1 00:00:02,560 --> 00:00:13,520 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live 2 00:00:13,560 --> 00:00:17,360 Speaker 1: from coast to coast with Caroline Hide in New York 3 00:00:17,680 --> 00:00:19,680 Speaker 1: and ev love Low into sent Francisco. 4 00:00:21,880 --> 00:00:23,880 Speaker 2: This is Bloomberg Tech and Caroline. 5 00:00:23,520 --> 00:00:24,400 Speaker 3: Heid in New York. 6 00:00:26,400 --> 00:00:29,000 Speaker 4: And am Ed Ludlow live in Coopertino from Apple. Is 7 00:00:29,040 --> 00:00:31,960 Speaker 4: the company's biggest product launch event of the year, and 8 00:00:32,000 --> 00:00:35,320 Speaker 4: we're waiting for the next generation of iPhone, smart watches 9 00:00:35,520 --> 00:00:36,479 Speaker 4: and much more character. 10 00:00:36,640 --> 00:00:39,159 Speaker 2: And let's just talk about what Apple is already pricing 11 00:00:39,159 --> 00:00:41,720 Speaker 2: in from a market valuation perspective, ED, I'm looking at 12 00:00:41,720 --> 00:00:44,360 Speaker 2: Apple off by six tens percent, as perhaps we brought. 13 00:00:44,120 --> 00:00:45,680 Speaker 3: The news into this unveil. 14 00:00:45,800 --> 00:00:48,600 Speaker 2: Usually stock does sinc after a product launch, and this 15 00:00:48,640 --> 00:00:50,960 Speaker 2: one is the iPhone seventeen ED. But let's look at 16 00:00:50,960 --> 00:00:54,120 Speaker 2: it on a longer term basis. This company has added 17 00:00:54,480 --> 00:00:57,920 Speaker 2: four hundred and thirty billion dollars in market capitalization since 18 00:00:57,960 --> 00:00:58,320 Speaker 2: the end. 19 00:00:58,240 --> 00:00:59,200 Speaker 3: Of July alone. 20 00:00:59,280 --> 00:01:02,640 Speaker 2: We have really not enough to bring it green in 21 00:01:02,720 --> 00:01:06,039 Speaker 2: a year to date perspective, though, ED. But that's because 22 00:01:06,080 --> 00:01:09,000 Speaker 2: we continue to worry about trade in so many other overhangs. 23 00:01:11,240 --> 00:01:13,480 Speaker 4: The way I think about it was third most valuable 24 00:01:13,520 --> 00:01:16,679 Speaker 4: company half of revenue as iPhone. Apple's biggest product launch 25 00:01:16,720 --> 00:01:18,520 Speaker 4: of the year is today in the company, which has 26 00:01:18,520 --> 00:01:22,080 Speaker 4: fallen behind in the generative AI race, will focus on hardware, 27 00:01:22,360 --> 00:01:25,000 Speaker 4: show off the new iPhone seventeen range. Let's bring in 28 00:01:25,000 --> 00:01:29,600 Speaker 4: Bloomberg's Global Consumer Tech Managing editor Mark German the basics 29 00:01:29,880 --> 00:01:33,080 Speaker 4: seventeen base model, through Pro and Pro maxin in the middle, 30 00:01:33,280 --> 00:01:37,200 Speaker 4: a seventeen air per you're reporting, Explain the features that 31 00:01:37,240 --> 00:01:39,920 Speaker 4: come with the seventeen air mark, but also why does 32 00:01:39,959 --> 00:01:40,479 Speaker 4: that matter? 33 00:01:41,840 --> 00:01:44,279 Speaker 5: The seventeen ear that's going to be the big deal today. 34 00:01:44,319 --> 00:01:47,480 Speaker 5: This is a slim down phone. On paper, it's a 35 00:01:47,520 --> 00:01:49,920 Speaker 5: third thinner than the other new iPhones that you're going 36 00:01:49,960 --> 00:01:53,440 Speaker 5: to see today, and this is an entirely new industrial design. 37 00:01:53,480 --> 00:01:55,880 Speaker 5: It's something brand new for the company. They have not 38 00:01:56,240 --> 00:01:58,960 Speaker 5: done an air phone to this point. Obviously there's the 39 00:01:59,000 --> 00:02:02,360 Speaker 5: Magwook Gear, there's the iPad Air, and now there's going 40 00:02:02,400 --> 00:02:03,640 Speaker 5: to be the iPhone Air. 41 00:02:03,880 --> 00:02:06,000 Speaker 6: This is going to be a pricey. 42 00:02:05,680 --> 00:02:07,880 Speaker 5: Phone, not as pricey as the pro models, but it's 43 00:02:07,880 --> 00:02:11,120 Speaker 5: going to be quite expensive, right somewhere between nine hundred 44 00:02:11,480 --> 00:02:13,520 Speaker 5: and around one thousand dollars, give or take. 45 00:02:13,880 --> 00:02:16,160 Speaker 6: It's going to only have one camera. It's going to. 46 00:02:16,120 --> 00:02:19,680 Speaker 5: Have drastically less battery life than the pro models. 47 00:02:19,800 --> 00:02:21,120 Speaker 6: But this is going to be exciting. 48 00:02:21,160 --> 00:02:23,639 Speaker 5: It's going to get people really interested in the phones 49 00:02:23,680 --> 00:02:24,120 Speaker 5: this year. 50 00:02:24,280 --> 00:02:26,639 Speaker 6: It's going to help draw people to Apple stores. 51 00:02:26,720 --> 00:02:28,520 Speaker 5: It's going to give Apple a way to have a 52 00:02:28,560 --> 00:02:32,000 Speaker 5: big marketing push going to the holiday season. But in 53 00:02:32,040 --> 00:02:35,040 Speaker 5: my view, as I've written, the most popular phones will 54 00:02:35,040 --> 00:02:38,519 Speaker 5: still remain the profones, and those prophones will also still 55 00:02:38,560 --> 00:02:42,040 Speaker 5: be the most practical new iPhones because of the better 56 00:02:42,080 --> 00:02:43,680 Speaker 5: battery life performance and cameras. 57 00:02:44,000 --> 00:02:45,720 Speaker 2: A lot of this, as you told us yesterday, is 58 00:02:45,760 --> 00:02:48,360 Speaker 2: sort of a warm up act to a foldable phone. 59 00:02:48,400 --> 00:02:51,160 Speaker 2: Having to make it as slim as possible and redesigning 60 00:02:51,160 --> 00:02:53,200 Speaker 2: that camera. Tell us about some of the health perks 61 00:02:53,200 --> 00:02:54,400 Speaker 2: that we're going to be getting. You've got a whole 62 00:02:54,480 --> 00:02:57,560 Speaker 2: new lineup of smart watches. We've also got AirPods really 63 00:02:57,720 --> 00:02:58,600 Speaker 2: lifting their game. 64 00:03:00,000 --> 00:03:02,320 Speaker 5: Pods Pro three that is going to be a health 65 00:03:02,320 --> 00:03:06,040 Speaker 5: centric upgrade. Last year they added hearing health features. This 66 00:03:06,160 --> 00:03:09,200 Speaker 5: year they're adding heart health features, so you're going to 67 00:03:09,280 --> 00:03:11,640 Speaker 5: have a heart rate monitor in the air pods for 68 00:03:11,639 --> 00:03:14,120 Speaker 5: the first time. This is interesting for people who want 69 00:03:14,120 --> 00:03:16,080 Speaker 5: to work out with their earbuds, which obviously is an 70 00:03:16,120 --> 00:03:19,400 Speaker 5: extraordinarily common use case, but people who don't have Apple 71 00:03:19,440 --> 00:03:21,760 Speaker 5: watches right the Apple Watch right, if you're like you 72 00:03:21,800 --> 00:03:23,600 Speaker 5: have an Apple Watch, it has a heart rate monitor 73 00:03:23,639 --> 00:03:26,960 Speaker 5: on there, but the total addressable market because of the 74 00:03:27,000 --> 00:03:31,440 Speaker 5: price and the more ubiquitous nature of the earbuds category, 75 00:03:31,480 --> 00:03:34,320 Speaker 5: will bring heart rate to more Apple customers, and if 76 00:03:34,320 --> 00:03:37,560 Speaker 5: you're an Android user, right, you might find that to 77 00:03:37,600 --> 00:03:39,640 Speaker 5: be an easier way to get into the Apple ecosystem 78 00:03:39,680 --> 00:03:41,480 Speaker 5: as well through the air pods. 79 00:03:41,560 --> 00:03:43,440 Speaker 6: So definitely a big upgrade there. 80 00:03:43,800 --> 00:03:47,000 Speaker 5: The smart watches, you're going to see the biggest overhaul 81 00:03:47,040 --> 00:03:49,080 Speaker 5: to the Apple Watch lineup in three years. So you're 82 00:03:49,080 --> 00:03:51,280 Speaker 5: going to see updates to the se which is their 83 00:03:51,360 --> 00:03:53,560 Speaker 5: low cost of three hundred dollars watch. You're going to 84 00:03:53,560 --> 00:03:56,360 Speaker 5: see a Series eleven minor after the big Series ten 85 00:03:56,440 --> 00:03:58,920 Speaker 5: overhaul last year, and then a pretty big update, the 86 00:03:58,920 --> 00:04:02,080 Speaker 5: biggest update ever the Apple Watch Ultra. Slightly bigger screen, 87 00:04:02,520 --> 00:04:06,560 Speaker 5: five G red cap so, faster internet connectivity, big thing 88 00:04:06,760 --> 00:04:10,360 Speaker 5: satellite capabilities. So if you are on the go in 89 00:04:10,400 --> 00:04:13,040 Speaker 5: a mountain range without cellular connectivity and you don't have 90 00:04:13,080 --> 00:04:14,920 Speaker 5: your phone with satellite, now. 91 00:04:14,800 --> 00:04:16,760 Speaker 6: Your watch the Ultra Watch will have it. 92 00:04:17,240 --> 00:04:21,520 Speaker 5: Apple is going squarely today after Fipit and Garmin Mark. 93 00:04:21,320 --> 00:04:22,520 Speaker 7: Pricing is going to be a story. 94 00:04:22,560 --> 00:04:26,320 Speaker 4: I've away right, Either Apple raises prices, passes it onto 95 00:04:26,360 --> 00:04:29,839 Speaker 4: the consumer, or they don't. They eat that cost largely 96 00:04:29,880 --> 00:04:33,120 Speaker 4: relating to tariffs, and then the carriers come in with 97 00:04:33,200 --> 00:04:33,920 Speaker 4: trade in deals. 98 00:04:33,960 --> 00:04:35,560 Speaker 7: What do we know about those three factors. 99 00:04:36,680 --> 00:04:38,760 Speaker 5: Yeah, so the pricing is interesting, You're right. Either way, 100 00:04:39,040 --> 00:04:42,320 Speaker 5: it's going to be noteworthy. It's interesting because Samsung and 101 00:04:42,400 --> 00:04:45,400 Speaker 5: Google both recently rolled out new phones and they did 102 00:04:45,400 --> 00:04:47,920 Speaker 5: not increase their prices. So the precedent is not set 103 00:04:47,920 --> 00:04:50,480 Speaker 5: there for Apple to raise the prices, even though they 104 00:04:50,480 --> 00:04:52,960 Speaker 5: do have the air cover of tariffs. If they do 105 00:04:53,080 --> 00:04:55,440 Speaker 5: raise prices, they're not really going to get into it. 106 00:04:55,480 --> 00:04:58,280 Speaker 5: But if they did, my bet would be they explain 107 00:04:58,320 --> 00:05:01,080 Speaker 5: it away as this is the first redesign, major camera upgrades, 108 00:05:01,160 --> 00:05:04,080 Speaker 5: new processors, whatever, whatever, whatever. They're not going to blame 109 00:05:04,080 --> 00:05:06,640 Speaker 5: Trump and tariffs because we as we all know, that 110 00:05:06,880 --> 00:05:10,400 Speaker 5: is a no no with this administration. In terms of 111 00:05:10,480 --> 00:05:14,720 Speaker 5: carrier deals, I am expecting an extraordinary amount of trade 112 00:05:14,760 --> 00:05:17,080 Speaker 5: in specials in deals from all the. 113 00:05:17,040 --> 00:05:18,360 Speaker 6: Major carriers in the US. 114 00:05:18,680 --> 00:05:20,479 Speaker 5: Apple has been working in the last several months with 115 00:05:20,520 --> 00:05:23,720 Speaker 5: these carriers to ensure that there are major deals in place. 116 00:05:24,320 --> 00:05:26,320 Speaker 5: To me, that implies there will be some tweaks to 117 00:05:26,360 --> 00:05:29,400 Speaker 5: the pricing strategy, and this could be positioned as a 118 00:05:29,400 --> 00:05:31,400 Speaker 5: way to offset any of those changes. 119 00:05:31,800 --> 00:05:33,960 Speaker 4: Bloomos Mark Gunman, who will be with us on the 120 00:05:34,000 --> 00:05:35,800 Speaker 4: network for coverage out throughout the day. 121 00:05:35,800 --> 00:05:36,400 Speaker 7: Thank you very much. 122 00:05:36,480 --> 00:05:39,080 Speaker 4: Let's get more Carly in a Millionacy president and principle 123 00:05:39,080 --> 00:05:43,120 Speaker 4: analyst of creative Strategies. You have a Galaxy S twenty 124 00:05:43,120 --> 00:05:47,599 Speaker 4: five edge handset. It is the Samsung Slim thin phone. Yeah, 125 00:05:47,640 --> 00:05:50,640 Speaker 4: it is a segment. So you've got Mark's reporting there 126 00:05:50,640 --> 00:05:55,279 Speaker 4: on a seventeen air Again, why does it matter for Samsung? 127 00:05:55,320 --> 00:05:58,200 Speaker 8: It was clearly a stepping stone to a much thinner 128 00:05:58,360 --> 00:06:02,520 Speaker 8: fold seven. They didn't put a lot of marketing behind 129 00:06:02,560 --> 00:06:04,880 Speaker 8: the product. To your point, is a segment, it's not 130 00:06:05,000 --> 00:06:09,400 Speaker 8: consumers are screaming for finner phones. But we also haven't 131 00:06:09,400 --> 00:06:12,560 Speaker 8: seen much difference in design for a long time. You know, 132 00:06:12,600 --> 00:06:14,640 Speaker 8: all the phones kind of look the same. The thing 133 00:06:14,680 --> 00:06:17,320 Speaker 8: that changes the most is the back where the camera is. 134 00:06:17,440 --> 00:06:19,880 Speaker 8: So it'd be interesting to see if a rumors are right. 135 00:06:19,920 --> 00:06:23,080 Speaker 8: But Apples is changing that part of the phone because 136 00:06:23,120 --> 00:06:25,039 Speaker 8: it's going to be very obvious that you have a 137 00:06:25,120 --> 00:06:29,200 Speaker 8: new model of your iPhone. But yes, the thinner phone 138 00:06:29,400 --> 00:06:33,200 Speaker 8: is something that vendors seem to be doing to lead 139 00:06:33,240 --> 00:06:35,880 Speaker 8: their way to a foldable which would make me wrong 140 00:06:35,960 --> 00:06:41,000 Speaker 8: about Apple doing affordable iPad before an iphable phone affordable iPhone, 141 00:06:41,000 --> 00:06:42,240 Speaker 8: which was always my theory. 142 00:06:42,920 --> 00:06:45,640 Speaker 2: Your theory unfoldable, though, is one that we listen to 143 00:06:45,720 --> 00:06:49,080 Speaker 2: because eventually we do anticipate a foldable phone from Apple, 144 00:06:49,400 --> 00:06:52,440 Speaker 2: but they lag there behind competition, and of course everyone 145 00:06:52,480 --> 00:06:54,120 Speaker 2: says they lag behind on gender to AI. 146 00:06:54,200 --> 00:06:55,360 Speaker 3: Does that matter to a consumer? 147 00:06:56,600 --> 00:06:59,680 Speaker 8: I don't think that consumers are going into a store 148 00:06:59,760 --> 00:07:02,159 Speaker 8: as in four AI, and I think what plays in 149 00:07:02,240 --> 00:07:05,279 Speaker 8: Apple's favor or what they don't have a tunnel of time, 150 00:07:05,720 --> 00:07:08,440 Speaker 8: is the fact that there's the assurance that when they 151 00:07:08,480 --> 00:07:13,120 Speaker 8: are ready, the software will come with all the phones 152 00:07:13,160 --> 00:07:16,760 Speaker 8: that you already have. So if consumers are drawn to 153 00:07:16,920 --> 00:07:20,760 Speaker 8: this year's models because of a change in hardware design, 154 00:07:21,280 --> 00:07:23,880 Speaker 8: they know they have peace on minding going in and 155 00:07:23,920 --> 00:07:28,880 Speaker 8: buy now knowing that when Apple Intelligence redesign will happen, 156 00:07:29,280 --> 00:07:31,040 Speaker 8: they will have access to it. 157 00:07:32,240 --> 00:07:35,160 Speaker 4: Karly, Now, what do we know from third party data 158 00:07:35,200 --> 00:07:40,080 Speaker 4: from consumer trends about what happened after iPhone sixteen launch, 159 00:07:40,120 --> 00:07:43,520 Speaker 4: particularly on Pro. You heard Mark explain that whatever happens 160 00:07:43,560 --> 00:07:46,120 Speaker 4: with pricing, the carriers will come out and say trade 161 00:07:46,160 --> 00:07:49,400 Speaker 4: in your handset. Lots of people get really frustrated, particularly 162 00:07:49,240 --> 00:07:51,520 Speaker 4: in the USA, where they say, I only just got 163 00:07:51,520 --> 00:07:53,960 Speaker 4: a sixteen Pro. Is there going to be enough in 164 00:07:54,000 --> 00:07:56,800 Speaker 4: the capability to drive me even with a trade in 165 00:07:56,800 --> 00:07:57,680 Speaker 4: to upgrade? 166 00:07:57,880 --> 00:08:02,120 Speaker 8: Yes, last year's upgrade from the carriers were very aggressive. 167 00:08:02,240 --> 00:08:05,880 Speaker 8: The tradeing pricing was really good for consumers. I think, 168 00:08:06,040 --> 00:08:08,600 Speaker 8: as always, you have a segment of the market that 169 00:08:08,720 --> 00:08:11,080 Speaker 8: is going to hold on to their phone no matter what. 170 00:08:11,320 --> 00:08:13,760 Speaker 8: The Where it really makes a difference is the early 171 00:08:13,760 --> 00:08:18,080 Speaker 8: adopters that will get that bump. Usually the hardware redesign 172 00:08:18,440 --> 00:08:21,360 Speaker 8: really drives a lot of upgrades, and I think that 173 00:08:21,720 --> 00:08:25,040 Speaker 8: between what we've see as room or colors and then 174 00:08:25,080 --> 00:08:28,240 Speaker 8: the finn design, people will get into the store. Whether 175 00:08:28,320 --> 00:08:30,960 Speaker 8: or not they'll decide to buy, we'll see depending on pricing. 176 00:08:31,000 --> 00:08:32,520 Speaker 8: As you just discussed with Mark. 177 00:08:32,600 --> 00:08:34,320 Speaker 4: May I ask in a quick fire around how many 178 00:08:34,400 --> 00:08:35,600 Speaker 4: iPhone events have you been to? 179 00:08:35,840 --> 00:08:38,840 Speaker 8: Oh my god since two thousand and seven, so too 180 00:08:38,840 --> 00:08:39,640 Speaker 8: many odd time. 181 00:08:40,080 --> 00:08:42,199 Speaker 4: We always say this is the biggest event for Apple 182 00:08:42,200 --> 00:08:44,360 Speaker 4: in the year. I put it back to basics. iPhone 183 00:08:44,400 --> 00:08:47,280 Speaker 4: is more than half of revenue. But this idea of 184 00:08:47,280 --> 00:08:50,760 Speaker 4: a seventeen generation with a thin and air thrown in 185 00:08:50,760 --> 00:08:52,920 Speaker 4: the middle, where do you think that ranks in the 186 00:08:52,960 --> 00:08:55,200 Speaker 4: history of the sort of storied Apple launches. 187 00:08:55,720 --> 00:08:58,360 Speaker 8: I think is to me, if it's true that this 188 00:08:58,600 --> 00:09:00,920 Speaker 8: is a step in stone to fold, is a moment 189 00:09:01,080 --> 00:09:03,880 Speaker 8: that is going to really fine the next generation. It'll 190 00:09:03,920 --> 00:09:06,040 Speaker 8: be interesting to see how much they get into the 191 00:09:06,160 --> 00:09:09,840 Speaker 8: architecture of the actual device, whatever they change, how they 192 00:09:09,840 --> 00:09:13,720 Speaker 8: are redesigned. Making something thin is really hard when it 193 00:09:13,720 --> 00:09:17,800 Speaker 8: comes to the phone, from battery size to not compromise 194 00:09:17,800 --> 00:09:21,840 Speaker 8: your battery life, which was the biggest drawback for some song, 195 00:09:22,679 --> 00:09:26,000 Speaker 8: and then the camera and the camera capability. You cannot 196 00:09:26,040 --> 00:09:28,760 Speaker 8: have the same camera set as you do on a Promax, 197 00:09:29,120 --> 00:09:32,520 Speaker 8: so how do you reinvent your camera to make sure 198 00:09:32,559 --> 00:09:34,520 Speaker 8: that there's no compromise for people that care? 199 00:09:35,120 --> 00:09:39,600 Speaker 2: Carolina talk to us about caring on wearables. How important 200 00:09:40,120 --> 00:09:42,960 Speaker 2: are the new iterations of their pods of the watch is. 201 00:09:42,960 --> 00:09:43,520 Speaker 3: Going to be for you? 202 00:09:44,720 --> 00:09:46,920 Speaker 8: I think they're really important, and there is the reason 203 00:09:46,960 --> 00:09:50,040 Speaker 8: why Apple always does these three products together because it 204 00:09:50,120 --> 00:09:54,120 Speaker 8: is the trifecta of what being mobile is. I do 205 00:09:54,160 --> 00:09:58,280 Speaker 8: think that the RT rate monitoring on the AirPods, if true, 206 00:09:58,880 --> 00:10:01,520 Speaker 8: is going to be a really interesting for Apple. There 207 00:10:01,559 --> 00:10:03,960 Speaker 8: are people who don't want to wear a watch, or 208 00:10:04,040 --> 00:10:07,640 Speaker 8: people that cannot afford to add that to their list 209 00:10:07,679 --> 00:10:10,680 Speaker 8: of products that they own, and so having AirPods allowing 210 00:10:10,720 --> 00:10:13,679 Speaker 8: you to work out and do what you need, you 211 00:10:13,720 --> 00:10:18,160 Speaker 8: will see, my guess, is a strong upgrade from regular 212 00:10:18,320 --> 00:10:22,520 Speaker 8: AirPods to Airport Pro and so nice revenue uptake for Apple. 213 00:10:22,880 --> 00:10:26,320 Speaker 2: What about to the bottom line, What about pushing up 214 00:10:26,360 --> 00:10:27,160 Speaker 2: the price points for. 215 00:10:27,200 --> 00:10:31,040 Speaker 8: These It'll be interesting to see if they're pushing up 216 00:10:31,320 --> 00:10:34,320 Speaker 8: the price point. I agree totally with market that they 217 00:10:34,360 --> 00:10:37,120 Speaker 8: cannot blame me on tariff if they do. There is 218 00:10:37,520 --> 00:10:42,200 Speaker 8: the president of both Google and Samsung not raising prices, 219 00:10:42,280 --> 00:10:44,559 Speaker 8: so it'll be really hard for them to do that. 220 00:10:44,800 --> 00:10:47,360 Speaker 8: I also do think that they're a moment where they 221 00:10:47,400 --> 00:10:51,000 Speaker 8: want to make sure that they're install based upgrades to 222 00:10:51,040 --> 00:10:53,920 Speaker 8: the latest devices so that they have the latest chipset. 223 00:10:54,120 --> 00:10:55,600 Speaker 8: That at the end of the day is what is 224 00:10:55,640 --> 00:11:00,199 Speaker 8: going to matter for Apple intelligence ANYI in general, you. 225 00:11:00,120 --> 00:11:02,040 Speaker 4: Know when you're setting the Steve jobs theater, what is 226 00:11:02,080 --> 00:11:04,640 Speaker 4: the one thing the absolute focus for you in that 227 00:11:04,760 --> 00:11:05,880 Speaker 4: moment that you're tracking. 228 00:11:06,720 --> 00:11:10,360 Speaker 8: I'm still looking at how Apple brings everything together so 229 00:11:10,520 --> 00:11:14,160 Speaker 8: that consumers stay tied to the ecosystem. That is going 230 00:11:14,200 --> 00:11:17,080 Speaker 8: to be their biggest ticket to winning when it comes 231 00:11:17,080 --> 00:11:17,559 Speaker 8: to AI. 232 00:11:18,120 --> 00:11:22,040 Speaker 2: Currently in a Milanasy, President principal Analystic Creative Strategies, She's 233 00:11:22,080 --> 00:11:24,800 Speaker 2: going to be back on Bloomberg again after Apple's keynote 234 00:11:24,840 --> 00:11:28,320 Speaker 2: this afternoon, so stay tuned. Meanwhile, coming up, Europe's AI 235 00:11:28,360 --> 00:11:32,200 Speaker 2: infrastructure company Nevious soaring after it said it will provide 236 00:11:32,240 --> 00:11:34,760 Speaker 2: Microsoft access to GPU infrastructure capacity. 237 00:11:35,559 --> 00:11:48,439 Speaker 3: This is putting their tech in video. 238 00:11:48,600 --> 00:11:50,840 Speaker 2: It plans to offer a new product design to make 239 00:11:50,960 --> 00:11:54,000 Speaker 2: certain types of AI work more efficient, such as video 240 00:11:54,040 --> 00:11:58,080 Speaker 2: generation and software creation. That The product, called REUBENCPX, will 241 00:11:58,120 --> 00:11:59,960 Speaker 2: debut at the end of twenty twenty six and will 242 00:12:00,080 --> 00:12:02,280 Speaker 2: be offered in the form of cards that can be 243 00:12:02,320 --> 00:12:06,160 Speaker 2: incorporated into existing server computer designs or used in discrete 244 00:12:06,160 --> 00:12:08,439 Speaker 2: computers that can operate separately. 245 00:12:08,160 --> 00:12:10,600 Speaker 3: Alongside other hardware in data centers. 246 00:12:11,280 --> 00:12:15,240 Speaker 4: Elshore A AI a massive infrastructure deal between Microsoft and 247 00:12:15,280 --> 00:12:18,880 Speaker 4: Europe's Nebius worth as much as nineteen point four billion dollars. 248 00:12:18,920 --> 00:12:23,280 Speaker 4: Neocloud nebbiis recently spun off from Russia's tech giant Yandex 249 00:12:23,520 --> 00:12:27,760 Speaker 4: will provide compute to Microsoft from a data center in 250 00:12:27,840 --> 00:12:30,520 Speaker 4: New Jersey. Let's get out to Bloomberg's Matt Day, who 251 00:12:30,559 --> 00:12:33,559 Speaker 4: covers Microsoft for US. And Matt, let's start with what 252 00:12:33,640 --> 00:12:35,680 Speaker 4: Microsoft gets out of this cloud arrangement. 253 00:12:36,760 --> 00:12:38,520 Speaker 9: So they get access to a whole bunch of video 254 00:12:38,600 --> 00:12:41,960 Speaker 9: GPUs that Nebus is said to receive and fire up 255 00:12:42,000 --> 00:12:45,480 Speaker 9: in New Jersey. They also get some optionality, right, They've 256 00:12:45,480 --> 00:12:47,760 Speaker 9: been spending a ton of money on their own data 257 00:12:47,760 --> 00:12:50,400 Speaker 9: center construction. They've also been throwing some to partners. This 258 00:12:50,520 --> 00:12:52,880 Speaker 9: is maybe a way for them to grow that portfolio 259 00:12:52,960 --> 00:12:54,480 Speaker 9: without so much of their risk if they had have 260 00:12:54,559 --> 00:12:56,079 Speaker 9: been buying all the stuff themselves. 261 00:12:56,559 --> 00:13:00,800 Speaker 2: We will Mebbius really making its name in neoc offering 262 00:13:01,120 --> 00:13:05,200 Speaker 2: extraordinary storied business where it spun out of yan Nex. 263 00:13:05,280 --> 00:13:06,360 Speaker 3: Of course, posts. 264 00:13:06,120 --> 00:13:09,960 Speaker 2: Russia's invasion of Ukraine, the CEO backs away and now 265 00:13:10,040 --> 00:13:13,680 Speaker 2: has this new European based juggernaut that's all things AI. 266 00:13:14,320 --> 00:13:16,199 Speaker 9: Yeah, out of nowhere, right, and it's a huge vote 267 00:13:16,200 --> 00:13:19,120 Speaker 9: of confidence in the yandexprass and some of the staffers 268 00:13:19,120 --> 00:13:23,160 Speaker 9: who who left Russia to set up this rebranded holding company. 269 00:13:23,400 --> 00:13:24,800 Speaker 9: They are quite quite a bet on a name that 270 00:13:24,880 --> 00:13:26,280 Speaker 9: just didn't have a whole lot going for it. Here 271 00:13:26,320 --> 00:13:27,319 Speaker 9: a couple of years ago. 272 00:13:29,880 --> 00:13:31,760 Speaker 4: Matt, You've got to get back to your desk because 273 00:13:31,800 --> 00:13:33,720 Speaker 4: in the time you've been in the seat, some news 274 00:13:33,720 --> 00:13:36,400 Speaker 4: from Microsoft a change in rto policy. 275 00:13:36,480 --> 00:13:37,319 Speaker 7: Do you have the details? 276 00:13:38,120 --> 00:13:40,000 Speaker 9: Yeah, it looks like three days a week starting in 277 00:13:40,040 --> 00:13:42,320 Speaker 9: Puget Sound, rolling out later to the rest of the 278 00:13:42,360 --> 00:13:45,319 Speaker 9: US and then abroad. Microsoft have been a pretty a 279 00:13:45,360 --> 00:13:47,839 Speaker 9: pretty lax hand on this sort of recommending two days 280 00:13:47,880 --> 00:13:49,800 Speaker 9: a week, but it really varied by team. Some teams 281 00:13:49,800 --> 00:13:51,240 Speaker 9: had an arty oot at all. So looks like they're 282 00:13:51,280 --> 00:13:53,040 Speaker 9: kind of following some of the some of the folks 283 00:13:53,080 --> 00:13:54,599 Speaker 9: like Amazon, the who have taken a harder line on 284 00:13:54,640 --> 00:13:55,960 Speaker 9: getting folks back into the office. 285 00:13:56,080 --> 00:13:57,480 Speaker 2: I mean, it doesn't seem to set them back in 286 00:13:57,559 --> 00:13:59,920 Speaker 2: terms of market valuation, in terms of performance as far, 287 00:14:00,760 --> 00:14:03,960 Speaker 2: But how much is there the fierce talent wars upon 288 00:14:04,040 --> 00:14:06,360 Speaker 2: Microsoft weighing as well as some of the other names 289 00:14:06,360 --> 00:14:07,000 Speaker 2: that we think about. 290 00:14:08,040 --> 00:14:10,319 Speaker 9: Well, for sure, and I think for some who would 291 00:14:10,640 --> 00:14:13,120 Speaker 9: argue that Microsoft's pres arrangements working well. It's been a 292 00:14:13,120 --> 00:14:15,920 Speaker 9: recruiting advantage for them right particularly here in Seattle, where 293 00:14:16,080 --> 00:14:18,800 Speaker 9: both Microsoft and Amazon are based. You know, you could say, hey, listen, 294 00:14:18,840 --> 00:14:20,080 Speaker 9: if you don't want to have to commute the office 295 00:14:20,120 --> 00:14:22,440 Speaker 9: five days a week, Microsoft's your bet. A little bit 296 00:14:22,520 --> 00:14:25,000 Speaker 9: less advantage there, but they still are relatively flexible by 297 00:14:25,000 --> 00:14:25,800 Speaker 9: big tech standards. 298 00:14:26,040 --> 00:14:29,200 Speaker 2: Bloomberg's Matt Day all things Microsoft and Nevis, we appreciate it. 299 00:14:29,680 --> 00:14:30,840 Speaker 3: Look, let's talk about the. 300 00:14:30,800 --> 00:14:33,880 Speaker 2: Dutch chip making equipment company ASML. Now it's investing one 301 00:14:33,920 --> 00:14:36,680 Speaker 2: and a half billion dollars in France's Mistral AI. 302 00:14:37,160 --> 00:14:38,520 Speaker 3: This is pretty unusual move. 303 00:14:38,560 --> 00:14:41,560 Speaker 2: It's going to allow ASML to incorporate Mistral's generative AI 304 00:14:41,680 --> 00:14:43,520 Speaker 2: services in its own machinery and operations. 305 00:14:43,800 --> 00:14:46,800 Speaker 3: Makes ASML the larger shareholder in Mistral within a Levember 306 00:14:46,840 --> 00:14:47,320 Speaker 3: cent steak. 307 00:14:47,520 --> 00:14:50,800 Speaker 2: Bloomberg's Benoir Buffalo is here for more from Paris. It 308 00:14:50,920 --> 00:14:54,400 Speaker 2: is the pin up generative AI business Mistral for France. 309 00:14:54,920 --> 00:14:57,880 Speaker 2: ASML coming in taking such a stake, what does it 310 00:14:57,920 --> 00:14:58,920 Speaker 2: mean for the French government. 311 00:15:01,920 --> 00:15:05,080 Speaker 10: It's obviously super important to French and I would say 312 00:15:05,080 --> 00:15:08,920 Speaker 10: to European tech because now Mistral is probably the only 313 00:15:09,560 --> 00:15:15,280 Speaker 10: European tech startup that's doing language models AI language models 314 00:15:15,280 --> 00:15:18,600 Speaker 10: and that has a full suite of products also doing 315 00:15:18,640 --> 00:15:21,720 Speaker 10: computing here, So it's definitely key. 316 00:15:21,960 --> 00:15:24,400 Speaker 6: And key is also the fact. 317 00:15:24,120 --> 00:15:30,680 Speaker 10: That it's a European tech giant, ASML investing in Mistral. 318 00:15:31,040 --> 00:15:35,800 Speaker 10: Mistral previously got back in from US venture funds people 319 00:15:35,800 --> 00:15:38,120 Speaker 10: who are doubting that they could continue to grow and 320 00:15:38,200 --> 00:15:42,880 Speaker 10: raise capital with the European backers, and this is the 321 00:15:42,920 --> 00:15:46,280 Speaker 10: case now, and it's important for Mistral because obviously we've 322 00:15:46,320 --> 00:15:51,120 Speaker 10: got these giants like open Ai and the x et 323 00:15:51,200 --> 00:15:55,800 Speaker 10: cetera doing the leading language models now, but there are 324 00:15:55,880 --> 00:16:00,840 Speaker 10: European companies choosing to cut deals with Mistral because they're 325 00:16:00,880 --> 00:16:06,240 Speaker 10: European and they see it as a sovereignty or strategic 326 00:16:06,280 --> 00:16:13,000 Speaker 10: independence issue to make this contract and it's important for 327 00:16:13,040 --> 00:16:16,360 Speaker 10: them for this reason. So it's extremely key for that reason. 328 00:16:16,440 --> 00:16:22,120 Speaker 4: Yeah, Ben, While SML participated in that broader funding round, 329 00:16:22,240 --> 00:16:26,120 Speaker 4: valuing Mistrau at almost twelve billion euros, that's the finance part. 330 00:16:26,480 --> 00:16:29,520 Speaker 4: But there's a technology story here too, right, What is 331 00:16:29,520 --> 00:16:33,400 Speaker 4: it that each company is partnering on in the technology sense. 332 00:16:34,040 --> 00:16:34,120 Speaker 11: So. 333 00:16:35,880 --> 00:16:38,280 Speaker 10: In a way they are on both ends of the 334 00:16:38,360 --> 00:16:42,480 Speaker 10: AI value chain right, ALSML, it is really at the 335 00:16:42,520 --> 00:16:47,320 Speaker 10: top of the value chain, really doing these very powerful 336 00:16:47,400 --> 00:16:50,360 Speaker 10: and sophisticated machines, the only one in the world to 337 00:16:50,360 --> 00:16:55,520 Speaker 10: do these machines, allowing chip makers to do very advanced chips. 338 00:16:55,960 --> 00:17:00,360 Speaker 10: They have Nvidia, they are powering Nvida for example. Stroll 339 00:17:00,520 --> 00:17:04,560 Speaker 10: is really at the end selling AI AI products. So 340 00:17:05,160 --> 00:17:08,240 Speaker 10: Mistral for example, is a customer of Nvidia because they've 341 00:17:08,240 --> 00:17:11,640 Speaker 10: got data centers that they're building in Europe to train 342 00:17:11,720 --> 00:17:16,159 Speaker 10: their models. So what they say of this deal, it's 343 00:17:16,200 --> 00:17:18,479 Speaker 10: a bit of a surprising deal in a way. What 344 00:17:18,560 --> 00:17:21,440 Speaker 10: they say on ICML sides is that it's going to 345 00:17:21,480 --> 00:17:24,800 Speaker 10: be for them a way to incorporate AI into the 346 00:17:24,880 --> 00:17:29,040 Speaker 10: whole company, and ASML is going to use Mistral AI 347 00:17:30,200 --> 00:17:34,840 Speaker 10: to improve the scanning of data to improve really it's 348 00:17:34,920 --> 00:17:39,320 Speaker 10: core products, to improve efficiency. So that's what they're telling 349 00:17:39,359 --> 00:17:41,920 Speaker 10: for now, but it's going to be interesting to follow 350 00:17:41,960 --> 00:17:43,920 Speaker 10: what they're going to do, and they might use other 351 00:17:44,160 --> 00:17:48,359 Speaker 10: AI companies, but they choose Mistral, and they choose to 352 00:17:48,400 --> 00:17:50,119 Speaker 10: back this company. 353 00:17:49,760 --> 00:17:51,160 Speaker 3: Well and immediately made every one thing. 354 00:17:51,240 --> 00:17:53,960 Speaker 2: Maybe SML eventually wants to buy it, but there was 355 00:17:54,000 --> 00:17:55,800 Speaker 2: pushback from the CEO. 356 00:17:55,560 --> 00:17:55,880 Speaker 7: On that. 357 00:17:58,320 --> 00:17:59,000 Speaker 6: Yeah, he said. 358 00:17:59,040 --> 00:18:03,640 Speaker 10: They don't want to win corporate every technology they use, 359 00:18:04,160 --> 00:18:07,880 Speaker 10: they don't want to integrate that into their company. So 360 00:18:08,320 --> 00:18:10,840 Speaker 10: it looks like a put back, a pushback for sure. 361 00:18:11,240 --> 00:18:15,840 Speaker 10: The founders of Mistrall and employees Mistral says they still 362 00:18:15,840 --> 00:18:20,080 Speaker 10: have the majority of the company, so for surely it 363 00:18:20,119 --> 00:18:21,480 Speaker 10: doesn't seem to be undergouts. 364 00:18:21,520 --> 00:18:23,399 Speaker 6: It's already a very sizable. 365 00:18:23,119 --> 00:18:26,359 Speaker 10: Investment for SML because they haven't done that kind of 366 00:18:27,119 --> 00:18:31,360 Speaker 10: venture deals before, so it's already something unusual for them 367 00:18:31,400 --> 00:18:32,040 Speaker 10: in a way to do. 368 00:18:32,320 --> 00:18:35,240 Speaker 4: Bloomberg spend war Butelo in Paris, thank you very much. 369 00:18:41,000 --> 00:18:44,119 Speaker 2: Attack association funded by the likes of Battle, Google and 370 00:18:44,160 --> 00:18:46,840 Speaker 2: other major tech companies, when it's launching a new initiative 371 00:18:46,880 --> 00:18:50,800 Speaker 2: to strengthen the freight relationship between Democrats and Silicon Valley, 372 00:18:50,920 --> 00:18:53,600 Speaker 2: all ahead of the twenty twenty six midterm elections, and 373 00:18:53,720 --> 00:18:56,760 Speaker 2: Bloomberg's Emily Burnbaun, who covers corporate lobbying for US, has 374 00:18:56,760 --> 00:18:59,919 Speaker 2: that story. It looks support for the Trump administration is 375 00:19:00,080 --> 00:19:02,919 Speaker 2: spiked among tech executives. So what does the Chamber of 376 00:19:02,960 --> 00:19:04,440 Speaker 2: Progress hope to achieve here? 377 00:19:05,320 --> 00:19:08,520 Speaker 12: Yes, they say that that movement, that right word shift 378 00:19:08,600 --> 00:19:11,640 Speaker 12: in Silicon Valley is in part due to a reaction 379 00:19:11,800 --> 00:19:15,480 Speaker 12: to the Biden administration's policies, which were much more skeptical 380 00:19:15,480 --> 00:19:20,160 Speaker 12: and critical of big tech and AI companies. So they 381 00:19:20,200 --> 00:19:24,119 Speaker 12: say we're here to do some relationship counseling. You know, 382 00:19:24,280 --> 00:19:27,600 Speaker 12: Silicon Valley was once associated with Democrats. They want to 383 00:19:27,600 --> 00:19:30,520 Speaker 12: bring us back to that more you know, Obama tech 384 00:19:30,560 --> 00:19:31,160 Speaker 12: friendly era. 385 00:19:32,480 --> 00:19:34,919 Speaker 4: Emily, I'm live here at Apple Park and Cupertino, And 386 00:19:34,960 --> 00:19:37,119 Speaker 4: in the story we note that Apple is one of 387 00:19:37,160 --> 00:19:40,720 Speaker 4: a number of technology companies helping to fund this association. 388 00:19:41,720 --> 00:19:43,520 Speaker 4: In the last week, we've seen Tim Cook at the 389 00:19:43,520 --> 00:19:48,360 Speaker 4: table with the President discussing the almost quid pro coo 390 00:19:48,440 --> 00:19:51,080 Speaker 4: of investing in America in return for sort. 391 00:19:50,960 --> 00:19:53,360 Speaker 7: Of policy relief. I gave you that backdrop, Souse. 392 00:19:53,359 --> 00:19:56,520 Speaker 4: I just want to understand who's involved here on the 393 00:19:56,520 --> 00:20:01,000 Speaker 4: company side and the democratic side, away from the association itself. 394 00:20:01,560 --> 00:20:08,600 Speaker 12: Yeah, the association has hired a Democrat who has relationships 395 00:20:08,600 --> 00:20:11,760 Speaker 12: with tech companies. So that's Dave Borland from the Department 396 00:20:11,800 --> 00:20:12,400 Speaker 12: of Defense. 397 00:20:13,080 --> 00:20:13,800 Speaker 3: And when I. 398 00:20:13,800 --> 00:20:18,600 Speaker 12: Asked which company specifically signed off on this, you know, 399 00:20:18,720 --> 00:20:23,720 Speaker 12: democratic project held under the Chamber of Progress, they said 400 00:20:23,760 --> 00:20:26,639 Speaker 12: they couldn't say specifically, but They pointed to their members. 401 00:20:26,680 --> 00:20:27,920 Speaker 3: They said, their members have. 402 00:20:29,320 --> 00:20:32,760 Speaker 12: You know, they are also interested in looking ahead to 403 00:20:33,320 --> 00:20:38,879 Speaker 12: a potentially more democratically controlled Washington and they want to 404 00:20:39,000 --> 00:20:42,440 Speaker 12: start thinking about what it's going to look like when 405 00:20:42,640 --> 00:20:44,000 Speaker 12: Trump is no longer in power. 406 00:20:44,320 --> 00:20:46,480 Speaker 2: I mean, it's going to be quite a major reset 407 00:20:46,880 --> 00:20:49,280 Speaker 2: because you just go back to the previous administration and 408 00:20:49,320 --> 00:20:51,879 Speaker 2: how CEO off the CEO really felt that they were 409 00:20:51,920 --> 00:20:55,240 Speaker 2: either being investigated or being fined. What's the next steps 410 00:20:55,280 --> 00:20:56,040 Speaker 2: to rectify it? 411 00:20:56,560 --> 00:21:00,600 Speaker 12: Well, you know, different people have different opinions on this contest. 412 00:21:00,800 --> 00:21:02,960 Speaker 12: You know, it's contested within the Democratic Party if this 413 00:21:03,080 --> 00:21:05,960 Speaker 12: is something to fix, but you know, if your chamber 414 00:21:05,960 --> 00:21:08,280 Speaker 12: of progress, if you're a tech friendly Democrat, then I 415 00:21:08,280 --> 00:21:13,680 Speaker 12: think first steps would be at least hearing out industry more. 416 00:21:13,840 --> 00:21:15,800 Speaker 12: There was kind of a blanket policy in the Biden 417 00:21:15,800 --> 00:21:18,879 Speaker 12: administration not to even speak to tech on issues that 418 00:21:18,960 --> 00:21:21,080 Speaker 12: might impact them for fear of corporate capture. 419 00:21:21,800 --> 00:21:23,320 Speaker 6: I think it would also be. 420 00:21:24,800 --> 00:21:28,000 Speaker 12: You know, not having as strong M and A policies 421 00:21:28,080 --> 00:21:28,879 Speaker 12: and things like that. 422 00:21:31,359 --> 00:21:39,600 Speaker 4: Bloomberg's Emily Burnbound, thank you very much, welcome back. 423 00:21:39,440 --> 00:21:41,640 Speaker 3: To Bloomberg Tech. And Caroline heid in New York. 424 00:21:43,440 --> 00:21:46,639 Speaker 4: And Amed Lovelow live in Cooper Tino from Apple. It 425 00:21:46,680 --> 00:21:48,639 Speaker 4: is iPhone day. I think it's worth thinking about the 426 00:21:48,640 --> 00:21:51,840 Speaker 4: stock carra right, It's normal not just to see the 427 00:21:51,840 --> 00:21:54,800 Speaker 4: stock treading water in advance of the presentation, but for 428 00:21:54,880 --> 00:21:57,040 Speaker 4: it to be a seldom used kind of event. Overall 429 00:21:57,280 --> 00:21:59,320 Speaker 4: yere to date, the stock's down almost six percent, but 430 00:21:59,400 --> 00:22:02,159 Speaker 4: since the end of July, Apple's had a big rally. 431 00:22:02,400 --> 00:22:04,679 Speaker 4: Some of the political issues behind it, some of the 432 00:22:04,720 --> 00:22:08,760 Speaker 4: tariff questions partly put to bed but not completely. And 433 00:22:08,800 --> 00:22:11,160 Speaker 4: now the overhang is what happens with AI. We don't 434 00:22:11,200 --> 00:22:14,240 Speaker 4: expect anything from that today. I'm also thinking about what 435 00:22:14,440 --> 00:22:17,560 Speaker 4: historically happens on iPhone day. Yes, sell the news, but 436 00:22:17,640 --> 00:22:20,800 Speaker 4: in the thirty day or sixty day period afterwards, we 437 00:22:20,880 --> 00:22:24,000 Speaker 4: do sometimes see that stock rally where the handset of 438 00:22:24,040 --> 00:22:26,800 Speaker 4: that generation has had a warm reception with the consumer. 439 00:22:26,960 --> 00:22:29,480 Speaker 4: We're in the fiscal fourth quarter, we're entering the holiday 440 00:22:29,480 --> 00:22:32,879 Speaker 4: period of fiscal first quarter. That's why we're here tracking 441 00:22:32,920 --> 00:22:35,280 Speaker 4: the third most valuable company in the world and the 442 00:22:35,359 --> 00:22:36,200 Speaker 4: latest handsets. 443 00:22:36,200 --> 00:22:38,120 Speaker 2: What you're looking at, I'm looking at another stock that's 444 00:22:38,200 --> 00:22:42,280 Speaker 2: rallied hard going into today, Oracle. It's earnings about after 445 00:22:42,320 --> 00:22:45,320 Speaker 2: the Bell Bloomberg Intelligence senior software analysts and rag Rana 446 00:22:45,520 --> 00:22:48,640 Speaker 2: writing that solid recent results from Microsoft and call we've 447 00:22:48,920 --> 00:22:52,280 Speaker 2: they're mode well for Oracle's own cloud infrastructure business. When 448 00:22:52,280 --> 00:22:55,160 Speaker 2: are report's earnings, anra joins us now for more? 449 00:22:55,320 --> 00:22:56,760 Speaker 3: The key question is. 450 00:22:56,760 --> 00:22:58,760 Speaker 2: Whether the news is going to be strong enough to 451 00:22:58,840 --> 00:23:01,359 Speaker 2: vindicate the run up in the stock. What strength do 452 00:23:01,400 --> 00:23:02,800 Speaker 2: you want on fundamental. 453 00:23:02,359 --> 00:23:06,520 Speaker 13: Zanerag Yeah, I think that is absolutely right. We really 454 00:23:06,560 --> 00:23:10,400 Speaker 13: have a lot of their solidy baked into expectations going in. 455 00:23:10,640 --> 00:23:12,400 Speaker 13: But the big question is going to be how much 456 00:23:12,440 --> 00:23:15,200 Speaker 13: capital expenditures have to go up in order to take 457 00:23:15,200 --> 00:23:17,600 Speaker 13: care of these you know backlock that is going to 458 00:23:17,640 --> 00:23:21,280 Speaker 13: be extremely strong. When outicle reports tonight, you know what 459 00:23:21,400 --> 00:23:23,680 Speaker 13: kind of funding they need? Well, you know when will 460 00:23:23,680 --> 00:23:26,160 Speaker 13: it go live? So there's a lot of supply chain 461 00:23:26,240 --> 00:23:30,159 Speaker 13: as well as financing questions, not so much demand issues 462 00:23:30,200 --> 00:23:30,720 Speaker 13: at this point. 463 00:23:31,440 --> 00:23:33,159 Speaker 4: And our Oracle to me has been a bit of 464 00:23:33,160 --> 00:23:36,760 Speaker 4: a surprise story, the relationship with open Ai and Stargate. 465 00:23:37,440 --> 00:23:39,840 Speaker 4: It's also just sort of getting a lot of wins. 466 00:23:40,119 --> 00:23:42,480 Speaker 4: How much has it surprised you when you put it 467 00:23:42,520 --> 00:23:44,520 Speaker 4: in the context of that broader field of let's call 468 00:23:44,560 --> 00:23:45,560 Speaker 4: them Hyperscalers. 469 00:23:45,600 --> 00:23:48,320 Speaker 13: Yeah, yeah, I know that's absolutely true. So when you 470 00:23:48,359 --> 00:23:50,760 Speaker 13: go back to twenty eighteen when we started looking at 471 00:23:50,760 --> 00:23:53,880 Speaker 13: the OCI infrastructure build up, you know, we were surprised 472 00:23:53,880 --> 00:23:56,639 Speaker 13: that why Larry is spending so much money? Why not 473 00:23:56,880 --> 00:23:59,479 Speaker 13: just you know, work with the hyperscalers to expand its 474 00:23:59,560 --> 00:24:02,160 Speaker 13: database business, which is the cash cow and the high 475 00:24:02,160 --> 00:24:05,560 Speaker 13: margin business. But frankly speaking, his bet was right because 476 00:24:05,640 --> 00:24:08,760 Speaker 13: right now the question is where can I get compute 477 00:24:08,800 --> 00:24:11,600 Speaker 13: And frankly speaking, they are now the fourth largest cloud 478 00:24:11,640 --> 00:24:14,520 Speaker 13: providers in terms of size. The next few years they're 479 00:24:14,520 --> 00:24:17,120 Speaker 13: going to generate twenty thirty billion dollars from it, so 480 00:24:17,160 --> 00:24:21,160 Speaker 13: it's fairly lucrative business. Right now, the margins are low, 481 00:24:21,480 --> 00:24:24,440 Speaker 13: but over time we anticipate that to improve as well. 482 00:24:24,760 --> 00:24:26,840 Speaker 2: I mean, going back to their last learnings, we learned 483 00:24:26,840 --> 00:24:29,520 Speaker 2: to the thirty billion dollars per year run. Right, we're 484 00:24:29,520 --> 00:24:32,160 Speaker 2: going to get from one client alone we want anticipate, 485 00:24:32,160 --> 00:24:34,760 Speaker 2: of course, that was open AI. Are we going to 486 00:24:34,800 --> 00:24:37,520 Speaker 2: hear any major victories once again in terms of new 487 00:24:37,520 --> 00:24:39,320 Speaker 2: clients or is it going to be more just showing 488 00:24:39,320 --> 00:24:42,159 Speaker 2: the proof in AYI infrastructure revenue growth? 489 00:24:43,119 --> 00:24:46,080 Speaker 13: Yeah, Oracle is very good at detailing the number of 490 00:24:46,080 --> 00:24:49,439 Speaker 13: customers it has gained every quarter, so we do anticipate 491 00:24:49,480 --> 00:24:52,280 Speaker 13: a long relist of that. But frankly speaking, the biggest 492 00:24:52,440 --> 00:24:55,520 Speaker 13: question is when can you get these data centers up 493 00:24:55,520 --> 00:24:58,480 Speaker 13: in live and running, and when do you start recognizing 494 00:24:58,520 --> 00:25:01,440 Speaker 13: this backlog into revenue and improve on the growth rate 495 00:25:01,480 --> 00:25:03,359 Speaker 13: which has already gone from you know, there was a 496 00:25:03,400 --> 00:25:07,040 Speaker 13: time they were growing at subpart five five percent and 497 00:25:07,119 --> 00:25:09,520 Speaker 13: now it's going to be low double digit's moving towards 498 00:25:09,520 --> 00:25:13,080 Speaker 13: middle double digit growth rate, So very good for uticle shareholders. 499 00:25:13,119 --> 00:25:14,960 Speaker 13: And you know management team and. 500 00:25:15,359 --> 00:25:18,560 Speaker 4: Rona a Bloomberg Intelligence setting us up for Oracle after 501 00:25:18,600 --> 00:25:21,440 Speaker 4: the bell, Thank you very much. It is iPhone day 502 00:25:21,480 --> 00:25:26,320 Speaker 4: here in Coopertino at Apple, Samantha Kelly recently joining Bloomberg's 503 00:25:26,320 --> 00:25:29,280 Speaker 4: consumer tech team. We have this squad now, but you 504 00:25:29,320 --> 00:25:31,760 Speaker 4: know how this works. Let's start with the basics. What 505 00:25:31,840 --> 00:25:33,679 Speaker 4: is it that you are looking out for and that 506 00:25:33,720 --> 00:25:35,199 Speaker 4: you think is going to be the big story here? 507 00:25:35,280 --> 00:25:36,439 Speaker 3: Yeah, thank you for having me. 508 00:25:36,920 --> 00:25:40,720 Speaker 14: So Apple is a master of you know, stagery basically, 509 00:25:40,760 --> 00:25:42,640 Speaker 14: you know, I just walked in a little while ago. 510 00:25:42,680 --> 00:25:44,840 Speaker 14: Everyone's had enjoyed the show, and I think it's a 511 00:25:44,880 --> 00:25:49,080 Speaker 14: reminder that this day is as almost about theatrics as 512 00:25:49,080 --> 00:25:51,720 Speaker 14: it is about the tech aspect. So we're here to 513 00:25:51,960 --> 00:25:54,080 Speaker 14: you know, listen to what they have to veil go, 514 00:25:54,280 --> 00:25:56,600 Speaker 14: we test it out and we kind of decipher. You know, 515 00:25:56,640 --> 00:25:59,000 Speaker 14: there's a lot of hype around it. Sometimes they might say, 516 00:25:59,200 --> 00:26:01,679 Speaker 14: you know, a certain feature might represent you know, the 517 00:26:01,680 --> 00:26:03,440 Speaker 14: whole new wave of what's to expect. 518 00:26:03,440 --> 00:26:04,560 Speaker 3: But is that the case? 519 00:26:04,600 --> 00:26:07,600 Speaker 14: How does that translate to why is it impactful to people? 520 00:26:07,800 --> 00:26:10,520 Speaker 14: Will it really impact the industry and does it really 521 00:26:10,600 --> 00:26:11,280 Speaker 14: actually matter? 522 00:26:12,080 --> 00:26:14,840 Speaker 2: When it comes to questioning if it really matters, many 523 00:26:14,920 --> 00:26:17,560 Speaker 2: feel it's the air that really matters to show the 524 00:26:17,600 --> 00:26:20,040 Speaker 2: next leap forward in a foldable phone? 525 00:26:20,119 --> 00:26:21,719 Speaker 3: Is that right for you? Sammy? Excited to get your 526 00:26:21,720 --> 00:26:22,280 Speaker 3: hand on the air. 527 00:26:22,880 --> 00:26:25,399 Speaker 14: I'm definitely excited to see it, that's for sure. I 528 00:26:25,400 --> 00:26:28,520 Speaker 14: do think whether or not it translates to whether people 529 00:26:28,600 --> 00:26:31,639 Speaker 14: actually need something like that. Again, it's going to be 530 00:26:31,760 --> 00:26:34,640 Speaker 14: a lot slimmer, But what does that mean for battery life? 531 00:26:34,640 --> 00:26:36,679 Speaker 14: What does it mean for the camera system? Kind of 532 00:26:36,680 --> 00:26:39,679 Speaker 14: will sit in this like murky spot in between the 533 00:26:39,840 --> 00:26:42,760 Speaker 14: entry level iPhone and higher end iPhone, But of course, 534 00:26:42,840 --> 00:26:45,720 Speaker 14: you know, why does it exist anyway? Could perhaps lead 535 00:26:45,760 --> 00:26:49,359 Speaker 14: the way to thinner perhaps foldable devices down the line. 536 00:26:49,400 --> 00:26:52,800 Speaker 14: So definitely interested to see how the form factor impacts 537 00:26:52,800 --> 00:26:53,960 Speaker 14: the functionality as well. 538 00:26:54,359 --> 00:26:57,760 Speaker 4: We perhaps assume or take for granted that everyone knows 539 00:26:57,760 --> 00:27:01,040 Speaker 4: what's going to happen. But the basics are local time 540 00:27:01,119 --> 00:27:05,720 Speaker 4: one pm New York time, a keynote, a presentation, take 541 00:27:05,760 --> 00:27:07,639 Speaker 4: it from there. How does Apple usually do it? Did 542 00:27:07,680 --> 00:27:09,320 Speaker 4: they just sort of come up front and say, Okay, 543 00:27:09,440 --> 00:27:11,280 Speaker 4: here's all the stuff. Do they tease things out? 544 00:27:11,560 --> 00:27:11,760 Speaker 7: Yeah? 545 00:27:11,800 --> 00:27:15,439 Speaker 14: What's interesting is it's changed in recent years. Before COVID, 546 00:27:15,480 --> 00:27:17,119 Speaker 14: we used to come out here and it was a 547 00:27:17,160 --> 00:27:20,600 Speaker 14: live presentation, a lot of excitement around that. You know what, 548 00:27:20,680 --> 00:27:24,320 Speaker 14: will they announce? Will the demo even work? More authentic? 549 00:27:25,160 --> 00:27:27,639 Speaker 14: During COVID they did. They switched to live streams. A 550 00:27:27,680 --> 00:27:29,960 Speaker 14: lot of other companies did that. A lot of companies 551 00:27:29,960 --> 00:27:32,679 Speaker 14: have since switched back, but Apple is still doing the 552 00:27:32,720 --> 00:27:35,879 Speaker 14: pre recorded streaming. So it depends. You know, wherever you 553 00:27:35,920 --> 00:27:37,679 Speaker 14: are in the world watching, you're going to see what 554 00:27:37,680 --> 00:27:40,520 Speaker 14: we're sitting in the lawn chairs watching. So what's different 555 00:27:40,560 --> 00:27:44,119 Speaker 14: here is Tim Cook usually addresses the audience, has a 556 00:27:44,119 --> 00:27:47,000 Speaker 14: few words, We watch the live stream and then we 557 00:27:47,000 --> 00:27:50,320 Speaker 14: get funneled into another room, we're able to try out 558 00:27:50,400 --> 00:27:53,240 Speaker 14: have some minutes with the devices for the first time, 559 00:27:53,280 --> 00:27:55,600 Speaker 14: and that allows us to see sort of what they're 560 00:27:55,640 --> 00:27:57,960 Speaker 14: conveying and how it translates to touch. 561 00:27:58,480 --> 00:28:02,480 Speaker 2: Some people love the people behind these stories, and we 562 00:28:02,640 --> 00:28:04,920 Speaker 2: know that actually a lot of key talent has been 563 00:28:05,000 --> 00:28:08,280 Speaker 2: being lost from Apple but largely in the AI sphere. 564 00:28:08,680 --> 00:28:11,240 Speaker 2: Who are we going to see getting off on a 565 00:28:11,280 --> 00:28:13,240 Speaker 2: pre recorded stage today. 566 00:28:13,080 --> 00:28:16,040 Speaker 3: Who's going to be making an impact? Yes, that's a 567 00:28:16,040 --> 00:28:16,600 Speaker 3: great question. 568 00:28:17,080 --> 00:28:19,880 Speaker 14: So of course it'll be introductions by Tim Cook, who 569 00:28:19,880 --> 00:28:23,320 Speaker 14: will be throughout the entire presentation, and then the leads 570 00:28:23,359 --> 00:28:27,200 Speaker 14: around the different products. So again we're expecting new iPhones, 571 00:28:27,240 --> 00:28:32,280 Speaker 14: we're expecting Apple Watches, we might see some air new AirPods, 572 00:28:32,560 --> 00:28:34,920 Speaker 14: home pods, so the respective leads will join. 573 00:28:35,119 --> 00:28:36,480 Speaker 3: But what's interesting too is. 574 00:28:36,480 --> 00:28:38,520 Speaker 14: Sort of before the event, you can kind of see 575 00:28:38,520 --> 00:28:42,520 Speaker 14: some key players in the audience. Last year, I remember 576 00:28:42,560 --> 00:28:44,400 Speaker 14: there was some buzz about whether or not there's going 577 00:28:44,440 --> 00:28:47,840 Speaker 14: to be an open AI partnership. In just moments before 578 00:28:47,840 --> 00:28:51,200 Speaker 14: the live stream, we saw Sam Altman walking around the grounds. 579 00:28:51,320 --> 00:28:53,480 Speaker 14: So it's always really kind of exciting to see sort 580 00:28:53,520 --> 00:28:55,200 Speaker 14: of who might play a part in what that means 581 00:28:55,240 --> 00:28:56,800 Speaker 14: for the announcements later in the day. 582 00:28:57,000 --> 00:28:58,280 Speaker 3: I'm bog Samantha Kelly. 583 00:28:58,520 --> 00:29:01,600 Speaker 2: We so appreciate you being live for us from Coombertino today. 584 00:29:01,800 --> 00:29:03,040 Speaker 2: Re ready to get your hands on some of the 585 00:29:03,120 --> 00:29:05,200 Speaker 2: new devices. Meanwhile, coming up, we're going to be joined 586 00:29:05,200 --> 00:29:08,000 Speaker 2: by the Cisco Chief Product Officer discussing the company's latest 587 00:29:08,040 --> 00:29:09,360 Speaker 2: agentic AI announcements. 588 00:29:09,960 --> 00:29:10,920 Speaker 3: This is Bloomberg Tech. 589 00:29:24,920 --> 00:29:28,240 Speaker 2: Now, amid the frenzy of demand for AI infrastructure, companies 590 00:29:28,400 --> 00:29:31,680 Speaker 2: are focused on monitoring its impact, crucially the security and 591 00:29:31,720 --> 00:29:32,560 Speaker 2: the cost. 592 00:29:32,600 --> 00:29:34,080 Speaker 3: Of their AI application stack. 593 00:29:34,240 --> 00:29:37,880 Speaker 2: That's including infrastructure but also LMS and agents. Now, Cisco 594 00:29:37,960 --> 00:29:41,920 Speaker 2: is today unveiling new Splunk enterprise solutions to do just this, 595 00:29:42,360 --> 00:29:43,920 Speaker 2: eighteen months after Cisco's. 596 00:29:43,560 --> 00:29:44,440 Speaker 3: Acquisition are Plunk. 597 00:29:44,520 --> 00:29:48,160 Speaker 2: The teams are revealing further product innovation focused on actionable AI, 598 00:29:48,240 --> 00:29:50,840 Speaker 2: and here to discuss it all, Cisco's Chief Product Officer 599 00:29:51,040 --> 00:29:55,680 Speaker 2: Gue two Patel a Splunks user conference. G two, what 600 00:29:55,920 --> 00:29:58,400 Speaker 2: is it that you really think Cisco can offer a 601 00:29:58,480 --> 00:30:01,960 Speaker 2: world in which AIA agree running left, right and center. 602 00:30:03,240 --> 00:30:04,880 Speaker 15: Caroline, It's good to see you again. Thank you for 603 00:30:04,920 --> 00:30:06,560 Speaker 15: having me on the show. Look, if you take a 604 00:30:06,560 --> 00:30:10,120 Speaker 15: step back, we are probably witnessing one of the most 605 00:30:10,160 --> 00:30:13,440 Speaker 15: seismic shifts that we've seen in humanity with AI, and 606 00:30:13,480 --> 00:30:16,560 Speaker 15: we're now squarely in the second phase of AI, where 607 00:30:16,560 --> 00:30:19,920 Speaker 15: you're moving from these chat pots that intelligently answered questions 608 00:30:20,320 --> 00:30:22,880 Speaker 15: to agents that are going to conduct tasks and jobs 609 00:30:22,920 --> 00:30:27,040 Speaker 15: almost fully autonomously, to automated workflows. Now, as that happens, 610 00:30:27,160 --> 00:30:28,680 Speaker 15: you know, we start to think about, like, what are 611 00:30:28,720 --> 00:30:32,800 Speaker 15: the constraints and impediments that might actually really limit the 612 00:30:32,840 --> 00:30:35,240 Speaker 15: growth of AI, And we think there are three big constraints. 613 00:30:35,600 --> 00:30:37,880 Speaker 15: First one is infrastructure where you just don't have enough 614 00:30:37,920 --> 00:30:41,920 Speaker 15: power compute networking bandwidth to go out and you know, 615 00:30:42,680 --> 00:30:47,600 Speaker 15: satiate the demand for AI. The second is a trust 616 00:30:47,640 --> 00:30:50,120 Speaker 15: deficit where if you don't trust these systems, you're not 617 00:30:50,120 --> 00:30:52,040 Speaker 15: going to use them, and so you have to make 618 00:30:52,040 --> 00:30:54,440 Speaker 15: sure that the safety and security is really well thought through. 619 00:30:54,840 --> 00:30:57,720 Speaker 15: And the third one is a data gap. And in 620 00:30:57,760 --> 00:31:00,840 Speaker 15: all these three areas, Splunk out he plays a pretty 621 00:31:00,840 --> 00:31:03,200 Speaker 15: big role. We happen to be at the user conferences 622 00:31:03,240 --> 00:31:07,719 Speaker 15: Plunk in Boston and we've just made some pretty amazing 623 00:31:07,720 --> 00:31:10,360 Speaker 15: announcements around what we're going to be able to do, 624 00:31:10,440 --> 00:31:14,480 Speaker 15: specifically around machine data in AI. Like, so far AI 625 00:31:14,560 --> 00:31:17,800 Speaker 15: has been really good with human data and training models 626 00:31:17,800 --> 00:31:21,240 Speaker 15: and human kind of human generated data that's publicly available 627 00:31:21,280 --> 00:31:23,960 Speaker 15: on the internet. What they've not been as good at 628 00:31:25,120 --> 00:31:27,600 Speaker 15: as good at is machine data. And so what we 629 00:31:27,640 --> 00:31:29,160 Speaker 15: want to do is make sure that we can actually 630 00:31:29,240 --> 00:31:31,360 Speaker 15: have the time series machine data also be used to 631 00:31:31,400 --> 00:31:34,959 Speaker 15: train these models. And we're excited about all the all 632 00:31:34,960 --> 00:31:36,280 Speaker 15: the innovations that we've ad So I mean. 633 00:31:36,280 --> 00:31:39,320 Speaker 2: You to as the product innovator here. How is it 634 00:31:39,360 --> 00:31:41,760 Speaker 2: that you what is the technological feats that you have 635 00:31:41,840 --> 00:31:43,840 Speaker 2: to do working alongside Splung? What is it that you 636 00:31:43,880 --> 00:31:47,520 Speaker 2: have to drive it's different from others Now. 637 00:31:47,520 --> 00:31:49,920 Speaker 15: I feel like that formula is pretty simple, Caroline. It's 638 00:31:49,960 --> 00:31:52,200 Speaker 15: like you know, in tech, you just have to be 639 00:31:52,360 --> 00:31:56,480 Speaker 15: relentlessly obsessed about continuing to innovate and making sure that 640 00:31:56,560 --> 00:32:00,600 Speaker 15: you keep listening to customers and creating solutions that are 641 00:32:00,680 --> 00:32:03,320 Speaker 15: at least an order of magnitude better than what's available 642 00:32:03,360 --> 00:32:06,080 Speaker 15: in the market. No one switches to you for ten 643 00:32:06,080 --> 00:32:08,320 Speaker 15: percent better. You have to be at least an order 644 00:32:08,360 --> 00:32:11,000 Speaker 15: of magnitude better. And so we have this rule internally 645 00:32:11,040 --> 00:32:13,200 Speaker 15: called B tenex better. And you're going to actually make 646 00:32:13,240 --> 00:32:16,160 Speaker 15: sure that customers will get excited, and we saw that 647 00:32:16,280 --> 00:32:20,720 Speaker 15: level of palpable energy today and at the event where 648 00:32:20,800 --> 00:32:24,719 Speaker 15: all of our customers were just completely excited about the 649 00:32:24,760 --> 00:32:27,520 Speaker 15: machine data Lake announcement we made. We made an announcement 650 00:32:27,520 --> 00:32:31,000 Speaker 15: around an open source model for time series data. These 651 00:32:31,040 --> 00:32:33,760 Speaker 15: are all really hard problems that actually require a level 652 00:32:33,760 --> 00:32:37,040 Speaker 15: of assistance so their organizations can harness the full potential 653 00:32:37,040 --> 00:32:39,360 Speaker 15: of AI because of the way that they can use data. 654 00:32:40,040 --> 00:32:44,760 Speaker 4: G Two, is there evidence that Splunk's historic customers are 655 00:32:44,920 --> 00:32:48,760 Speaker 4: using Cisco's other products and signing on for deals on 656 00:32:48,760 --> 00:32:50,680 Speaker 4: that side and vice versa. 657 00:32:50,840 --> 00:32:52,600 Speaker 7: Since you guys have closed. 658 00:32:53,320 --> 00:32:55,560 Speaker 15: We've actually seen a lot of great evidence around it. 659 00:32:55,600 --> 00:33:00,640 Speaker 15: In fact, just last quarter we closed one of the 660 00:33:00,720 --> 00:33:03,040 Speaker 15: large financial service or organizations that happen to be a 661 00:33:03,040 --> 00:33:07,680 Speaker 15: great Cisco customer is also a Splunk customer and now 662 00:33:07,720 --> 00:33:10,880 Speaker 15: and they had actually we replaced another competitor in that 663 00:33:10,920 --> 00:33:13,160 Speaker 15: account with Splunk. And let me tell you the reason why. 664 00:33:13,720 --> 00:33:18,160 Speaker 15: If you really think about where Splunk shines is correlating 665 00:33:18,240 --> 00:33:22,920 Speaker 15: data across multiple different sources, and if you start thinking 666 00:33:22,960 --> 00:33:25,560 Speaker 15: about the kind of data that we have, if you 667 00:33:25,640 --> 00:33:28,920 Speaker 15: assume that the attacker is already in your network, and 668 00:33:28,960 --> 00:33:31,160 Speaker 15: what you're trying to do is prevent lateral movement. Who 669 00:33:31,200 --> 00:33:33,520 Speaker 15: has the most amount of data about the network. Cisco 670 00:33:33,560 --> 00:33:38,720 Speaker 15: does the telemetry from that network. Hydrating Splunk actually gives 671 00:33:38,800 --> 00:33:43,240 Speaker 15: Plunk meaningful insights. The telemetry from users and devices, and 672 00:33:43,280 --> 00:33:46,040 Speaker 15: the security firewalls that we might have. All of these 673 00:33:46,080 --> 00:33:48,880 Speaker 15: pieces add value to Splunk. So what ends up happening 674 00:33:48,960 --> 00:33:52,880 Speaker 15: is customers when they're starting to use Cisco technology with 675 00:33:53,040 --> 00:33:58,400 Speaker 15: Splunk actually fine. Then not only be able to drive 676 00:33:58,440 --> 00:34:01,000 Speaker 15: insights that we're not able to be derived, but we 677 00:34:01,160 --> 00:34:03,080 Speaker 15: also get to be very economical in the way that 678 00:34:03,120 --> 00:34:05,240 Speaker 15: you use it. And we made this one big announcement 679 00:34:05,760 --> 00:34:11,240 Speaker 15: around Cisco firewall telemetry getting ingested in Splunk for free, 680 00:34:11,480 --> 00:34:15,360 Speaker 15: and so that actually provides incentives from a financial perspective 681 00:34:15,400 --> 00:34:19,400 Speaker 15: to our customers as well. G. 682 00:34:19,520 --> 00:34:19,719 Speaker 7: Two. 683 00:34:19,719 --> 00:34:23,719 Speaker 4: When I speak to industry, they say it's you personally 684 00:34:24,080 --> 00:34:27,680 Speaker 4: that's responsible for bringing Cisco into this AI era. So 685 00:34:27,840 --> 00:34:29,759 Speaker 4: very quickly to end, I wanted to ask where you 686 00:34:29,800 --> 00:34:32,880 Speaker 4: feel Cisco is today versus where you want it to 687 00:34:32,920 --> 00:34:35,360 Speaker 4: be in three to five years time now that Splunk's 688 00:34:35,400 --> 00:34:36,200 Speaker 4: being integrated. 689 00:34:37,360 --> 00:34:39,520 Speaker 15: Well, let me just start by saying that it is 690 00:34:39,640 --> 00:34:43,040 Speaker 15: not just me. There's a wonderful team of people behind 691 00:34:43,080 --> 00:34:44,600 Speaker 15: me that do all the work, and so I'm just 692 00:34:44,640 --> 00:34:47,120 Speaker 15: lucky to be a small part of it. Where we 693 00:34:47,160 --> 00:34:51,120 Speaker 15: see AI moving forward is we are now a squarely 694 00:34:51,160 --> 00:34:54,680 Speaker 15: in the second phase and we're helping companies out with 695 00:34:54,920 --> 00:34:59,480 Speaker 15: massive data center buildouts, whether it be hyperscalers or neo clouds, 696 00:34:59,640 --> 00:35:02,560 Speaker 15: or serve providers or the enterprise. And the fact that 697 00:35:02,600 --> 00:35:05,880 Speaker 15: we serve all those four constituencies helps each one of 698 00:35:05,880 --> 00:35:07,839 Speaker 15: the constituencies from the learnings that we get from each 699 00:35:07,840 --> 00:35:09,960 Speaker 15: one of them. So that's the first area that we're 700 00:35:09,960 --> 00:35:13,560 Speaker 15: really helping in a big way, and low latency, high performance, 701 00:35:13,680 --> 00:35:18,920 Speaker 15: energy efficient networking is one of our core value propositions there. Second, 702 00:35:19,160 --> 00:35:22,400 Speaker 15: we're really helping with making sure that AI is safe 703 00:35:22,400 --> 00:35:24,200 Speaker 15: and secure, and by the way, what I mean by 704 00:35:24,200 --> 00:35:27,760 Speaker 15: that is not just using AI for security, but securing 705 00:35:27,800 --> 00:35:31,560 Speaker 15: AI itself. That's a really, really important area that we've 706 00:35:31,640 --> 00:35:34,759 Speaker 15: got a tremendous amount of offerings that are helping customers out. 707 00:35:35,000 --> 00:35:38,200 Speaker 15: And the third one is this notion of fifty five 708 00:35:38,280 --> 00:35:41,920 Speaker 15: percent of the growth of data is coming from machine data, 709 00:35:42,520 --> 00:35:44,920 Speaker 15: and the market has not really gone out and figured 710 00:35:44,920 --> 00:35:47,879 Speaker 15: out how to use machine data effectively. With AI. That's 711 00:35:47,920 --> 00:35:50,120 Speaker 15: the problem that we want to solve and that's where 712 00:35:50,120 --> 00:35:52,640 Speaker 15: we've actually made these announcements with Splunk and so the 713 00:35:52,640 --> 00:35:55,920 Speaker 15: combination of those three technologies coming together in a unified 714 00:35:55,960 --> 00:35:59,640 Speaker 15: platform is where we can really shine. And very few 715 00:35:59,640 --> 00:36:02,400 Speaker 15: companies in the world have the level of breath and 716 00:36:02,520 --> 00:36:04,600 Speaker 15: depth of technology that we do, so we feel pretty 717 00:36:04,640 --> 00:36:05,360 Speaker 15: fortunate about that. 718 00:36:06,000 --> 00:36:16,359 Speaker 4: Cisco's Chief Product Officer G two Patel, thank you. I'm 719 00:36:16,440 --> 00:36:19,840 Speaker 4: joined now buying Nabila Popeau, senior research director at IDC 720 00:36:19,960 --> 00:36:23,920 Speaker 4: where she focuses on smartphones and consumer electronics. Smartphone is 721 00:36:24,000 --> 00:36:25,920 Speaker 4: key and Nabila, it's good to see you again. I 722 00:36:25,960 --> 00:36:27,880 Speaker 4: want to get something we haven't yet discussed in the show, 723 00:36:28,160 --> 00:36:32,359 Speaker 4: which is upgrade cycle and what it will take the 724 00:36:32,400 --> 00:36:36,320 Speaker 4: capability of an iPhone seventeen generation the features to drive 725 00:36:36,360 --> 00:36:38,080 Speaker 4: an upgrade cycle. Have you modeled for that? 726 00:36:38,680 --> 00:36:41,319 Speaker 11: Absolutely, that's what we've been talking about for I guess 727 00:36:41,360 --> 00:36:43,359 Speaker 11: as long as I can you know the past few years, 728 00:36:43,360 --> 00:36:45,439 Speaker 11: when is the next upgrade cycle going to come? And 729 00:36:45,760 --> 00:36:47,400 Speaker 11: you know we are right now looking at about a 730 00:36:47,400 --> 00:36:50,640 Speaker 11: forty plus or almost four year upgrade cycle for iPhones, 731 00:36:50,680 --> 00:36:54,920 Speaker 11: and this is what primes the iPhone seventeen regardless of 732 00:36:55,000 --> 00:36:58,480 Speaker 11: obviously there's big upgrades to the phone and device itself 733 00:36:58,520 --> 00:37:01,319 Speaker 11: in terms of hardware, and of course very anticipated and 734 00:37:01,360 --> 00:37:06,520 Speaker 11: exciting excitement around iPhone seventeen Air. But regardless of all that, 735 00:37:06,680 --> 00:37:10,160 Speaker 11: or on top of all that, the Apple devices themselves 736 00:37:10,200 --> 00:37:12,720 Speaker 11: are looking at a major upwoid cycle coming up, because 737 00:37:13,280 --> 00:37:16,560 Speaker 11: we're approaching that four year mark. So that's what we're 738 00:37:16,640 --> 00:37:18,200 Speaker 11: you know, looking baking that. 739 00:37:18,280 --> 00:37:23,120 Speaker 4: In Bluebosmark Gunman reports that an iPhone seventeen Air, a 740 00:37:23,160 --> 00:37:26,600 Speaker 4: thin five point five millimeters thickness phone, will be eSIM, 741 00:37:27,080 --> 00:37:30,080 Speaker 4: and he talks about how eSIM in the Chinese market 742 00:37:30,600 --> 00:37:31,520 Speaker 4: very interesting. 743 00:37:32,000 --> 00:37:33,480 Speaker 7: Why is that an important factor? 744 00:37:34,360 --> 00:37:37,240 Speaker 11: That's important because that makes it a barrier, right because 745 00:37:37,719 --> 00:37:40,120 Speaker 11: the Chinese market right now, on top of all the 746 00:37:40,160 --> 00:37:42,840 Speaker 11: other challenges that Apple is facing in terms of competition 747 00:37:43,000 --> 00:37:46,960 Speaker 11: being very driven with all the AI features that they 748 00:37:47,000 --> 00:37:51,200 Speaker 11: have been marketing to the hill, right, that's that's a big, 749 00:37:51,280 --> 00:37:55,120 Speaker 11: big challenge for Apple, on top of the accelerated growth 750 00:37:55,160 --> 00:37:57,319 Speaker 11: of Huawei and the support that they have from the 751 00:37:57,320 --> 00:38:02,000 Speaker 11: government as well as the consumer loyalty the ATH feature. 752 00:38:02,080 --> 00:38:04,920 Speaker 11: Despite the excitement that the consumers have with the Ultrasim 753 00:38:06,160 --> 00:38:09,680 Speaker 11: Ultraslim device. The fact that it doesn't is not going 754 00:38:09,800 --> 00:38:12,839 Speaker 11: to support that is going to be another challenge. So yes, 755 00:38:12,920 --> 00:38:16,600 Speaker 11: the Chinese market we're still expecting again regardless of you know, 756 00:38:16,640 --> 00:38:20,600 Speaker 11: on top of despite the great upgrades that the seventeen 757 00:38:20,640 --> 00:38:23,080 Speaker 11: will bring, there is the excitement in the Chinese market, 758 00:38:23,239 --> 00:38:25,680 Speaker 11: but we're still expecting a decline. So it's still going 759 00:38:25,760 --> 00:38:27,759 Speaker 11: to be a tough, uphill battle for Apple. 760 00:38:27,520 --> 00:38:29,080 Speaker 3: And China Narina. 761 00:38:29,120 --> 00:38:33,080 Speaker 2: How price sensitive are well China if you even called 762 00:38:33,120 --> 00:38:35,560 Speaker 2: it an emerging market now, but India they'd be making 763 00:38:35,640 --> 00:38:39,239 Speaker 2: scale there. How much is price and ability to move 764 00:38:39,320 --> 00:38:41,879 Speaker 2: higher on some of these newer and the ones you're 765 00:38:41,920 --> 00:38:43,400 Speaker 2: excited about, the slimmer versions. 766 00:38:44,480 --> 00:38:47,120 Speaker 11: So I'm glad you you know, you've brought India and 767 00:38:47,160 --> 00:38:48,719 Speaker 11: some of these emerging markets up. 768 00:38:48,800 --> 00:38:49,440 Speaker 7: I think. 769 00:38:50,760 --> 00:38:54,680 Speaker 11: What's interesting is that despite these markets being extremely price 770 00:38:54,719 --> 00:38:58,279 Speaker 11: sensitive traditionally, right we've seen the opposite trend. We've seen, 771 00:38:58,560 --> 00:39:02,280 Speaker 11: especially in India, the large ASB growth or in history 772 00:39:02,960 --> 00:39:06,040 Speaker 11: for the Indian market in twenty in Q two right 773 00:39:06,080 --> 00:39:09,000 Speaker 11: now we saw ten percent growth and the largest ASP 774 00:39:09,120 --> 00:39:13,160 Speaker 11: for smartphones ever. And Apple has been seeing double digit growth. 775 00:39:13,160 --> 00:39:17,040 Speaker 11: So regardless of where the price, despite the price increases, 776 00:39:17,080 --> 00:39:19,400 Speaker 11: and even with the new devices that will see Apple 777 00:39:19,440 --> 00:39:22,000 Speaker 11: is seeing tremendous growth and that is because of the 778 00:39:22,080 --> 00:39:24,839 Speaker 11: support from financing programs that we're seeing in all. 779 00:39:24,800 --> 00:39:28,520 Speaker 3: Of these markets. What will steal the show? 780 00:39:29,040 --> 00:39:32,520 Speaker 2: Is it all about the slimmer versions or will the 781 00:39:32,600 --> 00:39:35,560 Speaker 2: pro still be the standout? Will ultimately people go for 782 00:39:35,719 --> 00:39:39,680 Speaker 2: more power, more battery life versus trying out something that's 783 00:39:39,800 --> 00:39:42,040 Speaker 2: incredibly slim but might be better for a next generation. 784 00:39:42,880 --> 00:39:45,680 Speaker 11: So again, great question, and you know, for me, I 785 00:39:45,680 --> 00:39:48,840 Speaker 11: think it depends. It's going to be a combination. I 786 00:39:48,840 --> 00:39:51,480 Speaker 11: think that's what Apple is doing really well, and it's 787 00:39:51,640 --> 00:39:55,440 Speaker 11: ingenious move because with the Slim, they've gotten the buzz, 788 00:39:55,520 --> 00:40:00,600 Speaker 11: the marketing and a great you know lead up to 789 00:40:00,719 --> 00:40:03,759 Speaker 11: the event. Because the Slim will hit the mark with 790 00:40:03,840 --> 00:40:07,200 Speaker 11: a lot of consumers, or with a few consumers actually, 791 00:40:07,719 --> 00:40:11,040 Speaker 11: then the majority of consumers who are looking for camera 792 00:40:11,440 --> 00:40:14,920 Speaker 11: a better performance, so the Pro will hit the majority 793 00:40:14,920 --> 00:40:17,560 Speaker 11: of consumers. We will generate more volume and certainly more 794 00:40:17,680 --> 00:40:21,520 Speaker 11: revenue for Apple, but the slim device will also hit 795 00:40:21,560 --> 00:40:25,080 Speaker 11: the mark. So I think combined is what will lead 796 00:40:25,160 --> 00:40:27,520 Speaker 11: to a bigger upraight cycle for Apple this year. And 797 00:40:27,560 --> 00:40:30,560 Speaker 11: that's why, as a result, for total. So if you 798 00:40:30,560 --> 00:40:32,840 Speaker 11: look at the seventeen series, we're expecting them to do 799 00:40:32,920 --> 00:40:33,840 Speaker 11: bigger volume. 800 00:40:33,800 --> 00:40:36,719 Speaker 4: Listening very quickly, trade in how big a fact will 801 00:40:36,719 --> 00:40:41,080 Speaker 4: that be? Particular in America? Very quick huge, Okay, enormous 802 00:40:41,360 --> 00:40:43,160 Speaker 4: that sixtinct carry you had it there. 803 00:40:43,800 --> 00:40:46,000 Speaker 2: Nada Profile. It's so good to have you back on 804 00:40:46,040 --> 00:40:48,600 Speaker 2: the show. Senior research director at IDC. We love their 805 00:40:48,680 --> 00:40:51,719 Speaker 2: number crunching. Meanwhile, and that does it for this edition 806 00:40:51,880 --> 00:40:52,640 Speaker 2: a Bloomberg Tech. 807 00:40:52,680 --> 00:40:53,239 Speaker 3: We got more. 808 00:40:53,920 --> 00:40:56,399 Speaker 4: Yeah, stay with us throughout the news day for more 809 00:40:56,400 --> 00:40:59,719 Speaker 4: on Apple. Special coverage later today. It's very focused on 810 00:40:59,760 --> 00:41:02,280 Speaker 4: price seeing, bring in the tariffs and the political story. 811 00:41:02,440 --> 00:41:05,799 Speaker 4: And Zambila just talked about. Huge factor is trade. 812 00:41:05,480 --> 00:41:08,040 Speaker 3: Ins from New York, from Kupertino. 813 00:41:08,360 --> 00:41:10,440 Speaker 2: People all eyes on Apple, one of the most valuable 814 00:41:10,480 --> 00:41:11,280 Speaker 2: companies in the world. 815 00:41:11,520 --> 00:41:12,480 Speaker 3: This is Bloomberg Tech.