WEBVTT - Disney and Tyson Earnings, TikTok Latest 0:00:02.920 --> 0:00:12.600 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Intelligence 0:00:12.640 --> 0:00:14.440 with Alex Steinhl and Paul'sweenye. 0:00:14.520 --> 0:00:17.720 The real app performance has been in US corporate high yield. 0:00:17.880 --> 0:00:20.239 Are the companies lean enough? Have they trimmed all the fats? 0:00:20.320 --> 0:00:23.880 The semiconductor business is a really cyclical business. 0:00:23.600 --> 0:00:27.160 Breaking market headlines and corporate news from across the globe. 0:00:27.240 --> 0:00:29.880 Do investors like the M and A that we've seen? 0:00:30.080 --> 0:00:31.000 These are two. 0:00:31.040 --> 0:00:33.159 Big time blue chip companies. 0:00:33.320 --> 0:00:36.920 The window between the peak and cut changing super fast. 0:00:37.080 --> 0:00:41.680 Bloomberg Intelligence with Alex Steinhl and Paul'sweenye on Bloomberg Radio. 0:00:43.240 --> 0:00:45.720 On Today's Bloomberg Intelligence Show, we dig inside the big 0:00:45.760 --> 0:00:48.120 business story some inm Pacnew Wall Street and the global markets. 0:00:48.280 --> 0:00:50.440 Each and every week we provide in depth research and 0:00:50.560 --> 0:00:52.440 data on some of the two thousand companies and one 0:00:52.479 --> 0:00:55.120 hundred and thirty industries our analysts cover worldwide. 0:00:55.160 --> 0:00:56.960 Today, we'll take a look at why there may be 0:00:57.160 --> 0:00:59.840 prolonged legal battle over whether TikTok will be banned. 0:01:00.480 --> 0:01:03.400 Plus we'll discuss how and why one company thinks most 0:01:03.440 --> 0:01:06.000 banker bonuses will rise in twenty twenty four. 0:01:06.200 --> 0:01:08.200 But first we dive into the world's largest media and 0:01:08.280 --> 0:01:09.840 entertainment company Walt Disney. 0:01:09.880 --> 0:01:13.240 The company reported second quarter earnings that surpassed analyst expectations, 0:01:13.280 --> 0:01:15.600 but this was overshadowed by the company giving a week 0:01:15.640 --> 0:01:18.680 outlook for streaming subscriber growth in the current quarter. 0:01:19.080 --> 0:01:21.440 For more, guest host Tim Stenovick and I were joined 0:01:21.480 --> 0:01:24.839 by Githa Ranganathan, Bloomberg Intelligence analysts on the US media space. 0:01:25.080 --> 0:01:27.520 We first asked Getha for some of her key takeaways 0:01:27.520 --> 0:01:28.520 from Disney's results. 0:01:28.959 --> 0:01:32.319 What the street didn't like was the outlook. The outlook 0:01:32.440 --> 0:01:36.200 for the fiscal third quarter, especially for the theme park business, 0:01:36.440 --> 0:01:39.520 was definitely weak and not something that the street was expecting. 0:01:39.640 --> 0:01:43.199 So consensus had a twelve percent growth in operating income 0:01:43.200 --> 0:01:46.800 for the park's business. What Disney said zero growth. Wow, 0:01:47.000 --> 0:01:49.240 And that kind of really spooked investors. And they talked 0:01:49.240 --> 0:01:52.840 about different aspects here. They said that they have, you know, 0:01:52.920 --> 0:01:56.080 three new cruise ships that are basically coming on board, 0:01:56.120 --> 0:01:58.560 and you know there are launch costs associated with that. 0:01:58.760 --> 0:02:01.720 They're also opening this new kind of private island along 0:02:01.760 --> 0:02:04.840 with their vacation club and cruise business. Of course that also, 0:02:05.120 --> 0:02:07.120 you know, is contributing to that. But I think what 0:02:07.640 --> 0:02:11.519 really has investors super nervous. Is that they spoke about 0:02:11.560 --> 0:02:15.320 a moderation in demand, and this has been a constant, 0:02:15.440 --> 0:02:18.600 constant question for Disney. You know, can that park's momentum 0:02:18.760 --> 0:02:21.280 sustain and how long can it sustain? And will they 0:02:21.280 --> 0:02:23.520 have pricing power? And I think people are not so 0:02:23.680 --> 0:02:24.520 confident anymore. 0:02:24.639 --> 0:02:27.880 Is the moderation of demand about Disney's lack of exciting 0:02:28.040 --> 0:02:31.000 things to draw in people to the parks, to draw 0:02:31.040 --> 0:02:33.920 people to the theaters, or is it about a story 0:02:33.919 --> 0:02:35.760 that has to do with the consumer and the way 0:02:35.800 --> 0:02:37.240 that the consumer feels strapped. 0:02:38.160 --> 0:02:40.600 I think it's a little bit of everything. Tim So, 0:02:40.840 --> 0:02:43.320 you know, definitely the consumer, the overall health of the 0:02:43.360 --> 0:02:47.399 economy and the consumer for certain and you know, tremendous 0:02:47.400 --> 0:02:50.120 inflationary pressures. But of course for Disney, you know, one 0:02:50.120 --> 0:02:52.239 thing that they've done over over the past few years 0:02:52.320 --> 0:02:56.160 is they've really raised prices in their parks pretty dramatically, 0:02:56.400 --> 0:02:59.959 and it's becoming increasingly increasingly expensive for you know, affect 0:03:00.000 --> 0:03:03.040 family vacations, so to the point of almost becoming prohibitive. 0:03:03.120 --> 0:03:05.320 And you know, that's where kind of that whole pricing 0:03:05.400 --> 0:03:07.680 power question comes in. I think they're going to have 0:03:07.720 --> 0:03:10.560 to do it much more cautiously and gently in the future. 0:03:10.840 --> 0:03:13.280 Paul talking to some neighbors the other day who recently 0:03:13.280 --> 0:03:15.800 took their kids to Disney. Yep, they were adding up 0:03:15.800 --> 0:03:17.440 how much it costs for just a couple of days 0:03:17.440 --> 0:03:20.440 down there. They were saying, probably about five grand is 0:03:20.480 --> 0:03:23.560 what they spent in Florida. Wow, two kids a few 0:03:23.639 --> 0:03:24.400 days down there. 0:03:24.720 --> 0:03:26.760 Wow, it's a lot of money. I just called I 0:03:26.800 --> 0:03:28.360 just called Githa. She makes a phone call and I'm 0:03:28.440 --> 0:03:31.120 like the front of the line every time. Eithan. The 0:03:31.160 --> 0:03:33.519 other part of this story, And for the longest time, 0:03:33.639 --> 0:03:35.320 you know, the last four or five years, has been 0:03:35.440 --> 0:03:38.560 their streaming business and when will that business term profitable? 0:03:38.760 --> 0:03:40.920 They had some pretty good news on that front, didn't they. 0:03:41.600 --> 0:03:42.240 They did, Paul. 0:03:42.280 --> 0:03:44.360 I mean, we're just on the cusp of a major, 0:03:44.560 --> 0:03:47.520 major earning inflection point here for the first time ever 0:03:47.720 --> 0:03:50.880 in the in the streaming business's history, they actually posted 0:03:50.880 --> 0:03:54.440 them all this profit now again, they said fiscal third quarter, 0:03:54.440 --> 0:03:55.760 which is the next quarter, is going to be a 0:03:55.800 --> 0:03:58.640 little bit choppy. But then what they've said all along 0:03:58.760 --> 0:04:02.040 is that expect some some really good results in the 0:04:02.040 --> 0:04:04.440 fiscal fourth quarter, and then they're really going to build 0:04:04.480 --> 0:04:06.640 on that starting in you know, fiscal twenty twenty five 0:04:06.680 --> 0:04:09.600 and beyond. They have a lot of initiatives in the works. 0:04:10.040 --> 0:04:13.120 You know, they're cracking down on password sharing a la Netflix, 0:04:13.400 --> 0:04:16.200 and remember that has been a huge growth story at Netflix. 0:04:16.240 --> 0:04:18.920 The Netflix aded almost thirty five million subscribers after they 0:04:18.920 --> 0:04:21.880 started cracking down on password sharing, So Disney can also 0:04:22.000 --> 0:04:23.640 hope to see quite a lot of success with that. 0:04:23.839 --> 0:04:25.760 And then of course they also have the Hulu integration 0:04:25.880 --> 0:04:27.839 as well as you know, the ad tier, all of 0:04:27.880 --> 0:04:30.159 that kind of contributing. So streaming, I think is going 0:04:30.200 --> 0:04:33.760 to be a considerable source of earnings upside in the 0:04:33.800 --> 0:04:34.480 next few years. 0:04:34.560 --> 0:04:35.640 How's Bob Ayger doing? 0:04:36.360 --> 0:04:37.479 Does he have an ex successor? 0:04:38.920 --> 0:04:40.880 He spoke about that actually on the call that that 0:04:41.040 --> 0:04:43.000 came up, and he said that they're, you know, they're 0:04:43.080 --> 0:04:46.080 kind of actively considering. They have four internal candidates, the 0:04:46.240 --> 0:04:48.839 all of the division chiefs, the chiefs that are kind 0:04:48.880 --> 0:04:52.039 of up for consideration, and you know, he said that 0:04:52.080 --> 0:04:54.719 they're looking at them very carefully and the announcement will 0:04:54.720 --> 0:04:55.760 come when the time is right. 0:04:56.080 --> 0:04:59.360 Is this any replay of what happened a few years 0:04:59.360 --> 0:05:01.520 ago when Jpek took over? I mean It kind of 0:05:01.560 --> 0:05:04.880 sounds familiar. A number of internal candidates, the person gets picked, 0:05:04.880 --> 0:05:07.000 the other one's leave, and then Bob Ager comes back 0:05:07.040 --> 0:05:07.960 because it didn't work out. 0:05:09.080 --> 0:05:09.279 Yeah. 0:05:09.279 --> 0:05:11.360 I mean we've seen this movie play out so many 0:05:11.400 --> 0:05:14.359 times now at Disney. I hope and I think this 0:05:14.480 --> 0:05:17.000 time it really will be different. I mean, that was 0:05:17.040 --> 0:05:20.359 the whole bone of contention, you know, for the activist investors, 0:05:20.400 --> 0:05:23.240 including Nelson Pals and I think having this new succession 0:05:23.320 --> 0:05:26.880 planning committee suggests that this time they will do things 0:05:26.920 --> 0:05:28.080 probably a little bit differently. 0:05:28.560 --> 0:05:31.320 What did the companies say about their ability to potentially 0:05:31.440 --> 0:05:35.000 deal with maybe weaker demand. It's been a long time 0:05:35.040 --> 0:05:39.280 since we've seen them ever cut prices at the theme parks, promote, 0:05:39.640 --> 0:05:42.640 you know, at the theme parks, anything that would hurt profitability. 0:05:42.640 --> 0:05:44.159 It's been a long time since they've had to do that. 0:05:44.640 --> 0:05:46.480 Yeah, I mean, the theme park business has been such 0:05:46.520 --> 0:05:49.480 a consistent story for them, Paul, as you just pointed out, 0:05:49.520 --> 0:05:52.000 they have twenty five percent operating margin in that business, 0:05:52.360 --> 0:05:55.120 and they are really looking at this as a future 0:05:55.360 --> 0:05:58.880 earnings growth driver, which is why you know they're investing 0:05:59.000 --> 0:06:02.480 sixty billion dollars in the theme parks over the next 0:06:02.480 --> 0:06:06.400 ten years. Over half of that is basically just adding capacity, 0:06:06.480 --> 0:06:10.160 adding new attractions, and I think it's it's a really 0:06:10.200 --> 0:06:12.279 timely and a good strategic move. They're also bringing on 0:06:12.320 --> 0:06:14.520 those cruise ships that that's going to cost them about 0:06:14.520 --> 0:06:17.800 twelve to fifteen billion dollars, so you know, they're definitely 0:06:17.839 --> 0:06:20.360 adding capacity. So I think, you know, overall, definitely the 0:06:20.400 --> 0:06:22.880 business is in good shape, but in the near term, obviously, 0:06:22.880 --> 0:06:24.560 the sentiment has definitely soured. 0:06:24.880 --> 0:06:27.640 Our Thanks to Geitha rang Andath and Bloomberg Intelligence analysts 0:06:27.640 --> 0:06:28.440 on US. 0:06:28.240 --> 0:06:31.080 Media, we move next to the chip maker Intel. This week, 0:06:31.120 --> 0:06:33.280 the company said it now expect second quarter revenue to 0:06:33.320 --> 0:06:35.919 fall below the midpoint of previously issued projections. 0:06:36.120 --> 0:06:38.800 This comes as a result of the US revoking licenses 0:06:39.120 --> 0:06:43.080 allowing Huawei Technologies to buy semi conductors from Qualcomm and Intel. 0:06:43.440 --> 0:06:46.200 The move is aimed at preventing China from developing advanced 0:06:46.279 --> 0:06:47.440 artificial intelligence. 0:06:47.560 --> 0:06:49.120 For more on all of this, we were joined by 0:06:49.120 --> 0:06:52.080 Michael Sheppard, Bloomberg News senior editor. We asked him first 0:06:52.240 --> 0:06:54.520 to walk us through the revenue pain that Intel will 0:06:54.520 --> 0:06:55.040 see from this. 0:06:55.720 --> 0:06:59.960 For Intel, the company is under some pressure to produce 0:07:00.320 --> 0:07:04.800 on the turnaround that Pat Gelsinger has outlined to try 0:07:04.839 --> 0:07:08.600 to get the company back into the vanguard of manufacturing, 0:07:08.680 --> 0:07:12.520 but here in the US in particular, So analysts are 0:07:12.520 --> 0:07:17.720 out there looking for any sign of potential trouble for 0:07:17.840 --> 0:07:21.880 Intel as it tries to execute this plan. And here, 0:07:22.120 --> 0:07:25.920 even though we're not seeing a significant market for Intel 0:07:26.120 --> 0:07:30.080 with Huahwei, nonetheless any sign of trouble is something that 0:07:30.080 --> 0:07:31.880 they have to take into account. 0:07:32.160 --> 0:07:35.160 So, you know, for I guess the bigger picture here 0:07:35.480 --> 0:07:38.960 as you step back, it just feels like this technology 0:07:39.080 --> 0:07:43.720 cold war between China and the West, China and the US, 0:07:44.120 --> 0:07:46.880 it seems to we're just intensifying. Is that the feeling 0:07:46.880 --> 0:07:49.080 in Washington is that where Washington really wants to take this. 0:07:49.960 --> 0:07:51.760 But Paul, I'm glad you brought it up that way 0:07:51.800 --> 0:07:54.400 in those terms, because we really are seeing much more 0:07:54.400 --> 0:07:57.880 of a frost when it comes to technology. Settling in 0:07:58.520 --> 0:08:03.520 the US has been making clear. We heard Commerce Secretary 0:08:03.600 --> 0:08:07.160 Gina Raymunder just a few weeks ago say technological security 0:08:07.200 --> 0:08:10.920 is national security, and they are drawing a line when 0:08:10.960 --> 0:08:15.840 it comes to the more sophisticated and more advanced technology, 0:08:16.000 --> 0:08:18.840 especially when it comes to computer chips. The US is 0:08:18.880 --> 0:08:22.360 a leading innovator, if not a leading producer, of some 0:08:22.440 --> 0:08:26.160 of the most advanced and tiniest semiconductors that are out 0:08:26.160 --> 0:08:30.400 there powering technology everywhere. And one of the emerging fronts is, 0:08:30.440 --> 0:08:34.560 of course, artificial intelligence. And we spoke to House Foreign 0:08:34.559 --> 0:08:37.520 Affairs Committee Chairman Michael McCall, who's been pushing for these 0:08:37.559 --> 0:08:41.040 Quawei restrictions, and he said, the idea of the export 0:08:41.200 --> 0:08:45.400 controls that we reported on yesterday was to keep the 0:08:45.400 --> 0:08:48.240 most advanced AI tech out of China's hands. 0:08:49.040 --> 0:08:51.280 What about tech that's already in their hands that then 0:08:51.400 --> 0:08:54.840 China can adapt themselves. Wasn't there like a Huawei phone 0:08:55.520 --> 0:08:58.440 that really scratched everyone's head on like what kind of 0:08:58.480 --> 0:09:00.679 chips they actually used? I mean, how do you restrict 0:09:00.679 --> 0:09:01.480 that kind of stuff? 0:09:02.360 --> 0:09:05.880 Well, the US is actually investigating what happened with the 0:09:05.880 --> 0:09:09.959 May ninety. This device was unveiled as Gina Raimondo was 0:09:10.120 --> 0:09:14.040 visiting China and it was taken as a you know, 0:09:14.640 --> 0:09:18.679 something that was aimed directly at her during her visit 0:09:19.080 --> 0:09:21.720 to say that, look, you're trying to put these restrictions 0:09:21.720 --> 0:09:23.360 in place, we will show you. 0:09:23.760 --> 0:09:23.880 Now. 0:09:23.920 --> 0:09:28.000 The US has launched an investigation into how Huawei was 0:09:28.160 --> 0:09:31.119 able to develop it, and whether there are other companies 0:09:31.200 --> 0:09:35.280 that are forming this shadow network of suppliers to Huawei, 0:09:35.360 --> 0:09:39.280 in other words, creating proxies that allow the device maker 0:09:39.400 --> 0:09:41.440 to obtain the chips that it otherwise can't. 0:09:43.120 --> 0:09:46.040 So what's the response been from China? What can we 0:09:46.120 --> 0:09:47.800 It's just gonna be a tit for tat type of thing. 0:09:47.880 --> 0:09:49.839 So I'm Tim Cook, I'm paying attention here. 0:09:50.800 --> 0:09:57.319 Well, American technology executives should be watching this space. China responded, 0:09:57.400 --> 0:10:01.160 calling the moves economic coercion and a violation of what 0:10:01.240 --> 0:10:04.839 it sees as World Trade Organization rules, and they may 0:10:05.040 --> 0:10:08.440 very well decide to proceed with the case. At the 0:10:08.480 --> 0:10:10.880 same time, the US is trying to draw a line 0:10:11.160 --> 0:10:14.640 around the whole question of national security, and that is 0:10:14.679 --> 0:10:17.079 going to be something that we see as a tension 0:10:17.120 --> 0:10:20.360 point between the two countries. The US is made clear 0:10:20.400 --> 0:10:23.760 that it wants to do business with China, but just 0:10:24.320 --> 0:10:27.200 not that far. It is only willing to go so 0:10:27.400 --> 0:10:33.200 far when it comes to trade in more advanced technologies. 0:10:33.200 --> 0:10:36.120 It wants to preserve the American edge here at home. 0:10:36.640 --> 0:10:38.840 How hard is it for Intel to make up that 0:10:38.880 --> 0:10:39.920 revenue elsewhere? 0:10:40.880 --> 0:10:43.560 You know, it's a good question It's unclear exactly how 0:10:43.679 --> 0:10:48.079 much they would be losing here. It was only a 0:10:48.120 --> 0:10:52.080 slight drop. If you read between the lines on it. 0:10:52.400 --> 0:10:55.439 You know they're now seeing something more to the midpoint 0:10:55.960 --> 0:10:59.720 of their guidance, but it is still within the revenue 0:10:59.720 --> 0:11:02.680 that they projected between twelve and a half billion and 0:11:02.800 --> 0:11:03.960 thirteen and a half billion. 0:11:04.400 --> 0:11:07.240 You know, Michael, we've all grown up with Intel, and 0:11:07.520 --> 0:11:09.679 you know kind of I guess we now consider kind 0:11:09.679 --> 0:11:13.720 of the older generation of Silicon Valley of technology. It 0:11:13.760 --> 0:11:16.720 appears that they just have not been able to catch 0:11:16.760 --> 0:11:20.200 that AI wave, at least from investors perspective, in any way, 0:11:20.240 --> 0:11:24.000 shape or form. Is there any optimism that maybe they 0:11:24.040 --> 0:11:27.920 can infect pivot their company to go to where the 0:11:27.960 --> 0:11:29.880 puck is going, which is for AI. 0:11:31.120 --> 0:11:34.760 Well, Paul, we all remember the Intel inside jingle from 0:11:34.800 --> 0:11:37.680 those ads years ago, and that is something that Pat 0:11:37.760 --> 0:11:42.240 Gelsinger is really trying to recapture, and he is seizing 0:11:42.360 --> 0:11:47.559 upon the Biden Administration's Chips Act all those investments. We're 0:11:47.600 --> 0:11:52.040 seeing the company launch plants in Arizona and in Ohio. 0:11:52.120 --> 0:11:55.720 We just profiled the construction of this new facility in 0:11:55.760 --> 0:11:59.640 Ohio was really impressive. Look inside what they are trying 0:11:59.640 --> 0:12:02.400 to build there. It's ambitious, but it will take some 0:12:02.520 --> 0:12:06.440 time too. These plants can't be built overnight, and it 0:12:06.480 --> 0:12:08.480 is a race against the clock when it comes to AI. 0:12:09.000 --> 0:12:11.679 Our thanks to Michael Sheppard, Bloomberg News Senior editor. 0:12:11.920 --> 0:12:14.559 Coming up, we'll break down Apple's online launch event from 0:12:14.559 --> 0:12:16.120 this week's dubbed let Loose. 0:12:16.480 --> 0:12:19.520 You're listening to Bloomberg Intelligence on Bloomberg Radio, providing indepth 0:12:19.520 --> 0:12:21.760 research and data on two thousand companies and one hundred 0:12:21.760 --> 0:12:24.559 and thirty industries. You can access Bloomberg Intelligence via b 0:12:24.679 --> 0:12:25.600 I go on the terminal. 0:12:25.679 --> 0:12:28.640 I'm Paul Sweetey an Alex Steele, and this is Bloomberg. 0:12:32.559 --> 0:12:36.439 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:12:36.520 --> 0:12:39.160 weekdays at ten am Eastern on Apple car Play and 0:12:39.160 --> 0:12:42.240 Android Auto with the Bloomberg Business App. Listen on demand 0:12:42.280 --> 0:12:46.600 wherever you get your podcasts, or watch us live on YouTube. 0:12:47.520 --> 0:12:49.800 We moved now to big tech and Apple. Apple had 0:12:49.840 --> 0:12:52.520 its online launch event Tuesday dud let Loose, and the 0:12:52.559 --> 0:12:55.719 company unveiled a new artificial intelligence focused iPad pro and 0:12:55.840 --> 0:12:56.760 larger iPad Air. 0:12:57.200 --> 0:12:59.440 The goal is to reinvigorate a tablet lineup that has 0:12:59.520 --> 0:13:01.000 languished the past two years. 0:13:01.120 --> 0:13:01.439 For more. 0:13:01.720 --> 0:13:04.040 Guest host Tim Stenevick and I were joined by Man Deep, 0:13:04.040 --> 0:13:08.000 saying Bloomberg Intelligence senior technology analyst. We first asked man 0:13:08.040 --> 0:13:10.920 Deep about how important the new iPads are to Apple. 0:13:11.320 --> 0:13:14.800 iPad line is about a high single digit contributor to 0:13:14.920 --> 0:13:19.240 their overall revenue, so not as big as the iPhone, 0:13:19.280 --> 0:13:22.840 of course, but clearly you know they are trying to 0:13:22.920 --> 0:13:23.600 put their. 0:13:23.480 --> 0:13:26.160 Latest chip in the iPad. 0:13:26.640 --> 0:13:32.079 They showcase a new keyboard for the iPad and there 0:13:32.120 --> 0:13:36.240 were other battery announcements new all at display. So all 0:13:36.280 --> 0:13:39.520 these are cool, but fundamentally you have to ask yourself, 0:13:40.240 --> 0:13:43.679 is it, you know, worth to upgrade to a new 0:13:43.720 --> 0:13:46.840 iPad with all these incremental features as I would like 0:13:46.920 --> 0:13:50.679 to call And that's where I think the market is 0:13:50.720 --> 0:13:53.760 anticipating more along the lines of what can you show 0:13:53.800 --> 0:13:57.760 me in terms of AI and the wow factor around LMS? 0:13:58.040 --> 0:14:01.040 And I think that's what was messing at the event. 0:14:01.320 --> 0:14:03.439 Well what could they show? I mean, when we talk 0:14:03.480 --> 0:14:07.520 about AI and Apple, what are we thinking about? Because 0:14:08.280 --> 0:14:11.400 Mark German says that this is an AI focused pro model, 0:14:11.480 --> 0:14:15.560 So I'm wondering, apart from the chip, what about it 0:14:15.640 --> 0:14:16.800 is AI. 0:14:17.600 --> 0:14:20.720 It's at the app level, so that's why that operating 0:14:20.760 --> 0:14:21.920 system upgrade. 0:14:21.960 --> 0:14:24.120 And they did talk about the iOS eighteen. 0:14:24.680 --> 0:14:28.640 Look right now, the current version of my iPad, which 0:14:28.680 --> 0:14:32.160 is five generations behind what they launch, can run the 0:14:32.200 --> 0:14:35.880 latest version of the iOS operating system. So why do 0:14:35.960 --> 0:14:38.160 I need to upgrade? They have to give me a 0:14:38.200 --> 0:14:42.040 reason to upgrade to the latest iPad because my current 0:14:42.120 --> 0:14:45.240 version can't run the operating system and it's got some 0:14:45.360 --> 0:14:46.200 cool apps. 0:14:46.680 --> 0:14:48.880 That is what was missing, Like what. 0:14:48.760 --> 0:14:52.800 Functionality can you show me around Siri, around image editing, 0:14:52.920 --> 0:14:56.320 around summaries, like all the cool stuff that we talk 0:14:56.400 --> 0:15:00.280 about from Nvidia at the data center level. That's what 0:15:00.760 --> 0:15:03.400 a small kind of version of it is what you 0:15:03.440 --> 0:15:06.360 want to run on device instead of going to the cloud. 0:15:06.800 --> 0:15:09.600 And that's what they got a showcase in terms of 0:15:09.680 --> 0:15:11.640 why you need to upgrade to the latest hardware. 0:15:11.800 --> 0:15:15.960 Okay, so Paul, this is not our first rodeo. You 0:15:16.040 --> 0:15:18.640 and I have anchored before, and one thing that's different 0:15:19.560 --> 0:15:22.160 than versus a few years ago. When I would walk 0:15:22.160 --> 0:15:24.360 in here, you would have an iPad next to you. 0:15:24.480 --> 0:15:24.720 Yep. 0:15:24.800 --> 0:15:27.520 And the iPad you told me was like a really 0:15:27.560 --> 0:15:29.520 big part of how you prepared for the show, use 0:15:29.520 --> 0:15:32.160 the Boomberg terminal on the iPad. You also have the 0:15:32.160 --> 0:15:35.320 two screens for the terminal. You have no iPad anymore? Nope, 0:15:35.400 --> 0:15:35.720 why not? 0:15:36.480 --> 0:15:39.000 I still have the iPad, although it's probably the original version, 0:15:39.040 --> 0:15:40.200 but now everything's on the phone. 0:15:40.840 --> 0:15:42.840 So your phone has replaced your iPad absolutely. 0:15:42.920 --> 0:15:46.240 And I have a very long train ride every day, 0:15:46.280 --> 0:15:50.200 which I need a very engaging device, and your. 0:15:50.080 --> 0:15:52.160 Phone is that it's not the iPad. So, man, deep, 0:15:52.200 --> 0:15:53.680 how big of a problem is that for Apple? 0:15:54.320 --> 0:15:57.600 I mean, look in their case some of their newer 0:15:57.640 --> 0:16:00.640 products to cannibalize. You know, if the eye pad is 0:16:00.800 --> 0:16:03.640 very good, it's going to cannibalize the Mac sales. And 0:16:03.680 --> 0:16:06.360 if the iPhone is very good, it's going to cannibalize 0:16:06.400 --> 0:16:07.640 the iPad sales. 0:16:07.720 --> 0:16:09.560 So that's always been the case. 0:16:09.600 --> 0:16:12.600 But it's still a very sticky operating system, and you know, 0:16:13.040 --> 0:16:17.400 just ecosystem overall. The only problem that I think people 0:16:17.440 --> 0:16:20.200 are trying to grapple with here is what is the 0:16:20.280 --> 0:16:23.880 refresh cycle? Because right now, the refresh cycle continues to 0:16:23.880 --> 0:16:25.000 get longer and longer. 0:16:25.040 --> 0:16:26.440 It's not as if, you know, people. 0:16:26.240 --> 0:16:29.440 Are moving out of the ecosystem, but they're not gaining 0:16:29.480 --> 0:16:33.360 more Android users because they don't have the best looking 0:16:33.400 --> 0:16:37.360 phones or the best features that Android phones can offer, 0:16:37.520 --> 0:16:39.880 and so that is the part that is hurting their 0:16:39.920 --> 0:16:43.360 refresh rate and also the share gain from Android users. 0:16:43.880 --> 0:16:45.520 Is there a chance in your June developer meeting that 0:16:45.520 --> 0:16:46.800 they're going to come out with something that's going to 0:16:46.800 --> 0:16:49.040 blow the street away or expectations low? 0:16:49.520 --> 0:16:53.320 I mean, I'm expecting more emphasis on the software side 0:16:53.400 --> 0:16:57.360 in that developer meeting, and clearly they need to showcase 0:16:57.480 --> 0:17:01.800 what they are doing around the LM's trap, whether an 0:17:02.080 --> 0:17:05.200 LL and large anguid model will be part of their OS, 0:17:05.480 --> 0:17:09.840 and then how it influences the overall app ecosystem because 0:17:09.920 --> 0:17:11.960 that those are the features. If you look at the 0:17:12.119 --> 0:17:15.920 latest Pixel phone, they offer you a lot of those 0:17:15.960 --> 0:17:20.400 features already on Android, and that's what the Android ecosystem 0:17:20.440 --> 0:17:22.479 is looking to leverage more and more. Off look at 0:17:22.480 --> 0:17:26.000 the latest Samsung phones, they are targeting a lot of 0:17:26.040 --> 0:17:29.600 those JNAI features and Apple is really playing catch up 0:17:29.640 --> 0:17:31.800 over there, and they need to showcase that at. 0:17:31.680 --> 0:17:35.960 The WWDC when they have all the developers over there. 0:17:36.119 --> 0:17:37.879 Meande, this is something you think about a lot. So 0:17:37.960 --> 0:17:40.399 lay out the ultimate vision for us. What does Apple 0:17:40.760 --> 0:17:43.239 want its devices to be able to do for us 0:17:43.240 --> 0:17:45.800 from an AI perspective, like how is it going to 0:17:46.200 --> 0:17:47.920 interact with me using AI? 0:17:48.880 --> 0:17:52.760 I mean, the biggest kind of UI upgrade they can 0:17:52.880 --> 0:17:55.919 offer is around this sery. You know the fact that 0:17:56.119 --> 0:17:59.720 Siri is so underutilized right now as a voice assistant. 0:18:00.320 --> 0:18:03.560 If it has the right set of JENNYI features, clearly 0:18:03.720 --> 0:18:06.160 that will have a big influence and how we interact 0:18:06.240 --> 0:18:09.040 with the next version offer of the phones they make. 0:18:09.440 --> 0:18:12.840 And also you know some of the utility inside the app, 0:18:13.280 --> 0:18:17.399 like you don't have to you know, kind of touch 0:18:17.520 --> 0:18:22.119 everything or do everything manually in terms of giving instructions. 0:18:22.200 --> 0:18:25.720 There is this concept of AI agents that has to 0:18:25.760 --> 0:18:28.760 be front and center in the next version of software 0:18:28.800 --> 0:18:32.359 that Apple offers within their operating system, so that AI 0:18:32.480 --> 0:18:37.119 agent can automate a lot of the tasks, not fully, 0:18:37.280 --> 0:18:39.960 but pieces of it. And you want to see Apple 0:18:40.040 --> 0:18:41.240 making progress. 0:18:40.840 --> 0:18:43.600 On that front thanks to Man Deep Seeing Bloomberg Intelligence 0:18:43.640 --> 0:18:45.080 Senior Technology Analyst. 0:18:45.320 --> 0:18:47.159 You move now to social media and there may be 0:18:47.160 --> 0:18:49.560 a prolonged legal battle now on the horizon involving the 0:18:49.600 --> 0:18:51.280 popular video sharing app TikTok. 0:18:51.480 --> 0:18:54.080 TikTok is owned by China based Byte Dance, this week, 0:18:54.119 --> 0:18:56.720 the company filed a legal challenge to a measure signed 0:18:56.720 --> 0:18:59.520 by President Biden last month. That measure with ban TikTok 0:18:59.560 --> 0:19:03.000 in the US, if ByteDance hasn't divested from the app 0:19:03.080 --> 0:19:04.919 by January nineteenth. 0:19:05.000 --> 0:19:07.800 The potential ban is meant to address national security concerns 0:19:07.800 --> 0:19:10.520 that the Chinese government could access user data or influence 0:19:10.560 --> 0:19:12.200 what's scene on the TikTok platform. 0:19:12.440 --> 0:19:15.320 For more, we were joined by Matthew Schuttenhelm, Bloomberg Intelligence 0:19:15.400 --> 0:19:18.679 media litigation analysts. We first asked for his take on 0:19:18.720 --> 0:19:19.560 this week's news. 0:19:19.960 --> 0:19:23.040 This is the first Amendment lawsuit that we expected TikTok 0:19:23.200 --> 0:19:28.520 to bring, basically saying that Congress's action violates its First 0:19:28.520 --> 0:19:33.680 Amendment rights, that it, like any other platform, think about 0:19:33.720 --> 0:19:37.240 the New York Times or any other media outlet. If 0:19:37.320 --> 0:19:42.199 Congress were to effectively ban it, that it violates the 0:19:42.200 --> 0:19:46.280 First Amendment to do so unless Congress can pass a 0:19:46.359 --> 0:19:49.600 pretty tough test. And so I think this is a 0:19:49.600 --> 0:19:53.800 pretty substantial First Amendment case because we've rarely seen Congress 0:19:53.880 --> 0:19:58.280 take such drastic action with respect to such a major 0:19:58.359 --> 0:19:59.240 media platform. 0:20:00.160 --> 0:20:03.400 We hired Matt He was just a kid's got gray hair. 0:20:04.480 --> 0:20:07.800 I know, I don't know what happened exactly as a 0:20:07.840 --> 0:20:11.240 grizzled veteran there, Matt, I know it's important which court 0:20:11.320 --> 0:20:13.040 these things go to. So tell us where you think 0:20:13.359 --> 0:20:16.080 this case will be litigated initially and kind of how 0:20:16.119 --> 0:20:16.640