00:00:00 ◼ ► There are good times to come on the talk show, and there are really good times to come on the talk show.
00:00:32 ◼ ► At the end of the week, I had a very good time with David Pearson and Eli Patel on the Vergecast talking about, guess what?
00:00:48 ◼ ► So as you and I talked about sort of off camera last night and a few days ago, when I write, it sounds like you're the same way.
00:01:03 ◼ ► Obviously, I'll read, like, the major Wall Street Journal high overview reports to know what the details are.
00:01:09 ◼ ► But, you know, in terms of other people's takes and opinions and op-eds and whatnot, I try to keep those out of my feeds or just out of my reader until after I've written something.
00:01:19 ◼ ► And while I wrote something, I guess, shortly after, you know, the Cook announcement, I wrote about Cook, but I hadn't written anything about Ternus until I finally did.
00:01:43 ◼ ► I mean, I think that we've both been following the company long enough to know that this was handled exceptionally well.
00:01:51 ◼ ► There's some interesting, I think, things on the periphery to talk about with how it happens and sort of the go-forward strategy of what they may or may not do.
00:02:01 ◼ ► I think the more I think about it, the more, like, my original take was I kind of smelled this coming.
00:02:07 ◼ ► I, for one, really, really, when the FT Financial Times report came out in mid-November, I was like, oh, this is a little surprising that the timeline is so soon.
00:02:23 ◼ ► I remember, and it was like a really, it was a, for the blockbuster nature of the story that they reported in November, it was actually relatively short.
00:02:40 ◼ ► Led by Tim Bradshaw, right, who's well-known, like a very good reporter in this regard.
00:02:53 ◼ ► The timing, though, makes it seem like if the FT is coming out with this, there's something to the timing element of it.
00:03:00 ◼ ► Like either, you don't want to say it's like necessarily hand-fed to them by Apple, but there's some sort of probably something going on behind the scenes.
00:03:08 ◼ ► Maybe they were digging into it, maybe Apple decided that they wanted something out there, or maybe not even Apple itself, maybe someone just close to Cook decided that they were okay with sort of letting something sort of slip out there.
00:03:28 ◼ ► But the Mark Gurman element adds an interesting wrinkle to the way that this was reported.
00:03:52 ◼ ► And it's like, yeah, I guess that's just, you know, we've been sort of bracing for this.
00:03:59 ◼ ► And now a week later where the excitement is sort of worn off a little, and I don't mean that in a disparaging way.
00:04:09 ◼ ► And whether it turns out that Ternus is the right guy and Ternus does a good job in the role of CEO, obviously that is to be determined.
00:04:24 ◼ ► Whether it's a political thing like electing a new president or governor or a sports thing, like when you name a new head coach and the old head coach goes out on top and retires rather than being fired, which is probably even more rare in sports than CEOs.
00:05:10 ◼ ► I mean, I think, look, Apple back then, back 15 plus years ago, as all big companies do, they need a succession plan, right?
00:05:19 ◼ ► Like it's famous, like it gets talked about a lot in the press because it's a known thing.
00:05:37 ◼ ► So the plan really did have to be enacted a couple of times because it was an extended, protracted medical crisis with multiple, two significant medical leaves, et cetera, where Tim Cook stood in as the temporary CEO or I don't even know if they called him that.
00:05:54 ◼ ► And remind me this, I was thinking about this in the context of obviously this transition, but so I recall vividly when I think it was Wall Street Journal that broke the news about Jobs' liver transplant, but it had happened well after the fact, right?
00:06:12 ◼ ► And so presumably Cook had taken over the reins sort of as like when the president is ill or under anesthesia or whatnot, then the vice president sort of gets the ability.
00:06:23 ◼ ► And so I didn't remember, did Apple actually announce that Cook had taken over before they later announced that Jobs has actually had the liver transplant and they just said, oh, he's, he's, there's something going on and we need Cook or did they?
00:06:39 ◼ ► And I don't think, I don't feel like looking it up because I don't think it matters because I think in broad strokes, you're exactly right, which is that more or less his desire for privacy combined with his,
00:07:00 ◼ ► I forget if he actually, I don't know that he had the surgery without people knowing, but I think that he went on a medical leave before they announced that he went on a medical leave.
00:07:11 ◼ ► And it wasn't, it wasn't that he had the surgery and there was some initial denial and a really kind of, it really seemed to go just between Steve Jobs and Katie Cotton and the world.
00:07:29 ◼ ► And that was, and it was, remember when, and then Jobs, and he was still, there was that incident where he called Joe Nassera at the New York Times, just picked up the phone and called him.
00:07:50 ◼ ► But he was like, but, you know, you're at the New York Times, so I'll tell you the deal.
00:07:56 ◼ ► And it was, and I think the messiness is at a personal level, everybody can 100% understand the desire for privacy.
00:08:05 ◼ ► And as the leader of a publicly held company, you can also totally understand that you cannot keep this private.
00:08:13 ◼ ► It's, there's an obligation that it really is like being a public servant, being the better than me.
00:08:21 ◼ ► But that there are certain positions in a publicly held company that are effectively like public servants, and you have to be listed in the forms, and there's also.
00:08:39 ◼ ► Yeah, if anything, the laws might be more clear for the leaders of a publicly held corporation in terms of making that clear than for things like the president.
00:08:49 ◼ ► I mean, there was all sorts of, there was a lot of shenanigans when Trump got COVID, and apparently almost fucking died back in 2020, or whatever the hell that was.
00:09:00 ◼ ► Yes, but where you're headed with this is that, I think, is Cook, so Cook back then obviously took the reins sort of because someone had to, and that's not to say he wasn't a great choice.
00:09:14 ◼ ► He was the person who could keep the trains, all the operations literally running on time.
00:09:19 ◼ ► And so he, of course, would sort of swap in there without anyone missing a beat in terms of Apple's overall operations.
00:09:27 ◼ ► But I think there is a broader question, like, that you sort of hit on of if Cook would have actually been the successor had he not been teed up by Jobs' unfortunate health situation previously.
00:09:40 ◼ ► So Cook basically moved into the de facto role because he was already in the role previously, and then, of course, leading into Jobs' next sort of leave of absence and then ultimate stepping down.
00:09:55 ◼ ► And there is a question, though, I think, maybe with hindsight, would the board, I guess, and Jobs have chosen Cook to be the one to succeed him if he had been in total health throughout that entire role?
00:10:08 ◼ ► You know, and I do think it's interesting, and this was something, I'll bet you didn't look at my piece until after you wrote your piece, but we both, you and me, both opened by going back to 2011 when Steve Jobs resigned.
00:10:29 ◼ ► I think he had, what's that principle where you level up, the Peter principle where you rise to the level of your incompetence in an organization?
00:10:43 ◼ ► But the idea is, let's just say you're a really good programmer, and then you become a really good senior program, and then you become a programming manager, and maybe you're good at it.
00:10:53 ◼ ► And then you get promoted to be like a senior vice president of other programming managers, and maybe you're terrible at that job.
00:11:00 ◼ ► But you got the promotion because you were good at that level, and now you stop getting promoted because now you're at a job where you're no good.
00:11:07 ◼ ► And you kind of, if you, it's kind of a crappy place in your career because maybe like for your own personal happiness and you're thriving, you kind of want to take a demotion and go back to where you were good.
00:11:21 ◼ ► I think Cook knew that being the COO and right-hand man to Steve Jobs was exactly where he wanted to be.
00:11:29 ◼ ► I don't remember the specific ones, but of course there were because he was such an operational wizard, and everybody knew it.
00:11:35 ◼ ► Before Jobs even got sick, everybody knew, holy shit, Apple used to be known for having terrible operations.
00:11:43 ◼ ► I mean, it was a huge part of the bankruptcy crisis when Steve Jobs and Next were reunified with Apple in 1996 and going into 1997 and 98, and the whole, hey, we're like 90 days away from bankruptcy at one point.
00:12:00 ◼ ► A huge part of that, it wasn't because sales tanked particularly, it wasn't, and people misremember this, and no, it wasn't good two years after Windows 95.
00:12:08 ◼ ► Windows 95 did adversely affect the market share dynamics in the PC market in terms of, hey, this looks good enough.
00:12:18 ◼ ► But Mac sales were troubled, and the Mac future operating system was severely troubled, but the sales weren't so bad.
00:12:26 ◼ ► The biggest problem with the bankruptcy crisis is that they would have these quarters where they ended with massive amounts of inventory.
00:12:36 ◼ ► Right, and they had this totally dysfunctional internal culture where people were like, I don't know if this company is going to be around anymore.
00:12:46 ◼ ► And they had managers ordering all of this inventory and building it up because then for this quarter, well, look how many Macs we made.
00:12:58 ◼ ► And then they're like, they're sitting in warehouses not being sold, getting old, and you can't sell old computers.
00:13:06 ◼ ► And they had a huge inventory problem just manufacturing-wise and parts that were being shipped around the world.
00:13:13 ◼ ► And, hey, we're out of this one component, and we're manufacturing these devices in Mexico.
00:13:27 ◼ ► They went, if anything, he did the exact, he took it to the other extreme, right, with basically creating sort of just-in-time, yeah, creation.
00:13:36 ◼ ► They went from having, like, weeks of inventory to having, like, hours of inventory for a lot of things by moving to China.
00:13:46 ◼ ► I think Tim Cook, it was one of those things where his admin staff probably dealt with people asking, hey, do you want to be CEO?
00:13:54 ◼ ► You want to interview to be CEO of this company, that company, this company, every day?
00:13:59 ◼ ► I think that he's somebody who thought, hey, being the right-hand man and COO of this company is actually better than being the CEO of any other company.
00:14:17 ◼ ► And I wrote several times before Steve Jobs passed that if you just described what these two men did at Apple, just here's what this guy does.
00:14:39 ◼ ► And this other guy is, I don't know what his title is, but he's probably like the director of-
00:15:25 ◼ ► And he's still, he's not, he's not effectively CEO of Oracle, but he obviously runs Oracle.
00:15:31 ◼ ► And I think Jobs would probably be, it might be, I've referenced this recently, but you'll remember
00:15:40 ◼ ► switching job titles because the gaming commission won't give him, let him take that title.
00:15:49 ◼ ► So I can see Jobs, Jobs is the head of, yeah, the culinary staff at Apple, but calling the
00:16:07 ◼ ► My wife and I always refer back to that scene in Casino where De Niro is having breakfast
00:16:11 ◼ ► with somebody in the hotel restaurant and there's two blueberry muffins and one has way too
00:16:22 ◼ ► And he goes back to the kitchen to talk to the chef, the head chef of the whole casino.
00:16:50 ◼ ► To go back to your earlier point real quick, though, about the timing of this part with Cook himself.
00:16:55 ◼ ► So when the news first hit, yeah, my mind immediately went to, even ahead of sort of subsequent reporting,
00:17:14 ◼ ► The thing I had written months before sort of this, when it actually happened, had been around, like,
00:17:29 ◼ ► And it just felt like we knew we were heading into a, what Apple had already said in the previous earnings report,
00:17:35 ◼ ► would likely be a block, quote-unquote, blockbuster quarter, as Apple's holiday quarter often is,
00:17:42 ◼ ► But it seemed like it was teed up particularly well for it to be an all-time great quarter.
00:18:01 ◼ ► And we also knew where the stock was, but we knew that there were potentially some storm clouds on the horizon,
00:18:15 ◼ ► And so all of these things are swirling around and it just felt, look, Cook, while he cares first and foremost about Apple and leaving Apple in a great spot,
00:18:25 ◼ ► And he knows that this is like a unique moment in time for him to sort of step back and be sort of at the top, right?
00:18:32 ◼ ► With the best earnings of Apple's history, the stock potentially at or near all-time highs, around $4 trillion, Apple's 50th.
00:18:44 ◼ ► Famously repeating over and over again, we normally don't do things and Apple normally doesn't look back, but here we're going to do that.
00:18:52 ◼ ► And so I don't think it's a coincidence that obviously it happened shortly thereafter, a few weeks after,
00:19:00 ◼ ► And then, of course, going into the fall, we know about that with the iPhone and whatnot.
00:19:10 ◼ ► And so all of those things led to this perfect storm where, of course, this is the perfect timing for this to happen announcement-wise right now.
00:19:31 ◼ ► The announcements, the iPhone 17 generation, including the iPhone Air, which probably didn't contribute too much because everybody says it's not selling that well.
00:20:02 ◼ ► I talked to someone at Apple about, like, how come there are no ads for the iPhone Air?
00:20:22 ◼ ► And it's like there's only so many ads to go around, so many billboards, so many commercials.
00:20:40 ◼ ► But – and if you remember back to the iPhone 5C, the colorful one, they did plaster that all over.
00:20:50 ◼ ► There is a weird chicken and egg scenario to marketing where you can't – you don't just magically sell things by pushing it.
00:21:12 ◼ ► I think they could be confident they were going to have the record-breaking best quarter in the history of the company that they were going to have.
00:21:25 ◼ ► Like, this got set in motion in mid-November at a point where it's, okay, we're going to have the best quarter ever.
00:21:30 ◼ ► The most important product in the company, the iPhone, is in the best shape it's ever been.
00:21:38 ◼ ► Everything seemed – and again, this is the whole point of this whole segment of the show is a week later.
00:21:44 ◼ ► I can't – from Tim Cook's perspective, I cannot think of a way that this could have – this succession could have been announced and put into motion and timed better.
00:22:06 ◼ ► It doesn't seem – his birthday is not public knowledge, but he's either 50 or 51, and he might be – he'll probably be going to turn 51 before September 1st.
00:22:16 ◼ ► And if he's successful and has a 15-year run, he'll be around the age Cook is now when it's time for the next succession.
00:22:26 ◼ ► One more thing off of that, Cook is 65, which isn't technically the retirement age anymore.
00:22:36 ◼ ► And Apple famously has their 75 cutoff date for the board, so this would give him exactly 10 years to be on the board as chair and sort of lead from that thing.
00:22:48 ◼ ► Which leads to the one other bit of why I pushed back a little bit on Gurman after he pushed back on the FT report because just reading the tea leaves of what happened with Arthur Levinson, who is the board chair of Apple and longstanding since right after –
00:23:12 ◼ ► So the fact that Apple put out there that they were waiving the 75-year age limit for him and Ronald Sugar, who's another longstanding board member.
00:23:23 ◼ ► Now, at the time, they sort of couched it like, look, there's a lot of turnover at Apple.
00:23:37 ◼ ► I think that this – that signal, basically, that they knew that Cook would be stepping into that chairman role sooner rather than later.
00:23:46 ◼ ► And so there's no way that they let Levinson either off the board or taking out of a chairman role and putting someone in for six months.
00:24:01 ◼ ► And I think he may have taken the holiday time to make sure that he was feeling good about it and making sure that everything was aligned, making sure there was no, say, COVID on the horizon.
00:24:10 ◼ ► Like when Bob Iger retired the first time around and famously left sort of a mess, which ended up a giant mess back in his lap after it didn't work out with Bob J. Beck in the first go around.
00:24:24 ◼ ► Yeah, and I think if something else had happened, some black swan event, to put it in that parlance, where let's say instead of a war with Iran that closes the Strait of Hormuz, let's say it's some kind of situation with Taiwan.
00:24:39 ◼ ► And all of a sudden products can't get out of Taiwan with China or something like that, a real which would be a huge crisis for Apple.
00:24:53 ◼ ► Then I think they make a special announcement about Arthur Levinson where they're going to make an exception.
00:24:59 ◼ ► And he'll stay as chairman of the board for another year, even because there's a all this is going on.
00:25:06 ◼ ► And we're going to make we know that the rule says 75, but Arthur Levinson is in great health and has been a key part of the company since 2000.
00:25:20 ◼ ► And then that announcement would have been like, oh, Cook's not going anywhere for a year or two.
00:25:34 ◼ ► Like my analogy, I forget if I forget if I put it in writing or not or said it on a podcast.
00:25:49 ◼ ► Give me a minute to put my feet in, maybe go up to my ankles, and then I'm going to jump in.
00:25:56 ◼ ► The FT story in November was we're going to put everybody's feet in the water that this is going to happen.
00:26:27 ◼ ► It wasn't that there was a go, no go for like public perception of it or something like that.
00:26:32 ◼ ► It was just to guide the market to know that this was likely coming down the pike and it would happen at some point to be determined.
00:26:41 ◼ ► And again, I do think that there was some wiggle room there probably in Cook's court, right?
00:26:45 ◼ ► If he decided for whatever reason that he didn't want to step back just right now, it wasn't good timing.
00:26:51 ◼ ► For any number of reasons, macro or personal wise, we probably could have pulled it back and said like, hey, let's revisit this in the fall or whatnot.
00:27:02 ◼ ► And one other thing that I'm just reminded of talking through this is, remember, we talked about Iger.
00:27:12 ◼ ► And Bob Iger went through his own transition, his second transition out of CEO role around the same time.
00:27:19 ◼ ► And so obviously, he's conferring with people like that and figuring out exactly what that looks like.
00:27:23 ◼ ► Remember, too, he's on the Nike board and they've gone through their own CEO transition.
00:27:30 ◼ ► And so all of these things are in his head of knowing why this timing needs to be right.
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00:30:28 ◼ ► So let's go back to Disney and Nike, which I think are two examples of comparable companies to Apple in a lot of ways.
00:30:36 ◼ ► Disney in particular, right, because they've got like the Walt Disney equals Steve Jobs charismatic founder who constantly, every time he had a major success, would just have this constant drive to create something new, right?
00:30:52 ◼ ► That Walt Disney wanted to make just animated feature shorts, and then he wanted to make feature films.
00:31:12 ◼ ► It would have been a historical artifact that went out of business in 1937 or whatever year it was.
00:31:18 ◼ ► But it turned out Snow White was like the, at the time, like either the or one of the biggest box office hits of all time.
00:31:25 ◼ ► When you adjust for inflation, it's still one of the highest of all time, box office wise.
00:31:45 ◼ ► We want people to come into the theater and see these big, full color cinemascope things on 100 foot screens.
00:31:53 ◼ ► And stay away from the little 18 inch black and white static filled picture tube in your house.
00:32:30 ◼ ► And unfortunately, there is a similarity in how Steve Jobs and Walt Disney left the companies.
00:32:42 ◼ ► And I think it was Bob Iger in his autobiography talked about how he believed that Apple and Disney would combine at some point if Jobs had remained alive.
00:32:54 ◼ ► And it's wild to think about, but it's actually like viable right now in our current world because while Disney is still sort of the foremost movie production company and studio, obviously that whole industry is under just immense amount of change right now.
00:33:13 ◼ ► The dust got kicked up when Netflix, of course, zoomed in to try to buy Warner Brothers and which just showcases like the future of Hollywood.
00:33:22 ◼ ► As much as everyone in Hollywood will hate to admit it, probably looks a lot more like Netflix and now YouTube and all of these other streaming services coming in and sort of the movie studios are just a part of that, which has been the sort of trend over the past 50 years.
00:33:38 ◼ ► Where these giant conglomerate companies for everyone but Disney have swooped in to buy the studios.
00:33:44 ◼ ► And so when everyone's like freaking out about Netflix buying Warner Brothers, it's like, where have you guys been for the past 50 years?
00:33:57 ◼ ► And they're freaked out because, of course, streaming is the new boogeyman or has been the new boogeyman until AI becomes the ultimate boogeyman, which is happening now.
00:34:06 ◼ ► But again, just to go back, that's Disney and Apple like maybe is becoming more of an actual viable thing.
00:34:12 ◼ ► Remember, Disney, I believe, is what a $200 billion or $300 billion company, relatively small compared to the tech giants.
00:34:35 ◼ ► Yeah, and the world has changed so much since that time where Apple could make a $3 billion acquisition now and it would be like a big deal.
00:34:52 ◼ ► It sounds a little crazy to say a hundred times bigger acquisition, like a $300 billion acquisition of Disney would be roughly.
00:35:14 ◼ ► And I think the way that they've kept the Beats brand and they still sell Beats headphones and I actually really like the Beats cases.
00:35:23 ◼ ► I haven't written about it yet, but the Beats iPhone cases are actually better than the Apple branded cases because they don't have the bottom lip or at least you can.
00:36:37 ◼ ► And you have to imagine that at least at the corporate corp dev level, they've sort of thought about all these scenarios.
00:36:46 ◼ ► Like they have to kick tires on various things and run scenarios of what this looks like.
00:36:55 ◼ ► But much like when all the talk of, and I've written about this a number of times, like they should have bought HBO, right?
00:37:00 ◼ ► But they didn't want, and they would have loved to have, I think, Warner Brothers and all the IP there.
00:37:24 ◼ ► It wouldn't be like people in Cupertino would suddenly need to figure out how to run cruise ships and theme parks.
00:37:33 ◼ ► Yeah, but I think that part of the similarity is that Apple knows how important the retail stores have proven to Apple since they created them, how absolutely essential they are to Apple's brand, how there's now an entire generation, entire generation of young adults who don't remember a world without the Apple store.
00:37:54 ◼ ► That part of the Apple experience is going to your local Apple store and that if you have a problem or you want to get a new thing or you just want to see the new Neos, you want to see the people know you can just go and check them out.
00:38:05 ◼ ► And that they're at, they pay the premium to put the Apple stores in the best parts of the city or the best malls.
00:38:20 ◼ ► And so that's very similar to the real world experience of, hey, you don't just pay 20 bucks a month to get Disney Plus.
00:38:51 ◼ ► And so Apple would be sort of silly to get rid of it just from the bottom line perspective.
00:39:00 ◼ ► And so there is a Warren Buffett, Berkshire Hathaway, hey, separate all the other stuff.
00:39:17 ◼ ► And we haven't even mentioned the fact that Disney is the company that owns Pixar, which look it up.
00:39:35 ◼ ► You know, he's the one who apparently has done a bunch of the epic stuff, which would be awkward maybe with Apple.
00:39:43 ◼ ► And then, of course, there's ESPN, which is now Apple is clearly ramping on the sports side.
00:40:04 ◼ ► You and me are not trying to ignite a flame under a rumor that Disney and Apple are about to get married.
00:40:38 ◼ ► And do they really want to take that on, especially when they're undergoing a CEO change at the moment and how you would handle that?
00:40:47 ◼ ► What if they just let Disney run as is and they're just sort of the overall holding company of it?
00:40:54 ◼ ► And that they have – but also could filter back some – you can get a bundle deal and save money on an Apple TV+.
00:41:03 ◼ ► What if they backed into – so obviously Google, where I worked for a long time, when I was there, they moved up to the sort of alphabet level, right?
00:41:15 ◼ ► And so Apple could do the same thing in reverse where they buy a Disney and then have either Apple or something else as the holding company.
00:41:33 ◼ ► They would be sort of their own thing and maybe they buy up a couple other things, maybe in gaming, maybe some else tangential, where it can be its own pillar as well.
00:41:43 ◼ ► But it is – just to circle back to Cook, there's two reasons to look at Disney for succession.
00:41:49 ◼ ► There's what happened after Walt died and that was – the company didn't tank, but the 70s and until Eisner came back, came into the company and took the reign in the 80s, there was a sort of 15-year blah period for Disney without Walt.
00:42:09 ◼ ► That's more comparable to Tim Cook's era, the 15 years after the death of the charismatic, irreplaceable founder.
00:42:17 ◼ ► And Apple clearly had a better 15 years after Steve Jobs died than Disney did after Walt died.
00:42:37 ◼ ► And it does – the whole question of Iger coming back when Iger came back, it's like, well, somebody needs to come back because somebody's got to get this Chapek guy out of here.
00:42:50 ◼ ► So, you know, that whole situation, we're obviously going to get more of it with Iger now retired and, like, what actually happened there.
00:43:00 ◼ ► If you remember – I remember reading his biography before he retired the first time around.
00:43:04 ◼ ► And he sort of – it did seem like he was telegraphing the fact that he would choose Chapek because there's, like, a scene, a part of the book that I remember where there was an incident.
00:43:22 ◼ ► And there was this whole swirl around – there was always a swirl around who would be succeeding Iger at Disney, in part because he had been having such a successful run with all the M&A he had done.
00:43:34 ◼ ► And, obviously, after Eisner, he reinvigorated Disney to the point where it was by far the most successful studio.
00:43:40 ◼ ► And, again, he executed those M&A transactions better maybe than anyone ever has in history.
00:43:46 ◼ ► And then he had his number two person, like, the COO role was a rotating cast of characters who kept leaving.
00:43:53 ◼ ► And so it was, like, are they doing that because they don't think he's leaving anytime soon?
00:43:59 ◼ ► You know, and they're going to – to your point, earlier point about Cook, like, they must be getting poached left and right to go take a top job somewhere.
00:44:05 ◼ ► So did he sort of, like, back into Chapek as the sort of last man standing just at the time that he wanted to go?
00:44:12 ◼ ► And he's, well, I'm out, and here's the most obvious person to do it, and so I'm going to give it to him, and he'll be great.
00:44:21 ◼ ► No one thought that Bob Iger could sort of step into that role and take it on, and obviously he proved them otherwise.
00:44:27 ◼ ► And so I think that, in hindsight, it's easy to say what a failure Chapek was because it was a disaster.
00:44:33 ◼ ► But it was during COVID, and it was, like, there were a bunch of – yeah, a perfect storm in sort of – we talked about it was a perfect situation for Cook to step back right now.
00:44:59 ◼ ► And the idea of the Parks guy taking over, it sounded like a great idea without knowing anything about him.
00:45:06 ◼ ► But then the Parks guy took over the company and immediately started wrecking the Parks experience.
00:45:15 ◼ ► And they – but it's not – everybody – that's one of those similarities between Apple and Disney.
00:45:25 ◼ ► It is very expensive to take a vacation to Disney World or Disneyland or any Disneyland anywhere in the world.
00:45:31 ◼ ► And it's like everybody knows Apple's stuff is expensive and that they have high profit margins.
00:45:55 ◼ ► Like they had this system for years now called Fast Passes because I know you've been there.
00:46:02 ◼ ► It's like a way that you can get like tickets to go to a ride instead of waiting in line.
00:46:16 ◼ ► And then you just go, you don't go right to the front, but you only have like 20 minutes.
00:46:30 ◼ ► But you could do it and you could get, the bottom line is you could get on more rides in a day than you would otherwise.
00:46:43 ◼ ► And every day while you're at the park at 7 a.m., you need to go online and sign up for your Fast Passes.
00:47:08 ◼ ► But it was just one example of many of ruining the experience and giving people something to complain about.
00:47:16 ◼ ► It's not like somebody came in from the movie or streaming business and then started making bad decisions for the parks.
00:47:32 ◼ ► And it's like, well, wait, they put the hardware guy in charge and now the hardware is worse?
00:47:46 ◼ ► The whole point, like my argument when we were there doing this wasn't just that it was early in the morning and that it was stressful because hotel Wi-Fi is always an if and it's like you're in a race.
00:47:57 ◼ ► It was like any kind of online auction for tickets or something where it's like you don't want to mess it up because they're going.
00:48:09 ◼ ► But even more than that being a bad experience, shouldn't the whole point of going on vacation anywhere be that the better the vacation, the less time you want to spend on your computer or phone, right?
00:48:20 ◼ ► I mean, that should in today's world, that is like a good just rule of thumb for a good vacation or not.
00:48:34 ◼ ► And if your screen time doesn't go down on vacation, it's probably not a good vacation.
00:48:46 ◼ ► Tomorrow, the new CEO was the guy who stepped in and replaced him and apparently fixed.
00:48:53 ◼ ► So I'm sure I'm sure Cook knows more about that than just about anybody and really looked at it.
00:49:01 ◼ ► I don't know as much about that one, but I basically, though, the new after I forget the guy's name, but the new CEO of
00:49:21 ◼ ► I think Cook led the CEO search for the Nike board or at least was the main steward to bring him in and sort of mess that up, I guess.
00:49:37 ◼ ► But but yeah, it just seemed like they made the bad the wrong call, like the wrong the wrong type of guy to lead that business.
00:49:44 ◼ ► And now they're trying to work backwards and and sort of reverse all those changes again and selling selling direct and doing all that stuff that they used to do.
00:49:52 ◼ ► Yeah. And just sort of maybe took for granted the primacy of the position that Nike held in the sneaker world and that underestimated just how much competition was ready to rise up and how quickly Nike could go from being the coolest brand of sneaker to, hey, not so cool.
00:50:12 ◼ ► And it was similar in that, again, I don't know that much about Nike relative to Apple like yourself, but Mark Parker was the guy before who was also sort of out of left field, but became like one of these great CEOs.
00:50:25 ◼ ► And that's who who had this run that then Donahoe had to step in for and just, yeah, it just totally went sideways after that.
00:50:32 ◼ ► But obviously, that's always the risk after you're succeeding someone who's had great success.
00:50:36 ◼ ► And that is now the point that Ternus finds himself in, which is odd because, of course, everyone thought that Cook would be in that position.
00:50:45 ◼ ► And the one other analogy or back going back to think about a CEO succession thing that's not directly related, but is obviously these companies are forever interlinked is the way that that Balmer took over for Gates.
00:50:58 ◼ ► And in a way, like right Gates and Jobs famously were frenemies and had both massive control and mindshare over the companies that they had started and had hugely successful runs by the end of their tenures and left the keys for different reasons, obviously, in good hands.
00:51:19 ◼ ► And Balmer, while I think, again, these things are easy to say in hindsight, I think that he did a job of sort of keeping the trains running.
00:51:39 ◼ ► But what he really did, when you look back on it, is just sort of milked the cash cow, right?
00:51:45 ◼ ► Like he basically just took what was there, what was built from the Gates era, and what he helped build, to his credit, right?
00:51:52 ◼ ► Balmer was there as one of the high-up executives most of the time, famously from Harvard.
00:52:00 ◼ ► But still, when he came in as a CEO, it seemed like he would just keep everything running as Gates had done it.
00:52:05 ◼ ► But what he ended up doing was just like doing, again, milking the profits out of these companies.
00:52:15 ◼ ► But the stock, interestingly, was almost like stagnant for the entire 10-year period, which was obviously just not the case with Cook, who had done it.
00:52:24 ◼ ► You could say he did a similar thing in terms of growing the revenues off of the iPhone and growing the profits off of the iPhone.
00:52:37 ◼ ► I think strategically, Cook, and I do, it can be a high priority without being his top priority.
00:52:44 ◼ ► The way I put it is Cook's top priority was always the well-being of the company itself.
00:53:05 ◼ ► And to me, that's to Balmer's credit, that he never panicked over the fact that the stock was flat.
00:53:15 ◼ ► And those are both going up, and I can't control the stock price, and the stock price will eventually reflect the success we're having with revenue and profit.
00:53:25 ◼ ► I just think what the stock price was reflecting was, hey, this company doesn't seem to be heading towards a bright future.
00:53:34 ◼ ► And Balmer was hyper-focused on milking Windows as the real Windows, which is a PC operating system that runs on personal computers.
00:53:47 ◼ ► So it was like, hey, everything that this company does is going to be running on Windows PCs.
00:54:06 ◼ ► And then strategically, remember, of course, he had two deals, one of which didn't happen, which was trying to buy Yahoo, which he almost bought for $40 billion.
00:54:16 ◼ ► But Jerry Yang came back and blocked it from happening, which is incredible like in hindsight because if that deal gets done, what does Microsoft look like?
00:54:46 ◼ ► And then, of course, as he's sort of nearing the end of his run, he buys Nokia for a massive amount of money.
00:54:59 ◼ ► And then, again, I don't want to get sidetracked talking about Microsoft, but Satya Nadella, much more Tim Cookian, but really did clean that up and really did come in and just rip the Band-Aid off right away when he took over and said this whole, all we're going to do is Windows.
00:55:16 ◼ ► Windows is an important part of Microsoft's future, but we want our software everywhere, including platforms that are not Windows.
00:55:24 ◼ ► And it has turned into a very successful strategy in terms of Balmer's revenue and profit, but also in terms of investors looking at the company and saying, oh, that's pretty smart.
00:55:48 ◼ ► And famously, when one of Nadella's first moves, and this is sort of an interesting one to look back upon, but it was basically that he announced as one of his very first things, I think it was in the audience when he did this, was announcing the iPad version of Office.
00:56:03 ◼ ► And, of course, now people say, again, after the fact that, well, Balmer obviously had that in the works under his leadership.
00:56:09 ◼ ► But still, it was a watershed moment, and just the announcement of it was the big deal, right?
00:56:16 ◼ ► I would compare it to when Steve Jobs had the Macworld Expo in New York, I think, in summer of 97 with Gates on the screen saying, we've worked out a long-term deal to make Internet Explorer the main browser on a Mac.
00:56:30 ◼ ► And people started booing, and we've got a deal with them that they're going to continue developing Office for years to come or five years or something, which was the linchpin of the deal.
00:56:51 ◼ ► They're showcasing to the world, to the employee base, to the world that, like, to use the jobs, like, for Apple to win, Microsoft doesn't have to lose.
00:56:59 ◼ ► And it's basically showing that we're changing the mentality around what has sort of gotten us into these bad places that we're in.
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01:00:48 ◼ ► And the bottom line is, if he's going to transition, I don't see how he could do this better.
01:01:25 ◼ ► I would say the car, and I don't think Apple ever really disclosed exactly $10 billion.
01:01:47 ◼ ► And, you know, I think that they got some things out of it, I'm sure, that learnings and technologies out of it that they've been able to leverage.
01:01:56 ◼ ► But still, for the most part, it was a side quest to use OpenAI's new parlance for these things.
01:02:04 ◼ ► Like, what's a business that can actually move the needle, potentially, for a company the size of Apple, which already has potentially one of the biggest, if not the best, businesses of all time in the iPhone?
01:02:18 ◼ ► There's only a few things you can do that would actually potentially move the needle for Apple.
01:02:24 ◼ ► And I think that that was the most obvious and probably least painful banking would be a regulatory nightmare as Apple's seen, to some extent, with their partnerships and whatnot.
01:02:37 ◼ ► If the car didn't exist, if they never even dabbled in it, you could make the argument that – and I'm not trying to carry water for Tim Cook here – but you could make the argument that if they didn't have any, hey, we tried this and it didn't work out, then you could make the argument that they weren't trying hard enough.
01:02:57 ◼ ► If you're trying – if you're trying – the optimal amount of trying isn't every single thing you try is a success.
01:03:03 ◼ ► It's that most of what you try is a success and then you get a little bit out over your skis once in a while and it's, okay, there's where we tried too hard.
01:03:16 ◼ ► And Bezos is famous for sort of framing it right with Amazon when he was running Amazon.
01:03:24 ◼ ► But yes, and I think Cook – I think there's – you could say a lot of criticisms of Cook in different degrees, but I do think one thing that he could have sort of done better from a communications perspective is just sort of, yeah, like owning things like that.
01:03:39 ◼ ► I didn't actually – I haven't gone back and revisited it since I've written these pieces now and I'm looking back at these pieces.
01:03:45 ◼ ► But I know that one thing he apparently said in the town hall he talked about, the Apple Maps fiasco, right?
01:03:55 ◼ ► Yeah, that was – I guess Gurman reported that after the big announcement they held a thing in Steve Jobs Theater, which I always wonder.
01:04:04 ◼ ► I've talked to some people at Apple and I guess they simulcast it for the whole company.
01:04:19 ◼ ► They have like the – they basically, yeah, stream it into then all of the other sort of –
01:04:23 ◼ ► So everybody gets to watch it, but I always wonder how they adjudicate the tickets to actually be in the room because it's sort of like –
01:04:49 ◼ ► Eddie Q does not just show up late and it's, no, back to the – go back to your office, Eddie.
01:05:20 ◼ ► And first impressions do matter and there's a lot of people who haven't really looked at Apple Maps in a while and have no idea how good it is.
01:05:39 ◼ ► It's a U.S.-focused product and there are people in other countries around the world where Google Maps directions are good and Apple Maps are crap.
01:05:53 ◼ ► And there's no moment in time where anybody was like, hey, you know, in 2017 there was this big celebration and all these articles about how Apple Maps is now good.
01:06:12 ◼ ► Google had them over a barrel where Google, the Google Maps that they had the rights to in iOS was, people don't even talk about this anymore, but they were bitmapped map tiles.
01:06:27 ◼ ► So they're like bitmapped images that when you zoom in were pixelated until new map tiles were downloaded.
01:06:37 ◼ ► And vector map tiles where they just scale like a PDF file when you zoom in, they didn't have those.
01:06:58 ◼ ► And I think maybe you could get like a list of directions, but they weren't updated live.
01:07:07 ◼ ► And they were offering it to Apple, but they were offering it to Apple with a deal that meant that they would get the location data of the people using it.
01:07:18 ◼ ► You could use Apple Maps with the advanced Google features without signing in, but Google would still get the data, and they could fingerprint to figure out who you are.
01:07:33 ◼ ► And there would be a sign in so they could know for sure that it's me, John Gruber, who's getting directions to wherever I may not want them to know that I'm going to.
01:07:45 ◼ ► It was like you can keep – they had the choice between keeping the old busted bitmap maps from Google without turn-by-turn directions, or they could switch to the new stuff from Google but accede to Google's demands for what Apple determined was privacy-invasive information, which made that a no-go.
01:08:15 ◼ ► That was something they never really considered because it was – and they could not negotiate Google off of those privacy – you know, it was like on a privacy basis, it was like we can't really go this way.
01:08:27 ◼ ► Or flip the switch and go with Apple Maps, our in-house product, which we know isn't really ready to go.
01:08:34 ◼ ► And they're like, I guess the best of all these shitty choices is to just flip the switch and go with Apple Maps.
01:08:39 ◼ ► And maybe they should have waited another year, but it wouldn't have been a year where they had turn-by-turn directions from Google.
01:08:48 ◼ ► And it would have been a year that they weren't getting data in to make the Maps product better.
01:08:56 ◼ ► I just wrote about this when I reflected briefly on going full-time at Daring Fireball 20 years ago where my decision matrix was – there were a couple of years where I started having ads and started selling T-shirts.
01:09:10 ◼ ► But I kind of had this notion that I'm never going to make enough money doing this until I'm spending full-time doing it.
01:09:17 ◼ ► And I kind of have to go full-time doing it before the ads and the memberships and the T-shirts are going to make enough to support it.
01:09:25 ◼ ► And I don't know if I had to do it, but that turned out to be the truth where once I started doing it full-time, even though the revenue wasn't enough to support my family and we were chewing through our savings, that's when the revenue started picking up.
01:09:38 ◼ ► And I think they kind of had to go to Apple Maps before it was ready to make Apple Maps better.
01:09:42 ◼ ► So it's more complex than that, but it makes for a neater, nicer, hey, what do you regret in your time?
01:09:51 ◼ ► But it also is interesting in the context of today in that they're cutting the deals with Google again for AI.
01:10:08 ◼ ► And presumably because of the Maps situation, they've really locked in these contracts to know what's good and what's not.
01:10:16 ◼ ► But at the end of the day, there's always going to be something that they're going to be beholden to the other company on.
01:10:24 ◼ ► I think that they're thinking, and I keep going back to that white paper that I think it leaked from Google.
01:10:31 ◼ ► I don't think they released it, but I don't know that they, you know, once a white paper is written, it's kind of hard to keep it from leaking.
01:10:37 ◼ ► But it was the argument from within Google, from their AI team, that OpenAI has no moat and we don't either.
01:10:48 ◼ ► So that there's enough competition and always will be that if Google were to turn the screws on Apple and say, okay, you like Gemini and you like building Apple intelligence on a Gemini base layer, we want stuff, privacy invasive stuff that you don't want to give.
01:11:16 ◼ ► I don't think, I think Apple's looking at this situation and saying, I don't think they can ever do that because there's enough competition and we can just go somewhere else.
01:11:32 ◼ ► I don't think, I don't think it necessarily goes fully the other way where it gets like, yeah, it's just one provider rules them all.
01:11:42 ◼ ► But I think that there is a world in which it's problematic not to own the underlying models that you're using for these things.
01:11:52 ◼ ► But I think that, I don't think that going with Gemini now slows Apple down to get their own models.
01:11:59 ◼ ► And I think, I think it's pretty clear with, and they can't spell this out, but I kind of think the whole reason Google is going along with this, like why is Google going along with this?
01:12:23 ◼ ► It's, oh, it's, it's almost a statement of fact that Apple's in-house models are not up to snuff by today's frontier standards.
01:12:36 ◼ ► Doesn't Google have an interest in Android and aren't they letting their number one competitor catch up in a way?
01:12:41 ◼ ► And it's, Google doesn't look at Android the way Microsoft looked at Windows back in the day.
01:12:49 ◼ ► And they, the, the, the pixel team gets to run ads to, to try to get people to switch from iPhone and stuff.
01:12:55 ◼ ► And they, if more people want to use Android, Google, cool for Google, but it's not central to them.
01:13:09 ◼ ► And to some extent, Anthropic, like if, if Apple is going to go to somebody to fill in the underlying base model for Apple intelligence, let it be Gemini rather than these other guys.
01:13:25 ◼ ► If they don't do the deal and they already did a deal, obviously with open AI last go around and, or they wanted to do a deal.
01:13:33 ◼ ► So it sounds like with Anthropic per the reporting, but they couldn't come to terms on it, right?
01:13:37 ◼ ► If they do one of those all of a sudden, and they're the underlying model that's powering Siri or the next generation of Siri, all of a sudden, whatever that model is goes overnight, overnight from say hundreds of millions of users to billions of users potentially.
01:13:57 ◼ ► And so regardless of, of what the, the business terms are around it, I do think that there's, that there's truth in that Google looks at it as look, we have, we all of a sudden will get our models in the hands, the literal hands of, of billions of, of users and the most passionate and the most powerful sort of users of smartphones on the planet.
01:14:19 ◼ ► And so why would you not do that deal unless sort of the inverse of what we were talking about?
01:14:31 ◼ ► And if that goes away and, and all of a sudden you have to disclose that the, the Apple deal is ending one quarter and the stock tanks, because all of a sudden you don't have the iPhone user base anymore propping up sort of Gemini.
01:14:45 ◼ ► So I kind of feel like they don't really, you know, that it's more of a, even though Apple doesn't have a good model and Google does, and that makes it seem like Google's in the position of negotiating strength and Apple's not.
01:15:07 ◼ ► I think Bing had, had, had a maps product, but I don't know if it, and there was Yahoo maps, of course.
01:15:12 ◼ ► Yeah. But I don't think that they've, they didn't solve the problems that Apple needed solve with the vector tiles and the turn by turn and stuff.
01:15:19 ◼ ► And it probably would have been a harder sell narratively than doing their own thing by just saying, look, we know this isn't the best.
01:15:24 ◼ ► Obviously they wouldn't frame it that way, but Apple famously, of course, like wants to give their user base the best product, which is why they've long touted that they go with Google search,
01:15:33 ◼ ► even though Bing or someone else might give them better terms because it's the overall best product.
01:15:38 ◼ ► And so if they were to sort of swap out Google maps for Bing maps, would they really, with a straight face, say to their user base, hey, sorry, but you know, you got to use this thing now.
01:15:50 ◼ ► Yeah. And that competition factor, I think that does play into the stability of Apple senior leadership is unlike Disney, where there are other entertainment companies.
01:16:05 ◼ ► And especially if you're, and they're kind of are other theme park companies, you can go to universal.
01:16:10 ◼ ► There's not too much, there's not as much competition, certainly in theme parks, Disney theme park business is just way ahead.
01:16:24 ◼ ► Disney has a niche in the cruise ship industry that it's hard to imagine anybody else even coming close to.
01:16:47 ◼ ► If Google ramped up, if they did the opposite of what you were just talking about and really wanted to ramp up Pixel as the flagship product and they were going to do exclusive Gemini access and all that sort of stuff, maybe you could see it.
01:17:09 ◼ ► Samsung is obviously the competition for the iPhone and the iPhone is the biggest business.
01:17:16 ◼ ► I just blogged the other day about a rumor that Samsung is themselves warning investors about that their mobile business might actually register a loss for the first time this year because of the RAM crisis.
01:17:29 ◼ ► But it really does seem to still be true from 15 years ago that Apple takes like 80-ish percent of all the profits in the phone business and Samsung takes the other 15 to 20 percent.
01:17:44 ◼ ► And everybody else at best has like 1% or 2% profit share of the industry, like the Huawei's and Xiaomi's and that's it.
01:17:52 ◼ ► And then everybody else is just sort of breaking even and selling phones for break even.
01:17:57 ◼ ► And that's why the phones get loaded up with crapware because the deals that they get for the preloaded crapware software on the phone is the only money they make.
01:18:07 ◼ ► And that they can sell these things at cost basically to the carriers around the world as the freebie phones to give away for discount.
01:18:18 ◼ ► It's because there's some kind of demand for people who don't care about their phone, who just want a phone that they get with their $50 a month plan.
01:18:44 ◼ ► I honestly think if somebody from like the HP board got Ternus' ear two years ago and said,
01:19:00 ◼ ► But so all of this sort of points directly to what happens to everyone that has been at Apple for decades, including Ternus.
01:19:10 ◼ ► But now that Ternus is in charge, obviously, when there's CEO transitions, always there's shuffles at the top.
01:19:24 ◼ ► And so now that the transition is happening, who sticks around, who doesn't, and what does sort of that look like?
01:19:36 ◼ ► Reading between the lines of what's sort of out there a week into this now, it feels like there is certainly no animosity amongst the main people at the top of Apple.
01:19:52 ◼ ► And I haven't seen anything from Phil Schiller, but presumably, like, he's up there in age enough that he knows, like, this is probably the right pick.
01:19:58 ◼ ► I cannot say for sure, but I strongly suspect that Phil Schiller is very supportive of this pick.
01:20:06 ◼ ► You would have to imagine that they basically all are, like, they've all been working together so long that if there was major break in that room, like, either someone left already because they didn't like that decision the way it was headed, or they're signed off on it.
01:20:22 ◼ ► And they just know that Craig Federighi is an interesting one to me because he's around the same age.
01:20:28 ◼ ► I think he's a little bit older than Ternus, and so just from that light, he's the other name that could have been.
01:20:41 ◼ ► And he, I think, I don't know if there's been actual reporting on it, but I think, like, he became sort of the Cook version of if Cook got hit by a bus, like, he could slot in there after Jeff Williams sort of stepped away?
01:20:56 ◼ ► Here's what I, because if you look at the timing of all this, I think Williams was definitely that guy for the last, most of the last 15 years.
01:21:15 ◼ ► And I think everybody, I think everybody, I don't think this is all that, I don't know.
01:21:20 ◼ ► You'll never know because I think it's a very small group of people and they're very private.
01:21:42 ◼ ► Let me take him under his wing and pick his brain and see how he deals with these other.
01:22:49 ◼ ► In order of time I've spent with them, both on stage and public and behind the scenes, off the record, I've spent the most time with the product marketing people because they're the people whose job it is to deal with idiots like me.
01:23:08 ◼ ► Craig, second, probably just because – and that's almost all entirely on stage and backstage.
01:23:18 ◼ ► His real personality isn't totally different from his onstage personality, but he likes to argue.
01:24:06 ◼ ► And that – when you talk about it that way, that sort of reminds me of Sundar Pichai, right?
01:24:10 ◼ ► Like, he is that – he, I think, was that person within Google, which had a lot of big personalities when it came time to who would sort of come in to be the next CEO of the company, post-Erik Schmidt and then Larry Page sort of coming in.
01:24:49 ◼ ► It might have been the straw that broke the camel's back that there was some kind of, hey, Scott, you should put your name on this apology for maps.
01:25:04 ◼ ► It was because he did not get along with the other executives, particularly Johnny Ive, but I think others as well.
01:25:12 ◼ ► And I can report this from sources familiar with the matter, and other people have reported it from sources familiar with the matter, to put it in that parlance, that it had gotten to the point where Johnny Ive refused to be in a meeting with Scott Forstall or vice versa, that there were no meetings with the two of them together.
01:25:36 ◼ ► I don't know that either one of them, especially Johnny, I don't think Johnny Ive went, I don't think, went to Cook and said it's either him or me, but I think Cook looked at the dynamic and realized.
01:25:54 ◼ ► Right, and I think that Cook could see, he's so, he doesn't talk about such things, but I think he is very perceptive.
01:26:09 ◼ ► Part of what made Steve Jobs the singular personality and leader that he was, that that reality distortion field worked all the way up to the senior vice presidents of the company.
01:26:22 ◼ ► And that Steve Jobs could keep two people who could not work together otherwise working together because of him, Steve Jobs.
01:26:31 ◼ ► And that Cook could see, ah, Steve had something I don't have, and I can see it, and I can understand it, but understanding it doesn't give me the ability to do it too.
01:26:41 ◼ ► What I can do, Tim Cook, is I can just make the hard decision and back a truckload of money to Scott Forstall's house and make a decision and move onward.
01:26:52 ◼ ► And I forget the exact headline of the press announcement, but it was like, if you go to the Apple newsroom, it was like, in the headline, it was like, in a move to further communication within the company and coordination within the company, Apple announces senior leadership changes.
01:27:54 ◼ ► And it kind of put like a weird, it's like putting a 2,000-pound thing in the trunk of a car.
01:28:03 ◼ ► Like, the launch of Apple Watch was weighted a little wrong because there was these $20,000 ones at the high end that nobody was going to buy and almost nobody ever even saw in the real world.
01:28:14 ◼ ► I think the answer to that riddle was, and we see this now, now that it's played out and it's a successful product, but they didn't know exactly what it would be used for.
01:29:05 ◼ ► But I would bet money, I would bet money that John Ternus, I forget where he was when the one-port MacBook came out.
01:29:13 ◼ ► I'll bet, but he was obviously, he wasn't a senior vice president of hardware, but he might have been, like, second to Dan Ricci at the time.
01:29:28 ◼ ► And there has been subsequent reporting about the things that he, and who knows, you know, like, obviously a lot is coming out of the woodwork.
01:29:35 ◼ ► That he was opposed to other, I think maybe, was it even the Vision Pro, at least sort of?
01:30:02 ◼ ► But yes, but the Ive and Cook angle, though, was a little bit unique and weird, too, right?
01:30:08 ◼ ► Because Ive famously was so close to Jobs that it felt like any way that he would work with the new CEO, and they made it work for years and years, but it was never going to be the same dynamic, of course.
01:30:19 ◼ ► And so it was always sort of set up to probably not be as successful as it was with Jobs in that role.
01:30:27 ◼ ► Yeah, I just think that Cook can see that I don't think he has regrets over it, and I don't think he has regrets over parting ways with Forstall.
01:30:42 ◼ ► What if Johnny Ive had just said, look, and they backed the proverbial truckload of money to Johnny Ive's house and said, we'll do whatever it takes to keep you here, and we'll give you a title, chief design officer, whatever you want.
01:30:54 ◼ ► And Johnny Ive was like, nope, I really wanted design chairs and Ferraris, and I don't want to be here without Steve.
01:31:05 ◼ ► I think my disciples, the people I'm leaving behind, I'm leaving the design lab in great hands, but my heart's too broken without Steve.
01:31:15 ◼ ► I think it's an interesting counterfactual, and I think the world would be very different.
01:31:20 ◼ ► Apple would be very different, but I don't think Cook has – because that didn't happen.
01:31:24 ◼ ► I don't think Cook has regrets over it, but I think Cook sees how important that job is at Apple to managing extremely talented senior leaders under the CEO who have extremely big egos and strong opinions and to keep them aligned.
01:31:46 ◼ ► You've got to be Phil Jackson, basically, who can sort of handle the Zen-like philosophy of coaching Shaq and Kobe and bringing Carl Malone and Dalton.
01:32:02 ◼ ► Everybody remembers the – I mean, the Bulls – that documentary series is fantastic.
01:32:10 ◼ ► But you have to remember, Dennis Rodman is like a one and a – the only basketball player who's ever played basketball like Dennis Rodman is Dennis Rodman.
01:32:39 ◼ ► Phil Jackson is probably somebody Tim Cook looks at and says, yeah, that guy had a job a lot like mine.
01:32:54 ◼ ► He's the guy who has – I think has a very good relationship with both Jaws and Federighi and anybody else.
01:33:02 ◼ ► Eddie Cue, again, like you said and has been alluded to, Eddie Cue's been telling Cook, I think Ternus is the guy, right?
01:33:09 ◼ ► Eddie Cue is – has – I think everybody else – everybody I know at Apple really likes Eddie, but Eddie is a very strongly opinioned man.
01:33:17 ◼ ► And they're all going to be like that because, again, they've all – Eddie Cue and Jaws have been there for 40-some years, right?
01:33:23 ◼ ► Like they – regardless of like their own personalities, the fact that they've been at one company that long, which does not happen in this day and age in tech.
01:33:32 ◼ ► It just speaks to like they obviously live and breathe this company and they feel like it's theirs and rightfully so to many degree.
01:33:43 ◼ ► And you're right that it's got to be almost an impossible task to manage that – those sort of personalities when they have that sort of tenure and that level of experience with the company.
01:33:53 ◼ ► And just to go back to what kicked this off, but those people are – because of the nature of they've been there so long, they're up there in age to the point where they are not going to be there that much longer, relatively speaking.
01:34:04 ◼ ► And so what does that mean for – and so like it – but it even speaks well to what you're sort of laying out there.
01:34:11 ◼ ► And like Ternus could be the perfect sort of transitionary person, CEO, to take it from the current leadership stage and then bring in the people who are just the level below that.
01:34:23 ◼ ► And I know that every – we can – I want to do one more segment here, but – and we have to talk about AI.
01:34:35 ◼ ► I think the bigger problem, the most important thing on his plate is bringing up the next generation of senior leaders.
01:34:44 ◼ ► I agree because it's been so – Apple is so weird in that what we just talked about, people have been there for so long.
01:34:53 ◼ ► But the leadership level in particular has been in place for so long that there never really has been this sort of big transition.
01:35:03 ◼ ► There's been small ones here and there where people elevate like Ternus who come up here and there.
01:35:07 ◼ ► But we're at the point where they're all around the same age that they're all going to be transitioning out around the same time.
01:35:21 ◼ ► The software leadership, it was Avi Tavanian, but he actually left kind of early, right?
01:35:43 ◼ ► But he had a background, he had been at Next, then he left and sort of built up his leadership chops and then came back to Apple and it's been there ever since.
01:36:25 ◼ ► If it wasn't for Chris Espinosa, employee number eight, who joined when he was 14 years old, Jaws would be seemingly more of a freak.
01:37:01 ◼ ► But, yeah, Schiller and then Jaws are the only two marketing, product marketing chiefs the company's had since then.
01:37:27 ◼ ► If, you know, the Mansfeld, and I love Bob, and I only met him a couple, a handful of times.
01:37:33 ◼ ► They don't really usually put the hardware guys like Bob Mansfeld in the product briefing things that I get in the media, but in person, he seems like exactly what you think he was like, which is awesome.
01:37:45 ◼ ► He just seems like an awesome guy, but the, hey, Bob tried to retire, and then we had to bring him back, like, twice.
01:37:55 ◼ ► And remember the other famous, one of the famous sort of cook misses was Browlett, the guy that they hired to do retail, and they, and cook to his credit, I think, recognized the mistake quickly.
01:38:30 ◼ ► And then Apple fought and fought and fought, and got him on board, and then when the antenna gate happened, they were like, hey, this is Papermaster's fault.
01:38:44 ◼ ► And it came up recently in the context, this is why I looked back at it, in the context of the way Cook dealt with John Gianandrea and AI, where Cook's style was to give, obviously Gianandrea was deemed a failure.
01:39:00 ◼ ► And the Apple intelligence, Fiasco might be too strong, because I don't think they're in a bad place.
01:39:07 ◼ ► But the fact that they made embarrassing announcements at WWDC two years ago that they could not deliver on fell on Gianandrea.
01:39:15 ◼ ► And he was famously, again, in his public remarks, did not think LLMs were the future of AI.
01:39:23 ◼ ► It was more of a, if anything, like, I view that as much more of a, just strategic mistakes that he made.
01:39:38 ◼ ► They probably looked very good early on within Apple when they were having the success before it was LLMs, when it was just machine learning.
01:39:53 ◼ ► But when you search for dog in your Apple photos, you find all the pictures of dogs now.
01:40:03 ◼ ► Well, they made some announcements early last year and said Rockwell's going to take over Siri and this and that.
01:40:11 ◼ ► But Gianandrea got to stay until December when they announced that he would be retiring.
01:40:17 ◼ ► And he just got to leave very, as graciously and gracefully as possible when effectively it was like, yeah, you're out and we're taking everything away from you.
01:40:26 ◼ ► Whereas, when there was the antenna gate issue with the iPhone 4, Papermaster was fired like six weeks later.
01:40:39 ◼ ► And if Jobs were still there, Gianandrea would have been fired like in February when they had to announce the delay.
01:40:55 ◼ ► But this is one where I cannot imagine that Jobs would have said, okay, you can stay on the job for eight months and we'll let you go out gracefully in December.
01:41:06 ◼ ► And I'm not even saying one's right or one's wrong because I think both of them were very true to themselves.
01:41:13 ◼ ► If Jobs had lived, I think it would have killed him if he was still alive to let Gianandrea stay at the company for eight months for the sake of grace.
01:41:31 ◼ ► And that's one of the sort of very high-level praise that you would say of Cook but is absolutely true and important is that Jobs famously, of course, told him, don't do what I would do, do what's right.
01:41:44 ◼ ► But I think you could knock him a bit for – I think you could knock Apple overall in the intervening years for maybe swaying too much to – even though they're not explicitly doing what Jobs might do.
01:41:58 ◼ ► But I do think Cook, to his credit, knew that he could not manage and certainly from a stage presence on down but including the company, he couldn't manage in the style of Jobs.
01:42:16 ◼ ► And so he knew he was confident enough and lived in his own skin enough to know that he had to do it sort of the way that he does things, which is not the way that Jobs did things.
01:42:27 ◼ ► I think – and I think that's where that advice from Jobs, parting advice from Jobs to Cook was most applicable.
01:42:33 ◼ ► And it wasn't like, hey, don't do what I would do when it comes to product, which it's like, how could they not?
01:42:44 ◼ ► I think like Disney can look at a movie and say like, you know who would have loved this?
01:42:51 ◼ ► You don't want to just do the opposite of what has been successful because the founder's not there.
01:42:58 ◼ ► And the whole like argument over hand-drawn animation versus Pixar-style Toy Story animation.
01:43:15 ◼ ► And I think that's where – and the Giannandrea versus Papermaster thing exemplifies it.
01:43:31 ◼ ► It is a daily planner for iPhone, iPad, and Mac built on a kind of focused, intentional design that stems from the idea of like a paper bullet list or paper bullet journal or a day timer or something like that from the paper era.
01:44:18 ◼ ► If you don't want to give it weather access or your location access to get your weather, you don't have to.
01:44:27 ◼ ► It also has, in addition to reminders, which integrate with the system reminder database and the Apple reminders app, finalist has its own tasks.
01:44:42 ◼ ► So you can create and edit reminders in finalist that are both in finalist and in a reminders app or tasks which are only in finalist.
01:44:54 ◼ ► There are certain things that I want to be in reminders and there are certain things that I want only in finalist.
01:45:15 ◼ ► And since I started using it in December, I've actually been using the TestFlight builds just to watch it go.
01:45:23 ◼ ► And in December, it was already good enough for me to start using on a day-to-day basis.
01:45:41 ◼ ► One of the things that really makes it different from most to-do tasks apps that I've ever tried is that instead of setting due dates for tasks,
01:46:06 ◼ ► With the top-level items being days and days having tasks and events, it just makes it easier to go through time.
01:46:14 ◼ ► And maybe there's some things from like last week or the week before that just stay on those days, and you never finish them, and you never go back, and you kind of don't need to.
01:46:22 ◼ ► And there's always a list of all unfinished tasks that you can go to to see them, see items from last week that you never finished if you want.
01:46:31 ◼ ► But it's a great way to sort of keep your list of things that are at the top of your mind at a minimum as opposed to having a giant pile of tasks that grows faster than you can finish them off.
01:47:21 ◼ ► But if you go to finalist.works slash talkshow, you can just try it for free for six months just for listening to the talkshow.
01:47:45 ◼ ► So let me read – I haven't linked to it yet, but this is Stephen Levy's take at Wired.
01:47:58 ◼ ► And again, that's sort of the – hey, this was all – you look back, it's like the usual suspects or the Sixth Sense or any of those movies where you get to the end and the big reveal.
01:48:23 ◼ ► And if it's midnight, you're like, tomorrow night at 8 p.m. we're watching this movie again because I have to – and then you watch it over again.
01:48:34 ◼ ► And I think you can look at everything that's happened since the Financial Times leak and planned leak in November and see, oh, yeah, this is why Jaws and Ternus talked to Stephen Levy a month ago.
01:49:08 ◼ ► We want to ship amazing products, features, and experiences, and we don't want our customers to think about what technology makes it possible.
01:49:19 ◼ ► Now, Stephen Levy wrote, that's fine, but I look back to the mid-2000s when everybody was waiting for Apple to come out with a phone.
01:49:33 ◼ ► It's a big ask for Ternus to do something similar for the AI age, but it's an opportunity that must be seized.
01:49:49 ◼ ► They will just tell their always-on AI agent to get them home, or that agent will have already figured out where they need to go,
01:50:18 ◼ ► And the reason why my icon is this Susan Kerr one is that that was a wedding present from him.
01:50:24 ◼ ► But anyway, neither here nor there, I am also a Stephen fan, but I also know where you're going with this.
01:50:50 ◼ ► I think there will be transitions and differences in the way that we do certain things.
01:50:59 ◼ ► But I do think, like, I'm of the mindset very much that the iPhone is going to be the hub for the foreseeable future.
01:51:09 ◼ ► But I do think that there's a world in which, and I wrote about this when I was writing, thinking through the future of Ternus.
01:51:36 ◼ ► And in fact, the more people use them and they sell more of them, the curve might actually have just taken a sharp uptick last month when the MacBook Neo came out.
01:51:46 ◼ ► I mean, that MacBook Neo might go down in history as a product that actually, an inflection moment that shifted the demand curve and the number of users of the Macintosh.
01:52:04 ◼ ► The only problems that have come out about it are the fact that they've run out, apparently, they've run out of the binned 5GPU chips and might have to restart production.
01:52:18 ◼ ► And decide what to do with all of the A18 Pro chips that have six working GPUs and just say, okay, now, you know, some of the MacBook Neos have six GPUs and some have five.
01:52:34 ◼ ► So is it crazy to think that the iPhone right now at 20-ish years in, next year it will be the 20, next year's 20, that it'll have 40 or 50 years?
01:52:48 ◼ ► And I think if you stop thinking about it as the iPhone and everything you do on the iPhone today, because you do different things on your iPhone today than you used to.
01:52:58 ◼ ► And you just think, is the main product a roughly card, pack of cards, wallet-sized computer?
01:53:17 ◼ ► And it is a full Unix computer with all-day battery life that most people, from not just adults, but down to some level of teen or even preteen, have with them all day, every day.
01:53:42 ◼ ► And I don't see anything that's changing that, that there is going to be a computer that you carry around with you.
01:53:47 ◼ ► And you go back to what Stephen Levy said here, and it's by the end of the decade, you may not tap on Uber or whatever.
01:54:11 ◼ ► I guess they would say maybe we get to the point – again, it's timetable stuff, though.
01:54:17 ◼ ► Like, maybe we get to the point where an AirPod-like device can be made by someone else that doesn't require tethering to the iPhone.
01:54:32 ◼ ► And that it could – maybe it can even, like, in the next five years, can run models locally that are good enough to be able to do some stuff.
01:54:58 ◼ ► And just to play devil's advocate, I guess the counter argument would be that you'll have the meta Ray-Bans on, right?
01:55:15 ◼ ► Glasses made by somebody else, and the glasses have a screen, and you can be entertained with that.
01:55:20 ◼ ► And again, the other function that the phone serves for people when they're out at dinner and they need an Uber.
01:55:24 ◼ ► I like to take a picture every time I go out to dinner with friends or some – multiple pictures just so I can remember.
01:55:44 ◼ ► And it's very hard for me to imagine a world where people are doing that without a phone.
01:55:51 ◼ ► You would need – it's basically like – it goes back to the old argument in the earlier days of the iPhone, like the best camera is the one you have on you, right?
01:55:59 ◼ ► And are you really going to disintermediate the iPhone into six – it's like bundling and unbundling.
01:56:06 ◼ ► Are you going to unbundle the iPhone into six different devices that you always have to carry around and that you have to charge and that need connectivity and all this?
01:56:13 ◼ ► Or are you going to – more likely the iPhone remains the main hub that you keep and maybe increasingly it's in your pocket because you have one or two other devices, including, by the way, for everyone like right now, AirPods and or the watch, which are already those devices.
01:56:30 ◼ ► And maybe now they augment that with either a pendant that has been some level of talked about or glasses or something else.
01:57:00 ◼ ► They spent so much time in that – the best keynote of all time talking about voicemail.
01:57:26 ◼ ► From that keynote on forward, we've now narrowed the device down to just a computer in your pocket.
01:57:33 ◼ ► Like it doesn't – yes, it still has the screen because that's sort of the interface that you do everything you need to do.
01:57:50 ◼ ► And that's a – that is like the nightmare scenario for Meta and the nightmare scenario for many other companies, OpenAI too.
01:58:10 ◼ ► Computers just keep getting smaller and even when it becomes theoretically possible for your AirPod sized devices to be your main computer with all day battery life and the internet connection that wherever you go.
01:58:30 ◼ ► When do you reach the point though where somebody says, oh, I'm going to put my phone on the shelf and I'm going to call Verizon or AT&T or T-Mobile and say, I cancel my cell phone plan.
01:58:52 ◼ ► And then they take – they're paying for a cellular networking plan or a satellite plan in the future.
01:59:00 ◼ ► But they're paying somebody for always on internet, wherever they go, from another device and stop paying for the one on their phone even though the phone has this beautiful screen and has a camera that is always going to be better.
01:59:14 ◼ ► The camera in your phone is always going to be better than the one in your glasses optically.
01:59:22 ◼ ► In the same way and maybe eventually the one in the glasses will get good enough optically in the way –
01:59:31 ◼ ► The way that the phone cameras are clearly good enough that people take better pictures with their phones today, almost everybody, than they would with a $1,000 big camera camera from Sony or from Canon or Nikon.
01:59:46 ◼ ► Because most people don't have those cameras with them and what makes them better are things that people don't want to use and they're not going to carry that thing around with them.
01:59:55 ◼ ► They take, in practical experience, better photos with their phone today than they would with a bigger camera even though optically it's not superior because it's good enough.
02:00:08 ◼ ► So, therefore, it's even better than the phone because the phone is not – it's sometimes in your pocket and not pointed at the moment that you would miss.
02:00:14 ◼ ► But maybe not because by that time the phone camera will be so good that the 8X camera will – or 20X camera, whatever up to at the point, will let you take like these incredible photos from the back of the arena when you're shooting the stage.
02:00:31 ◼ ► My heavy guess would be that the reality is for, say, another decade that the phone remains the main computing hub in your pocket.
02:00:40 ◼ ► And increasingly it does maybe stay in your pocket more as these other devices sort of come in and out of popularity.
02:00:48 ◼ ► And to your question about connectivity and whatnot, do you cancel – eventually cancel your phone contract because you're using whatever the internet through your AirPods or something?
02:00:57 ◼ ► I think that they – just like sort of the cable companies have all morphed into internet now cable companies, it basically becomes the connectivity companies are all just giving you one bill.
02:01:11 ◼ ► And you can already get this and bundle together your watch and iPad and everything onto the same cellular thing.
02:01:17 ◼ ► I think you're just paying for a data connection and all of your devices are able to access it.
02:01:21 ◼ ► And so you pay AT&T or Verizon and basically all of your devices have a link into your account there.
02:01:29 ◼ ► But I still think that the phone remains the main computing hub because it's going to have the best CPU and it's going to have sort of the best battery life and it's going to have the way that brings all of those things together.
02:01:50 ◼ ► And you can set it up when you set one up for like an older parent, like if I got one from my 88-year-old dad or if you sent one up for your young child, which both are use cases I know a lot of people do with Apple Watch.
02:02:07 ◼ ► You as like a middle-aged adult can pair an Apple Watch with your phone and give it to your elderly adult parents or your small children.
02:02:24 ◼ ► And think about the early years of Apple Watch and the way people – everybody who had one knows that you kind of struggle to get through the day on battery life.
02:02:32 ◼ ► In the early – for years, that was sort of like, can you get to the end of the day before you have to charge it overnight?
02:03:08 ◼ ► Obviously, technology progresses and all the stuff gets smaller and sort of battery life becomes sort of an inhibiting factor always.
02:03:18 ◼ ► But I do think, like, even at a more fundamental level, like, it's just a question of what's more comfortable to use?
02:03:23 ◼ ► Is it more comfortable to use a bigger screen when you want to browse, yeah, the internet versus doing it in your glasses or on your watch?
02:03:33 ◼ ► And I just don't see a world in which there's a context anytime soon where you wouldn't want a phone-like screen device for a lot of what you want to do.
02:03:47 ◼ ► And you'll be able to do some new things, like, with always-on AI through AirPods or whatnot that you can't do right now with a phone because it's in your pocket.
02:03:55 ◼ ► But I do think, like, the context matters for all these things and how you're going to use them.
02:04:00 ◼ ► And I think it comes down to, like, form factors more than, like, people really want to displace the iPhone because we're looking for what's next.
02:04:12 ◼ ► And I think there is a gnomes-wearing-underpants step two, dot, dot, dot, between AI is an industry-changing technology, dot, dot, dot, new form factors.
02:04:31 ◼ ► And think about the other things over the 20 years of the iPhone's life that have happened that Apple – the other thing that I feel like Stephen kind of fell into the trap with, with the hype around AI right now, by writing that and saying that Apple needs an AI-first product that's going to supplant the phone,
02:04:52 ◼ ► It's – think about the other things that have come up that Apple just isn't a part of.
02:05:08 ◼ ► It is entirely based – and Meta's presence in the top 10 or top 5 at times in market cap companies is entirely predicated on the role social media plays in the world.
02:05:19 ◼ ► And the whole reason social media plays the role it does in so many people's lives, hours a day, tons of screen time, tons of money and ads and the way people get news.
02:05:35 ◼ ► One of the biggest companies and one of Apple's biggest rivals is entirely based on people having phones, but that's not it.
02:05:48 ◼ ► All of those software as a service companies are a part of people's lives because they're on their phones all the time and that you can get into your companies, whatever you're doing the software as a service for.
02:06:01 ◼ ► And yes, computers were a big part of all these companies before everybody had an iPhone or an iPhone-like phone in their pocket all the time.
02:06:22 ◼ ► There's the whole Dropbox is a feature, not a product that Jobs told the Dropbox founders.
02:06:32 ◼ ► It's an important one, but I don't think it's one that necessitates our pants are on fire.
02:06:44 ◼ ► I think there might, there could be, I don't think it'll be any time in the immediate future, but there could be a world in which basically this is, what dictates this is sort of the interface.
02:06:56 ◼ ► And so we had computers and then that went to phone and touch, obviously, famously, the iPhone ushered in.
02:07:04 ◼ ► If we do get to a world where voice becomes the, maybe not the overall thing, because there's obviously times you don't want to use your voice, but becomes one of the main interfaces of computing.
02:07:21 ◼ ► There is an argument to be made that we need some sort of newfangled device that's different from a phone.
02:07:29 ◼ ► I still think it will be tethered to the phone for the foreseeable future, but that would be the case for there being some sort of, in my mind, at least, that would be the case for there being some sort of new form factor that comes up.
02:07:41 ◼ ► It's not so much because of the technology itself, but it's because of the new interface that sort of dictates it.
02:07:49 ◼ ► I'm not trying to be a Luddite here regarding, hey, what if AI keeps getting better at the rate it has over the last five years for another five years?
02:08:01 ◼ ► Could it be the case that you really just talk to your device and everything gets managed and you really don't have an email app anymore?
02:08:25 ◼ ► We're always going to have screens, but what's shown on your screen is just presented on the fly at all times, like an ad hoc interface for everybody.
02:08:33 ◼ ► I see that as possible, but I don't see Apple as being lost by not saying, oh, that's definitely the future at this point.
02:08:48 ◼ ► I've written about this a little bit, and I think the other angle that I've been sort of noodling around it and written a little bit about because of news, I think it was a couple weeks ago now, which is that I wouldn't be shocked if a lot of the big technology companies jump back into the smartphone game.
02:09:04 ◼ ► Because they know that Apple's position is such, and Google to a lesser extent, and Samsung, as we've discussed.
02:09:12 ◼ ► So there was a rumor that Amazon might be trying to get back in, and now I don't know how Meta is not going to try to get back in.
02:09:21 ◼ ► And if the world we're talking about sort of plays out that way, Mark Zuckerberg famously despises Apple because they have control over his ecosystem, and including the new devices, the Meta Ray-Bans and whatnot that they're trying to do.
02:09:35 ◼ ► And he's obviously pushing from all angles to try to, from regulatory and whatnot, to try to displace that and break that advantage that Apple holds.
02:09:43 ◼ ► I think that they're all going to dive back into smartphones, and it might not be the exact form factor that we've known, the candy bar sort of type style that we've known over these past many years.
02:09:53 ◼ ► But they might try with foldables and stuff to get back into this world now that they see sort of these new types of devices coming in.
02:10:00 ◼ ► So I wouldn't be shocked if we see Microsoft, we see Amazon, we see Meta, we see everyone else basically jump back in.
02:10:10 ◼ ► And I think one of the biggest problems Apple faces is that they don't have enough competition, and it leads to complacency and arrogance.
02:10:21 ◼ ► And other companies with an edge, not an edge, an advantage, but like a grudge, like the way that Zuckerberg has a grudge, that's good for Apple, that he was motivated to do it.
02:10:34 ◼ ► It's good that Bezos has instilled in Amazon a, hey, why don't we take over the whole world mentality.
02:10:51 ◼ ► One, I think as these companies go down more, and this is related to Apple directly, as they all go down the path of trying to do their own chips more, right?
02:11:02 ◼ ► Because they're all basically spinning up these projects to do it from an AI perspective.
02:11:13 ◼ ► They're building different types of TPUs, different specialized chips in order to do inference in some cases, but also just to do different things.
02:11:21 ◼ ► And still, even when you're running AI, you still need a CPU to coordinate all this stuff.
02:11:26 ◼ ► And so a lot of them are also now going back into and thinking about building CPUs again.
02:11:30 ◼ ► And so if they're building the CPUs already, what if you put that in a device, like a newfangled device that's a mainstream computing device?
02:11:38 ◼ ► I think you're going to see, I think NVIDIA is already rumored to be working on more mainstream computing devices.
02:11:46 ◼ ► You would probably see Intel eventually get back into that world and all of them, again, competing along those lines.
02:11:59 ◼ ► Apple has such an advantage, not only in obviously supply chain elements, but also in the retail element, the way to sell these things.
02:12:08 ◼ ► The reason why Google isn't selling trillions of pixels is you can argue like they're good or not.
02:12:18 ◼ ► The problem is they don't have nearly the retail footprint in order to get the consumer traffic that they would need in order to do that.
02:12:25 ◼ ► So they have to start carrier deals and do the old school ways of doing things that Apple doesn't have to do right now.
02:12:34 ◼ ► They have two or three of them right now, and they're trying to roll out more because they know,
02:12:57 ◼ ► Right, and Apple went very fast at that, but it still was like a 20-year process of expanding.
02:13:16 ◼ ► So even if the companies recognize this opportunity, maybe try to go back into the smartphone game
02:13:23 ◼ ► because they're building chips and because they have more hardware prowess than they did previously,
02:13:27 ◼ ► and there's just more competition out there in the world to build these types of products,
02:13:34 ◼ ► Amazon obviously has a way, but still, people are going to want to use some of these devices
02:13:53 ◼ ► I do think it does make more sense just in general, not just by Ternus' personal disposition personality,
02:14:01 ◼ ► but which I think fits too, but I also think a hardware person is the right person at the moment
02:14:12 ◼ ► It is grounded in reality, but this is also a good segue to the last thing I have on my list to talk about,
02:14:32 ◼ ► It is only from Mark Gurman, and it was hot on the heels literally at the end of the very week
02:14:37 ◼ ► where Alan Dye left Apple for Meta, and Bloomberg, Gurman had the scoop, which I don't know,
02:14:44 ◼ ► but I believe, and I know a lot of people at Apple believe, came from Dye because Bloomberg
02:14:56 ◼ ► Apple had his little time to prepare for the Bloomberg story announcing that Dye was going
02:15:06 ◼ ► It was a very pro-Alan Dye, very pro-Apple, or pro-Meta, anti-this is a big problem for
02:15:16 ◼ ► And then at the end of the week, Gurman had a, nobody else ever had this, but that a story
02:15:22 ◼ ► that said Johnny Suruji had gone to Tim Cook and said, hey, I want more, I want more, and
02:15:29 ◼ ► if you don't give me more, I don't know if it was money, I don't know if it was a promotion
02:15:38 ◼ ► And that, and then on, that was like on a Saturday, I think Gurman published that, which is unusual
02:15:50 ◼ ► And then by Sunday night or Monday morning, Suruji had sent a memo to his entire team, more
02:15:57 ◼ ► or less calling bullshit on it and saying, I love my job, I love that I'm here, and I'm
02:16:01 ◼ ► Now, you could say, well, Gurman was right, and when the story came out, Tim Cook called
02:16:07 ◼ ► Johnny Suruji and said, okay, this looks bad, I'll give you anything you want, and then Suruji
02:16:14 ◼ ► And the other angle, which is my angle, is that the story was nonsense and there was no truth
02:16:21 ◼ ► to it, and that's the reason nobody but Gurman had it, and it didn't come from Suruji or
02:16:32 ◼ ► you know, we just took Dai, you know, Johnny Suruji's sniffing around, and we could use a
02:16:38 ◼ ► Because this is what I, now, again, I didn't talk to Johnny Suruji, I didn't talk to anybody
02:16:45 ◼ ► who talked to Johnny Suruji, but to believe the Gurman narrative, you would have to believe
02:17:03 ◼ ► I think if somebody went, if Johnny Suruji went to Tim Cook and said that, I think Tim Cook
02:17:29 ◼ ► I think if somebody went to Cook and threatened him, it might actually trigger the Steve Jobsian
02:17:40 ◼ ► That, I honestly think Tim Cook, I cannot fathom the idea that Tim Cook would take a threat.
02:17:47 ◼ ► My gut instinct on this, and we'll talk to the broader German thing, because I think you
02:17:53 ◼ ► and I aligned on the broader point about the succession itself, but, like, with the Suruji
02:18:00 ◼ ► element, my instinct was that there's something to Gurman's report here, only because, no, inside
02:18:09 ◼ ► information, just the optics of the fact that they announced Suruji's ascension to his new
02:18:23 ◼ ► Like, it suggests that there was some sort of agreement that they would tout him to the
02:18:31 ◼ ► heavens, saying that he has this new important role, and that just please stick around, we're
02:18:38 ◼ ► making John Ternus the CEO, and we would like you to take over a bigger role within the company.
02:18:51 ◼ ► They could basically have said to him, look, your counterpart in hardware is getting elevated
02:19:05 ◼ ► But we would like you to take on his responsibility, some of, at least some of his responsibilities
02:19:26 ◼ ► But I do think that there's a world in which Suruji maybe doesn't go to cook, but is sort
02:19:47 ◼ ► Again, maybe not to Tim Cook, but maybe to others within his orbit at Apple and just being
02:19:53 ◼ ► like, I don't know what, am I signing up for another decade, like under this new CEO who
02:20:02 ◼ ► And I don't want to keep doing the same thing that I've been doing because I've had success
02:20:22 ◼ ► And so there's a world in which it's not necessarily like an ultimatum that he gives, but it's just
02:20:48 ◼ ► And you could even argue then that that's why Suruji reacted the way he did, which is maybe
02:21:12 ◼ ► And again, it's a lot, I think for Suruji is a lot like Craig Federighi, where, like I said,
02:21:18 ◼ ► where else could Craig Federighi go as a software executive whose expertise, he'd be the first
02:21:28 ◼ ► Where could he go that would have anywhere near the domain and the effect and just the prestige of leading Apple software at this stage in his career?
02:21:40 ◼ ► In theory, he could go, like we said, we could go to Google, but he's not just, Craig Federighi is not just a manager, right?
02:21:48 ◼ ► He's not just a guy who could have been the head of fabrics at Nike or the head of roller coasters at Disney theme parks.
02:22:00 ◼ ► Like, a couple of years ago on my show, he was talking about the fact that one of his hobbies is writing apps.
02:22:14 ◼ ► He gets into arguments and discussions, I say arguments, but he does get into arguments with people at Apple, and he's talking about, like, the API calls.
02:22:31 ◼ ► Like, you could get in a meeting with him, and he could be bringing up source code and talking to you about it, and he knows what the fuck he's talking about.
02:22:38 ◼ ► He's not going to have that level of expertise anywhere else because the software he has an expertise with is very specific to Apple.
02:22:51 ◼ ► Because Apple has such an advantage there at the moment, and there's obviously any number of competitors would love to have be in that position.
02:22:59 ◼ ► The question then becomes, like, the IP, like, what could he reasonably do at another company if he's not doing exactly what Apple has been doing?
02:23:10 ◼ ► Like, does his level of expertise in the way that he's made the A-level chips and the M-series chips, does that translate to doing a slightly different?
02:23:28 ◼ ► Qualcomm, isn't it Qualcomm who poached, they make Snapdragon, and they poached a lot of Apple talent with big, big money?
02:23:34 ◼ ► And no surprise, their chips have gotten better and have kind of closed the performance gap with A-series chips.
02:23:47 ◼ ► Like, he leaves and he's got the M5 Max chip in his head and can take it and say, now we've got an M5 Max.
02:23:56 ◼ ► I mean, I think the reality is what any of these people, the only real option for them to do is not to go, it's like, why do you go to another big company to make, you're already making a zillion, as much money as you can as, like, an executive at these big companies.
02:24:17 ◼ ► But still, like, there's a world in which you could be a co-founder, say, like the technical co-founder of a startup that on paper, given the talent that you have around the table, would be able to raise X billions of dollars at an X billion valuation.
02:24:32 ◼ ► And then all of a sudden, your comp, which is tens of millions to hundreds of millions of dollars, is equity that could, on paper, be valued at billions of dollars.
02:25:11 ◼ ► He's going to leave Apple to go to a company to make the chips that are getting their ass kicked by Apple's chips every year.
02:25:29 ◼ ► And the only competitor that you could say actually beats Apple in chips in any way right now is NVIDIA.
02:25:36 ◼ ► But it's a totally different – Apple makes chips that NVIDIA doesn't make and NVIDIA makes chips that Apple doesn't make.
02:25:58 ◼ ► I think somebody going to Meta is more surprising than somebody from Apple going to NVIDIA, but it's about the same level.
02:26:10 ◼ ► So the other way of looking at this promotion and timing it to the announcement of Ternus and Cook –
02:26:20 ◼ ► And it is funny, Ben Thompson and I talked about this on Dithering, where the news from Apple hit the wires at 4.30 p.m. on last Monday.
02:26:34 ◼ ► But in between – so it was out there, and people suddenly started tweeting about it because it was on the PR Newswire, whatever the service is called.
02:26:43 ◼ ► And I was reloading Apple's newsroom page, and the first story to come up was Johnny Saruji named chief hardware officer.
02:26:57 ◼ ► Yeah, and then you look at the story, and the story says – has a quote from Tim Cook, Apple's CEO.
02:27:18 ◼ ► And I think they released the one a minute ahead of the other so that the other one would be at the top of the page.
02:27:24 ◼ ► But there was this one-minute period where it seemed like the way they were announcing it was with a quote in the second paragraph.
02:27:46 ◼ ► It could be that this is sort of like a Phil Schiller to Apple Fellow moment for Saruji.
02:27:59 ◼ ► Despite what that name sort of suggests, it sounds like a Tolkien that's like out in the fields having fun.
02:28:06 ◼ ► Since stepping down as senior vice president of product marketing and Jaws, his longtime right-hand man, taking over, Phil still runs the App Store, which has become ever more complicated.
02:28:21 ◼ ► And he runs all of Apple's events, all of the keynote movies and the actual on-press events and stuff like that.
02:28:59 ◼ ► And it's a way of saying, hey, this guy, too, who was Ternus' peer and has done great things for Apple and I think gets along extremely well with Ternus, I think.
02:29:25 ◼ ► Then, come early September, September 1st, September 2nd, a week before the iPhone event, Ternus is named CEO on the first.
02:29:39 ◼ ► He can name a new senior vice president of hardware and a new senior vice president of silicon.
02:29:46 ◼ ► Ternus and Suruji can name him together, you know, that there's got to name two new senior vice presidents, one for chips, one for hardware to replace.
02:29:56 ◼ ► Because that's Ternus' title until September 1st is still senior vice president of hardware.
02:30:01 ◼ ► And the first action Tim Cook took as CEO was promoting Eddie Q from I forget his old title to a senior vice president of whatever his title was at the time.
02:30:15 ◼ ► And Steve Jobs, by multiple reports of this, would take Eddie with him into negotiating rooms.
02:30:29 ◼ ► Like Intel, like when they went in and were like, like Eddie Q was in the room when they went in and said, okay, we'll do this.
02:30:56 ◼ ► And it's a great thing to leave for a new CEO to do as their first action is to name...
02:31:06 ◼ ► So promoting Johnny Surugi to see chief hardware officer, you're just putting a new title on a picture that's already on this leadership page.
02:31:16 ◼ ► What's left for Ternus on September 2nd or 1st or whatever day is to add one or two new pictures to that page.
02:31:32 ◼ ► Like, there is a difference, obviously, between SVP, which is still the upper echelon and the leadership team, versus C-suite, right?
02:31:40 ◼ ► And so, Surugi is now on C-suite level, technically, with his new title, whereas he was SVP before.
02:31:51 ◼ ► And it's also interesting that they didn't give him, though, the more obvious CTO role.
02:32:03 ◼ ► Well, CTO would be all technology, and that would imply that Federighi reports to him, and he doesn't.
02:32:11 ◼ ► And I think in the way that chief design officer was a one-time title for Johnny Ive, I think chief hardware officer is a one-time title for Surugi for as many years as he has left.
02:32:22 ◼ ► And it could be two or three years or something, and then we'll be like, oh, he was on his way out.
02:32:33 ◼ ► But I think it's only for him, and when Surugi leaves, there's no new chief hardware officer.
02:32:51 ◼ ► There are a lot of people in that division, and he is the face of it, so he's the one who gets the keynote time when they talk about new silicon and new M-series chips.
02:32:59 ◼ ► And he does have a very fun on-camera persona, that sort of stern, almost military style.
02:33:34 ◼ ► That's what makes it impossible for me to imagine doing anything but doing this until he retires.
02:33:39 ◼ ► Whether he's retiring soon or far in the future, this is his life's work, and it is still an ongoing concern.
02:33:57 ◼ ► The different series chips, and there's the ongoing rumors, whispers, that they are continuing to work on their own infrastructure to potentially do more AI work, like in servers.
02:34:23 ◼ ► I've got the senior leadership page up right now, and Saruji's title, still, it actually hasn't been updated, which is a little surprising.
02:34:36 ◼ ► But his current title on the page is, and I'm glad they haven't changed it so I can get it right, Senior Vice President Hardware Technologies, and Ternus is Senior Vice President Hardware Engineering.
02:34:53 ◼ ► Like, the next Senior Vice President of Hardware Engineering is not going to have Ternus' future ahead of him, because Ternus only spent a few years with the title before becoming CEO.
02:35:04 ◼ ► And presumably, the next person to be named Senior Vice President of Hardware Engineering is not going to be the CEO in three years, hopefully.
02:35:22 ◼ ► And B, I do not, even more so, there is no way Tim Cook would respond to a threat from somebody who is replaceable.
02:35:35 ◼ ► Again, I think that there's a way to sort of have both sides be somewhat correct in this.
02:35:44 ◼ ► And I think doing it now, it's a very big feather in his cap, that it's a way of making the promotion carry a little more weight.
02:35:53 ◼ ► Where Apple is saying, this is so important to give him the new chief hardware officer title, that we're doing it on the same day that we're announcing this other thing.
02:36:00 ◼ ► That is how important Johnny Suruji's contributions to the company are and will be in the future.
02:36:07 ◼ ► And Ternus can say, and I love him, and we work great together, and we have great things ahead.
02:36:24 ◼ ► But from a pure technical perspective, I would imagine that he's the most impressive technical resume and what he's done with those chips that Apple has.
02:36:33 ◼ ► Maybe, you know, and I guess if Vision Pro has a brighter future ahead, Rockwell, maybe.
02:36:57 ◼ ► And it's one of those things where we'll either see it play out, and you could say, oh, there's one that Gurman got right.
02:37:08 ◼ ► If he is still here in five years or a couple of years, then I could say we could say Gurman was wrong, not that something's changed.
02:37:19 ◼ ► He framed it that, A, anything wouldn't happen anytime soon, that he's going to see through his work with Federighi on AI to get that shipped out the door, but that it could be a next year thing.
02:37:28 ◼ ► But also that potentially he was perturbed that he thought that maybe he was on a path to CTO-type role if the Vision Pro had worked out and all of that stuff.
02:37:41 ◼ ► But again, this all speaks to just there's going to be an immense amount of sort of natural turnover when Ternus sort of takes the helm because of age-related stuff.
02:38:25 ◼ ► Phil Schiller eventually, I guess, will step down as Apple fellow and seed those things.
02:38:46 ◼ ► Is that really going to, does anybody really, can anybody just off the top of their head say when Angela Arntz left and when Deirdre O'Brien took over?
02:39:01 ◼ ► Kavan, I think, it's very telling that he's, I think he's probably got a long runway ahead of him as COO.
02:39:29 ◼ ► They're all going to retire eventually, but I don't know that any of them want to retire.
02:39:35 ◼ ► One thing I was going to ask you, we talked about the 75-year thing with board members, but Apple doesn't have a rule, right, in terms of forced retirement.
02:39:43 ◼ ► And Microsoft famously now is doing this buyout thing, right, to try to get people to sort of retire.
02:40:13 ◼ ► One of the advantages is being a 50-year-old company that was founded by people who were so young, is that it was...
02:40:46 ◼ ► So I think this idea that, hey, come September and October, or maybe after the stuff gets, you know, October, maybe new Macs get announced, that by the end of the year, like December this year, when they showed Gian Andrea the door and a couple other people retired, right?
02:41:02 ◼ ► A couple other people had planned retirements that just unfortunately retired the same week.
02:41:15 ◼ ► I think that it'll be a couple of years into Ternus' run as CEO before we start seeing some of these people retire.
02:41:27 ◼ ► The fact that Ternus has been there for 25 years, half of his life, which is incredible, just speaks to, like, he doesn't necessarily have, quote-unquote, his guys, because his guys are the people who are there.
02:41:47 ◼ ► So, I don't think it'll happen right away, and I think the telltale sign will be in the keynotes.
02:41:51 ◼ ► If and when we start seeing more younger people take more time away from people whose faces we're familiar with.
02:42:02 ◼ ► What is, I know we're running on, coming up on three hours here, just really quick, who takes over design mantel now?
02:42:09 ◼ ► I guess they have the people in place, but they haven't, but they sort of have bifurcated it, right?
02:42:15 ◼ ► Dai was only ever in charge of software, and I forget the guy's name is essentially in charge of hardware.
02:42:20 ◼ ► The question is, under Ternus, do they kind of make faces out of the people in charge of design again?
02:42:45 ◼ ► But it's no surprise, there's an awful lot of designers who were still there and who worked under Johnny Ive.
02:43:01 ◼ ► And the one last thing I wanted to ask you, because this is what I sort of focused on in writing today.
02:43:08 ◼ ► How do you think Ternus will do as the actual emcee of these events when he picks up the iPhone?
02:43:18 ◼ ► I think he'll do great, but I do think the format will stay the same, which he'll just take over as Tim Cook as the guy in front of the press who announces the movie that's the real announcement.
02:43:29 ◼ ► And I think all the, hey, maybe it's Tim Cook who wanted to make movies and not have live events is way too simplistic.
02:43:36 ◼ ► And everybody at Apple is fully aware and they have the nostalgia for the live events and they know exactly what we're all talking about when we say we miss them and they miss them too.
02:43:46 ◼ ► But if we're talking to people involved, the list of pros and the list of cons is heavily in favor in Apple's perspective to the way they've started doing it in the COVID era.
02:44:18 ◼ ► I have the sneaking suspicion based on nothing that they're going to try to bring back the energy, at least for the iPhone event,
02:44:34 ◼ ► Like, I'll be there, hopefully, knock on wood, in the Steve Jobs Theater, and he will come out on stage.
02:44:54 ◼ ► I would be very excited to be in the room for that, but I would bet very large that it's not even being discussed.
02:45:02 ◼ ► And I think he would do fine, and I think that it would be a good way to introduce other people.
02:45:07 ◼ ► But trust me, I've talked about this, and the list of pros from Apple's perspective in the new format is so overwhelming that it's not even a close call for them.
02:45:35 ◼ ► Yeah, if they could do smaller events all around the world, which he's been doing for a while, right?
02:45:38 ◼ ► He was doing, even a few years ago, he was doing the Halloween events and all that sort of stuff.
02:45:45 ◼ ► I knew it was good having you here, and the fact that we've almost made it to three hours shows it.
02:45:53 ◼ ► You're writing your column in your newsletter at spyglass.org, which is, to me, you have found your voice.
02:46:18 ◼ ► Because the link I have only goes to Apple Podcasts, but it's wherever you can find your podcast.