WEBVTT - iPhone Sales Drop and APEC Kicks Off in San Francisco 0:00:01.200 --> 0:00:06.480 From Mahard where Innovation, money and power Collie in Silicon Valley, NBN. 0:00:06.800 --> 0:00:10.840 This is Bloomberg Technology with Caroline Hyde and Ed Ludlove. 0:00:24.360 --> 0:00:27.280 I'm Caroline Heine blombergsweltad quarters in New York and I 0:00:27.360 --> 0:00:28.800 met Ludlow in San Francisco. 0:00:28.920 --> 0:00:30.920 This is Bloomberg Technology coming up. 0:00:30.960 --> 0:00:34.319 We'll have full market coverage ahead. Inflation, those worries they 0:00:34.360 --> 0:00:37.960 call the rate hike bets come down? Will this fuel 0:00:38.040 --> 0:00:39.479 still the tech sector rally? 0:00:40.840 --> 0:00:44.000 As apet gets underway in San Francisco, tech executives look 0:00:44.040 --> 0:00:47.199 to meet with China's g will bring you the detail. 0:00:46.920 --> 0:00:49.800 And Apple's largest assembler of iPhones, well, it warns of 0:00:49.800 --> 0:00:52.960 a sales drop as demand concerns linger in the smartphone market. 0:00:53.600 --> 0:00:55.280 There's a lot happening in the show today, and the 0:00:55.280 --> 0:00:57.400 stocks behind me kind of reflect the stories we'll cover. 0:00:57.440 --> 0:00:59.400 We're going to look at fox Conn in its earnings, 0:00:59.440 --> 0:01:03.480 the main contract manufacturer that assembles the iPhone, a worrying outlook, 0:01:03.640 --> 0:01:06.959 but Apple actually up moving higher. Grinder had strong earnings 0:01:06.959 --> 0:01:10.360 to stock up significantly. We will speak to the Grinder CEO, 0:01:10.400 --> 0:01:12.560 and then finally Alphabet, parent company of Google. We're going 0:01:12.600 --> 0:01:15.240 to go to our reporter to talk about what YouTube's 0:01:15.280 --> 0:01:19.960 doing in the context of AI generated content and content moderation. 0:01:20.400 --> 0:01:22.600 In terms of the stock story, there is one name 0:01:22.680 --> 0:01:24.679 that is a big story in its own right, and 0:01:24.720 --> 0:01:27.320 that is in Vidia Video Shares around one and a 0:01:27.360 --> 0:01:29.800 half percent in the session, but currently up for a 0:01:30.040 --> 0:01:33.839 tenth straight day, and if they close highering in the green, 0:01:34.200 --> 0:01:36.800 that ten day win streak matches the record that in 0:01:36.920 --> 0:01:40.480 Vidia set in December of twenty sixteen. It is the 0:01:40.520 --> 0:01:42.800 best performing stock on the S and P five hundred 0:01:42.840 --> 0:01:45.200 year to date. It is the best performing stock on 0:01:45.240 --> 0:01:47.960 the Nasdaq one hundred year to date, and its gain 0:01:48.040 --> 0:01:50.960 is almost two hundred and forty percent year to date. 0:01:51.000 --> 0:01:53.040 The story in the near term has been around AI 0:01:53.200 --> 0:01:56.440 right in their products announcements, but also in this session 0:01:56.760 --> 0:01:59.120 getting a boost from that call of an expected inflation 0:01:59.200 --> 0:02:00.600 print is paused. 0:02:00.880 --> 0:02:04.080 The so called Magnificent seven, those key stocks that are 0:02:04.200 --> 0:02:06.960 just driven some of the rally throughout the year. Is 0:02:07.000 --> 0:02:09.160 it still times you're buying into them? Well, please to 0:02:09.200 --> 0:02:12.440 welcome the perfect guests Leafetangla Investment CIO Nancy Tangla, who 0:02:12.720 --> 0:02:14.799 I think has some key thoughts on really whether there's 0:02:14.800 --> 0:02:16.640 still fuel to the fire of the tech rally. Is 0:02:16.680 --> 0:02:18.680 there when you're getting these sorts of information prints. 0:02:19.720 --> 0:02:21.560 Oh absolutely, I'm in the market loves it. 0:02:21.600 --> 0:02:24.359 But let's also not forget that these stocks have been 0:02:24.360 --> 0:02:28.040 delivering all the way through the rate hype regime from 0:02:28.080 --> 0:02:31.519 the Fed, and then again with inflation higher. We have 0:02:31.639 --> 0:02:35.920 argued that inflation comes down symmetrically, but not necessarily literally 0:02:36.040 --> 0:02:41.560 so linearly. So I think that this is a good number, 0:02:41.800 --> 0:02:45.160 not a huge surprise, and we'll see what happens in December. 0:02:45.240 --> 0:02:47.520 But you know, Caroline, I wrote a piece that this 0:02:47.600 --> 0:02:52.200 market is analogous to nineteen ninety, where we had inflation above. 0:02:51.880 --> 0:02:54.040 Three percent for the entire. 0:02:53.840 --> 0:02:57.239 Decade, yields between five and eight percent on average for 0:02:57.440 --> 0:03:00.640 the entire decade, a war, a recession credit like we 0:03:00.720 --> 0:03:03.880 have now. And then in addition to that, the indices 0:03:03.919 --> 0:03:06.880 we're up, you know, four hundred percent over four hundred 0:03:06.919 --> 0:03:09.239 percent for the Dow in S ANDP and eight over 0:03:09.240 --> 0:03:10.799 eight hundred percent for the Nasdaq. 0:03:12.240 --> 0:03:14.440 The nancy. To be clear in your mind, have we 0:03:14.560 --> 0:03:15.800 hit peak rate. 0:03:18.000 --> 0:03:18.080 Ed? 0:03:18.200 --> 0:03:20.760 I think so, But that doesn't mean we're not going 0:03:20.800 --> 0:03:24.360 to continue to see volatility. I think you know, we've 0:03:24.440 --> 0:03:28.560 never had this much supply come on so quickly, and 0:03:28.600 --> 0:03:30.520 so I think we'll continue to get you know, the 0:03:30.560 --> 0:03:32.639 market will react to bits of news. We'll see what 0:03:32.680 --> 0:03:37.120 the PPI says, But in general, I think we're kind of. 0:03:37.040 --> 0:03:42.640 There, going back to that nineties reminiscing and perhaps echo 0:03:42.760 --> 0:03:45.520 that we currently see in the current market. Nancy, is 0:03:45.560 --> 0:03:47.800 it that therefore we can continue to run on the 0:03:47.920 --> 0:03:51.040 same sort of seven names that the market has loved 0:03:51.120 --> 0:03:53.720 us far, or do you need to get broader, wider 0:03:54.040 --> 0:03:55.760 and where you anticipate some of the gains are going 0:03:55.800 --> 0:03:56.360 to come from. 0:03:57.320 --> 0:03:59.280 I do think you need to get wider, Caroline. I 0:03:59.320 --> 0:04:03.880 mean I think we need industrials to work again, maybe energy. 0:04:04.000 --> 0:04:06.600 I think financials have to do some of the heavy lifting. 0:04:07.040 --> 0:04:09.920 But in general, if you look at the Magnificent Seven, 0:04:10.000 --> 0:04:12.920 this is not my work, it's Jason Trennard said strateigis, 0:04:13.280 --> 0:04:18.320 and he separated it out as its own sector. Margins 0:04:18.360 --> 0:04:22.600 are growing faster, earnings and revenue growth growing faster than 0:04:22.640 --> 0:04:25.400 the rest of market and rest of technology, and so 0:04:25.480 --> 0:04:27.160 I think you have to give them the tip of 0:04:27.200 --> 0:04:29.640 the hat and say I may not want to own 0:04:29.720 --> 0:04:32.320 all of them, but I want to own some of them. 0:04:32.720 --> 0:04:35.360 And I need to have them in my portfolio because 0:04:35.400 --> 0:04:38.080 the tailwinds, the secular tailwinds, are at their back. 0:04:39.720 --> 0:04:42.560 Speaking of tailwinds, Nancy, you heard me talk about Nvidia 0:04:42.720 --> 0:04:44.600 at the top of the program, up for a tenth 0:04:44.680 --> 0:04:48.200 straight day, matching it's record run that it's set in 0:04:48.200 --> 0:04:51.479 twenty sixteen. It is the best performing stock on both 0:04:51.600 --> 0:04:53.520 S and B five hundred and as that one hundred. 0:04:53.800 --> 0:04:55.440 What do you make of that run? What is your 0:04:55.480 --> 0:04:56.600 attitude towards it? 0:04:57.560 --> 0:05:00.120 I wished I owned it. 0:05:00.120 --> 0:05:01.880 It was never cheap enough for us. 0:05:02.240 --> 0:05:04.560 It was for about twenty minutes on one day, and 0:05:04.600 --> 0:05:07.760 then we just missed it. I think importantly, what you 0:05:07.880 --> 0:05:12.320 know from last quarters earnings is that the multiple actually 0:05:12.400 --> 0:05:14.600 went down despite the stock running up. 0:05:14.680 --> 0:05:17.000 So I think this is one of those stocks like. 0:05:17.040 --> 0:05:20.640 Amazon a decade ago, like Walmart two or three decades ago, 0:05:21.080 --> 0:05:23.160 that you just step aside and let it run and 0:05:23.200 --> 0:05:26.960 hopefully you own it. We owned Broadcom, so we you know, 0:05:27.000 --> 0:05:30.400 we've had some of the benefits of AI chip and 0:05:30.440 --> 0:05:33.400 cloud computing. We own a lot of the Magnificent seven, 0:05:33.560 --> 0:05:35.719 we just don't own that name. I think if you 0:05:35.800 --> 0:05:38.760 own it, you keep it and let it run, and 0:05:38.800 --> 0:05:40.120 if you don't own it. 0:05:40.120 --> 0:05:42.560 You wait on all of these stocks for pullbacks. 0:05:43.360 --> 0:05:45.200 And what would be the spalk of a pullback do 0:05:45.200 --> 0:05:46.960 you think, Nancie, Well, I. 0:05:46.960 --> 0:05:50.440 Think we got one in October, so in September, I 0:05:50.480 --> 0:05:53.120 think if we and that was based on you know, 0:05:53.200 --> 0:05:56.679 the FED saying they were going to be higher for longer, 0:05:56.760 --> 0:05:59.520 But I would argue in the medium term that doesn't 0:05:59.560 --> 0:06:03.520 matter because we've had much higher rates and strong investment performance, 0:06:03.520 --> 0:06:07.640 particularly from technology, and then I think if we get 0:06:07.680 --> 0:06:10.479 conflicting data and we just continue to hear the FED speak, 0:06:10.560 --> 0:06:14.000 the market is still reacting to that on a daily basis. 0:06:14.760 --> 0:06:17.080 But I would point out that the reason I think 0:06:17.120 --> 0:06:19.080 you want to own these stocks for the long term 0:06:19.440 --> 0:06:22.400 is that in periods of tight labor markets, and they're 0:06:22.640 --> 0:06:26.279 historically been three or four but one again that's mostly analogous, 0:06:26.279 --> 0:06:29.680 which is around the eighties nineties, these stocks, the spend 0:06:29.680 --> 0:06:32.719 in technology has gone up, and then these stocks have outperformed. 0:06:33.120 --> 0:06:35.120 So I don't think the trade's over. 0:06:35.200 --> 0:06:37.680 Someday it will be, but I think for now you 0:06:38.080 --> 0:06:42.000 do want to wait for volatility, maybe a week earnings report, 0:06:43.520 --> 0:06:47.680 a FED another FED speak period where we get you know, 0:06:47.680 --> 0:06:50.320 some conflicting data like we did from pal meeting. 0:06:50.360 --> 0:06:51.560 He was a little more dubvish. 0:06:51.800 --> 0:06:54.960 Last speech he was less so, and the market took 0:06:55.000 --> 0:06:56.760 into heart those are your times. 0:06:56.839 --> 0:06:58.120 That's the time when you stepped in. 0:06:59.320 --> 0:07:01.960 Stepping in two well and in videos we're just hearing 0:07:01.960 --> 0:07:04.200 from ed is at more than two hundred percent. Microsoft 0:07:04.240 --> 0:07:06.799 just hugely outperformed, so has the likes of even Meta 0:07:06.920 --> 0:07:09.960 in this year of efficiency. Nancy, can you talk about 0:07:10.080 --> 0:07:12.840 if there's any consistency on what you're seeing in some 0:07:12.880 --> 0:07:14.760 of the companies that you like. Is there anything that 0:07:14.800 --> 0:07:17.840 makes them stand out uniquely that therefore once you make 0:07:17.880 --> 0:07:20.040 to add because I know you take individual names and 0:07:20.080 --> 0:07:21.040 bring them to us. 0:07:21.600 --> 0:07:23.440 Yeah, so I'm happy to do that. 0:07:23.520 --> 0:07:25.840 So I think I don't know that you would necessarily 0:07:25.920 --> 0:07:28.400 recall this, but we were adding to the group blast fall. 0:07:29.280 --> 0:07:31.400 There was not a good piece of news to be found, 0:07:31.480 --> 0:07:35.200 but they were slowly and quietly delivering strong earnings growth. 0:07:35.520 --> 0:07:37.800 So the names that are in our twelve Best Ideas 0:07:37.840 --> 0:07:43.520 portfolio are Microsoft, strong management team. As you'res taking share, 0:07:44.240 --> 0:07:48.440 they've got they're going to monetize AI. We're seeing them 0:07:48.480 --> 0:07:51.120 cram it into every nick and cranny of offices and 0:07:51.160 --> 0:07:54.080 every other aspect of their business. The deal went through 0:07:54.120 --> 0:07:57.960 with Activision, they launched three sixty five co pilot. I 0:07:58.000 --> 0:08:00.280 think you're going to see this company continue to take 0:08:00.360 --> 0:08:01.520 share and dominate. 0:08:01.880 --> 0:08:04.400 And it's been a you know, it's an obvious. 0:08:04.080 --> 0:08:06.120 Name, but I don't think you want to walk away 0:08:06.120 --> 0:08:09.640 from it at these levels. Adobe is the unsung hero 0:08:09.960 --> 0:08:13.520 of AI. It's also a good management team. That is 0:08:13.600 --> 0:08:16.480 our theme. We paid very close attention to management. I 0:08:16.480 --> 0:08:18.560 think that's the name you want to buy on pullbacks. 0:08:18.600 --> 0:08:21.280 It's a little rich right now service now I've talked 0:08:21.320 --> 0:08:24.680 about before on your program. Bill McDermott delivered a beat 0:08:24.720 --> 0:08:28.360 beaten Rays last quarter, and he's a great salesman and 0:08:28.400 --> 0:08:30.440 he knows how to run the business. They are taking 0:08:30.560 --> 0:08:33.880 it spend away from other providers because they're in the 0:08:33.880 --> 0:08:38.720 sweet spot of navigating cloud computing and generative AI computing. 0:08:39.040 --> 0:08:39.920 And then Amazon. 0:08:40.000 --> 0:08:44.240 I think Tony Jasse got Tim cooked when he took over. 0:08:44.360 --> 0:08:47.000 I bought Apple after Tim Cook was heralded as no 0:08:47.120 --> 0:08:49.520 Steve Jobs, and that was in about twenty twelve to 0:08:49.520 --> 0:08:53.720 twenty thirteen. We were adding to our Amazon last year. 0:08:53.840 --> 0:08:56.280 I think you can still buy it here. He has 0:08:56.320 --> 0:08:59.160 figured it out. He's cut costs, and we're paying very 0:08:59.160 --> 0:09:02.320 close attention to the healthcare portion of their business. But 0:09:02.360 --> 0:09:05.280 the cloud business is still growing remarkably. I think that's 0:09:05.320 --> 0:09:07.319 the name you just buy and you put it away. 0:09:08.400 --> 0:09:11.920 Nancy, you didn't mention Mark Zuckerberg. You mentioned everyone else. 0:09:12.280 --> 0:09:15.760 Meta is a magnificant, magnificent seven stock. Do you hold 0:09:16.200 --> 0:09:20.959 Zuckerberg in the same leadership bracket as those No, So. 0:09:21.040 --> 0:09:22.440 We owned it many years ago. 0:09:22.600 --> 0:09:26.319 We described ourselves as reluctant shareholders. We sold it at 0:09:26.400 --> 0:09:29.520 levels at about current levels and a little bit higher. 0:09:29.800 --> 0:09:31.199 We missed getting back in. 0:09:31.640 --> 0:09:34.280 But as with Google, though, we do own some of Google, 0:09:34.400 --> 0:09:36.680 not in our twelve Best Ideas portfolios, as the names 0:09:36.679 --> 0:09:40.720 I just discussed were. But we don't like the two 0:09:40.760 --> 0:09:45.080 share class. It's really an advertising business. I think the 0:09:45.160 --> 0:09:48.640 metamist step and the spending at both companies needs to 0:09:48.679 --> 0:09:52.160 be rained in. With Google, we're a little more optimistic 0:09:52.160 --> 0:09:56.040 because we like Ruth Kretts in the new role as president, 0:09:56.160 --> 0:09:58.720 but I know you can still make money on it. 0:09:58.760 --> 0:10:01.360 I just think there's better places and more interesting places 0:10:01.400 --> 0:10:05.840 to be, and I don't like I haven't really been 0:10:05.880 --> 0:10:08.240 thrilled with the leadership. Even though the stock price is 0:10:08.240 --> 0:10:09.960 delivered and they cut costs. 0:10:09.960 --> 0:10:11.880 That's great. You can only do that for so long. 0:10:12.760 --> 0:10:15.360 Nancy. We always love you coming here giving us our 0:10:15.440 --> 0:10:18.320 straight talk. Talking about the individual names as well, Nancy 0:10:18.360 --> 0:10:21.439 Tenglo Investments. Always great to catch up with you. Thank 0:10:21.480 --> 0:10:25.319 you very much. Indeed. Meanwhile, speaking of CEOs in San Francisco, 0:10:25.440 --> 0:10:27.640 all eyes are on APEC has lead us on the 0:10:27.679 --> 0:10:30.840 world of tech attend hopeful in fact for an audience 0:10:30.840 --> 0:10:34.760 with one China President Xi Jinping. In fact, CEOs of 0:10:34.840 --> 0:10:37.640 Microsoft City, Tesla, they're all looking to meet with the president. 0:10:37.679 --> 0:10:40.600 She and according to sources, he's even expected to hold 0:10:40.640 --> 0:10:43.560 a dinner with some executives for many corporations that the 0:10:43.600 --> 0:10:46.760 agenda is simple. They're ready to get back to business 0:10:46.760 --> 0:10:47.479 in China. 0:10:47.320 --> 0:10:50.760 End and part of the agenda for Jijingping to meet 0:10:50.800 --> 0:10:53.800 with President Biden is to announce an agreement that would 0:10:53.800 --> 0:10:58.080 see Beijing crackdown on the manufacturer and export of fentanyl. 0:10:58.440 --> 0:11:02.200 According to sources, sentinal crisis is something I discussed with 0:11:02.280 --> 0:11:04.480 San Francisco Mayor London Breed have listen. 0:11:06.840 --> 0:11:10.160 Just to work with the US and to ensure that 0:11:10.200 --> 0:11:15.120 the resources that are being sent out of China that 0:11:15.240 --> 0:11:18.480 come into either the US or Mexico are cut off 0:11:18.800 --> 0:11:22.560 to the fullest extent possible, that we work together in 0:11:22.640 --> 0:11:25.440 order to ensure that this deadly poison that is killing 0:11:25.480 --> 0:11:28.760 people in San Francisco in significant numbers and all over 0:11:28.800 --> 0:11:32.079 the country, that we're able to combat this to stop it. 0:11:34.280 --> 0:11:37.480 So San Francisco, Carrie becomes the center of the US 0:11:37.600 --> 0:11:41.239 China relationship this week, right the social issue of fentanyl, 0:11:41.480 --> 0:11:43.920 the supply chain for that that we discussed, and then 0:11:43.960 --> 0:11:46.559 all of these CEOs who basically say, let's get back 0:11:46.559 --> 0:11:47.960 to good terms with China. 0:11:48.000 --> 0:11:50.520 And it's interesting who might likely be there, And of 0:11:50.559 --> 0:11:53.640 course we know Tesla has key supply chain issue with Shanghaim, 0:11:53.679 --> 0:11:56.959 particularly in China. More broadly, what was interesting sort of 0:11:57.040 --> 0:11:59.040 who's not there? And I know Tim Cook's just been 0:11:59.080 --> 0:12:02.720 to China himself. Notable that as like a California executive, 0:12:02.760 --> 0:12:05.680 not their metal we understand, of course, stunning to sell 0:12:05.720 --> 0:12:08.400 their VR equipment in China. Interesting that Zucker isn't there either. 0:12:09.520 --> 0:12:11.680 Yeah, and AI again is going to be a talking 0:12:11.720 --> 0:12:13.960 point because while there's some kind of move forward on 0:12:14.000 --> 0:12:17.439 the relationship, in the background, used to have US technology 0:12:17.480 --> 0:12:21.040 export curves on chips to China that have directly impacted 0:12:21.200 --> 0:12:23.920 the AI supply chain. So a big week ahead. 0:12:24.280 --> 0:12:26.800 I'm sure it feels pretty busy where you are. Meanwhile, 0:12:26.840 --> 0:12:29.840 coming up, look Iphonemaker on Hi public arm of Fox 0:12:29.920 --> 0:12:33.160 gone growing concerns, sales may drop in the current quarter. 0:12:33.600 --> 0:12:36.160 We'll have more on its tep it out look. That's 0:12:36.240 --> 0:12:39.040 next for the look. And you're looking at some particular movers. 0:12:39.880 --> 0:12:43.800 Yeah. Fiska, the ev maker, down eighteen point two percent 0:12:43.880 --> 0:12:46.439 over the last couple of days, twenty four percent in 0:12:46.480 --> 0:12:49.079 this session, delayed its ten Q It has got all 0:12:49.160 --> 0:12:53.720 kind of material weakness and accounting issues, revenues missing estimates, 0:12:53.720 --> 0:12:57.760 and basically it's behind schedule on delivering its contract manufactured 0:12:57.840 --> 0:13:00.679 evs a name we continue to track. This is Bloom 0:13:00.679 --> 0:13:13.880 by Technology. Okay, time for talking tech and first up 0:13:14.040 --> 0:13:18.240 see Southeast Asia's biggest internet company is reeling from profit loss. 0:13:18.280 --> 0:13:21.320 In its third quarter, the single war based company posted 0:13:21.320 --> 0:13:24.000 a net loss of one hundred and forty nine million dollars, 0:13:24.040 --> 0:13:26.480 compared with a profit of three hundred and twenty two 0:13:26.559 --> 0:13:29.240 million dollars the previous quarter. The e commerce growth in 0:13:29.240 --> 0:13:32.760 the region has been pressured by macro conditions and intense 0:13:32.800 --> 0:13:37.160 competition in the sector, and Snap is reportedly teaming up 0:13:37.160 --> 0:13:40.240 with Amazon to let its users shop for products directly 0:13:40.480 --> 0:13:43.480 from ads on the Snapchat app. Shares arising after The 0:13:43.520 --> 0:13:47.280 Information reported that the deals being launched for US customers. 0:13:47.480 --> 0:13:49.800 This comes after last week's news of a similar deal 0:13:49.800 --> 0:13:53.960 with Meta for shopping on Facebook and Instagram. Plus Huawei 0:13:54.000 --> 0:13:58.040 and Jiaomia leading the resurgence in China's smartphone market. Phone 0:13:58.040 --> 0:14:00.559 sales are up eleven percent in the first four weeks 0:14:00.559 --> 0:14:03.600 of last month compared to the same period a year ago, 0:14:03.679 --> 0:14:08.040 according to Counterpoint Research. The domestic brands picked up the slack, 0:14:08.480 --> 0:14:11.880 while Apple's latest set of phones had an unusually muted 0:14:11.960 --> 0:14:13.679 debut in China so far. 0:14:13.840 --> 0:14:17.240 Carol, and let's stick on that muted demand for some 0:14:17.320 --> 0:14:21.200 of Apple's iPhones and what that means for its key manufacturer, Honheim. 0:14:21.360 --> 0:14:25.000 It's actually been revising its outlook after profits they'd beat expectations, 0:14:25.040 --> 0:14:27.680 but revenue still under pressure. Remember this is the public 0:14:27.720 --> 0:14:29.480 arm of Fox Cone and it's been warning that sales 0:14:29.520 --> 0:14:32.960 may four. This demand for the iPhone remains come in flux. 0:14:33.200 --> 0:14:35.720 Frankly to say that we're joined by Mandinkxing Bloomberg Intelligence 0:14:35.720 --> 0:14:39.760 senior technology analysts. And perhaps not that surprising given that 0:14:39.840 --> 0:14:42.320 we know that there's sort of a cultural backlash somewhat 0:14:42.360 --> 0:14:44.960 against Apple use of the phones in government as well. 0:14:45.000 --> 0:14:47.040 But how much is it starting to be reflected in 0:14:47.080 --> 0:14:47.760 the supply chain? 0:14:48.040 --> 0:14:51.080 Well, so think of you know, how these companies are 0:14:51.080 --> 0:14:54.640 connected TSMC and Fox Cone and if you see weakness, 0:14:54.680 --> 0:14:58.920 you know, with TSMC calling out PCs and smartphones continuing 0:14:58.960 --> 0:15:01.520 to be weak, it's not a surprise that, you know, 0:15:01.680 --> 0:15:03.600 Fox can't did the same. End at the end of 0:15:03.640 --> 0:15:06.840 the day, the consumer electronics market, we don't know if 0:15:06.840 --> 0:15:10.520 it is bottom. Everyone keeps talking about it. With PCs, 0:15:10.560 --> 0:15:12.840 we saw a couple of data points this quarter that 0:15:13.080 --> 0:15:16.160 suggested a bottom, but we don't know that yet. And 0:15:16.200 --> 0:15:20.280 I think this is a confirmation that consumer maybe week, 0:15:20.400 --> 0:15:23.160 you know, in the first half of next year as well. 0:15:23.400 --> 0:15:25.120 A lot of this man deep is like reading the 0:15:25.160 --> 0:15:28.640 tea leaves of third party data and suppliers. 0:15:28.800 --> 0:15:28.960 Right. 0:15:29.000 --> 0:15:31.600 Go back to Apple's earnings and Tim Cook talked about 0:15:31.840 --> 0:15:34.520 when he visited the country, they claim to have the 0:15:34.560 --> 0:15:38.200 top four smartphone handsets in a market that they saw 0:15:38.280 --> 0:15:41.160 as contracting, and you kind of draw the conclusion. What 0:15:41.520 --> 0:15:45.000 does that mean you're taking market share? What do we 0:15:45.080 --> 0:15:47.800 wait for to know what's really happening with Apple on 0:15:47.880 --> 0:15:48.840 the data side. 0:15:49.280 --> 0:15:52.400 I mean, look with Apple, clearly you know the iPhone 0:15:52.520 --> 0:15:56.000 fifteen isn't going to be a big upgrade cycle, That's 0:15:56.000 --> 0:15:58.320 what it seems like. And everyone is talking about what 0:15:58.360 --> 0:16:01.000 they can do at the chip level to really drive that, 0:16:01.080 --> 0:16:05.560 you know, gen AI kind of adoption at the edge level. 0:16:05.600 --> 0:16:09.760 But look for fox Con, it's more about what else 0:16:09.800 --> 0:16:13.360 can they diversify with? And there is demand for AI servers. 0:16:13.400 --> 0:16:16.760 In fact, in video when they are making these Genei servers, 0:16:17.000 --> 0:16:20.280 they're having TSMC make the chip and fox Con is 0:16:20.320 --> 0:16:24.320 the assembler. So clearly there is demand when it comes 0:16:24.360 --> 0:16:27.840 to AI servers. I think it's just the consumer side 0:16:27.920 --> 0:16:31.720 is continues to be weak, and these companies, all of 0:16:31.720 --> 0:16:35.880 them TSMC, fox Con, have a pretty sizeable consumer explosure. 0:16:35.920 --> 0:16:38.240 In fact, I would say it's almost sixty percent of 0:16:38.280 --> 0:16:41.200 their business, whereas AI servers is still less than five 0:16:41.240 --> 0:16:43.160 percent of their overall footprint. 0:16:44.000 --> 0:16:46.840 All right, man, deep seeking it to Bloomberg Intelligence, Thank. 0:16:46.680 --> 0:16:57.120 You shares a grinder absolutely popping. Today. Let's talk about 0:16:57.200 --> 0:16:59.800 the social the dating app as it raises its soliet guidance, 0:17:00.120 --> 0:17:02.400 a third quarter revenue that's higher than thirty nine percent 0:17:02.440 --> 0:17:04.240 year every year. But now I'm on the CEO of 0:17:04.280 --> 0:17:06.480 Kind George Harrison. George is great to have you on 0:17:06.520 --> 0:17:09.159 the show, and just this growth is managing to be 0:17:10.080 --> 0:17:12.240 what's driving it at the moment. Is it all about subscriptions. 0:17:13.320 --> 0:17:16.200 It's almost all coming from subscriptions and add on products. 0:17:16.280 --> 0:17:19.000 We did have a great quarter growth, third nine percent 0:17:19.080 --> 0:17:20.840 year of a year, and a lot of it had 0:17:20.840 --> 0:17:24.000 to do with us launching a weekly pricing option. Users 0:17:24.000 --> 0:17:26.199 have been asking for a lower priced tier that they 0:17:26.240 --> 0:17:28.359 could use to entry point into the product on a 0:17:28.359 --> 0:17:31.920 paying basis, and we launched that you know, earlier this year, 0:17:31.960 --> 0:17:33.879 and the results of that have been really really positive, 0:17:33.920 --> 0:17:37.919 So really happy about that. Now Grinder is really under monetized. 0:17:37.920 --> 0:17:40.840 Our conversion to paying customers is much lower than our 0:17:40.880 --> 0:17:43.080 peer set, partly because we've never really focused on that. 0:17:43.119 --> 0:17:45.040 It was all about offering a lot of free features 0:17:45.160 --> 0:17:47.560 versus paying features. And now as we transition to offering 0:17:47.600 --> 0:17:49.879 more paying features, I think we're seeing really positive results 0:17:50.200 --> 0:17:52.080 and there's a lot more room to continue with that 0:17:52.320 --> 0:17:55.280 because obviously, where like half the pair penetration that somewhere 0:17:55.320 --> 0:17:56.320 up years are so. 0:17:56.359 --> 0:17:59.560 Let's talk about thirteen and a half million average monthly users. 0:18:00.200 --> 0:18:02.679 Then if you're managing to continue to grow, do you 0:18:02.760 --> 0:18:05.480 spend do you invest? Is it more about marketing? Is 0:18:05.520 --> 0:18:08.439 it about branding? Is about more actually the underlying product 0:18:08.480 --> 0:18:10.760 and perhaps into weaving AI within it. 0:18:11.440 --> 0:18:14.199 Yeah, almost all of our investments are around people to 0:18:14.280 --> 0:18:17.399 build technology and product because we have a ton of 0:18:17.440 --> 0:18:20.600 opportunity to create new features that yous want. For example, 0:18:20.640 --> 0:18:22.359 right now we're working on teleport, which is going to 0:18:22.440 --> 0:18:24.679 let users show themselves in different market from the one 0:18:24.720 --> 0:18:27.560 they're in today, something that you have been asking for 0:18:27.560 --> 0:18:30.800 for a long time. We spend virtually no money on marketing. 0:18:31.480 --> 0:18:34.480 It's like less than one percent of our revenue this year, 0:18:35.280 --> 0:18:37.440 and we'll expect that number to go up a little 0:18:37.440 --> 0:18:39.040 bit as we focus on our brand to tell our 0:18:39.119 --> 0:18:41.240 story a little better, but it's going to be pretty minor. 0:18:41.680 --> 0:18:44.520 We don't do a pair acquisition. We're really fortunate that 0:18:44.920 --> 0:18:47.800 it's the product and the fact that people already know 0:18:47.800 --> 0:18:50.320 about us that drives that use a growth are My 0:18:50.440 --> 0:18:52.520 growth is also really strong and has been for a 0:18:52.560 --> 0:18:55.240 long time now, but it's all driven by word of 0:18:55.320 --> 0:18:58.760 mouth and by top of funnel user products that we build, 0:18:59.040 --> 0:19:01.520 like albums for exams that went live last year. We 0:19:01.520 --> 0:19:04.600 added video to albums this year, and you know, users 0:19:04.600 --> 0:19:06.760 have loved that. Over a billion albums shared in less 0:19:06.800 --> 0:19:09.120 than a year, which is really fantastic. 0:19:10.400 --> 0:19:14.520 So, George, forty percent top line growth, twenty percent paying 0:19:14.600 --> 0:19:18.399 user growth, and then eight percent active user growth. What 0:19:18.440 --> 0:19:21.720 should that tell us about who's using the platform and 0:19:21.800 --> 0:19:22.960 how they're using it? 0:19:24.040 --> 0:19:25.520 Yeah, so, I mean, I think it's telling you that 0:19:25.600 --> 0:19:28.080 as we launch more features that people want to pay for, 0:19:28.400 --> 0:19:31.440 a larger percentage of people will convert to becoming pain customers. 0:19:31.480 --> 0:19:32.879 And we have a lot more to do on that 0:19:32.960 --> 0:19:35.840 over the next couple of years. And then we also 0:19:35.920 --> 0:19:38.240 know that younger people come back to the platform. Right, 0:19:38.480 --> 0:19:40.760 Unlike a lot of other social products that have been 0:19:40.800 --> 0:19:44.119 replaced by one platform by the next, etc. Right, TikTok 0:19:44.200 --> 0:19:47.800 replacing Instagram and so forth, that hasn't really happened in 0:19:47.840 --> 0:19:50.520 our space. The users have been coming back to Grinder 0:19:50.720 --> 0:19:54.880 as they've kind of become eighteen plus, in part because 0:19:55.040 --> 0:19:57.080 they know that that's where everybody else in that community is. 0:19:57.119 --> 0:19:58.920 And so the community aspect of brind It really helps 0:19:58.920 --> 0:20:01.240 with that, and that something that we want to continue 0:20:01.280 --> 0:20:03.840 to lean in on now. At the same time, we 0:20:03.880 --> 0:20:06.160 do see a lot of opportunity with what i'd call 0:20:06.200 --> 0:20:09.000 older users. Now that's not that much older. We're talking 0:20:09.000 --> 0:20:12.720 about thirty to forty year olds. That cohort of gay 0:20:12.760 --> 0:20:15.280 men in particular wants to start thinking about dating, and 0:20:15.320 --> 0:20:17.920 so there's a lot of opportunity to enable dating products 0:20:17.920 --> 0:20:20.119 for them, which we already have a lot of dating 0:20:20.480 --> 0:20:23.720 relationships that develop on Grinder. About one and four gay 0:20:23.760 --> 0:20:26.880 relationship with the US originates on Grinder, but we think 0:20:26.880 --> 0:20:28.680 we have a much better user set for them to 0:20:30.800 --> 0:20:32.840 date better and to meet people a lot better, and 0:20:32.960 --> 0:20:34.840