 6: understand where it begins, where it ends, more of a
Speaker 6: unified product experience things that Apple's had in the past.
Speaker 6: They've done the iPhone five C in twenty thirteen. The
Speaker 6: idea was the same molding color from the operating system
Speaker 6: to color on the phone. And so this is going
Speaker 6: to be pretty exciting. And so yes, this portends to
Speaker 6: some major hardware developments in the coming years, but in
Speaker 6: terms of this year and the short term, nothing that
Speaker 6: exciting coming from Apple other than the UI, I would.
Speaker 2: Say, and therefore mark the age old question is is
Speaker 2: it going to be enough to really invigorate purchasing because
Speaker 2: there's a laundry list of issues that Apple faces. And yes,
Speaker 2: it's about AI and indeed the product is also about
Speaker 2: the supply chain, and it's also about regulation here in
Speaker 2: the United States.
Speaker 6: I mean, for this fall, you've got the iPhone seventeen
Speaker 6: Pro that's going to have a redesigned back, a redesigned
Speaker 6: camera area, and anytime Apple does a design change, whether
Speaker 6: it's for usability or just aesthetic right, that gets lines flowing,
Speaker 6: gets people interested. So I do think the iPhone seventeen
Speaker 6: Pro will be a success. By then the AI features
Speaker 6: will be a bit better. They're doing some fundamental changes
Speaker 6: to the large language models themselves. But if you compare
Speaker 6: and contrast what you've seen from Google and open AI
Speaker 6: and Anthropic over the last several months to what you're
Speaker 6: going to see from Apple today, it's going to be
Speaker 6: very stark and it's going to be very clear that
Speaker 6: Apple's behind. Of course, they're going to tell a very
Speaker 6: good story, right, They're going to market their way through this.
Speaker 6: But if you focus on the substance, you'll see the
Speaker 6: big differences.
Speaker 2: Well, we'll see if that can change the opinion of
Speaker 2: the investor base right now, Mark Germ and Ed Ludlow
Speaker 2: as well, Thank you both so much.
Speaker 3: Now, coming up.
Speaker 2: US and China, they're trying to avoid a clash as
Speaker 2: trade talks kickoff in London with a global tech supply
Speaker 2: chain at the heart of discussions.
Speaker 3: We'll have the latest. This is Bloomberg Technology.
Speaker 2: Talks between the US and China. They are underway in
Speaker 2: London in a bid to restore confidence that both sides
Speaker 2: are well living up to commitments made back in Geneva,
Speaker 2: with the US signaling actually a willingness to remove restrictions
Speaker 2: on exports in exchange for assurances that China is easing
Speaker 2: limits on rare earth shipments.
Speaker 3: Let's bring in Bloomberg's Amorhoden, who.
Speaker 2: Is in London live any signal this is going well.
Speaker 8: Well, Caroline. They have been in talks now since just
Speaker 8: a little bit after one pm, so a few hours
Speaker 8: and likely we could see these talks bleed into tomorrow,
Speaker 8: which we saw actually happen a month ago in Geneva.
Speaker 8: It does seem like things are going well if you
Speaker 8: take the word from Kevin Hassett, the ANC director or
Speaker 8: the President of the United States, who talked about this
Speaker 8: on social media after he got off the phone from
Speaker 8: President Shijiingping. As you said, the two big points here
Speaker 8: that they really want to try to diffuse the tension
Speaker 8: in these talks has to do with China's ability potentially
Speaker 8: to get more semiconductors things that there's been export controls
Speaker 8: on when it comes to some semiconductors as well as
Speaker 8: jet engine chips. The question I have is what is
Speaker 8: going to be the red line is the United States
Speaker 8: willing potentially to ease the export controls on things as
Speaker 8: in Vidia's advanced chip that had built basically to comply
Speaker 8: with the Biden administration export controls when it comes to China,
Speaker 8: and then with the United States wants out of all
Speaker 8: of this is the easing of those restrictions for the
Speaker 8: rare earths to magnets, the materials that you need for
Speaker 8: mobile phones, for the defense industry and the high tech industry.
Speaker 8: So coming out of this, we're really going to want
Speaker 8: to part the details of what was agreed upon.
Speaker 3: Of course, reading.
Speaker 8: Through the tea leaves, potentially we can see other matters
Speaker 8: agreed upon at this meeting. The President did say they
Speaker 8: discussed potentially traveling to China or Shujing pain coming to
Speaker 8: United States on that phone call. But we should just
Speaker 8: note it's only been four weeks since the Geneva talks
Speaker 8: and already we had to see Beijing and Washington sit
Speaker 8: down again to de escalate.
Speaker 2: A Marie, I love that you point us towards the
Speaker 2: semiconductor resilience and indeed what's been held back from China
Speaker 2: going forward, the H twenty is not able to be
Speaker 2: sent now from Nvidia into China. The fact that Howard
Speaker 2: Lutnik is there is that key.
Speaker 8: Yeah, absolutely, the fact that you at Howard Lutnak join
Speaker 8: this delegation. Remember in Geneva, it was just Secretary Scott
Speaker 8: Besson of the Treasury and USTR representative Ambassador Jamison Greer
Speaker 8: leading that delegation. Then following the phone call between Shiji
Speaker 8: Ping and President Trump, you at Howard Lutnik added to
Speaker 8: the delegation. So already everyone was speculating how far potentially
Speaker 8: the United States would go on export controls because export
Speaker 8: controls squarely lie within the Commerce Department. So clearly that's
Speaker 8: why he's at the table. Clearly these export controls are
Speaker 8: at the table. But really the key question is what
Speaker 8: is the US red line when it comes to those
Speaker 8: export controls and how far are they going to go?
Speaker 8: And then, depending on what comes out of this meeting,
Speaker 8: what does this mean for the future, because we have
Speaker 8: seen the United States ratchet up export controls administration after
Speaker 8: administration when it comes to China in the name of
Speaker 8: national security.
Speaker 2: I'm Marie Holden live from London. We appreciate it so much.
Speaker 2: Let's get more on the global tariff impact. What to
Speaker 2: expect from today's trade talks. Ben Harberg's with us another
Speaker 2: capital managing partner, Core Values Alpha portfolio Manager as well,
Speaker 2: not the capital. It's a private fund managing over two
Speaker 2: billion dollars in assets on management. But call for US
Speaker 2: is Core Values, which brings particular exposure to Chinese companies.
Speaker 2: Then will we see a walk back in restrictions of
Speaker 2: a semiconductors and their access into China.
Speaker 9: I think we will, and I think there will be,
Speaker 9: you know, a move from these kind of broad based
Speaker 9: numerical sanctions and terror figures to something that's more pointed
Speaker 9: and targeted. And we've seen already those levers being pulled
Speaker 9: on both sides. Obviously the you know, the US imposing
Speaker 9: the export restrictions on the Age twenty chips that could
Speaker 9: impact four and a half billion dollars of sales of Nvidia,
Speaker 9: the Chinese obviously restricting the magnets which are hitting everything
Speaker 9: from electric vehicles to smartphones. The Americans retaliating with efforts,
Speaker 9: you know, to block the Leap one sea engines that
Speaker 9: are being used by commacs jets as China tries to
Speaker 9: build its own aerospace industry. So there's a lot of
Speaker 9: I think individual sectors or even specific companies that can
Speaker 9: be sanctioned or named rather than the odd based sanctions,
Speaker 9: and so I think if they can kind of carve
Speaker 9: their way around those and get through some of these
Speaker 9: very sensitive areas that really acutely pain the respective economies,
Speaker 9: then we can start to make some progress that sensitivity.
Speaker 2: That fine line, though, Ben is one that you have
Speaker 2: walked and talked about a lot. When I think about
Speaker 2: what the core Values Alpha ETF family does, particularly the
Speaker 2: Greater China Growth ETF, you basically say on the website,
Speaker 2: it's accessing China Alpha without compromising American national security or
Speaker 2: American values. How do we get this agreement with China
Speaker 2: without compromising American national security?
Speaker 9: So I think there are specific Chinese companies and specific
Speaker 9: Chinese verticals that are coming in direct competition with their
Speaker 9: American counterparts that we're seeing that on chips, We're seeing
Speaker 9: that in the aerospace and the event space.
Speaker 7: We're seeing that in.
Speaker 9: The critical mineral supply chains, We're seeing that in telecommunications.
Speaker 9: Those are all verticals where there is direct Chinese threat
Speaker 9: to American superior when it comes to leadership and those
Speaker 9: technology verticals and what we really describe as kind of
Speaker 9: the industries of the future. There are, of course, plenty
Speaker 9: of Chinese companies and specific business lines that don't intersect
Speaker 9: with American interests, for instance, Chinese e commerce companies that
Speaker 9: are selling into developing markets, Chinese entertainment communication businesses, and
Speaker 9: so that line needs to be walked very carefully, and
Speaker 9: that can be done through these negotiations and through an
Speaker 9: investment platform that enables you to access the high alpha
Speaker 9: that Chinas generated both domestically and through its foreign kind
Speaker 9: of counterparts, where it is the leading trade partner to
Speaker 9: over one hundred and forty countries around the world. But
Speaker 9: also it restricts America sending its most prize technological IP
Speaker 9: towards the Chinese as they try to compete with us
Speaker 9: in those industries of the future.
Speaker 2: What's so interesting, though, is that maybe some of those
Speaker 2: entertainment and e commerce companies that you talk of have
Speaker 2: been embroiled and what's deemed national security threats. We think
Speaker 2: about what Tencent was painted as in some way, ben
Speaker 2: is this the art or lack of art around negotiation
Speaker 2: and diplomacy. Our company is going to get dragged in
Speaker 2: rightly or wrongly, that may not have a direct exposure
Speaker 2: to national security.
Speaker 9: China, through you know It's its own initiative, has recognized
Speaker 9: that these these large scale businesses, the Ali Baba's, the
Speaker 9: ten Cents, the byteedances, the Matwons of the world, became
Speaker 9: bloated and had too many business lines under one hood
Speaker 9: that stretch from innocuous you know, grocery delivery all the
Speaker 9: way to you know, to web you know, to to
Speaker 9: military applications in the aerospace and defense, you know, maps,
Speaker 9: geospatial et cetera. And so even they, I think are
Speaker 9: starting to piece apart those businesses and start to require
Speaker 9: that some of those are divested or spun off, and
Speaker 9: that the kind of core assets are left alone. And
Speaker 9: I think that will actually aid them as they work
Speaker 9: to negotiate with the Americans, because it's easier than to
Speaker 9: sanction those specific verticals rather than the entire company getting
Speaker 9: caught up in one dragonet. So it's it's beneficial for
Speaker 9: anti trust, anti monopoly efforts domestically in China as well
Speaker 9: as for US trade and sanctioned talks.
Speaker 2: What does therefore, a portfolio with exposure to Chinese names
Speaker 2: look like in the future for you, ben, what should
Speaker 2: be accessed, Which bets should you be making at this time?
Speaker 9: Well, I think there will continue to be verticals where
Speaker 9: the United States and China are not going to be
Speaker 9: directly competitive.
Speaker 5: It's it's it's very.
Speaker 9: Hard for America today to build, for instance, a low
Speaker 9: cost handset that competes with the Shaomi's, Opos and Vivos
Speaker 9: of the world. We've we've seen the likes of Apple
Speaker 9: pricing themselves significantly outside of those companies at you know,
Speaker 9: and at a point where that was kind of next
Speaker 9: billion consumers that are in say Africa, Southeast Asia, South
Speaker 9: Asia just simply cannot pay. And so there will be
Speaker 9: continue to be verticals where China, through low cost, high
Speaker 9: end manufacturing of consumer facing products, will continue to grow
Speaker 9: in market leadership, but not directly intersect American national secure
Speaker 9: or strategic comparatives. America, for its part, has huge leadership
Speaker 9: and a head start in the in the AI space
Speaker 9: and obviously the chipset space, historically in aerospace and defense,
Speaker 9: and so those are verticals that should stay very much
Speaker 9: within the American camp and whose supply chains need to
Speaker 9: be reinforced such that there isn't dependence in the future
Speaker 9: Chinese magnets or other key inputs to fortify those supply chains.
Speaker 2: Ben Will there be any change to global supply chains
Speaker 2: when it comes to air US in the future, though
Speaker 2: for now it is incredibly dependent on China. How quickly
Speaker 2: can that turn around? Should you want to have them
Speaker 2: accessed here in the United States?
Speaker 9: Absolutely we should. And this is one of the biggest
Speaker 9: problems that we face and why we needed change and
Speaker 9: why Donald Trump was elected. He's you know, the objective
Speaker 9: of this Trump administration is to tear down a lot
Speaker 9: of those barriers that were impeding growth of the American industry.
Speaker 9: And we're seeing a resurgence of American aerospace defense and
Speaker 9: then this accounting company supply chain there was a result
Speaker 9: of the President coming to office. Silicon Valley historically has
Speaker 9: been almost entirely aligned behind this Trip administration because they
Speaker 9: see that he's tearing down a lot of those barriers,
Speaker 9: be it EPA or other forms of barrier, ensuring that
Speaker 9: there are stimulus and other forms of support, ensuring that
Speaker 9: procurement is done in an efficient way without the kind
Speaker 9: of cost plus archaic methods that we're used historically. We
Speaker 9: have a lot of these natural resources within our own borders,
Speaker 9: but we weren't extracting them because of environmental concerns and
Speaker 9: other DEI issues that got in the way of that.
Speaker 9: And so I think that that will be unlocked and
Speaker 9: must be unlocked to ensure American national security.
Speaker 3: Ben Habag ofv Nova Capital, thanks for your time today.
Speaker 2: Let's go back to today's main tech story, Apple's Developers Conference,
Speaker 2: where our own ed Ludlow is standing by Ed.
Speaker 4: Yeah, WWDC is a developers conference, and I kind of
Speaker 4: want to get to that conversation with Creative Strategies, Princeville
Speaker 4: analysts and President Curly In a milianacy like I always.
Speaker 5: Remind myself, why are we here. We're here for the developers.
Speaker 4: In terms of expectation, right, what the reporting tells us
Speaker 4: is that Apple will open up the lllms it's been
Speaker 4: working on to third party developers. That seems very important.
Speaker 10: It is absolutely critical because that's at the end of
Speaker 10: the day, how developers will take advantage of the core
Speaker 10: of Apple intelligence going forward, and how they can do
Speaker 10: that on device in a private and secure way if
Speaker 10: it wants so, and differentiate what they can do with
Speaker 10: others like CHURCHIPD open AI and so forth.
Speaker 4: If you accept that Apple is behind in AI, why
Speaker 4: would the step of opening up access to developers to
Speaker 4: the work.
Speaker 5: It has done in AI remedy.
Speaker 10: That I don't know if your remedies, but it preps
Speaker 10: for the future, right. It is about allowing developers to
Speaker 10: take advantage of AI within their applications. And if there's
Speaker 10: one thing that I think we can all agree with,
Speaker 10: it's about the ecosystem from a developer perspective, that Apple
Speaker 10: has always been the thing that got consumers engage with
Speaker 10: their devices and kept them where they are.
Speaker 4: So it's important today for a reason and everything that's
Speaker 4: inside of.
Speaker 10: It, absolutely, and that's what Apple is trying to do
Speaker 10: to continue especially as the pressure. If you're thinking about
Speaker 10: what Microsoft is trying to do, you know they're very
Speaker 10: clear that coming out or Build last month, they want
Speaker 10: developers to look at Microsoft as the future of development.
Speaker 5: Let's think about specifics.
Speaker 4: One of the things we might hear today is translation
Speaker 4: across imssage calls and live simultaneous translation. But the good
Speaker 4: thing about talking to you on WWDC days is you
Speaker 4: and I go to all the same conferences, particularly developers conferences,
Speaker 4: and I've got Daja view or at least I distinctly
Speaker 4: remember Meta talking about exactly the same thing.
Speaker 5: They've done it.
Speaker 10: And Google did too at some level, right, So I
Speaker 10: think part of it is catching up. Part of it
Speaker 10: is trying to give consumers what they want. If you're
Speaker 10: looking specifically at the US market, there are a lot
Speaker 10: of people who are bilingual, and so translation of all
Speaker 10: week sometimes just narrow down to all when I go
Speaker 10: on holiday somewhere is actually more important on day to day.
Speaker 4: What we're expecting are largely interface changes. What will that
Speaker 4: tell us about how Apple thinks, consumers, knowledge workers, engage
Speaker 4: where they are in the future from like a human
Speaker 4: to device perspective.
Speaker 10: Yeah, it's interesting because I do think that there are
Speaker 10: probably two things, that maybe three things where they're trying
Speaker 10: to address. One, there were some changes that came last
Speaker 10: year that consumers were not particularly happy with. Photo is
Speaker 10: a good example for instance, and so and the second
Speaker 10: thing is that this is probably the biggest redesign, as
Speaker 10: Mark was saying, since iOS seven, So it's been a
Speaker 10: long time, which means that for some users, this is
Speaker 10: the first time that they're going to use iOS and
Speaker 10: other os is in a different way. So trying to
Speaker 10: take away friction, but not actually changing things so that
Speaker 10: you have a learning curve all of a sudden is
Speaker 10: going to be one thing. The other part is there's
Speaker 10: much more cross device usage, so trying to make that
Speaker 10: easier so that AI actually is useful across all Apple
Speaker 10: devices and getting out of a way so that AI
Speaker 10: can actually shine.
Speaker 4: We go from iOS version number to IOOS year version number.
Speaker 4: It's just like the car companies do. And just like
Speaker 4: the car companies, they always go one year ahead. So
Speaker 4: what we might get is the twenty twenty six year.
Speaker 4: How do you feel about that?
Speaker 10: I think that with AI we're going to see changes
Speaker 10: on a faster cadence as we are seen with all
Speaker 10: the models that have been released over the past six months,
Speaker 10: So you know, anchoring in what the core of DOS
Speaker 10: is going to do for a year and then having
Speaker 10: updates throughout the years.
Speaker 4: Yes, absolutely, creative strategies. Principal analysts President Carly and Midlanacy.
Speaker 4: Good to be back on the road with you.
Speaker 3: Welcome back to tech.
Speaker 2: I'm Caroline Hyde and New York.
Speaker 3: We've got a new look for you.
Speaker 2: But Tesla is basically trading lower, but only slightly. We're
Speaker 2: coming off of what had been a sell off a
Speaker 2: more than a percentage point earlier in trade. And why
Speaker 2: was that Well, because the company had been seeing not one,
Speaker 2: but two downgrades from certain analysts. Let's dig into that
Speaker 2: particular move. We've got Argus Research on one side, we
Speaker 2: have BED on the other. This is the ev maker
Speaker 2: really received the downgrades on the back of anxiety around
Speaker 2: the ongoing feud between Trump and Elon Musk. Of course
Speaker 2: that had been darved back somewhat, but we also have
Speaker 2: BED and the others really shining light on what has
Speaker 2: been anxiety around Robotaxi as well. Blue Begg's round Rstelica
Speaker 2: is joining us. Now you've written up the fact that
Speaker 2: we had these two downngrades. We're actually just seeing Tesla
Speaker 2: stock price stabilize at the moment, Ryan, But what do
Speaker 2: you make of the reasons for their concerns?
Speaker 5: Hey, good morning, thank you for having me.
Speaker 11: Well.
Speaker 12: I guess one thinking say is that it is not
Speaker 12: too surprising, given just sort of how high profile and
Speaker 12: sort of just the blow up was between Elon Musk
Speaker 12: and Donald Trump last week. It's not surprising to see
Speaker 12: a bunch of anamals kind of taking stock of this
Speaker 12: and say, what is the real impact of this kind
Speaker 12: of you know, political uncertainty, this kind of fallout. It's
Speaker 12: extremely difficult to sort of assess what could happen next.
Speaker 12: I've spoken to a few investors and analysts and they
Speaker 12: all kind of say that this sort of situation is
Speaker 12: basically unprecedented, having this kind of personal attack between a
Speaker 12: CEO who is the richest person on the world, and
Speaker 12: then the president. So obviously, when you have a situation
Speaker 12: like this, it's very difficult to know what comes next.
Speaker 12: And that's why you saw two analysts so far downgrade
Speaker 12: to stock, basically saying the level of uncertainty and the
Speaker 12: outlook here is just too clouded to feel comfortable with
Speaker 12: more overweight position.
Speaker 2: Today we are only down by a tenth of a percent,
Speaker 2: but then we look at what's happened here to date,
Speaker 2: twenty seven percent lower. Can you put that into the
Speaker 2: context of other MAGS seven and just how negative analysts
Speaker 2: have gone.
Speaker 12: Yeah, So, with respect to the MAG seven, I believe
Speaker 12: Tesla is now the worst performing of them. I believe
Speaker 12: Apple was underperforming it a couple of weeks ago. Given
Speaker 12: the recent weakness, the double digit drop, it's on the
Speaker 12: wake of the big blow up. Believe Tesla is now
Speaker 12: the worst performing stock it saw very significantly from the
Speaker 12: peak it saw in the immediate aftermath of the election
Speaker 12: in November. I believe the stock peaked in December found
Speaker 12: forty percent or so since then, So there are some
Speaker 12: growing concerns out there. With respect to the analyst consensus,
Speaker 12: Tesla is the least loved of the MAGS seven stocks.
Speaker 12: I believe fewer than half of the analysts that Bloomberg
Speaker 12: tracks recommends buying it. That is well below the rates
Speaker 12: that you see at other major companies. It's pretty low
Speaker 12: for large cap in general. In general, analysts tend to
Speaker 12: be pretty positive on the companies they cover, but Tesla
Speaker 12: a bit of a unique outlier in this example.
Speaker 3: Man Vacelica, we thank you so much.
Speaker 2: Another stock that's had analysts not loving it so much
Speaker 2: is Apple. Let's go back to his developers conference, where
Speaker 2: our own ed Ludlow is standing by with a developer.
Speaker 4: Yeah, it's about time we got the perspective of a developer.
Speaker 4: Paul Hudson is the creator of Hacking with Swift as developer,
Speaker 4: but his whole points, his whole raisin detray is to
Speaker 4: help teach people how to develop within iOS and the
Speaker 4: broader Apples ecosystem. So let's just start by asking the
Speaker 4: simple question, what is it you want to see?
Speaker 5: What is it you want to hear? What is it
Speaker 5: you want to learn?
Speaker 7: Yeah? So fair enough. Developers right now streaming in and
Speaker 7: mostly saying the same thing. Is this the year we
Speaker 7: got another big leap forward for generating stuff with AI? Code, text, images, sound,
Speaker 7: something with AI one device in the cloud. We don't
Speaker 7: really mind, but just something forward basically.
Speaker 4: So, based on current reporting, I think the answer is no.
Speaker 4: But what we are expecting is that Apple basically opens
Speaker 4: up access to your community, third party developers, to its
Speaker 4: own LMS, its own proprietary working AI.
Speaker 5: Why would you welcome something like that if at all?
Speaker 7: So, Apple normally does a thing internally where they dog
Speaker 7: food the AP I would call it eternally. They're trying
Speaker 7: things out and then okay, this is good, We're ready
Speaker 7: now a go to developers and hopefully that's today, and
Speaker 7: so things like last year we had the writing tools
Speaker 7: to rewrite or summarize or bullet point or whatever really
Speaker 7: good stuff, but we couldn't do it from our code.
Speaker 7: We had to let the user do it directly in
Speaker 7: the UI. So hopefully today we can finally have that
Speaker 7: and add a whole bunch of layers to what apps.
Speaker 7: You know, it's a real force multiplier, that kind of functionality.
Speaker 4: It is a force multiplier in the sense if you
Speaker 4: think about the history of the App Store and what
Speaker 4: you can do across not just iOS but mac os,
Speaker 4: that's how things generally get built. Yeah, but it's distinct
Speaker 4: from whatever Apple will tell us or not tell us
Speaker 4: with Siri and Apple Intelligence, as one uses it with
Speaker 4: their their handset, Why would you want to know about
Speaker 4: their own work and their own success.
Speaker 7: Well, look, last year they a lanced to the big
Speaker 7: Apple Intelligence push, right they did. That was the first
Speaker 7: part of the story, because you know, there's two parts
Speaker 7: to it. We all want the deep conversational Siri thing
Speaker 7: going on, but for that to work, us app developers
Speaker 7: have to expose our logic, our data, our function It's
Speaker 7: a system and last year Apple announced a whole bunch
Speaker 7: of code just for that. So now we've been working.
Speaker 7: There's tens of thousands of developers using this stuff now
Speaker 7: called app intents. They all work, they'll work the great
Speaker 7: now hopefully today, Apple, go right, we've got your data.
Speaker 7: Let's go for it and strip something great.
Speaker 4: All being well, how much of a networking effect literal
Speaker 4: networking is WWDC? Like all of you and your your
Speaker 4: peers are kind of gathered in one place and you
Speaker 4: wait to hear what Apple will tell you. But I
Speaker 4: also find it interesting and like the kind of access
Speaker 4: part of it to each other, but also to the
Speaker 4: team at Apple that are working on the on the
Speaker 4: codebase that you killed off.
Speaker 7: Yeah, so all the sort of Apple indie developer heroes
Speaker 7: are here. There's a new game, the Art of Fauna
Speaker 7: love It. He's here, The Haylight team here, the Slopes
Speaker 7: team here. They're all here. So you can go and
Speaker 7: meet your heroes and get your selfies and stuff. Lot
Speaker 7: of fun. But there's also the labs with Apple own engineers,
Speaker 7: Whereas here's a Swift UI team, here's the data team,
Speaker 7: here's the Metal team or whatever.
Speaker 4: The labs almost happen in parallel with WWDC. So for
Speaker 4: the uninitiated, what is it and why is it?
Speaker 5: Evaluated?
Speaker 7: So today, in specially the special event Apple Park is
Speaker 7: the in person labs right where the teams who make
Speaker 7: stuff who are mostly locked away in this building behind us, right,
Speaker 7: get to come out normally.
Speaker 5: Right, I know, right.
Speaker 7: Once year it's like, oh, it's developers and they talk
Speaker 7: to us and we throw our questions at them and
Speaker 7: they get answers straight to our face, which is really nice.
Speaker 7: They enjoy it too. They love it because they can
Speaker 7: meet us and see how we use their code and
Speaker 7: write weird and wonderful ways, and that's really special. But
Speaker 7: then the rest of the week there's also online labs
Speaker 7: you can book which are very helpful. It's for our
Speaker 7: WebEx call and this year is new they have group labs,
Speaker 7: so you guy as a group go together like twenty
Speaker 7: or thirty folks and bounce questions off one engine someone
Speaker 7: lucky engineer to get our questions and learn via other
Speaker 7: folks questions too.
Speaker 5: Paul, what's your biggest frustration with Apple at the moment?
Speaker 4: I have no franspetionis for Apple at all now, just kidding,
Speaker 4: there aren't that many of them standing behind the camera.
Speaker 4: Just be honest, Like, if you are a developer and
Speaker 4: you are developing for an os, Okay, So.
Speaker 7: The biggest thing right now, it's actually quite interesting. It
Speaker 7: is about revenue. So we have this thing the Small
Speaker 7: Business program, okay, where if you earn less than a
Speaker 7: million dollars, which is most developers, Yes, right, you pay
Speaker 7: only fifteen percent towards Apple. What a brilliant scheme. And
Speaker 7: that includes now support API's credit card access, all that
Speaker 7: download stuff, all down fifty percent. Good deal. But if
Speaker 7: you weren't a million and one dollars, it's not progressive.
Speaker 5: So now we're getting into epic games territory a little bit.
Speaker 7: Well, a million one dollars isn't quite a big game,
Speaker 7: but yeah, but when you hit a million and one,
Speaker 7: it's not progressive. For that one dollar, you lose the
Speaker 7: previous million as well for all future years, so you've
Speaker 7: increasingly you lose fifty percent extra every year. So that's
Speaker 7: not great. I know a lot of folks that like
Speaker 7: see that fixed.
Speaker 4: A lot of what we expect to come today. And
Speaker 4: again this is based on reporting bad boom bogs, Mark Gumman, But.
Speaker 5: It's just interface changes.
Speaker 4: Within that you can look for hints about how Apple
Speaker 4: sees the future, about how we interrate rapped with hardware.
Speaker 5: Right, I have an iPhone app at a Mac. How
Speaker 5: do you think about that and approach that?
Speaker 7: So one of the nice things about Apple's big push
Speaker 7: towards their swifty Wi framework is in theory, we just say,
Speaker 7: give me a button, give me an image, give me
Speaker 7: a whenever you want slider, and it adapts to the
Speaker 7: system correctly. So we'll find out in about an hour
Speaker 7: or so. But I'm kind of hoping I just press
Speaker 7: build an excode and it's going to look great and
Speaker 7: glassy automatically. And if that's true, then iOS, Macaws, vision
Speaker 7: of Wes, whatever platforms they choose to unify will just work.
Speaker 4: You kind of give the impression, Paul that it's the
Speaker 4: people behind the scenes that you're most excited about. But
Speaker 4: when you think about the keynote, who is it from
Speaker 4: Apples kind of more leadership.
Speaker 5: Focused teams that you get excited.
Speaker 7: But honestly, if you're in Apple Park with a special event,
Speaker 7: everyone loves to see Craig okay, because he's a massive
Speaker 7: fan favorite the Silver Fox, right, everyone loves Craig. The
Speaker 7: selfie with Kraig and stuff. And from a technology perspective,
Speaker 7: he's a massive coder. Okay, I mean like Craig, I'm sorry, Craig,
Speaker 7: you're He's a super geek. He personally reviews a lot
Speaker 7: of work going out. He reviews xcode every year. He's
Speaker 7: very very in detailed APIs. You wouldn't believe it because
Speaker 7: given how he is, but he's very serious about code.
Speaker 5: I love that you seem upbeat.
Speaker 4: You've got us energized and ready, like Paulson as the
Speaker 4: creator of hacking with Swift, and we're here in WWDC
Speaker 4: and Coubertino character.
Speaker 2: I'm so psyched the energy from Koupertino. We love it
Speaker 2: at Thank You. Meanwhile, coming up right here in New York,
Speaker 2: we talk about Warner Brothers Discovery. It's plans to split
Speaker 2: its businesses but separately into two traded stocks. Details behind
Speaker 2: the company's efforts to split TV and streaming.
Speaker 3: This is Bloomberg Tech.
Speaker 2: Warner Brothers Discovery when it plans to separate more formally,
Speaker 2: it's streaming of movie.
Speaker 3: Divisions from TV network operations.
Speaker 2: They're going to create two publicly traded operations by the
Speaker 2: middle of next year. For more, Bloomberg's Felix Jewett joins us.
Speaker 3: Now, oh what a surprise. Never seen that one before.
Speaker 13: Yeah, yeah, a little bit of deja vous. I mean
Speaker 13: Comcast just did the same move, essentially spinning off its
Speaker 13: cable networks. In fact, you can go back to twenty
Speaker 13: nineteen when Rupert Murdoch broke up his empire and sold
Speaker 13: the studios and the IP and the franchises at Disney
Speaker 13: and then spun off you know, the legacy networks, the news,
Speaker 13: the sports. So yeah, we're basically seeing consolidation into two
Speaker 13: different markets, one being the legacy traditional cable networks and
Speaker 13: then the other being streaming and content production.
Speaker 2: David Sazanov keeps the content production, the streaming, you get
Speaker 2: your CFO kind of videfield taking over as the leader.
Speaker 3: Of the other business. We had to get the names.
Speaker 3: But one analyst reaction caught my attention in your.
Speaker 2: Guys story, like the recent pivot back to HBO Max,
Speaker 2: this move reveals a company fumbling its way through disruption.
Speaker 5: Yeah, fambiling.
Speaker 13: Yeah, I mean, I think it's an admission that the
Speaker 13: entire rationale for this merger of assets to begin with
Speaker 13: three years ago hasn't worked out, right. I mean, you
Speaker 13: think about the deal in twenty twenty two at and T.
Speaker 13: We're going to spin off WarnerMedia. We're going to combine
Speaker 13: it with Discovery. You're going to get the premium content
Speaker 13: production you're going to get the reality TV from Discovery.
Speaker 13: You're going to create this huge streaming colossus that's going
Speaker 13: to take on Netflix, and you know, we're going to
Speaker 13: change it from HBO Max to Max. And now three
Speaker 13: years later, you're saying that we're going to go back
Speaker 13: to HBO Max, we're going to make it a premium,
Speaker 13: we're going to get rid of this low cost streaming,
Speaker 13: and you know from Discovery that people aren't watching on
Speaker 13: the service.
Speaker 7: So yeah, it's kind of unwinding.
Speaker 13: Everything that's happened over the past three years. And you know,
Speaker 13: the value of the company has you know, dropped by
Speaker 13: sixty percent since then, so it's not a huge surprise.
Speaker 2: So when you put that into the context, so many
Speaker 2: would say the investors love it today, it's the best
Speaker 2: performing stock on the nasat one hundred. The shares spike,
Speaker 2: but in the longer term context, it has just been
Speaker 2: so under pressure because of these underperforming assets as a whole.
Speaker 13: Yeah, and now I think you know, people are thinking, well,
Speaker 13: it will set up both companies.
Speaker 5: For better m and a positioning.
Speaker 3: Okay, so that's the gross story.
Speaker 13: Yeah, I think so at this point, because someone's going
Speaker 13: to come along probably in the next couple of years
Speaker 13: and consolidate all the cable networks. You would think Comcasts
Speaker 13: having spun off theirs, you know, you have Fox, which
Speaker 13: is again pure like entertainment network news at this point.
Speaker 5: And then on the other side, Yeah, I.
Speaker 13: Mean it's interesting to hear the company talk about their
Speaker 13: new streaming strategy, which is basically, Okay, Netflix and Amazon
Speaker 13: have essentially won all things for all people business, and
Speaker 13: what we really offer is a premium streaming option with
Speaker 13: HBO and so we're an add on service. And again,
Speaker 13: you know, paramount Better merger you know, is up up
Speaker 13: in the air at this point. So I think there
Speaker 13: is going to be a lot more consolidation. I think
Speaker 13: investors are probably thinking, Okay, this move sets up both
Speaker 13: companies for bettermine either as a buyer as a seller.
Speaker 2: At this one, we know about David Sazdev and m
Speaker 2: and A thoughts, but what about what do we know
Speaker 2: about kind of vitem filst what do we know about
Speaker 2: the CFO.
Speaker 13: I mean, he's been responsible for cutting costs. There's been
Speaker 13: all these layoffs, consolidations over the past three years, paying
Speaker 13: down the debt, which they've done a great job of.
Speaker 13: You know, twenty billion dollars paying down the debts in
Speaker 13: the past three years. I think he's going to be
Speaker 13: in charge of managing these assets, which are still profitable,
Speaker 13: but they're all losing subscribers, losing audience. It's a downward trajectory,
Speaker 13: So how do you manage that. It's going to be
Speaker 13: managing costs.
Speaker 2: Meanwhile, they say they're going to raise a bridge loan
Speaker 2: from JP Morgan of seventeen and a half billion, but
Speaker 2: going to recapitalize that before the split Clix Jollette.
Speaker 3: It's time now for talking tech.
Speaker 2: First up Meta is set to invest in Scale AI
Speaker 2: with potentially more than ten billion dollars, making one of
Speaker 2: the largest private company funding projects of all time now.
Speaker 2: According to Bloomberg Reporting, It's Scale generated about eight hundred
Speaker 2: and seventy million dollars in revenue twenty twenty four expects
Speaker 2: to make two billion dollars in revenue this year. Rus
Speaker 2: ion Q has agreed to buy UK startup Oxford Ionics
Speaker 2: in a one point zero eight billion dollar deal.
Speaker 7: Now.
Speaker 2: The takeover will bring together ion q's quantum hardware and
Speaker 2: software capabilities with Oxford ionics quantum chip technology. Transaction is
Speaker 2: expected to close in twenty twenty five, subject to regulatory approvals,
Speaker 2: and Qualcom has agreed to buy semiconductor company Alpha Way
Speaker 2: for about two point four billion dollars in cash. That's
Speaker 2: a ninety six percent premium into Alpha Wave's shares price in.
Speaker 3: March thirty first.
Speaker 2: The deal is expected to close in the first quarter
Speaker 2: of twenty twenty six, pending regulatory and shareholder approval. Now,
Speaker 2: let's head back to Apple's developers conference.
Speaker 4: Ed, you're standing by, Yeah, And even if the news
Speaker 4: flow isn't about Apple Intelligence specifically, there's still the reader
Speaker 4: cross of what we hear today and how it drives
Speaker 4: adoption of the ecosystem and sales of the iPhone. And
Speaker 4: that's why I'm delighted to speak with IDC's senior research
Speaker 4: director and Abila Papal Like, that's how I think about it.
Speaker 4: So the reporting tells us that it will be largely
Speaker 4: interface changers. It will be some developer access to Apple's
Speaker 4: work in AI that will drive some innovation. How does
Speaker 4: that translate to the iPhone?
Speaker 11: Thank you? And it's nice to be here. I think
Speaker 11: those are you know, really still big steps. You know,
Speaker 11: it's very important, it's going to help Even if there
Speaker 11: aren't really those big revolutionary announcements in AI. Those two
Speaker 11: things that you mentioned are going to help drive steps towards,
Speaker 11: you know, moving Apple in the right direction, right like
Speaker 11: opening apples it models to the developers, which they haven't
Speaker 11: done before. Are going to create innovation, even if it's
Speaker 11: from the community and not you know, driven by Apple.
Speaker 11: I think that's a big step. And that's also an
Speaker 11: innovative step, even if it's different.
Speaker 5: Right.
Speaker 11: And the changes to the operating system across platforms, I
Speaker 11: think that's also very important, and that's going to do
Speaker 11: two big things right. One is going to give users
Speaker 11: a new experience because the last time day of the
Speaker 11: design overhaul was especially with io has a decade ago.
Speaker 11: And then two, it's going to unify the experience and increase.
Speaker 3: The user's sickness.
Speaker 11: So if there are some potential users thinking to move over,
Speaker 11: it's going to make that even more difficult.
Speaker 4: How to consumers respond to OS labeling where they go
Speaker 4: from version iOS seventeen eighteen to year OS twenty six
Speaker 4: point blah blah blah blah blah.
Speaker 11: I think it's going to make it easier, right, It's
Speaker 11: before like that before there was just so much confusion
Speaker 11: between the different platforms, and we see users using.
Speaker 5: More devices you mean iOS, mac os, etcetera.
Speaker 11: Between different devices, Right, we have more use consumers having
Speaker 11: multiple devices, and it's harder to attract what's the different version,
Speaker 11: even though consumers are not that much focused in terms
Speaker 11: of what's the software and what version it's on. It's
Speaker 11: going to make that much easier for the average consumer
Speaker 11: to follow. And we're used to that with other products, right,
Speaker 11: other consumer products. So I think it's a really good
Speaker 11: move and simplifying.
Speaker 4: What's the kind of IDC must watch lists for today?
Speaker 4: What are the top three things that you want to
Speaker 4: hear from the company?
Speaker 11: Well, I do you know, I know that even though
Speaker 11: we're not going to get the big announcements around uh
Speaker 11: kind of Apple Intelligence, and that will appease Apple II critics,
Speaker 11: but I'm still eager to hear what the announcements will
Speaker 11: be around Apple Intelligence. I do still think they will
Speaker 11: address those to you know, signify that they are making
Speaker 11: those even if there are smaller steps, that they are
Speaker 11: still pacing towards that and they're you know, they have
Speaker 11: not dropped the ball. So I think that that that's
Speaker 11: I'm eager to see that. I'm also eager to see
Speaker 11: what kind of design. You know, we did hear some
Speaker 11: different obviously, rumors about the design changes about some liquid
Speaker 11: liquid glass. So I'm very interested to see how that looks.
Speaker 11: Because Apple, even though sometimes they make simple and small changes,
Speaker 11: it's always it's always really brilliant, brilliant.
Speaker 4: I'm eager to see that there's some functionality discussion as well.
Speaker 4: Live translation in I message calls and through air pods
Speaker 4: is something that we may hear about.
Speaker 5: But I also think about.
Speaker 4: The DISCUSSI I've had quite recently with Meta who have
Speaker 4: been working on this across different form factors of hardware.
Speaker 4: Google's been working on translation for a really long time.
Speaker 4: Apple's going to catch up there.
Speaker 5: Well, you know, there's.
Speaker 11: Always again, the critics are always going to be saying
Speaker 11: like be saying that, oh, you know, Android has had
Speaker 11: this for so and so many years. But we have
Speaker 11: to think about the ecosystem of Apple users. I mean,
Speaker 11: I have friends that the average Apple consumer doesn't really
Speaker 11: know what's been announced on Google Io or Microsoft Build
Speaker 11: or they don't really know. To them, it's their Apple universe,
Speaker 11: and to them this is going to be revolutionary and
Speaker 11: life translation is one of the biggest AI features that's
Speaker 11: been used. It's really popular in the you know where
Speaker 11: it's so to the Apple consumer, they're going to be
Speaker 11: really happy about that. And if that does get announced
Speaker 11: and really it's going to be very well received.
Speaker 5: Just really quickly.
Speaker 4: How uncertain is it right now for Apple in particular
Speaker 4: the smartphone or iPhone context with.
Speaker 5: Tariffs et cetera.
Speaker 11: Of course the terriff question, there is definitely a lot
Speaker 11: of uncertainty. But regardless so where the terraffs land. And
Speaker 11: you know, despite the high uncertainty that we've seen, even
Speaker 11: you've seen with our latest forecast, we still expect a
Speaker 11: growth for Apple because we've seen even with the pandemic
Speaker 11: right in times of high uncertainty, we see that the
Speaker 11: Apple consumer segment is still pretty resilient. So we'd still
Speaker 11: expect a low single digit growth for Apple this year.
Speaker 4: Nabila popeow IDC Research here at Cubatino at Apple's WWDC Carroc.
Speaker 2: Still so much to come, you're reporting throughout the day
Speaker 2: or an extraordinary event that's about to unfold, now, does it?
Speaker 2: For this edition a Bloomberg Tech do not forget.
Speaker 3: To check out our podcast.
Speaker 2: You find it on the terminal as well as online
Speaker 2: on Apple, Spotify, and iHeart Do. Go back to Coopatino
Speaker 2: with Ed a little bit later throughout our programming, This
Speaker 2: is Bloomberg.