Speaker 1: So what we're going to do is fly in the
Speaker 1: men from LA and we're going to have a light.
Speaker 1: We're commercial free with you this hour. Thank you to
Speaker 1: our all of our wonderful advertisers for that. And this
Speaker 1: is on Apple. Mark German flat out drives a conversation worldwide.
Speaker 1: He joins us, our chief correspondent on technology and Apple
Speaker 1: at Bloomberg News. How's Tim Cook doing? I mean the
Speaker 1: litigation and all where they're like tantrums and arguments over
Speaker 1: the last two weeks as Apple went after Sam and
Speaker 1: open AI.
Speaker 2: I have to tell you they're dealing with so much
Speaker 2: right now. They have this big management transition, right Tim
Speaker 2: Cook stepping down at the beginning of September, John Turnus
Speaker 2: dating over. They're dealing with the memory shortage, dealing with
Speaker 2: global politics, Trump, tariffs, you name it, right, But it
Speaker 2: feels like the biggest thing they've been dealing with over
Speaker 2: the last year is actually open Ai. Tim Cook, the
Speaker 2: executive team over there, they've been beside themselves four hundred people,
Speaker 2: four hundred people, and in their mind they needed to
Speaker 2: do something to stop the bleeding.
Speaker 3: How can they stop people from leaving?
Speaker 2: In the lawsuit, the lawsuits Okay, but the lawsuit.
Speaker 1: Every day everybody leaves, we lose people of Bloomberg, we
Speaker 1: gain people.
Speaker 3: Yes, But what's just so what here.
Speaker 2: We don't lose you know, another company, right, a competitor.
Speaker 2: Ten percent of that company isn't made up of Bloomberg employees, Right,
Speaker 2: It's four hundred people leaving one company for another company.
Speaker 2: And it's in Apple's history, completely unprecedented. Open Ai probably
Speaker 2: made up between five and ten percent of that company's
Speaker 2: made up of people who came from Apple. It's in
Speaker 2: Apple's view, it's it's absurd. Apple believes there was some
Speaker 2: shady behavior going on. They couldn't prove it, of course,
Speaker 2: until they caught this kid, this iPhone engineer named Chang Lu,
Speaker 2: who hacked into Apple servers after he left the company
Speaker 2: and was able to pull engineering presentations and all sorts
Speaker 2: of other material. And so they were able to build
Speaker 2: a case around that. But one thing I'll tell you
Speaker 2: is even so the lawsuit is kind of flimsy. Like
Speaker 2: you said, people transfer between companies all the time. That
Speaker 2: is commonplace. But what Apple's doing here is they created
Speaker 2: a narrative to scare their current employees. I think, uh,
Speaker 2: and if you're an Apple employee right now, and you're
Speaker 2: teetering between staying an Apple and going to open a eye.
Speaker 1: Happens here mister Bloomberg cut walks by me, says if
Speaker 1: you don't shape up, I'm cutting off coffee.
Speaker 2: Oh that's funny, Paul Sweety, what's.
Speaker 4: The what's what's the intent here of Apple here? Is
Speaker 4: it maybe, as you suggest, maybe to scare existing employees.
Speaker 4: But if you're you don't like to be in a
Speaker 4: position where you have to do that. You want to
Speaker 4: create an environment where you want to say Apple because
Speaker 4: it's Apple.
Speaker 2: Well they're okay, Well, how much time do we have?
Speaker 2: But let's unpack this. So Apple has been dealing with
Speaker 2: a lot lately. Obviously, the innovation engine has slowed down.
Speaker 2: There are a lot of people who wanted to go
Speaker 2: to open AI and work on this new technology with
Speaker 2: the promise of building something revolutionary, thinking we're going to
Speaker 2: build the next iPhone.
Speaker 1: Right.
Speaker 2: The other thing you have to know is that open
Speaker 2: ana's paying three four, five x what Apple is paying
Speaker 2: them more money. They're paying them more money.
Speaker 3: It's like when they go from the Giants to the Dodgers.
Speaker 2: It's the combiny. It's the combination of yeah, there's no
Speaker 2: salary cap in Silicon Valley, right, You're getting the combination
Speaker 2: of more money with the promise of working on something
Speaker 2: far cooler, not doing the same phone or iPad or
Speaker 2: Apple Watch.
Speaker 1: Guys, Sonara wearing brunicuc and l T shirts, I get it,
Speaker 1: Like the way you style mark is there business? I mean,
Speaker 1: are we going to get a bombshell for them this
Speaker 1: quarter like we did from IBM this morning?
Speaker 3: I don't see it.
Speaker 2: No, that's not going to happen. In fact, if you wanted.
Speaker 3: A record high yesterday.
Speaker 2: Well let's turn the conversation into Apple's future. What Apple
Speaker 2: is going to do over the next two and a
Speaker 2: half years in terms of new products has never happened
Speaker 2: before in its history. There is so much stuff coming
Speaker 2: that I am having a hard time wrapping my heat
Speaker 2: around it. There's a lot coming. You've never seen anything
Speaker 2: like this. My credit card is already. I can feel
Speaker 2: it in my pockets.
Speaker 3: It's shaking. It is.
Speaker 1: I mean, I mean, I have and folks, I don't
Speaker 1: get tweaked a nerdy on this, but I'm gonna do
Speaker 1: it with young German.
Speaker 3: I got an M three Ultra at home Okay, I.
Speaker 1: Have a twenty nineteen Mac Pro, which I'm using as
Speaker 1: a coffee table to put a martini.
Speaker 2: I didn't know you were that cool. I mean, I
Speaker 2: know you were cool, but I didn't know. But I
Speaker 2: like an every ultra QUI I.
Speaker 3: Have an M three altar. Blah blah blah.
Speaker 1: I don't want to get into it because you're your
Speaker 1: conversation is more important than mine. I don't see any
Speaker 1: innovation slow down here. I got a needle, Alexis go.
Speaker 1: Would somebody go up, go.
Speaker 3: Out to my man bag at my desk and pull
Speaker 3: out the Neo?
Speaker 2: Okay, the incredible just so market see incredible. My wife
Speaker 2: just got one last week. Okay, that machine is awesome,
Speaker 2: even though they did one hundred dollars price, Like at
Speaker 2: seven hundred dollars, you're not getting anything in that category.
Speaker 2: So yeah, that is an innovative product and she loves it.
Speaker 2: Everyone I know who has the Neo absolutely loves it.
Speaker 2: By the way, there's a new Neo coming next year.
Speaker 3: They hit a.
Speaker 1: Record high yesterday. Woe is me, Apple, Paul, you gotta
Speaker 1: be kidning. IBM's done twenty perc.
Speaker 2: It's ridiculous.
Speaker 1: These guys are rocking the free world because they're not
Speaker 1: doing all this AI stuff right right.
Speaker 2: I mean it's funny people say, oh, Apples the new IBM,
Speaker 2: Apple is the new Microsoft, and they mean in a
Speaker 2: negative sense. No, no, no, no, no no. Apple's future
Speaker 2: the next three years extraordinarily strong AI wearables. They're working
Speaker 2: on three AI wearables, and they're working on three AI
Speaker 2: home products. They've got stuff coming that's going to blow
Speaker 2: your mind, from smart glasses to this new smart home device.
Speaker 2: I'm pumped. And don't get me started on the iPhone
Speaker 2: Ultra of the foldable phone. I'm really excited for that.
Speaker 4: So you think Apple, from an investor's perspective, can shake
Speaker 4: the concern that they're kind of missing AI, they're lagging
Speaker 4: behind AI?
Speaker 2: Can they change that narrative? Do you think? Have you
Speaker 2: tried the new Seri AI on the phone?
Speaker 1: No?
Speaker 2: So, the public beta came out yesterday. I've been using
Speaker 2: it since the beginning of June, the developer beta. But
Speaker 2: the new Serie AI, what they've gone from on CIRI
Speaker 2: is completely incompetent to competent. I'm not saying it's anywhere
Speaker 2: near as good as Chat GPT, but for ninety five
Speaker 2: percent of people. The SERI in your pocket now will
Speaker 2: do absolutely what you expect, and it's it's terrific.
Speaker 3: Paul twenty finally, finally, Yeah, I.
Speaker 1: Don't get Serriu twenty eight point seven percent per year
Speaker 1: for the last ten years.
Speaker 3: This company's a failure, exactly. It's terrible exactly.
Speaker 4: So what's next stage for this suit here? Because this
Speaker 4: kind of goes to the heart and soul of any
Speaker 4: tech company.
Speaker 3: It's the people.
Speaker 4: They walk out the door, your assets walk out the
Speaker 4: door every day at five o'clock.
Speaker 2: Well, let me just say, well, in some places five o'clock.
Speaker 2: But let me tell you this, if you're an Apple
Speaker 2: employee and you read that lawsuit, you'd have to be
Speaker 2: a lunatic to not second guests going to open AI
Speaker 2: the way that Apple frames this, the way Apple talks
Speaker 2: about how your their security is going to go after
Speaker 2: you if you go to open AI. I think Apple
Speaker 2: employees are going to be very scared to move between
Speaker 2: companies at this point.
Speaker 1: Do you have winners and losers in your head? You
Speaker 1: don't have to tell us, because I understand it's rude,
Speaker 1: But if there's like seven players in AI, does Mark
Speaker 1: know these two or three aren't gonna make it, that.
Speaker 2: Are not going to make it. Well, I'll tell you this.
Speaker 2: I guess people are listening in on this one to
Speaker 2: hear about Apple. Apple's gonna make it because Apple is
Speaker 2: a hardware company at its very core, and they have
Speaker 2: the models now from Google to do cool hardware stuff.
Speaker 2: And I think that these six AI products that they're
Speaker 2: coming out with are going to do an effective job.
Speaker 2: I think they're going to sell well, and I think
Speaker 2: the integration of hardware and AI is the next step
Speaker 2: for the company of those Again, Okay, so we're going
Speaker 2: to see a few next year and a few the
Speaker 2: year after. You've got smart glasses, you've got AirPods with AI,
Speaker 2: you've got a pendant, you've got the smart Home Hub. Basically,
Speaker 2: Tom Paul, you put this smart Home command center on
Speaker 2: your desk, you put it in your kitchen, you put
Speaker 2: it wherever you walk up to it, and it's like,
Speaker 2: oh hi, Paul, right, be able to pull up your news,
Speaker 2: your notes, your music, You'll do FaceTime on it. It's
Speaker 2: going to be a really cool device. It's a game changer.
Speaker 1: If you met Rebecca Ferguson, I mean, a guy as
Speaker 1: cool as you like side those Season three on it
Speaker 1: Apple Rocket It right now?
Speaker 3: Are you going to be one.
Speaker 1: Of these people at the beginning that's an executive producer, marker?
Speaker 3: You know, how's that whole thing going for them? For Apple?
Speaker 2: You're talking about the home devices.
Speaker 1: No, I'm talking about Apple TV and silos. Oh there's
Speaker 1: season and there's executive. There's all these fancy people. I
Speaker 1: don't think of producers.
Speaker 2: It's not a money maker for them, but it is
Speaker 2: is a marketing engine, right. How many people are falling
Speaker 2: in love with these shows and they're like, I want
Speaker 2: to be part of the CECO system. So I think
Speaker 2: that people ignore that this is part of the marketing
Speaker 2: budget even though it's a money loser. But like the
Speaker 2: tide is sort of turning right Like a few years ago,
Speaker 2: it felt like I don't know how much long are
Speaker 2: they going to do this? For now it's feeling like
Speaker 2: they can do this forever and they are going to
Speaker 2: turn a profit on Apple TV at some point.
Speaker 1: And what's so great is we have Gerard Cassidy coming
Speaker 1: up Portland, Maine.
Speaker 3: Who's using an iPhone eight. It's like Nixon.
Speaker 2: iPhone eight twenty seventeen.
Speaker 3: It still works, It still works.
Speaker 2: It still works much even.
Speaker 1: What's more amazing is drug Cassidy still works. Mark German,
Speaker 1: thank you, thank you so much for joining us in
Speaker 1: our studios. Usually I see him at the bar at
Speaker 1: the Sunset Tower in l A. But he's here today
Speaker 1: and that's a good thing. On Apple is well.