WEBVTT - Apple Kicks Off Terns Era with First Foldable Phone 0:00:02.520 --> 0:00:05.369 Bloomberg Audio Studios. Podcasts. 0:00:05.680 --> 0:00:06.210 Radio. 0:00:06.650 --> 0:00:16.510 News. Bloomberg Tech is live from the heart of Silicon 0:00:16.570 --> 0:00:25.410 Valley with Ed Ludlow in San Francisco. This is Bloomberg Tech. 0:00:25.430 --> 0:00:27.970 We're live from Apple Park in Cupertino for what could 0:00:27.990 --> 0:00:31.640 be the iPhone maker's most consequential product launch. in years 0:00:31.730 --> 0:00:34.720 all eyes on john turnus making his first major public 0:00:34.760 --> 0:00:38.020 appearance as apple's ceo since taking the helm on september 0:00:38.240 --> 0:00:41.440 1st and bloomberg reports apple will unveil its first foldable 0:00:41.560 --> 0:00:44.680 iphone a device nearly a decade in the making marking 0:00:45.020 --> 0:00:48.060 the biggest change to iphone's form factor in almost 20 0:00:48.060 --> 0:00:51.460 years we'll bring you the details and analysis throughout the 0:00:51.500 --> 0:00:53.680 hour so apple's kind of treading water down a percentage 0:00:53.720 --> 0:00:56.440 point on the stock but really the story has been 0:00:56.480 --> 0:00:59.570 about a comeback on the shares since late june you 0:00:59.610 --> 0:01:03.570 remember in june Apple raised prices on everything apart from 0:01:03.590 --> 0:01:07.290 the iPhone, reflecting higher memory costs. A rally of 15% 0:01:07.290 --> 0:01:11.569 since then, adding $ 580 billion or so of market cap, 0:01:12.010 --> 0:01:16.210 is in part reflective of enthusiasm around this latest generation 0:01:16.230 --> 0:01:19.450 of products with the folding iPhone at the center of it. 0:01:19.490 --> 0:01:21.830 Let's get out to Bloomberg's Mark Gurman, who leads our 0:01:21.860 --> 0:01:25.100 coverage of Apple and consumer technology. And let's just start 0:01:25.120 --> 0:01:27.260 with the basics, Mark. You've done a lot of reporting 0:01:27.680 --> 0:01:30.160 on what Bloomberg says will be called the iPhone Duo. 0:01:30.440 --> 0:01:32.180 What are the specs? What do we need to know? 0:01:33.840 --> 0:01:35.500 Yes, so I'm hearing the phone will be called the 0:01:35.600 --> 0:01:40.840 iPhone Duo. This is the foldable phone. It'll start at $ 2, 000, 0:01:40.720 --> 0:01:44.690 5.5-inch screen on the outside, 7.8-inch screen on the inside, 0:01:45.450 --> 0:01:50.670 dual 48-megapixel cameras on the back, software-based telephoto, so there's 0:01:50.690 --> 0:01:55.200 no dedicated telephoto lens similar to the iPhone Air that 0:01:55.240 --> 0:01:59.150 came out last year. Come in dark blue, come in white. 0:01:59.930 --> 0:02:03.830 There will be storage capacities up to two terabytes and 0:02:03.870 --> 0:02:07.830 that model will cost roughly $ 3, 000. 0:02:06.270 --> 0:02:07.890 And so at. 0:02:07.880 --> 0:02:10.679 The $ 2, 000 price point, they are eating a lot of 0:02:10.700 --> 0:02:12.860 the memory costs here and they're going to be passing 0:02:12.880 --> 0:02:16.580 it on to international shoppers where the price tags are, 0:02:16.600 --> 0:02:19.560 you know, are less influential and less, you know, read 0:02:19.600 --> 0:02:22.770 into by Wall Street. They really want to keep the U.S. 0:02:22.850 --> 0:02:28.570 prices at $ 19. 99 threshold for effect. And you'll see that 0:02:28.950 --> 0:02:32.889 be announced today and go on sale in October. So 0:02:33.090 --> 0:02:36.670 slightly later than the iPhone 18 Pro and Pro Max 0:02:36.710 --> 0:02:40.960 that are launching this month. Speaking of 18 Pro and 0:02:40.980 --> 0:02:43.940 Pro Max, lots of talk about price increases over the 0:02:43.980 --> 0:02:48.200 last several months. Here's the deal. $ 100 more on each 0:02:48.240 --> 0:02:52.180 of those models. So not that $ 300, $ 500 price increase 0:02:52.200 --> 0:02:55.620 that some are expecting $ 100. Why are they doing this? 0:02:56.139 --> 0:03:00.440 Samsung and Google, they recently raised prices. They did $ 100. 0:02:59.900 --> 0:03:02.020 Apple doesn't want to go past that. They want to 0:03:02.100 --> 0:03:05.179 eat these costs. They're chasing market share here at a 0:03:05.240 --> 0:03:08.880 time where they really could raise prices substantially. 0:03:09.280 --> 0:03:09.460 Right. 0:03:12.080 --> 0:03:14.140 Bloomberg's Mark Gurman, stay with us. We have some breaking 0:03:14.180 --> 0:03:16.720 news on the Bloomberg terminal out of the U.S. Treasury. 0:03:16.740 --> 0:03:22.120 Bloomberg's international economics and policy correspondent, Mike McKee, has those details. Hi, Mike. 0:03:22.910 --> 0:03:23.160 Hi, Ed. 0:03:23.210 --> 0:03:25.450 Well, all of our bond market friends are getting the 0:03:25.490 --> 0:03:29.790 information they were looking for. The Treasury is going to 0:03:29.889 --> 0:03:35.700 buy back $ 6 billion in worth of 10- and 20-year notes. 0:03:36.200 --> 0:03:39.780 The question had been, would they go above the $ 4 0:03:39.380 --> 0:03:42.610 billion that they suggested, which was double the normal $ 2 0:03:42.290 --> 0:03:44.990 billion amount? And they have gone over that, maybe to 0:03:45.010 --> 0:03:47.530 send a message that they are serious about all of this, 0:03:48.030 --> 0:03:53.470 starting on September 10th. They will raise the size to 0:03:53.470 --> 0:03:59.070 $ 6 billion. Tomorrow we get the first buybacks of the day. 0:03:59.630 --> 0:04:02.560 And you can see the debt distribution right now of 0:04:03.180 --> 0:04:07.120 what we have out there that people can pick and 0:04:07.160 --> 0:04:10.240 choose to try to sell back. These will be off-the-run 0:04:10.980 --> 0:04:14.140 treasuries that the Treasury Department has been buying back because 0:04:14.180 --> 0:04:17.700 they say it's a liquidity need. But the market thinks 0:04:17.820 --> 0:04:20.279 that perhaps the ramping up of the number to $ 6 0:04:20.240 --> 0:04:23.550 billion From $ 2 billion is really more a question of 0:04:23.630 --> 0:04:27.510 trying to bring down rates. And as you can see there, 0:04:28.210 --> 0:04:31.600 that didn't work immediately. Rates have gone up quite a 0:04:31.620 --> 0:04:35.120 bit on the 10-year note. This is just early moments, 0:04:35.220 --> 0:04:37.840 but we'll see how this plays out. The rates right 0:04:37.880 --> 0:04:40.060 now are higher than they were when they first said 0:04:40.100 --> 0:04:41.080 they were going to do this, Ed. 0:04:44.570 --> 0:04:47.650 Treasuries falling, UK bonds also extending their drop. Mike McKee, 0:04:47.690 --> 0:04:50.590 thank you very much. I'm live at Apple Park in Cupertino. 0:04:50.930 --> 0:04:53.190 Let's get back to Los Angeles and Blumeau's Mark Gurman. 0:04:53.210 --> 0:04:56.840 We were talking about the foldable iPhone that you've reported 0:04:56.900 --> 0:04:59.159 will be called the iPhone Duo. I want to go 0:04:59.180 --> 0:05:01.980 into some of the backstory, Mark, if we can. The 0:05:02.100 --> 0:05:05.900 idea initially, and this work's been going on since before 2019, 0:05:05.900 --> 0:05:08.480 when Samsung came to the market with a foldable, maybe 0:05:08.620 --> 0:05:12.950 Apple looked at an iPad form factor. You're reporting details 0:05:12.970 --> 0:05:15.370 that Tim Cook made a pretty clear intervention on this 0:05:15.410 --> 0:05:17.890 needing to be an iPhone. And then John Ternus more 0:05:17.950 --> 0:05:21.930 recently got it over the line. Bring us that reporting. Yeah, 0:05:21.950 --> 0:05:23.250 it's exactly what you said, right? 0:05:23.270 --> 0:05:27.109 Initially, Apple looked at foldable displays, its core technology teams. 0:05:27.800 --> 0:05:31.780 This was over a decade ago. 2019, Samsung launches their phone, 0:05:31.800 --> 0:05:35.700 Huawei launches their phones, Tim Cook goes to Asia, Korea, China, 0:05:36.120 --> 0:05:39.309 sees that these are popular, gets enthusiastic about the category, 0:05:39.580 --> 0:05:41.570 which was rare for him. He really was never close 0:05:41.589 --> 0:05:45.150 to product development. Really pushed the hardware engineering team to 0:05:45.190 --> 0:05:47.670 develop this into a phone. And around 2023, Apple had 0:05:47.690 --> 0:05:53.570 its aha moment. where the core technologies, making the crease slimmer, 0:05:54.330 --> 0:05:56.650 making battery life to a better place, durability to a 0:05:56.650 --> 0:06:02.200 better place, that intersected with this idea of a passport-sized iPhone, 0:06:02.300 --> 0:06:05.460 a shorter display, a wider internal display. 0:06:05.500 --> 0:06:06.420 That all came together. 0:06:06.440 --> 0:06:08.920 Now, three years later, this is coming to market in 0:06:09.660 --> 0:06:10.900 just about a month and a half from now. 0:06:13.880 --> 0:06:15.760 We're going to be speaking to Bloomberg's Mark Gurman, our 0:06:15.779 --> 0:06:18.580 managing editor for ConsumerTech all day long. Big thank you 0:06:19.040 --> 0:06:22.320 to Mark. Joining us here at Apple headquarters is Carolina Milanesi, 0:06:22.380 --> 0:06:25.870 president and principal analyst at Creative Strategies. And what was 0:06:25.890 --> 0:06:27.550 so interesting in some of the kind of history that 0:06:27.589 --> 0:06:30.870 Mark detailed is Apple isn't always the first to enter 0:06:30.890 --> 0:06:35.289 a category, but when it does, they're often ready. Your 0:06:35.430 --> 0:06:39.540 expectations of how that would play out in the foldable category? 0:06:40.110 --> 0:06:43.130 I mean, for Foldable, it's really about taking friction away 0:06:43.390 --> 0:06:47.050 so that consumers are ready to take advantage of a 0:06:47.089 --> 0:06:47.890 new form factor. 0:06:47.970 --> 0:06:49.450 We are so used. 0:06:49.290 --> 0:06:51.870 To a slab of glass that we've been using for 0:06:51.950 --> 0:06:56.150 so long. So taking the software together with the hardware 0:06:56.270 --> 0:06:59.800 and then the ecosystem of apps that will come alive 0:06:59.950 --> 0:07:03.180 from a larger form factor. And it reminds me of 0:07:03.260 --> 0:07:07.080 the iPad days, right? The beginning, it was like, basically, 0:07:07.100 --> 0:07:09.479 it's an iPhone, but bigger. And that was enough for 0:07:09.540 --> 0:07:12.580 people to understand what they could do with it. But 0:07:12.600 --> 0:07:15.380 then it was the attention to the software and the 0:07:15.440 --> 0:07:19.650 application that came optimized for that screen size that really 0:07:19.670 --> 0:07:20.730 brought the device to life. 0:07:22.610 --> 0:07:25.110 Taking an interest in the software story in two ways. 0:07:25.230 --> 0:07:29.350 There's what Mark reported about how Apple has got ready 0:07:29.830 --> 0:07:32.330 for the foldable on the software side, but it also 0:07:32.350 --> 0:07:33.670 kind of links to Siri AI. 0:07:34.010 --> 0:07:34.730 Absolutely. 0:07:35.030 --> 0:07:35.690 Why do you think that? 0:07:36.050 --> 0:07:39.080 Because I think there is a way for AI to 0:07:39.620 --> 0:07:44.160 have all devices, all categories of devices really come together. 0:07:44.440 --> 0:07:47.520 So I'll be curious to see if there are going 0:07:47.540 --> 0:07:52.820 to be applications that Siri will have specifically on the 0:07:52.880 --> 0:07:56.240 Duo or maybe that it plays out slightly differently. I'm 0:07:56.280 --> 0:07:58.920 also curious to see if Apple have paid attention to 0:07:58.940 --> 0:08:07.000 other devices aiding or coming together. with the Duo in particular. 0:08:08.080 --> 0:08:09.460 You know, I don't know if it's something with the 0:08:09.480 --> 0:08:14.670 earbuds or with AirPods or with watch that might bring 0:08:15.050 --> 0:08:17.350 the ecosystem even tighter together. 0:08:18.590 --> 0:08:21.310 Pricing is going to be one of the biggest watches 0:08:22.020 --> 0:08:26.060 The Bloomberg reporting is that the Duo will have a 0:08:26.140 --> 0:08:31.700 floor of about $ 2, 000, but for higher storage spec, $ 3, 000. 0:08:30.420 --> 0:08:33.720 But even the next generation of iPhones being $ 100 higher 0:08:34.020 --> 0:08:37.800 than the prior generation, Apple has to do that really, 0:08:37.850 --> 0:08:38.160 don't they? 0:08:38.900 --> 0:08:41.300 They don't have much of a choice. Supply chain is 0:08:41.320 --> 0:08:45.000 what it is. Cost is going up. Obviously, you know, 0:08:45.200 --> 0:08:49.240 one choice they could have had is eating into their margins. 0:08:49.360 --> 0:08:52.830 I'm sure Wall Street wouldn't have appreciated that very much. 0:08:52.850 --> 0:08:57.210 But it's that balance is how much they can give 0:08:57.290 --> 0:09:01.429 back from a cost perspective to consumer, but also make 0:09:01.470 --> 0:09:05.010 sure that they do have an upgrade cycle that matters 0:09:05.090 --> 0:09:07.960 to them. And so it's that balance. And Apple has, 0:09:08.050 --> 0:09:12.400 in a way, an advantage over other OEMs, which is 0:09:12.440 --> 0:09:15.260 that they have a lot of content. They are generating 0:09:16.000 --> 0:09:20.240 revenue from services. And so that's the other part, is balancing, okay, 0:09:20.260 --> 0:09:23.949 maybe I'm not raising my prices as much because I 0:09:23.990 --> 0:09:27.070 know that I have some money coming in from subscriptions, 0:09:27.130 --> 0:09:28.690 which is something that others don't have. 0:09:29.770 --> 0:09:35.460 How is Carolina Milanese and Creative Strategies modeling in John Ternus? 0:09:36.340 --> 0:09:39.490 How do you do that? On the future, what might 0:09:39.510 --> 0:09:40.530 be different for Apple? 0:09:41.500 --> 0:09:43.650 I've been saying that at the end of the day, 0:09:43.760 --> 0:09:47.120 you're still talking about Apple, right? So you're not having 0:09:47.179 --> 0:09:49.309 a wild card that is going to now take the 0:09:49.370 --> 0:09:52.750 company into a totally different direction, but it will make 0:09:52.850 --> 0:09:55.510 its mark. And so from somebody that is coming from 0:09:55.530 --> 0:09:59.849 engineering and product, I think as we turn more into AI, 0:10:00.400 --> 0:10:03.359 that to me is really important. I've been saying for 0:10:03.400 --> 0:10:07.200 a while that you still need to sell hardware before 0:10:07.280 --> 0:10:10.820 you sell AI. And that is where the integration of 0:10:10.960 --> 0:10:14.689 silicon hardware and software is going to bring AI to life. 0:10:15.130 --> 0:10:18.189 The global smartphone market will probably be a billion units 0:10:18.230 --> 0:10:20.370 this year, something like that. Foldables is going to be 0:10:20.390 --> 0:10:21.170 a very small part. 0:10:21.190 --> 0:10:21.650 Very small. 0:10:21.670 --> 0:10:23.210 But if I can take you back to what Apple 0:10:23.230 --> 0:10:26.410 said at earnings, it really surprised me. Put memories one side. 0:10:26.460 --> 0:10:29.980 They basically said we misread demand. And so we didn't 0:10:30.020 --> 0:10:33.760 place orders for the processors. Demand seems really robust around 0:10:33.780 --> 0:10:35.320 the world. What are you seeing? 0:10:36.570 --> 0:10:38.780 As much as we want to talk about what comes 0:10:38.920 --> 0:10:42.000 after the phone, the phone, the smartphone is still our 0:10:42.080 --> 0:10:45.600 most precious device. And I think that consumer, especially at 0:10:45.720 --> 0:10:50.360 times of economic pressure, rely on this device so much 0:10:50.460 --> 0:10:52.449 more because it's everything to you. 0:10:52.520 --> 0:10:53.830 It's your internet device. 0:10:53.910 --> 0:10:55.170 It's your calculator. 0:10:55.309 --> 0:10:56.010 It's your wallet. 0:10:56.370 --> 0:11:01.770 So we've become highly dependent. And over time, consumers have 0:11:01.830 --> 0:11:03.829 proven that that's where they're going to put their money. 0:11:04.360 --> 0:11:06.679 Just to go over the basics, you know, John Ternus 0:11:06.700 --> 0:11:08.900 has been on stage before. It's just that this time 0:11:08.920 --> 0:11:12.420 he's the CEO. Does it matter what he says, how 0:11:12.460 --> 0:11:14.040 he says it? Oh, absolutely. 0:11:14.750 --> 0:11:16.949 You know, not that, bless him, not that before it 0:11:17.090 --> 0:11:20.189 didn't matter. But, you know, the weight that you carry 0:11:20.690 --> 0:11:23.170 when you speak as a CEO versus, you know, a 0:11:23.230 --> 0:11:27.270 lead engineer is very different. So yes, we'll be watching 0:11:27.530 --> 0:11:30.860 and I'm curious to see what he will anchor himself 0:11:31.480 --> 0:11:33.880 on as far as who he wants to be as 0:11:33.960 --> 0:11:34.480 a CEO. 0:11:34.940 --> 0:11:37.660 Very quickly, you've been on campus for 24 hours or so. 0:11:37.940 --> 0:11:41.280 Is it different this time? There's a lot of excitement. 0:11:41.380 --> 0:11:44.830 I think people are not just around the foldable iPhone, 0:11:44.870 --> 0:11:47.830 but really about the change of the guard. 0:11:47.470 --> 0:11:51.860 And what comes next. Carolina Milenanesi, Creative Strategies. Thank you 0:11:51.900 --> 0:11:54.800 very much for being with us here at Apple Park Cupertino. 0:11:54.820 --> 0:11:57.170 Coming up, we're going to talk through consumers' preference changes 0:11:57.490 --> 0:12:00.429 and what it means for Apple with Nicole Peng from Omdia. 0:12:00.470 --> 0:12:02.670 We'll be back from Apple Park in just a moment. 0:12:02.809 --> 0:12:13.490 This is Bloomberg Tech. OK, let's get back to that 0:12:13.530 --> 0:12:15.580 breaking news at the top of the hour. The U.S. 0:12:15.630 --> 0:12:18.760 Treasury said it will buy up to $ 6 billion of 0:12:18.860 --> 0:12:21.660 longer-dated government debt. This is the first operation under an 0:12:21.720 --> 0:12:25.809 expanded buyback program. Bloomberg International Economics and Policy Correspondent Mike 0:12:25.830 --> 0:12:28.089 McKee is back with us. I see market moves on 0:12:28.110 --> 0:12:28.670 this news, Mike. 0:12:29.400 --> 0:12:32.280 We're seeing the kind of moves that the Treasury Department 0:12:32.340 --> 0:12:34.870 did not want to see as the 10-year note yield 0:12:34.970 --> 0:12:40.069 rises on this news. Originally in August, when Treasury Secretary 0:12:40.130 --> 0:12:44.130 Besson said they would increase the size of the Treasury's buybacks, 0:12:44.770 --> 0:12:49.059 it was thought that it would bring down the yields some, 0:12:49.240 --> 0:12:52.060 and it did in the short run. But then yields 0:12:52.080 --> 0:12:56.140 started climbing again as people in the bond market started 0:12:56.179 --> 0:12:59.780 worrying about things like the U.S. debt, about inflation. about 0:12:59.820 --> 0:13:02.350 what's going on with the war in the Middle East, 0:13:02.420 --> 0:13:05.550 and it looks like that is continuing through. Besson's buybacks, 0:13:05.610 --> 0:13:08.110 as you mentioned, $ 6 billion, up to $ 6 billion. They 0:13:08.150 --> 0:13:10.470 don't have to go that high, but they likely will. 0:13:10.830 --> 0:13:14.410 Maturities between 10 and 20 years, and this operation will 0:13:14.450 --> 0:13:15.650 take place tomorrow. 0:13:16.050 --> 0:13:19.950 There should be a decent enough response to the auction. 0:13:19.720 --> 0:13:22.140 Because there's a lot of paper out there that is 0:13:22.260 --> 0:13:25.640 lightly traded and could get turned back into the Treasury. 0:13:26.020 --> 0:13:28.880 What we didn't get today is any kind of indication 0:13:28.940 --> 0:13:31.350 about how this is going to be paid for or 0:13:31.550 --> 0:13:34.929 whether this is going to go on beyond this one operation. 0:13:35.570 --> 0:13:39.250 They have been buying back regularly in this debt maturity 0:13:39.309 --> 0:13:43.580 range $ 2 billion worth. And do they intend to keep 0:13:43.620 --> 0:13:45.880 this at $ 6 billion? Will they raise it? Do they 0:13:45.920 --> 0:13:49.040 go back to $ 2 billion? Those are unanswered questions right now. 0:13:49.059 --> 0:13:52.600 And then the other unanswered question is, do they fund 0:13:52.640 --> 0:13:55.530 this by selling more T-bills? Or do they fund this 0:13:55.600 --> 0:13:58.000 out of the Treasury general account? It may depend on 0:13:58.260 --> 0:14:00.640 how often they're going to continue to do this. So 0:14:01.120 --> 0:14:03.800 still questions for the markets to have answers to, but 0:14:03.840 --> 0:14:06.579 at least we know what the initial amount is. 0:14:09.760 --> 0:14:12.060 That's quite a pop in yields we're seeing. What is 0:14:12.100 --> 0:14:15.880 the Treasury trying to achieve here, Mike? What are they 0:14:15.920 --> 0:14:17.230 trying to affect with this action? 0:14:17.770 --> 0:14:19.970 This is coming under the rubric of the program that 0:14:19.990 --> 0:14:24.500 they say is for liquidity help. They want to make 0:14:24.560 --> 0:14:29.900 these bonds more liquid, more available to sell. So they 0:14:29.920 --> 0:14:32.200 will be the buyer of last resort, which would then 0:14:32.260 --> 0:14:35.300 give people in the Treasury market more money to buy 0:14:35.500 --> 0:14:39.210 newer bonds. But really, the market thinks that that wasn't 0:14:39.250 --> 0:14:42.290 really a problem. And they're just trying to bring down 0:14:42.350 --> 0:14:45.790 yields because the higher the 10-year goes, the higher the 0:14:45.830 --> 0:14:46.830 whole yield curve goes. 0:14:47.190 --> 0:14:48.370 The more they have to pay. 0:14:48.190 --> 0:14:52.040 In interest, and it's getting very, very expensive to do that, 0:14:52.460 --> 0:14:55.300 plus the fact that we're seeing a reaction because the 0:14:55.340 --> 0:14:58.420 debt keeps going up and these added interest payments only 0:14:58.680 --> 0:15:01.380 add to that. So it's a kind of a vicious 0:15:01.440 --> 0:15:06.770 circle that the market suspects the Treasury is trying to 0:15:06.910 --> 0:15:11.130 sort of stop. The question is, can they? Maybe not, 0:15:11.170 --> 0:15:14.290 if this is any indication of what's happening today. And 0:15:14.510 --> 0:15:17.690 can they afford to keep doing this? Also, there's an 0:15:17.750 --> 0:15:21.050 impact on the Fed because they want to take cues 0:15:21.090 --> 0:15:24.710 from the Treasury market on what the economy is doing 0:15:24.750 --> 0:15:27.530 and what the Fed should do. And instead, they're getting 0:15:27.980 --> 0:15:30.600 a market that is manipulated by the Treasury and that 0:15:30.760 --> 0:15:33.100 will throw off whatever they're calculating. 0:15:36.610 --> 0:15:39.020 Lumos, Mike McKee, thank you very much. Equity is also 0:15:39.080 --> 0:15:41.240 at session lows, but Apple on a points basis, one 0:15:41.260 --> 0:15:44.590 of the biggest drags. Apple's foldable iPhone is expected to 0:15:44.610 --> 0:15:47.890 be the crown jewel of product announcements later today, but 0:15:47.930 --> 0:15:50.090 how will it fit into the wider picture of what's 0:15:50.150 --> 0:15:53.960 a growing but nascent segment. Nicole Pang, Research VP covering 0:15:53.980 --> 0:15:57.750 Consumer Hardware Application at Omdia is with me to discuss. 0:15:58.290 --> 0:16:00.950 The pricing is the focus, right? They are going to, 0:16:00.990 --> 0:16:05.390 according to Bloomberg's reporting, price iPhone Duo at $ 2, 000, up 0:16:05.410 --> 0:16:08.600 to $ 3, 000 for higher spec storage. Where does that sit 0:16:08.880 --> 0:16:09.720 in the market today? 0:16:10.540 --> 0:16:13.830 Actually, it's not a surprise for us for this pricing. 0:16:13.990 --> 0:16:16.350 It seems that all the foldable in the market is 0:16:16.390 --> 0:16:22.510 sitting at around $ 1, 900 on the US dollars on a 0:16:22.550 --> 0:16:26.910 retail price. And for Apple, we don't expect anything less 0:16:27.370 --> 0:16:32.470 than that. It's still three times than the average selling 0:16:32.490 --> 0:16:34.850 price of a normal smartphone in the market. 0:16:36.290 --> 0:16:38.550 It is a premium market anyway, isn't it? I mean, 0:16:38.590 --> 0:16:42.480 if you think about consumers in different geographies, a foldable 0:16:42.620 --> 0:16:45.440 iPhone would almost be like designerware. 0:16:46.830 --> 0:16:49.510 I will say that if you look at the market 0:16:49.530 --> 0:16:53.270 data these days, in fact, China is more than 50% 0:16:53.270 --> 0:16:55.790 of all the foldable chips. 0:16:55.810 --> 0:16:57.270 The existing foldable market. 0:16:57.330 --> 0:16:59.830 Exactly. And US is about 15%. 0:16:59.830 --> 0:17:07.859 Then 12% is coming from developed Asia, for example, Korea, Japan. Indeed, 0:17:08.440 --> 0:17:11.800 in those markets, they look at such a device as 0:17:12.280 --> 0:17:17.939 very much premium and also early adopter. And what is 0:17:18.000 --> 0:17:22.800 interesting is in China, the early adopters usually are. 0:17:22.720 --> 0:17:24.220 Very high-end consumers as well. 0:17:24.700 --> 0:17:28.240 So these fit in very well with what they need 0:17:28.290 --> 0:17:30.570 and what they want at the same time. 0:17:31.310 --> 0:17:34.869 How important is it that the iPhone Duo, which Bloomberg 0:17:34.930 --> 0:17:37.170 is reporting is the name of this foldable to come 0:17:37.210 --> 0:17:42.780 later today, is AI-ready, that they've taken into account the 0:17:42.859 --> 0:17:43.540 AI age? 0:17:44.300 --> 0:17:45.700 It's an interesting question. I will offer. 0:17:47.010 --> 0:17:52.680 different perspective here. We did a consumer survey across the world. 0:17:52.980 --> 0:17:54.620 Some of the places. 0:17:54.359 --> 0:17:59.000 Are really keen to get everything AI, for example, India, China, 0:17:59.840 --> 0:18:02.960 and US is somewhat in the middle. And we look 0:18:03.020 --> 0:18:05.980 at Europe, it's much more reserved when it comes to 0:18:06.210 --> 0:18:10.950 AI feature. We asked them what are the top factors 0:18:11.010 --> 0:18:14.170 that influence how they buy a smartphone brand, how they. 0:18:14.090 --> 0:18:15.070 Choose a smartphone brand. 0:18:16.060 --> 0:18:19.490 More than 50% of the user, they want it from 0:18:19.530 --> 0:18:23.310 a trusted company with reliable quality product. 0:18:24.250 --> 0:18:26.750 Second factor, best user experience. 0:18:27.250 --> 0:18:34.399 Third factors, best specs, top specs. Four factors, security, privacy. 0:18:34.980 --> 0:18:37.940 So when it comes to AI feature, cool AI feature, 0:18:38.180 --> 0:18:41.620 guess what? It comes down to the eighth of the 0:18:41.619 --> 0:18:43.139 12 factors that we asked them. 0:18:43.900 --> 0:18:47.109 So these days, but we can't do without AI. 0:18:47.510 --> 0:18:51.550 All the companies coming with cool AI feature, really helpful. 0:18:52.050 --> 0:18:55.190 I think it's really fitting into the number two factor 0:18:55.210 --> 0:18:57.290 where we're saying the best user experience. 0:18:57.820 --> 0:18:59.460 So the AI ready. 0:18:59.600 --> 0:19:03.980 What I'm thinking is not just AI feature that. 0:19:03.859 --> 0:19:04.560 You're talking about. 0:19:04.840 --> 0:19:08.400 Talking about or a GPT or a chatbot. It's more 0:19:08.440 --> 0:19:11.470 about how you enhance the user experience. That is the 0:19:11.530 --> 0:19:14.030 number two factors that are helping people to choose their. 0:19:14.170 --> 0:19:16.490 Phone these days. But those other factors seem important as well. 0:19:16.510 --> 0:19:21.219 Bloomberg's reporting detailed that Apple spent a lot of time 0:19:21.400 --> 0:19:25.060 on the hinge. on the margin or the fold and 0:19:25.800 --> 0:19:28.439 by necessity in a foldable you have to make some 0:19:28.500 --> 0:19:32.920 compromise lower battery life lower quality camera yeah to achieve 0:19:33.600 --> 0:19:36.620 the aesthetic um how important do you think those that 0:19:37.119 --> 0:19:38.740 it will be that apple nails. 0:19:38.510 --> 0:19:43.330 That that's why it takes so long so photo bear 0:19:43.390 --> 0:19:45.830 is not new and then it's been like 10 years 0:19:45.930 --> 0:19:49.050 already but what we're seeing quite a lot of breakthrough 0:19:49.170 --> 0:19:52.060 actually only have in this two years. 0:19:53.000 --> 0:19:54.780 For example, battery breakthrough. 0:19:54.960 --> 0:19:57.500 There is a new battery technology that really enhance and 0:19:57.550 --> 0:20:00.750 making it very thin and light at the same time 0:20:00.790 --> 0:20:04.830 very durable. Hinge of course and then screen technology is 0:20:04.910 --> 0:20:07.290 only just come out these two years and then making 0:20:07.350 --> 0:20:11.389 it much better. reliable devices that you can use longer. 0:20:11.890 --> 0:20:14.399 So I believe what we are looking at here is 0:20:14.560 --> 0:20:17.800 not just the cost of purchasing a device, it's the 0:20:17.859 --> 0:20:21.320 cost of owning it, which is actually preventing a lot 0:20:21.340 --> 0:20:26.719 of people not buying it at the moment. How expensive 0:20:26.740 --> 0:20:28.100 it might be taking to repair. 0:20:28.119 --> 0:20:32.179 Nicole, Apple has spent 20 years trying to get us 0:20:32.220 --> 0:20:36.840 to live our lives through a rectangle. this foldable iPhone 0:20:37.280 --> 0:20:39.620 is going to be short and wide. Yeah. Like a passport, 0:20:39.660 --> 0:20:40.280 we keep saying. 0:20:40.520 --> 0:20:40.760 Yeah. 0:20:41.770 --> 0:20:43.930 Is that what the form factor that the market wants? 0:20:44.910 --> 0:20:48.690 I think it's another very interesting question, how we evolve 0:20:48.790 --> 0:20:51.770 from a bar form factor that actually comes from a 0:20:51.810 --> 0:20:52.370 feature phone. 0:20:52.390 --> 0:20:53.570 Do you remember BlackBerry? 0:20:54.170 --> 0:20:54.650 Just about. 0:20:54.670 --> 0:20:57.780 So you have a screen on top and a keyboard 0:20:57.820 --> 0:20:58.859 on the bottom. 0:20:59.520 --> 0:21:00.840 But when you're coming to. 0:21:02.400 --> 0:21:08.690 tablet how people consuming a lot of video content multitasking 0:21:09.130 --> 0:21:10.030 it's a completely. 0:21:09.710 --> 0:21:13.230 Different form factor so we are moving. 0:21:12.950 --> 0:21:18.629 From actually a phone from a tablet light devices and 0:21:18.690 --> 0:21:22.170 other also very interesting when you're looking at immersive experience 0:21:22.550 --> 0:21:26.949 everything is about wide and a wider TV that you 0:21:26.970 --> 0:21:31.359 got at home, a wider cinema screen, and now it's 0:21:31.400 --> 0:21:34.909 a wider phone. So what we look at here is, 0:21:35.130 --> 0:21:38.159 we found that from our other devices that you look at, 0:21:38.230 --> 0:21:42.350 it's quite hard for people to go back to the 0:21:42.390 --> 0:21:44.820 previous experience and when they're starting to experience a much 0:21:44.859 --> 0:21:49.419 more immersive experience here. So this is especially important as 0:21:49.460 --> 0:21:54.100 well in this AI world because all the interaction has 0:21:54.140 --> 0:22:00.430 become much more voice-centric and we are consuming much more information. 0:21:59.950 --> 0:22:00.470 On the phone. 0:22:01.030 --> 0:22:06.130 So it could be a more AI-ready form factor compared 0:22:06.170 --> 0:22:07.929 to previously it was a phone. 0:22:07.990 --> 0:22:10.680 It's supposed to do what the phone needs to be doing. 0:22:11.140 --> 0:22:11.750 Things like that. 0:22:12.280 --> 0:22:15.460 Nicole Peng, Omdia on Bloomberg Tech here live at Apple 0:22:15.480 --> 0:22:18.320 Park in Cupertino. Thank you very much. Another big story, 0:22:18.480 --> 0:22:21.520 Amazon is tapping yet another corner of the global debt 0:22:21.560 --> 0:22:24.620 market to fund its AI ambitions. Tech giant is expected 0:22:24.660 --> 0:22:27.680 to raise more than 5.8 billion in its first ever 0:22:27.800 --> 0:22:32.479