WEBVTT - Apple’s New CEO

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. It was big news

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<v Speaker 1>all over the world. Apple is getting a new CEO

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<v Speaker 1>in fine John Turners. The current chief executive, Tim Cook,

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<v Speaker 1>will step aside in September, and longtime Apple executive John

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<v Speaker 1>Turnas will succeed him. Cook is sticking around. He'll become

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<v Speaker 1>Apple's executive chairman because, as he told ABC's Good Morning America,

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<v Speaker 1>I can't imagine life without Apple. During Cook's tenure, Apple's

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<v Speaker 1>market value sword by more than three point six trillion dollars.

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<v Speaker 1>It sold its billionth iPhone, reached five hundred and forty

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<v Speaker 1>stores worldwide, and it's celebrated as fiftieth anniversary. Those are

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<v Speaker 1>big milestone sure.

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<v Speaker 2>But what we haven't seen are real breakthrough new types

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<v Speaker 2>of products under Cook.

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<v Speaker 1>That's Bloomberg's Mark German, who's covered Apple for years.

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<v Speaker 2>I think there was a recognition that Apple is at

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<v Speaker 2>an inflection point in its history where you're seeing Open Ai,

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<v Speaker 2>Meta and other companies cropping up with new types of devices.

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<v Speaker 1>And Mark says the careful CEO succession plan is an

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<v Speaker 1>indication Apple sees just how much is at stake.

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<v Speaker 2>You know, when Steve Jobs picked Tim Cook, the idea

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<v Speaker 2>was that they had this product roadmap. They needed someone

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<v Speaker 2>to execute the ideas broad and manufacturing, bring the iPhone

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<v Speaker 2>into China, release new types of variations of existing products.

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<v Speaker 2>What they need now is someone who can lead Apple

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<v Speaker 2>into a new era with entirely new types of products.

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<v Speaker 2>And so they're betting on who else but their hardware

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<v Speaker 2>engineering person, the youngest person on the executive team, to

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<v Speaker 2>take the company into the new era. Tim Cook is

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<v Speaker 2>always going to do what's best for Apple, and really

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<v Speaker 2>what's best for Apple at this point is for Tim

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<v Speaker 2>Cook to no longer be CEO. So I think Tim

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<v Speaker 2>Cook is doing right by Apple by passing off the baton.

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<v Speaker 1>Right now, I'm David Gura, and this is the big

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<v Speaker 1>take from Bloomberg News today. On the show A New

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<v Speaker 1>Era for Apple, Mark walk us through John Turner's resume

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<v Speaker 1>at Apple.

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<v Speaker 2>He worked on their product design team. He worked on

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<v Speaker 2>cinema displays early on. Then he worked on a bunch

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<v Speaker 2>of max He worked on the IMACG five, he worked

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<v Speaker 2>on some Mac notebooks and what have you, and then

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<v Speaker 2>he was selected to be part of the leadership building

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<v Speaker 2>the original iPad. And what turn has made his name

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<v Speaker 2>on was product durability. If you ever held the original iPad,

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<v Speaker 2>I think the thing that people remember was how durable

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<v Speaker 2>it felt, how good it felt in the hand, and

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<v Speaker 2>it felt like this strong piece of equipment.

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<v Speaker 1>Or the original iPad. Turnis was put in charge of

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<v Speaker 1>development for the Mac and spearheaded the creation of AirPods.

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<v Speaker 1>He would seeing that someone who had a real gift

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<v Speaker 1>for coming up with new products and product designs for Apple.

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<v Speaker 2>And then his final test was actually at the turn

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<v Speaker 2>of the decade, going into twenty twenty, Tan Riccio, his

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<v Speaker 2>boss at the time, he ran harder engineering. He shifted

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<v Speaker 2>engineering of the iPhone to Turnis. Could he bring a

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<v Speaker 2>major new iPhone to market? And very successfully They were

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<v Speaker 2>able to bring the iPhone twelve that was at at

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<v Speaker 2>the height of COVID and only launched at about a

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<v Speaker 2>month a month and a half later than their usual patence.

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<v Speaker 2>What Turners was able to bring to market was a

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<v Speaker 2>major new redesigned iPhone, the first iPhones with five G,

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<v Speaker 2>which kickstarted a new supercycle of launches for the company.

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<v Speaker 1>Mark says it was that success during the pandemic that

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<v Speaker 1>set up Turners to succeed Tim Cook.

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<v Speaker 2>Twenty twenty one turnas officially becomes head of hardware Engineering

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<v Speaker 2>for Apple and served on Tim Cook's executive team for

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<v Speaker 2>the last five six years in that position.

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<v Speaker 1>What do we know about who actually picked Turn? Is

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<v Speaker 1>this the board's decision?

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<v Speaker 2>Tim Cook, he made this election. He made the choice.

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<v Speaker 2>And my strong belief is that Eddieq, the head of

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<v Speaker 2>Services at Apple, who had worked very closely under Steve Jobs,

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<v Speaker 2>was Tim Cook's perhaps chief advisor on this election here.

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<v Speaker 2>Apple doesn't do CEO transitions too often, and it's fair

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<v Speaker 2>to say this is the first sort of well executed

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<v Speaker 2>CEO transition in Apple's history. Obviously, the Tim Cook era

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<v Speaker 2>began because Steve Jobs, the company co founder, was about

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<v Speaker 2>to pass away, and that was very sad, and Cook

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<v Speaker 2>was pushed into this role. But now we're getting a

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<v Speaker 2>formal transition here where a successor is being handpicked and

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<v Speaker 2>is going to ease into the role over the next

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<v Speaker 2>three to six months or so. And so I would

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<v Speaker 2>say this was a choice made between Tim Cook, Eddieq,

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<v Speaker 2>and Apple's board of direct But ultimately Apple's board is

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<v Speaker 2>going to go with what Tim says. He's now the

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<v Speaker 2>exec chairman, and they voted unanimously to select John Turnis

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<v Speaker 2>as the CEO.

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<v Speaker 1>What is that background, that emphasis on hardware say about

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<v Speaker 1>the way he's likely to approach the big job at Apple.

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<v Speaker 2>The role that Apple CEO is to take what they're

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<v Speaker 2>best at and apply that knowledge to those specific areas

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<v Speaker 2>at the company. When you're the CEO of such a

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<v Speaker 2>gigantic company, and Tim Cook he has about twenty direct reports.

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<v Speaker 2>The way Apple's organized is that all the major functions

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<v Speaker 2>report up to the CEO directly, and so you have

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<v Speaker 2>to pick your spots. You can't really get your hands

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<v Speaker 2>dirty with every function. Tim Cook a finance guy, a

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<v Speaker 2>sales guy, an operations guy, so he put his fingers

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<v Speaker 2>and all that and had been deeply involved in the operations,

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<v Speaker 2>the supply chain, the manufacturing of the company. What you're

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<v Speaker 2>going to see with Turnus is he is going to

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<v Speaker 2>leave the operational stuff, manufacturing, supply chain, you name it

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<v Speaker 2>to the other leaders at Apple who are in charge

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<v Speaker 2>of those functions. They have a new COO, they have

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<v Speaker 2>a new CFO, so they have a new procurement person,

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<v Speaker 2>they have a salesperson who's been elevated in the company

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<v Speaker 2>in recent years. But you're going to see him apply

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<v Speaker 2>his attention to the product design teams, the hardware engineering teams,

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<v Speaker 2>the silicon teams, probably the software teams, and really get

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<v Speaker 2>knee deep in the product development side of things. And

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<v Speaker 2>I also expect him to have a very strong influence

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<v Speaker 2>and involvement on Apple's AI work, not only in how

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<v Speaker 2>the company is run, but AI products as well.

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<v Speaker 1>Ahead of the CEO announcement, Mark notis Turnus got a

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<v Speaker 1>marquee role at a major Apple event last month.

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<v Speaker 2>We're so excited to have you go out here so

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<v Speaker 2>you can get your hands on all living price screen

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<v Speaker 2>announces this week. He kicked off the event, which was

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<v Speaker 2>usually what Tim Cook did.

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<v Speaker 1>And it's not just a big deal that he, rather

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<v Speaker 1>than other Apple executives, took center stage, but it was

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<v Speaker 1>the kind of product that he rolled out next, one that,

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<v Speaker 1>according to Mark, has the potential to this rep the

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<v Speaker 1>lower end of the laptop market, totally.

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<v Speaker 2>New from the ground, a new system to do just that.

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<v Speaker 1>And we call it MacBook VU, the MacBook Neo, an

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<v Speaker 1>Apple laptop for five hundred and ninety nine dollars, almost

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<v Speaker 1>half as much as the MacBook Air.

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<v Speaker 2>Turnus's big push with the MacBook Neo was this idea

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<v Speaker 2>that they need something fun, cheap and cool for students,

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<v Speaker 2>for kids, for people who don't want to spend you know,

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<v Speaker 2>eleven hundred dollars plus a on a Mac computer. In

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<v Speaker 2>order to bring more people into the Apple ecosystem, the

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<v Speaker 2>thought is, if you get a MacBook Neo at an

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<v Speaker 2>early age, you'll become an Apple customer for life. Get

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<v Speaker 2>the phone, get the iPad, get the AirPods, get the watch,

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<v Speaker 2>you name it. They needed some sort of gateway entry

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<v Speaker 2>level product into the Apple ecosystem, and they knew that

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<v Speaker 2>for students an iPad in many cases wasn't going to

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<v Speaker 2>cut it because the effectiveness of a Mac is so

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<v Speaker 2>much better. For years, Apple's marketing people they really pushed

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<v Speaker 2>back against the idea of what they called chasing market

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<v Speaker 2>share with cheaper products, and so turnis really pushed for this,

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<v Speaker 2>and as Eddie q, Apple Services chief said in a

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<v Speaker 2>town hall meeting with employees after the CEO introduction, he said,

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<v Speaker 2>it's the hottest product in the world right now. But

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<v Speaker 2>it is indicative of turnis being able to fight for something,

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<v Speaker 2>push through something, and make a meaningful change when it

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<v Speaker 2>comes to a product at the company. The truth of

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<v Speaker 2>the matter is is that they've been preparing for twenty

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<v Speaker 2>twenty seven twenty twenty eight to be this big product moment.

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<v Speaker 2>For the last several years, Turnis is externally not talking

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<v Speaker 2>about the plan, but I can tell you that Turnis

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<v Speaker 2>has been leading the charge on six major new products

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<v Speaker 2>that are all new product categories for Apple.

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<v Speaker 1>Compared to these six products planned for the next two

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<v Speaker 1>years under Turnis, Mark says Apple only launched three new

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<v Speaker 1>product categories during Cooks fifteen years as CEO. So what

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<v Speaker 1>are these six products have in common? AI AI AI AIAIAI.

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<v Speaker 2>So the first one we'll see is a product that

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<v Speaker 2>is a smart display. This is a home pod with

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<v Speaker 2>a screen. It's a mini sized iPad that you can

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<v Speaker 2>put on your wall or put on a speaker base.

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<v Speaker 2>Then it has facial recognition. It could play nicely with

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<v Speaker 2>the new SERI and be a home hub command center

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<v Speaker 2>for everything you want to do in your home. The

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<v Speaker 2>second product is a tabletop robot. It's that same device

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<v Speaker 2>I just explained, but with a robotic arm. So you

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<v Speaker 2>put on your desk, your kitchen counter, and then that

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<v Speaker 2>display can move around in air in space with a

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<v Speaker 2>robotic actuator, sort of like an artificial limb. And then

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<v Speaker 2>the third product is going to be a privacy focused

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<v Speaker 2>security camera and home security system.

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<v Speaker 1>The other three products are going to be AI wearables.

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<v Speaker 2>You're going to see new AI AirPods with AI features.

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<v Speaker 2>You're going to see smart glasses, and you're going to

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<v Speaker 2>see a pendant. They have computer vision cameras so they

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<v Speaker 2>can feed data into the Apple Cloud and into your

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<v Speaker 2>iPhone with AI processing to do things like visual reminders

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<v Speaker 2>or visual turn by turned directions. You could wearing the

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<v Speaker 2>air pods or the smart glasses, and when you're walking

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<v Speaker 2>down the street with maps going and instead of it

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<v Speaker 2>telling you turn right in one thousand feet, it'll say

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<v Speaker 2>turn right by the gray building with a bunch of

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<v Speaker 2>windows on the outside.

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<v Speaker 1>Marx's Apple also has plans for new features and updates

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<v Speaker 1>in existing product categories, like a new twentieth anniversary iPhone

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<v Speaker 1>with curved glass and touchscreen MacBooks. Assuming all goes to plan,

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<v Speaker 1>but of all the potential products that Mark is anticipating,

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<v Speaker 1>the incoming CEO to release first.

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<v Speaker 2>John Turnis is going to become CEO the first week

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<v Speaker 2>of September, and then a week later he is going

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<v Speaker 2>to introduce the biggest new Apple product in several years

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<v Speaker 2>the foldable iPhone.

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<v Speaker 1>Why is a foldable iPhone such a big deal?

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<v Speaker 2>First of all, I think FULLI ofble iPhone is freaking

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<v Speaker 2>cool me personally, and I can't wait. And it's a

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<v Speaker 2>game changer, you know. The big difference with this foldable

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<v Speaker 2>phone is that Apple has really upped the quality in

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<v Speaker 2>three key ways. One is durability. Foldable phones are known

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<v Speaker 2>for being really flimsy and breaking easily. And turnus is

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<v Speaker 2>non for someone that wants to apply very high product

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<v Speaker 2>quality reliability so people can get really long term use

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<v Speaker 2>out of these things. But it's really an engineering marvel,

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<v Speaker 2>technical marvel, and they're going to get into the nitty

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<v Speaker 2>gritty about why this is so complex, And like the

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<v Speaker 2>new CEO is the guy who spearheaded it. Not everyone's

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<v Speaker 2>going to want to buy it or be able to

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<v Speaker 2>afford it, but I'll be first in line.

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<v Speaker 1>Up. Next, what does the leadership change at Apple mean

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<v Speaker 1>for the company's relationship with President Trump? Tim Cook, who

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<v Speaker 1>has been the CEO of Apple for fifteen years and

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<v Speaker 1>has worked at the company for twenty eight years, is

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<v Speaker 1>staying on as Apple's executive chairman. I asked Bloomberg's Mark German.

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<v Speaker 1>How Cook is going to approach that new role.

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<v Speaker 2>What he said is there's one CEO at a time.

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<v Speaker 2>He's not getting in the way of Turnus. He said,

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<v Speaker 2>he is going to be there for whatever he's called

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<v Speaker 2>upon by Turnis and to serve as a sounding board

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<v Speaker 2>as an advisor to him. The other thing he said

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<v Speaker 2>is that he'll be very focused on policy reading between

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<v Speaker 2>the lines. He's very focused on the next three years

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<v Speaker 2>of Donald Trump's term, dealing with him, Very focused on

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<v Speaker 2>dealing with China, very focused on world stage related matters.

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<v Speaker 1>How were you thinking about Tim Cook's legacy as CEO

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<v Speaker 1>amidst all this.

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<v Speaker 2>Tim Cook's legacy is that he took over for a

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<v Speaker 2>generational once in a lifetime technology company co founder and leader.

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<v Speaker 2>And when he took over for Steve Jobs, I mean,

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<v Speaker 2>if you remember, it was pretty tumultuous and uncertain of

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<v Speaker 2>the time. You know, things could have gone either way.

0:12:40.920 --> 0:12:44.800
<v Speaker 2>But he kept that ship steady. He executed the vision

0:12:44.840 --> 0:12:47.840
<v Speaker 2>of Steve Jobs. He brought new products to market, and

0:12:47.880 --> 0:12:50.600
<v Speaker 2>he squeezed so much lemonade out of the lemons that

0:12:50.760 --> 0:12:54.600
<v Speaker 2>was Apple at the time, to make variations of products,

0:12:55.320 --> 0:12:58.479
<v Speaker 2>growing the financials of the company, to such an incredible

0:12:58.960 --> 0:13:04.080
<v Speaker 2>mind boggling I melting degree, taking Apple into services really

0:13:04.120 --> 0:13:06.000
<v Speaker 2>in a big way for the first time, Apple TV,

0:13:06.080 --> 0:13:10.480
<v Speaker 2>Apple Music, health products, financial services. The other thing he

0:13:10.559 --> 0:13:13.880
<v Speaker 2>did was that China Mobile deals, getting the iPhone into

0:13:13.960 --> 0:13:17.080
<v Speaker 2>China in a big way in the early twenty tens.

0:13:17.280 --> 0:13:21.960
<v Speaker 2>So his legacy is nothing short of incredible. I think

0:13:21.960 --> 0:13:24.280
<v Speaker 2>it could have been even better if there were a

0:13:24.320 --> 0:13:28.280
<v Speaker 2>few product related things that worked out. He's leaving Apple

0:13:28.720 --> 0:13:33.080
<v Speaker 2>with an AI legacy so far that is negligible and

0:13:34.120 --> 0:13:37.840
<v Speaker 2>very unfortunate for them. The other thing was a mishandling

0:13:37.840 --> 0:13:40.360
<v Speaker 2>of the self driving car project, where Apple spent a

0:13:40.400 --> 0:13:42.760
<v Speaker 2>decade and tens of billions of dollars working on that

0:13:42.800 --> 0:13:45.920
<v Speaker 2>self driving car. Obviously, the hard calls to cancel that

0:13:45.960 --> 0:13:49.720
<v Speaker 2>project were made, but quite frankly, with Apple's resources and

0:13:49.800 --> 0:13:52.840
<v Speaker 2>ideas and manufacturing capabilities, they should have been able to

0:13:52.840 --> 0:13:54.920
<v Speaker 2>bring something to market and they simply didn't.

0:13:55.120 --> 0:13:57.480
<v Speaker 1>I think about the challenges this company faces, and you've

0:13:57.520 --> 0:14:00.240
<v Speaker 1>alluded to a few of them, certainly lagging in the

0:14:00.280 --> 0:14:04.200
<v Speaker 1>AI race. You've written about this exodus of top talent

0:14:04.280 --> 0:14:07.040
<v Speaker 1>from Apple to competitors and other companies, particularly in the

0:14:07.080 --> 0:14:11.600
<v Speaker 1>AI space. How well equipped is John Turnis to write

0:14:11.600 --> 0:14:13.800
<v Speaker 1>the ship when it comes to those issues and others.

0:14:14.160 --> 0:14:17.400
<v Speaker 2>I think Turnis is definitely equipped. I think that one

0:14:17.440 --> 0:14:19.600
<v Speaker 2>of the biggest issues Apples facing right now are some

0:14:19.680 --> 0:14:23.240
<v Speaker 2>of these AI companies wanting to build hardware basically pillaging

0:14:23.280 --> 0:14:26.400
<v Speaker 2>the hardware ranks of Apple. And I think putting a

0:14:26.440 --> 0:14:29.280
<v Speaker 2>hardware engineering person at the top of Apple, who's going

0:14:29.320 --> 0:14:30.880
<v Speaker 2>to leave Apple right now? In the middle of this

0:14:31.040 --> 0:14:33.640
<v Speaker 2>from your hardware engineering standpoint, when now you have heard

0:14:33.760 --> 0:14:36.320
<v Speaker 2>engineering running the company versus sort of what people have

0:14:36.360 --> 0:14:37.360
<v Speaker 2>called the being encounters.

0:14:38.160 --> 0:14:41.040
<v Speaker 1>Tim Cook has been the job for fifteen years. Let's

0:14:41.080 --> 0:14:44.320
<v Speaker 1>assume that John Turners has a similar tenure fifteen year tenure.

0:14:45.000 --> 0:14:47.120
<v Speaker 2>Well, if he doesn't, then this was all a failure.

0:14:47.240 --> 0:14:49.880
<v Speaker 2>The whole idea was that Turnis could walk in for

0:14:49.960 --> 0:14:50.520
<v Speaker 2>fifteen years.

0:14:50.680 --> 0:14:53.040
<v Speaker 1>Played out for me, what does this company look like

0:14:53.080 --> 0:14:55.600
<v Speaker 1>fifteen years from now if John Turners has a successful

0:14:55.640 --> 0:14:56.760
<v Speaker 1>run at CEO.

0:14:56.840 --> 0:14:58.760
<v Speaker 2>Well, fifteen years from now, if he had a successful

0:14:58.840 --> 0:15:02.160
<v Speaker 2>run as CEO, they would invent new types of product

0:15:02.200 --> 0:15:05.200
<v Speaker 2>categories that we haven't seen from other companies. Maybe he

0:15:05.280 --> 0:15:08.080
<v Speaker 2>brings the car project or some sort of mobility project

0:15:08.120 --> 0:15:10.840
<v Speaker 2>back to fruition. Maybe he's able to get Apple into

0:15:10.920 --> 0:15:14.400
<v Speaker 2>the humanoid space, helping lead the charge to move away

0:15:14.480 --> 0:15:19.160
<v Speaker 2>from manufacturing all their silicon essentially in Taiwan and move

0:15:19.200 --> 0:15:21.200
<v Speaker 2>it to the US and elsewhere at a faster pace.

0:15:21.640 --> 0:15:23.720
<v Speaker 2>You know, at least doubling or tripling the size of

0:15:23.720 --> 0:15:26.000
<v Speaker 2>the Apple ecosystem and the user base, just like Tim

0:15:26.040 --> 0:15:30.080
<v Speaker 2>Cook was able to do. Make this a perhaps if

0:15:30.080 --> 0:15:32.440
<v Speaker 2>you look at inflation and everything like, this should be

0:15:32.440 --> 0:15:35.400
<v Speaker 2>a ten trillion dollar company by the time you know

0:15:35.520 --> 0:15:38.440
<v Speaker 2>all I said and done. But most of all, most

0:15:38.440 --> 0:15:43.520
<v Speaker 2>important thing is retaining the Apple brand, keeping and growing.

0:15:43.520 --> 0:15:46.720
<v Speaker 2>Apple is the strongest technology brand in America and not

0:15:46.800 --> 0:15:49.560
<v Speaker 2>losing steam to newcomers like open ai and Meta.

0:15:55.120 --> 0:15:57.480
<v Speaker 1>This is the big take from Bloomberg News. I'm David Gura.

0:15:57.720 --> 0:15:59.880
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