00:00:30 ◼ ► Anonymous, anonymous question asker wrote in and said, assuming that the next Apple CEO transition is another 15 years from now, do you think you will still be podcasting to cover it?
00:00:45 ◼ ► So, on one level, I want to say yes, because I want to, you know, I want us all to be here and alive and healthy and doing podcasts.
00:00:58 ◼ ► This is, like, if this had been 10, I would have said, I would have said, that's my plan.
00:01:03 ◼ ► 15, I always, so at least, you know, the conversation in the U.S. always was like, 65 was retirement age.
00:01:34 ◼ ► So, I think what, my answer to this question is this, which is, I imagine that as my career goes along here, some of the work that I do is going to fall off because it's just not going to make sense anymore.
00:01:56 ◼ ► And, um, I, I hope that one of the last things to fade away would be upgrade, actually.
00:02:07 ◼ ► So, um, cause I can't really imagine not, but, um, but also I would say at some point, you know, there comes a time where you say, I don't need to work anymore.
00:02:45 ◼ ► I, I, I do because I hope that I still love it and I still want to do it and I'm still capable of doing it.
00:03:00 ◼ ► Like I, I think that I would just be one of these people just works in some capacity forever.
00:03:10 ◼ ► I just can't, I can't, I don't have a, you know, I don't play golf or something where I've, I've got a hobby that I just wish I could devote all my time.
00:03:29 ◼ ► I mean, we were just having a little walk down memory lane before we started the show today.
00:03:40 ◼ ► And so we were kind of just like, we were just talking about a bunch of different things and some of the stuff that was happening around that time, like for example, the airport, Apple's airport routers were discontinued.
00:03:51 ◼ ► And I said to Jason, like I, sometimes I think I hear about things that happened during the course of this show and it feels like there was no way we were recording that long ago.
00:04:02 ◼ ► And so if I project backwards, you know, like 12 years from the beginning of the show or whatever, and do that again into the future, it seems completely plausible to me that we'd still be doing it.
00:04:14 ◼ ► I hope that we're in a position where that is something that we can choose to be doing.
00:04:23 ◼ ► I hope that at that point I probably will stop saying the number of the episodes, but I mean, Leo still does it for Twitch.
00:04:52 ◼ ► If you would like to send in a snow talk question of your own to help us open a future episode of the show,
00:05:03 ◼ ► First, we're going to start out with a question from Upgradian Mark, who writes in and says,
00:05:08 ◼ ► you mentioned the Bloomberg report that Johnny Seruji felt burned out and now he has been promoted to the chief role.
00:05:16 ◼ ► I've heard this on multiple podcasts and multiple reports, but it doesn't make sense to me.
00:05:36 ◼ ► One reasonable scenario is that they're trying to keep him for reasons that are not wise.
00:05:43 ◼ ► I think Johnny Ive was burned out and they tried to keep him and it, I think, didn't go that great.
00:05:53 ◼ ► When he says he's burned out, does that mean he feels like, does that mean he, you know, is actually burned out?
00:06:01 ◼ ► A lot of these people who are high powered Apple executives, they are looking for another challenge.
00:06:08 ◼ ► They are working on thinking of whatever the next big hard driving thing is going to be.
00:06:21 ◼ ► I might go do something else as a way to get them to spring into action and give them more of an offer.
00:06:32 ◼ ► Johnny Seruji, like, because that's really like between him and his family and his therapist and whatever.
00:06:37 ◼ ► Like if Johnny Seruji is truly what we think of as burned out, he should not, he should take a sabbatical is what he should do.
00:06:47 ◼ ► But is he or is that just a statement that was made that actually means something different?
00:06:52 ◼ ► Because, um, and the reason that I, I don't think I discussed it is I, I don't know, but I'm inclined to believe that this was a negotiation and that that was what was going on.
00:07:08 ◼ ► And that if Johnny Seruji truly was like what we consider burned out, given everything he's got, he could retire and go away and play golf or do whatever for a year.
00:07:24 ◼ ► And that's not what he chose to do, you know, and, and we, we can't know whether he's choosing poorly because it's too great an opportunity for him not to say yes.
00:07:33 ◼ ► I've been there personally where it's like, this is probably not something I should agree to, but I'm going to agree to it because it seems like a good idea.
00:07:42 ◼ ► And you can regret those decisions, but it's so first off, it's impossible to know from the outside.
00:07:48 ◼ ► And second, I just kind of tend to believe that this is a more about negotiating, uh, in the wake of Tim Cook's succession plan and not about a legitimate burnout situation.
00:07:59 ◼ ► I would say that in my career, I have been burned out on particular types of work and maybe he was not interested in running the Apple Silicon team.
00:08:11 ◼ ► Maybe it's like, I have done this too many times and what he would like to do is take a much broader, bigger picture role where he's more interfacing with people about how they're working in teams rather than like, all right, so how many courses is this one going to have?
00:08:33 ◼ ► And I think what Mark is referring to as, as burnout, that's more like, I'm looking for a new challenge.
00:08:41 ◼ ► I'd like more responsibility here or, and again, if this is part of the negotiation process, a great way for me to get new challenges is to leave and start my own company or go work somewhere else and then build something new.
00:09:28 ◼ ► They came up with a good story for this new, you know, next chapter in Ted Lasso's life.
00:09:35 ◼ ► And I'm encouraged by the idea that they sort of told the story they wanted to tell, which was about him trying to figure out who he was.
00:09:41 ◼ ► And he's running away from his failing and figuring out who he is and then ultimately going full circle and going back to America.
00:10:13 ◼ ► They just finished the third season of shrinking and they said that the whole point of that was that was a three season arc about Jimmy going through grief and getting to the end and then being able to look forward again.
00:10:32 ◼ ► They didn't want to suspend those characters permanently in the middle and that if they wanted to do more, which they do, find a new story to tell with those characters about where they go next in their lives.
00:10:43 ◼ ► Because so many TV shows, you end up with a premise and then you have to suspend the premise and just it hovers there forever and nobody can ever progress because we don't want to change the show.
00:11:09 ◼ ► There had been a break of over a month because a couple of races got canceled because they were in the Middle East.
00:11:35 ◼ ► Like this is original content like that Apple's producing, but they're not making it available outside.
00:11:46 ◼ ► The two hosts are former world champion Nico Rosberg and content creator, and I'll read from Apple's press release, record-breaking car builder and driver, Amelia Hartford.
00:11:59 ◼ ► They're using the F125 video game made by EA to produce the show and show the tracks, which is a great way to do it because the tracks have all the courses in them.
00:12:17 ◼ ► And then there's also something called the POV, which is a social series featuring former Red Bull racing senior technician, Callum Nicholas.
00:12:28 ◼ ► He was featured quite heavily in Drive to Survive and built a social following and now has left Red Bull and is doing this, is a content creator.
00:12:36 ◼ ► And content creator and engineer Christina Roarky as they react to key moments from the weekends.
00:12:44 ◼ ► I find this fascinating because why at this point in the season are we debuting our first original content?
00:12:53 ◼ ► I think it, again, says to me a thing that I think we were feeling is that this came together maybe a little later than everybody would have wanted.
00:13:08 ◼ ► Which is why they went with F1 TV and just like kind of like taking all that as I would just do what they're doing.
00:13:13 ◼ ► And this is a multi-year relationship and they're progressing it and they figure this is also this is the first US race.
00:13:23 ◼ ► Then they moved it up because of the rain, because who could figure there would be rain in Florida?
00:13:27 ◼ ► I have a note here, Mike, which is I watched not all, but I watched some of their, so I turned it, I turned on the TV.
00:13:39 ◼ ► But very, very soon, shockingly soon, a few hours after the race was over, they posted their race in 30 cut down where you can watch the entire race in 30 minutes.
00:13:51 ◼ ► I thought that was really well done and I love that idea that you're not necessarily invested enough to watch the race live or watch a playback of it in real time, but you can watch a 30 minute cut down.
00:14:04 ◼ ► I watch baseball games like that sometimes that are these condensed games that are only like 14 minutes long, but they show you everything that happened in the game.
00:14:17 ◼ ► That was, that was, I think giants in 30 and they would take that games, that day's game and cut it to 30 minute time slot.
00:14:37 ◼ ► Like there was all kinds of weird stuff happening, so it was worth watching spinning cars and lots of spinning and yeah.
00:14:50 ◼ ► I also noticed that, um, friend of the show, Carolina Milanese, he went to a, uh, an IMAX screening of F1 in Atlanta, which is fun.
00:15:01 ◼ ► Cause they did it in theaters and then all the theaters are like, Oh, it's starting three hours early.
00:15:14 ◼ ► I had a friend who went to one of these, uh, and he said it was fun, but didn't really feel like it made any sense for why it was an IMAX.
00:15:37 ◼ ► And they also said at the screening that they went to, there were a screen, good sound.
00:15:42 ◼ ► But like they said that there were Apple, there were people from Apple at this screening and they were doing like a focus group with a selection of people.
00:16:00 ◼ ► Sticking on the, the motor racing vibe, Porsche have celebrated Apple at 50 with an homage to their 1980 Le Mans livery, which is a very like, um, it is a iconic, the Le Mans livery, uh, with this Apple computer in the classic Apple.
00:17:33 ◼ ► Well, I love that he's, uh, yeah, he apparently, you know, drives a Porsche and, um, and I think
00:17:45 ◼ ► And I was thinking this one and maybe during practice or something, he did do that at Laguna
00:17:57 ◼ ► Like, well, I mean, yeah, but there's like putting a kid in a car and being like, we I'm
00:18:15 ◼ ► a little quick follow-out, but please tell me another, another fact about America's favorite
00:18:31 ◼ ► Uh, and I wonder if this is going to change, if he will get public social media and where
00:18:37 ◼ ► that will be, or if he's just saying, I ain't doing that, like, it's going to be interesting
00:18:45 ◼ ► Well, I mean, even saying he will, I think Apple's marketing people will put together a
00:18:50 ◼ ► John Turner's channel of content somewhere that will be fed by Apple's pre-art marketing
00:19:02 ◼ ► And like any kind of handled celebrity, I mean, Tim Cook is like that too, I would argue.
00:19:11 ◼ ► Yeah, I, it's possible, but I, I'd be surprised if that happens for, for, um, for Turner's.
00:19:17 ◼ ► And, uh, I, I, it's actually kind of a shame that they don't create like an Apple, Apple
00:19:23 ◼ ► So they can just roll to the next, like the Tim Cook account just becomes the John Turner's
00:19:30 ◼ ► Like, or, or John Turner's just becomes at Tim Cook, you know, maybe, you know, maybe at
00:19:45 ◼ ► with, um, with, with Federico and Steven called Connected, the Connected program, formerly the
00:19:57 ◼ ► Um, episode 600 is funny and it, it, it's got all clip show and then Steven makes some videos
00:20:18 ◼ ► So I recommend it because it's wild and it's a great way to kind of like revisit things that
00:20:22 ◼ ► like we were talking about earlier, you're like, I can't believe that that happened back
00:20:26 ◼ ► then and, and that things that our brains have just suppressed or have filed away in the
00:20:37 ◼ ► And I've shared these with you earlier today because I was listening to the podcast this
00:20:51 ◼ ► And then it became like Wall Street Journal conference and then it turned into the code
00:20:54 ◼ ► But like the D conference had a lot of great quotes from Steve Jobs and Bill Gates and other
00:21:00 ◼ ► And you had a tier list and I thought it was a real missed opportunity not to just declare
00:21:12 ◼ ► I know, but still by definition, you're like, well, I mean, this is a good quote, but it
00:21:23 ◼ ► Uh, here is my other piece of feedback for you, which is, yes, it is literally, I can't
00:21:41 ◼ ► And so that's the reason you see so many iPhones out there in the wild chasing Pokemans.
00:22:13 ◼ ► I wish we would have had this one, because that would have been an S tier for all the wrong
00:22:29 ◼ ► Okay, but just to replay this now, if he's going to talk about Pokemon Go on an analyst call,
00:23:33 ◼ ► Delete Me makes it easy, quick, and safe to remove your personal data online at a time when surveillance and data breaches are all too common and make everybody vulnerable.
00:23:41 ◼ ► Delete Me will send you regular personalized privacy reports showing what information they have found about you online, where they found it, and what has been removed.
00:23:51 ◼ ► This is a super simple service where you just go and you say, hey, look, there's a bunch of information about me, or it could be your family's personal information.
00:23:59 ◼ ► This is the stuff that I want removed from the internet, and they will go out and take care of it for you because Delete Me knows that your privacy is worth protecting.
00:24:06 ◼ ► Sign up and provide them exactly what information you want deleted, and their experts will take it from there.
00:24:11 ◼ ► I get regular reports from Delete Me where it shows, I actually just got one this weekend, where it shows me, hey, look, we found your information at these data brokers, and we're getting it removed.
00:24:26 ◼ ► They're going out and they're checking this stuff over time, and they're making sure that my private information remains just that.
00:24:32 ◼ ► Take control of your data and keep your private life private by signing up for Delete Me.
00:24:37 ◼ ► Now, with a special offer for listeners of this show, you can get 20% off your Delete Me plan when you go to joindeliteme.com slash upgrade20 and use the promo code UPGRADE20 at checkout.
00:24:47 ◼ ► You will get that 20% off, and this is the only way to do it by going to joindeliteme.com slash upgrade20 and use the code UPGRADE20.
00:24:57 ◼ ► Check out, one last time, that is joindeliteme.com slash UPGRADE20 with the code UPGRADE20.
00:25:34 ◼ ► I'm always happy when there's actual interesting stuff to talk about after one of these things, and this is unbelievably one of those quarters.
00:25:45 ◼ ► I mean, you've written many words about it, Jason, so I would like to assume that you have some things that you want to say.
00:25:50 ◼ ► I did write a lot of words about it, but I will say it's a challenge in the sense that.
00:26:53 ◼ ► I think the most notable thing here is that this is three straight quarters over $100 billion in revenue.
00:27:04 ◼ ► There's the holiday quarter, which is, like, super exciting, and they always make a huge amount of money.
00:27:17 ◼ ► And I'll just say, if you look back at my chart, you'll see that in 2021, the boring quarters were 80.
00:27:29 ◼ ► Like, that is kind of the growth that is harder to notice, which is that Apple just, their baseline of what they make in a quarter just keeps ratcheting up every single year.
00:27:42 ◼ ► Well, now it's like, what, we just assume $100 billion is the floor, the quarter floor?
00:27:49 ◼ ► I mean, their previous, at $111.2 billion, their previous Q2 record quarter was $97, I want to say.
00:28:11 ◼ ► So, from, with the overall revenue, with, like, the year-over-year growth, it was, like, from 2024, it was a single-digit percentages most of the way through into 25.
00:28:59 ◼ ► And I want to jump to a chart we don't always talk about, which is the greater China revenue, which Apple pulls out specifically in their earnings report.
00:29:15 ◼ ► And the thing that really stuck out to me from looking at your charts is if you take the iPhone chart and, like, the revenue change chart and the greater China revenue change chart, they essentially overlap.
00:29:28 ◼ ► And what you can see is this growth, this, like, this huge, this big growth, and then this big growth for the iPhone, again, like, up, like, 22% year-over-year.
00:29:39 ◼ ► It seems to be that China has driven the majority of that change because China has also finally started rising again.
00:29:48 ◼ ► Did they give a lot of context as to why the China, like, China has been down, essentially, for years?
00:30:00 ◼ ► It was very much like Tim saying, you know, we're, you know, we're the best-selling phone.
00:30:13 ◼ ► Now, they defined it in a very specific way that you can find in the charts, which is if you look at Q1 and Q2 performance are put together, which is, like, the first two quarters on sale for the iPhone.
00:30:25 ◼ ► But it is clear to me that the iPhone 17 has been very successful, which is funny, right?
00:30:31 ◼ ► Because going into it, there was a lot of talk about how it was going to be kind of, you know, Apple was making the same phone over and over again for a while.
00:30:45 ◼ ► And they brought a bunch of Pro features down into the slightly more affordable models.
00:30:51 ◼ ► And I think, generally, the iPhone 17, people in our world have suggested that it's very good, that it's a successful product.
00:31:20 ◼ ► Like, when China's going kind of bad, or not bad, but not great, the results in China are sort of down a little bit from what they are in the rest of the world.
00:31:59 ◼ ► So, it's just interesting to see that China and overall revenue kind of track, but there are, like, the places where China's ahead and the places where China's behind.
00:32:14 ◼ ► I, you know, my best guess is just really that it's the strength of the iPhone 17 line.
00:32:28 ◼ ► It's going to be really interesting to see what the next two years look like, knowing what we believe to know about Apple's roadmap, that we have kind of some big iPhones on the horizon.
00:32:53 ◼ ► But, yeah, I think it is pretty clear that what we felt about the 17, you know, we were both talking about it on this show, of, like, this feels like the strongest lineup of phones Apple has ever produced.
00:33:14 ◼ ► But it's, you know, showing it all off, like, oh, there is every single one of these phones is good in its own way.
00:33:20 ◼ ► And I think that has bared out in the fact that they've made an ungodly amount of money from the iPhone in the past year.
00:33:55 ◼ ► It is a, it has been growing double digits, sort of low to mid-teens, every quarter since Q4 of 2023, right?
00:34:39 ◼ ► Services narrative serves in part to insulate Apple from the vagaries of iPhone sales and other product sales and cycles.
00:34:48 ◼ ► Because Wall Street's always worried about, is the next iPhone going to do good or going to do bad or all of that, right?
00:34:56 ◼ ► So, services allows them to point at a thing and say, look, constant growth, don't you love it?
00:35:09 ◼ ► It is important to note, I've said this many times before, and I'll say it again, when we talk about services, it's important to note, services is best thought of as add-on services for Apple products you already use.
00:35:24 ◼ ► And since half of Apple's revenue is from the iPhone, you could really strongly argue that, you know, because sometimes people, this is that freakout thing, and my freakout chart hasn't happened.
00:35:35 ◼ ► It hasn't hit yet, but we're getting close, where there's going to be a quarter where Apple makes more profit on services than products.
00:35:41 ◼ ► And everybody's going to have that existential moment of like, oh, oh no, Apple's just a services company.
00:36:00 ◼ ► And, like, you know, one of my favorite charts that you do is the quarterly revenue by category.
00:36:11 ◼ ► I reckon within the next five years, there will be, the quarter will happen, where the services quarter will be bigger than the iPhone.
00:36:23 ◼ ► But again, if you want to think about it that way, I would encourage you, and I would say the services is probably even indexed further toward iPhone.
00:36:43 ◼ ► Because a whole bunch of that services is tied into people who are primarily iPhone customers.
00:36:51 ◼ ► So, like, just the law of numbers, there aren't as many Mac users as there are iPhone users, right?
00:36:57 ◼ ► So, like, there are so many people who are using Apple services who just have an iPhone.
00:37:06 ◼ ► If Apple wasn't selling products anymore and was just a services company, I assure you, their services business would not be good.
00:37:16 ◼ ► Like, even people that do have all of the products, the iPhone is just where the services money comes from, no matter what you're doing, because of what the services money is, right?
00:37:39 ◼ ► Like, you may be using Chrome, so you're not even, you know, benefiting Apple in the search deals.
00:37:46 ◼ ► Like, no matter kind of where the user is based, the iPhone is the core of the services.
00:37:52 ◼ ► So, yeah, if you thought of it as we have iPhone hardware and iPhone software and we've just put services in the software, then it just makes Apple, you know, like 80% of their revenue for this quarter was iPhone in that scenario.
00:38:11 ◼ ► It's not, you know, not 100%, but, and I'm sure that there's some, I'm sure they've done the numbers inside, that there's some amount of capture of, like, the more Apple devices you have,
00:38:22 ◼ ► the more services revenue you probably are likely because then you're more in the ecosystem.
00:38:27 ◼ ► I get, I get why that's probably true, but, like, it just, I just want to restate the idea that services is very impressive and it's important, especially, I think, for Wall Street.
00:38:39 ◼ ► And it allows Apple to set a narrative a certain way, but I think we can talk about it a little too much because, in the end, Apple services revenue is largely generated from the success of Apple's hardware.
00:38:50 ◼ ► I'm actually going to bring in and ask a great question now because it's very related to what we're talking about.
00:38:56 ◼ ► I was reading Jason's Six Colors post about the earnings and I have a question about the categories Apple report.
00:39:03 ◼ ► Why do they separate the hardware products into distinct categories and then there is just the bucket of services, which maybe makes more sense to report separately than the hardware?
00:39:19 ◼ ► First off, there are some filing, there are actual regulations in, because Apple is a public company, about how they disclose.
00:39:27 ◼ ► They don't, what they don't have to do is disclose, like, every detail of every iPhone model, right?
00:40:05 ◼ ► So, but there's a point at which it's a material to your business and I don't know the actual regulations.
00:40:12 ◼ ► And so, Apple is comfortable with numbers that characterize the trajectory of their hardware business in certain ways.
00:40:27 ◼ ► So we have to guess about how the, like, is the business growing or is it only becoming more revenue generation focused, right?
00:40:36 ◼ ► Like, if the revenue goes up, did they sell more phones or did they just raise the price of the phones?
00:41:03 ◼ ► They don't want people to know how much money they make from Apple TV compared to Google.
00:41:12 ◼ ► And they get to, it allows them, talking about the service narrative earlier, it allows the service narrative to seem bigger.
00:41:21 ◼ ► And it's not a lie, it's not a lie, but it allows it to seem bigger than maybe, it allows people to think of it as, wow, that Apple TV is doing great.
00:41:37 ◼ ► So I would say Apple is, as a public company, legally obligated to disclose a certain amount about their business.
00:41:51 ◼ ► And then I would say beyond that, their disclosures are a combination of historic, but also choices they make about how they want to explain the narrative of their business to investors.
00:42:07 ◼ ► Because I'll tell you, if Apple was privately held, we would know nothing about their business.
00:42:17 ◼ ► And they've chosen philosophically, I think smartly, to view that as an opportunity to market.
00:42:27 ◼ ► They are essentially marketing their business to investors because it's their fiduciary duty to do so.
00:42:56 ◼ ► It's a combination of what they're legally required to disclose and then the story they want to tell.
00:43:03 ◼ ► The last category is wearables, home and accessories, $7.9 billion, up 5% year over year.
00:43:24 ◼ ► But this is, I'll say it again, John Ternus is rumored to be behind a lot of their push into a new set of smart home products, which, I mean, we've been saying it for a decade, that this is a place that Apple could actually do something.
00:43:45 ◼ ► It is by far not Apple's most important product category, but it had a growth phase for a while and then it stopped.
00:43:58 ◼ ► It had, I'm looking at the numbers here, what, like it had two and a half years of down, of year over year losses until this quarter.
00:44:14 ◼ ► Yeah, well, and I would say, like, you can go through the whole upgrade archive and hear us talk about this at depth.
00:44:24 ◼ ► But I would say the HomePod with the screen will not move it much, just like the HomePod didn't, just like the HomePod mini didn't, just like the Apple TV doesn't.
00:44:35 ◼ ► But if they had a coherent strategy, and honestly, the one that I keep coming back to is if Apple could put out a privacy-focused set of doorbell cams and security cams that didn't share your video with the cops or the FBI or whoever, but was like just for you.
00:44:56 ◼ ► And Apple could use its security promise to say, we're going to keep your data secure and we're going to keep your home secure.
00:45:04 ◼ ► Like, I think that's a really interesting sales pitch at a point where there are a lot of people, especially, who are just so dissatisfied with, like, ring cameras and where that data goes and that the feeling that it's not private.
00:45:16 ◼ ► But I think that, but I think this is the larger point here, which is, if Apple's going to do this, they can't just toss another product in the mix.
00:45:36 ◼ ► I mean, I'm not saying I necessarily believe that they will do it and that they will succeed in it, but I would like, I sure like them to try.
00:45:43 ◼ ► This episode is brought to you by our friends over at Squarespace, the all-in-one website platform that is designed to help you stand out and succeed online.
00:45:53 ◼ ► Whether you're just getting started or scaling a business, Squarespace will give you everything that you need to claim your domain, showcase your offerings of a professional website, grow your brand and get paid all in one place.
00:46:05 ◼ ► With Squarespace, you can get discovered fast with a suite of integrated SEO tools, because why build a beautiful website for nobody to ever see it?
00:46:12 ◼ ► That is why every Squarespace website is optimized to be indexed with meta descriptions and auto-generated sitemap and more, so people will find your site through search engine results.
00:46:21 ◼ ► It's so easy to build a Squarespace website, make it look exactly the way that you want, and you're going to be so proud of it because of how beautiful it's going to look, so you want people to be able to find it, especially if it's for a business.
00:46:32 ◼ ► Because you can also offer your services and get paid with Squarespace, from consultations to events and experiences, you can showcase your offerings of a customizable website that is designed to attract clients and grow your business.
00:46:44 ◼ ► You can have built-in appointment scheduling, email marketing tools, and more, plus keep everything cohesive with unbranded invoices and get paid easily with online payments.
00:46:53 ◼ ► I've been playing around with some of the email marketing tools recently, and I've been so impressed by, again, just how easy it is and understandable it is, and fully featured as well.
00:47:04 ◼ ► Go to squarespace.com slash upgrade and you can sign up for a free trial, and when you're ready to launch your website to the world, use the offer code UPGRADE.
00:47:14 ◼ ► That is squarespace.com slash upgrade with the offer code UPGRADE to get your 10% off your first purchase and to show your support for this show.
00:47:27 ◼ ► So I want to do some analysis stuff, and there was some news that came out kind of during and after the results.
00:47:46 ◼ ► I mean, I remember when Tim would do the calls when Steve was CEO, and Steve would occasionally appear, and we got excited when Steve appeared, but usually it was just Tim.
00:48:02 ◼ ► So I think we've got one more, one last dance with Tim Cook to talk about the numbers in late August.
00:48:20 ◼ ► Because it kind of felt like when I was looking at your report, it kind of felt like, all right, goodbye, everybody.
00:48:26 ◼ ► But obviously, they treated it a little bit of, because you can't not, of like, oh, okay, we're acknowledging the fact that we all know he's leaving now.
00:48:39 ◼ ► I think you could even argue that it's kind of a victory lap about how they managed it, where they got the information out there, and let's just not, you know, make no bones about it.
00:49:05 ◼ ► John Ternus read a little statement, and then he threw it back to Tim, and then Tim continued on.
00:49:14 ◼ ► But, like, but I'm still doing it now, because we're adults here, and this is what we said we would do, and September 1st he'll take over.
00:49:36 ◼ ► I mean, let's just say, he was introduced by Tim Cook, who said lots of very kind things about John Ternus.
00:49:42 ◼ ► And then John Ternus immediately said, Tim Cook is one of the greatest business leaders of all time.
00:50:08 ◼ ► It also said, one of the hallmarks of Tim's tenure has been a deep thoughtfulness, deliberate,
00:50:12 ◼ ► deliberateness and discipline when it comes to financial decision-making of the company.
00:50:17 ◼ ► And I want you to know that is something Kevin and I intend to continue when I transition into the role in September.
00:50:38 ◼ ► Like, obviously, I suppose you're going to say, I think maybe people have been reading into this.
00:50:51 ◼ ► The whole point of the CEO transition is to let the business community understand that it's all being done carefully and responsibly and everything's going to be okay.
00:51:01 ◼ ► Which, again, remember how it happened the last time, where it was sudden and shocking, and Tim Cook was thrown into it, and they had to scramble.
00:51:23 ◼ ► He's chosen this guy to succeed him, and he's saying, I'm going to uphold the values of the greatest business leader of all time.
00:51:32 ◼ ► And Tim is like, John is, I mean, Tim also, importantly, does say John is great, and he's going to, with some great detail about, John Turner's very similar in his other public statements.
00:51:42 ◼ ► But that's what they're trying to do here, is just make everybody feel okay about it, like it's going to be fine.
00:51:57 ◼ ► There were surprises that I find that interesting, because sometimes the call, sometimes the charts are interesting and the call is boring.
00:52:08 ◼ ► So CFO Kevin Parrick said, as we move ahead, we are no longer providing net cash neutral as a formal target, and we will independently evaluate
00:52:19 ◼ ► Now, to translate this, previously, Apple had pledged to have less of a cash reserve, because they were just sitting on a mountain of money.
00:52:30 ◼ ► In 2018, Luca Maestri, the CFO at the time, announced that Apple's policy was to become net cash neutral over time.
00:52:39 ◼ ► So essentially, what they had done is they had built up a cash hoard of, I think, $163 billion at its highest point of just cash, net cash.
00:52:59 ◼ ► And I think you could look at the narrative and say that in some ways, Apple's culture was to bank the cash, because Apple had been on the brink of bankruptcy, and they never wanted to be that way again.
00:53:11 ◼ ► And they decided, and I think part of it, too, was how do we make Wall Street happy with us?
00:53:16 ◼ ► How do we make Wall Street happy when we know that the iPhone is going to hit some pockets of turbulence?
00:53:25 ◼ ► Because they reinstated the dividend, and then with this policy, they said, we're going to be net cash neutral.
00:53:32 ◼ ► So if we've got $100 billion in cash coming in, and we spend $80 billion, and we have $20 billion left over, what they're basically saying is, what we're going to do is use that $20 billion to buy back stock, which raises the price.
00:53:53 ◼ ► Or dividends, which is they literally send you money for each share of Apple stock you have.
00:54:08 ◼ ► And I imagine that this, like the net cash neutral idea was, it wasn't every, it was post anything they were assuming they might want to use money for, right?
00:54:19 ◼ ► Like, if they were going to make an acquisition, they have to have cash around to do that.
00:54:26 ◼ ► But yes, I think, and I think net cash neutral over time, over time did a lot of work there.
00:54:32 ◼ ► And they always had, they were starting from a position where they had an enormous amount of cash.
00:54:39 ◼ ► I don't know how much cash they have now, but they still have an enormous amount of cash.
00:54:48 ◼ ► And yeah, the idea was that they wanted enough to do work, but they also didn't want to have this huge cash hoard laying around.
00:54:54 ◼ ► And what Kevin Parrick announced last week is they're not going to do that because they want more flexibility.
00:55:13 ◼ ► It could be as simple as we found the net cash neutral policy to be a little too inflexible for us.
00:55:20 ◼ ► And we'd like a little more breathing room to take a little money here and there, take a little debt out here and there.
00:55:35 ◼ ► We, we've, we've shown that we are going to do stock buybacks and we are going to do dividends.
00:55:48 ◼ ► And they, they pointed out the board has already approved a hundred billion dollars in stock buybacks in the future.
00:55:53 ◼ ► And that's an amount they haven't even gotten through the last board approval of stock buyback money.
00:55:57 ◼ ► So they, they are, they are approved to spend a lot of money buying back stock and raising the stock price as they go.
00:56:05 ◼ ► I do wonder if the real motivator here is they would like to have more cash on hand because they are in now in an era
00:56:22 ◼ ► And that, that, that cash hoard might actually be very good in terms of strategy to buy other companies and not even buy other country companies, buy or invest in other companies.
00:56:37 ◼ ► You see some of that now where there are these high valuation AI companies, especially where you can have a strategic partnership or investment where,
00:56:53 ◼ ► Or if there's like a bubble pops and there's a, an AI company that's in trouble that Apple says, like, we've got a lot of cash, we can help you out.
00:57:05 ◼ ► They may realize they need to build out more data centers or whatever, and they would have the cash to do that.
00:57:10 ◼ ► Um, I had the idea and this is just, I made this up, but I'm saying, you know, if they're worried about things like the RAM shortage or their limit on, um, nodes at TSMC.
00:57:23 ◼ ► One of the solutions is you go to one of your providers and you give them a giant bag of money and you literally say, it's a shame that you don't have another factory making cutting edge nodes.
00:57:38 ◼ ► And then we want the output of that factory for the first five years or whatever it is.
00:57:43 ◼ ► I don't know what the details are, but that idea or RAM, you go to the RAM manufacturers and they're like, you know, we're just making too much RAM here for AI.
00:57:50 ◼ ► We can't, you know, it's very expensive and you could, and again, it's very expensive to do this.
00:57:55 ◼ ► You could hand them a bag of billions of dollars and say, build us a factory where you will make RAM for us.
00:58:05 ◼ ► And the way, the calculation you make there is we're going to, by putting the money in upfront, you're guaranteeing yourself a price over time that will actually be a good deal for you in the end.
00:58:19 ◼ ► There may be opportunity for stuff like that where they can spend the money because they've got the cash and some of their competitors might have a harder time with that.
00:58:29 ◼ ► So I wonder if that's what part of what they're thinking too, is just like, there are a bunch of things about the Apple's business that right now are a little, there's a little more uncertainty than normal.
00:58:39 ◼ ► And one of Apple's superpowers, if not its greatest superpower right now is that it's a cash generation machine.
00:58:51 ◼ ► And that cash can be given back to the shareholders or put into dividends and given back to the shareholders directly.
00:59:01 ◼ ► It could also be used to improve the business, which would also make the shareholders happy.
00:59:17 ◼ ► But I mean, it could be something minor, but yeah, it strikes me that what happened is they're like, we, what if we want to do this?
00:59:28 ◼ ► And the way they messaged it, because remember, they're talking to the financial community.
00:59:33 ◼ ► We're dropping the net cash neutral target because we might want to manage those independently, but don't worry.
00:59:43 ◼ ► We're still going to do dividends, but we're not going to focus on being cash neutral over time.
00:59:53 ◼ ► A lot of ink has been spilled over the last couple of months about the huge capital expenditure of Apple's competitors and that Apple is in a position where they've not been doing that.
01:00:09 ◼ ► Actually, we would also like to spend some of that money on stuff for the same reasons.
01:00:13 ◼ ► But maybe now they're like, OK, we're at a point now where we may need to start doing some of these things, whatever they might be.
01:00:26 ◼ ► Apple pays companies to build factories for them in China and it pays TSMC and it pays RAM suppliers.
01:00:53 ◼ ► It's more of the moment that we're in in that they may have desire for flexibility that they've otherwise handcuffed themselves from being able to do because of a pledge.
01:01:14 ◼ ► They had some conversation about what if we did a strategic investment or an acquisition.
01:01:18 ◼ ► And they're like, you know, right now we would have a problem with that because we're giving away too much of our cash.
01:01:25 ◼ ► Not necessarily that they are going to make an acquisition even, but that they want to be in the position where if it happens, they don't get...
01:01:33 ◼ ► Like it would be a shame if you're Apple and you want to make a vitally important strategic decision and you can't do it because you spent that money on stock buybacks, right?
01:01:55 ◼ ► I don't even think I really believe this, but I was saying maybe that was a Tim and Luca thing.
01:02:10 ◼ ► There was the iPhone revenue had kind of flattened and there was a narrative that like the iPhone was over, which is silly in hindsight.
01:02:17 ◼ ► But that was that idea of like, well, it's only incredibly profitable, but it's no longer going to be explosively a growth.
01:02:38 ◼ ► They're not saying we're eliminating the dividend and we're not going to do any stock buybacks.
01:02:41 ◼ ► But they are saying we're going to kind of unhook that from this goal of being cash neutral.
01:03:10 ◼ ► For the June quarter and what's embedded in the guidance that Kevin went through earlier, we expect significantly higher memory costs.
01:03:23 ◼ ► And then, where we don't give color beyond June, I can tell you that beyond the June quarter, we believe memory costs will drive an increasing impact on our business.
01:03:37 ◼ ► So, this is a long way to say we're running out of the benefit that we had, of the memory that we already had.
01:03:58 ◼ ► So, on the call, Tim called out that the Mac Mini and the Mac Studio are seeing increased demand due to their AI usages.
01:04:04 ◼ ► And then, actually, later that day, Apple stopped offering the 256 gigabyte storage for the Mini.
01:04:21 ◼ ► So, you know, it's like Apple are now saying that, essentially, as we move forward through the year, something's going to change.
01:04:44 ◼ ► They raise the price by eliminating low tiers like they literally did later that day with the Mac Mini, right?
01:05:07 ◼ ► They can change the prices on the products or they can keep some base prices around and change the upgrade prices to be more in order to get more money out of it to offset the cost.
01:05:25 ◼ ► Their margins are not enormous because they know that they can eat margin and give that money back to people.
01:05:35 ◼ ► So, but they're not immune from the RAM price thing, and they're going to get bitten by it.
01:05:41 ◼ ► And they've done – what we've seen – I feel like what we've seen is very Apple, which is that they built in cushion, but the cushion can't last forever.
01:05:51 ◼ ► And then also – and maybe this is related to what we talked about, about their cash – but they also hate being buffeted around by markets like this.
01:06:11 ◼ ► So, is the cash they want on hand for what I was saying earlier, which is, are there ways that we can spend money to guarantee us access to RAM and processors because we don't like where we are right now in being at the whims of the constraints of the suppliers of our RAM and processors?
01:07:05 ◼ ► Essentially, they blame themselves that Apple's saying that they did not correctly forecast demand for the iPhone and the Mac.
01:07:13 ◼ ► Specifically, talking about the MacBook Neo, Cook said, we were very bullish on the product line before announcing it, but we undercalled the level of enthusiasm that would be with it.
01:07:24 ◼ ► It is a side effect of the iPhone 17 doing so well because it's on an advanced node at TSMC and they have to estimate what they need, right?
01:07:47 ◼ ► But if you're above the upside, you end up in a situation where there's no more capacity for them.
01:07:55 ◼ ► And so, yeah, this was a great iPhone quarter, but they said they could have sold more.
01:08:03 ◼ ► And then on the Mac side, I think it's interesting they talk about the Neo because we think about it and think about them using that binned chip.
01:08:28 ◼ ► You know, they're telling the story about undercalling the enthusiasm for the MacBook Neo, but I don't know what that means in terms of what was the constraint there on the MacBook Neo.
01:08:39 ◼ ► Was it because we've been all kind of assuming that this chip is binned and it's just sitting somewhere.
01:08:49 ◼ ► Because, like, if those chips were already made by TSMC, there can't be a supply constraint on there.
01:09:02 ◼ ► So on the call, Cook said that Apple will be applying for a refund of the tariffs that they had to pay to the U.S. government, but they will take that money and invest it into U.S. manufacturing.
01:09:22 ◼ ► And in the middle of the call, Kevin Parrick was like, now I'd like to throw it to Tim, who has a statement about tariffs.
01:09:28 ◼ ► Like, in the middle of his answer, he throws it to Tim, who says, I'm going to make a statement here about tariffs since you asked, which they didn't kind of didn't, but they were obviously waiting for an opportune moment to make this statement.
01:09:40 ◼ ► And the statement was, we are following standard procedure on tariff refunds because it turns out that these tariffs were ruled illegal.
01:10:05 ◼ ► government has to pay a billion dollars to Apple for tariffs, Apple will add that billion to their commitments, their existing commitments to U.S.
01:10:13 ◼ ► And that is your political statement of, don't worry, don't get mad, don't claim that Apple is trying to steal money from the American people.
01:10:24 ◼ ► And it's such a, it's just a really smart move because it's Apple just saying, you know, you can't be mad at us and we're reinvesting it in America, which completely defangs the argument about, like, Apple is, this profitable company is stealing money from the American people.
01:10:42 ◼ ► Apple is saying, no, no, no, we'll reinvest all of your tariff money in our initiatives.
01:10:53 ◼ ► And then your line of the call, Cook says, net, net, I'm over the moon excited about India.
01:11:08 ◼ ► Basically, Apple's excited about the prospect of India becoming the next China from a buying perspective for them, as well as from a manufacturing perspective.
01:11:16 ◼ ► One of the last questions, which was from Aaron Rakers from Wells Fargo, is about asking Tim to play the hits of being bullish on China and India.
01:11:32 ◼ ► He listed all the ways that they've been doing great in China and pointing out, I think, importantly, that it's not just that the iPhone was top selling in urban China, but the Mac mini was the top desktop in China and the MacBook Air was the top laptop.
01:11:48 ◼ ► And then he said something he said before about India, which is, it's the second largest smartphone market.
01:11:55 ◼ ► And despite being there for a long time and doing pretty well, Apple's share in India is modest.
01:12:04 ◼ ► So from Apple's perspective, they have an enormous amount of growth potential in India.
01:12:23 ◼ ► After he did some, he worked on a spreadsheet, he saw where it was net-net, and then from there, it placed his position above the moon.
01:12:38 ◼ ► There might be something healthy in the fridge that you could be making, but you want a good meal, and most of all, you want it fast.
01:12:49 ◼ ► With Factor, you can hit your nutrition goals this season without the planning, grocery runs, or cooking.
01:12:55 ◼ ► Factor has meals built around your goals, whether that's weight loss, overall nutrition, more protein, or GLP-1 support.
01:13:02 ◼ ► And for strength and workout recovery, you can check out Factor's Muscle Pro collection.
01:13:10 ◼ ► There are over 100 rotating weekly options meals, I should say, including globally inspired flavors like Mediterranean and Asian, so there's always something new to look forward to.
01:13:22 ◼ ► Factor shops, preps, cooks, and delivers straight to your door so you have more time for everything you love this spring.
01:13:29 ◼ ► And that setup problem idea I know is important in the snail household because, you know, it's sometimes just about what people have access to, and I know that your family very much enjoys the Factor meals, Jason, for that reason.
01:13:40 ◼ ► Yeah, I mean, Lauren will take them to work with her because we both have this issue, right?
01:13:47 ◼ ► She's got to commute and she's got to get lunch and to go outside and walk to the store and get something or have a leftover or whatever.
01:13:56 ◼ ► You know, when the Factor meals are here, she can just take that with her and in a couple of minutes, she's got her lunch and she can continue to do whatever she else needs to do in her job.
01:14:05 ◼ ► And then we also get them for my mom so she can supplement what she doesn't really like to cook anymore and cooking for one is hard.
01:14:12 ◼ ► And so we can get her some pre-made meals that are very easy for her to heat up and eat.
01:14:16 ◼ ► Head to factomeals.com slash upgrade50off and use the code UPGRADE50OFF to get 50% off and free daily greens per box with new subscriptions only while supplies last until September 27, 2026.
01:14:43 ◼ ► Mark Gurman is reporting on some new features that Apple is planning to add to the Photos app at WWDC this year.
01:15:09 ◼ ► So to extend an image, this would essentially let you generate imagery around the photo to make it larger.
01:15:17 ◼ ► So for example, if you have a photo that you would like to make a lock screen image, but say, so if you're a family and the lock screen image is too close and they get covered up by the clock, you could extend it to make sure it fit correctly.
01:15:34 ◼ ► I had a picture of Idina and Sophia, but when I put it into the lock screen, the clock was over their face.
01:15:40 ◼ ► And I wanted there to be kind of space above so they would be kind of more towards the lower third, lower half of the lock screen.
01:15:50 ◼ ► And so I used Photoshop and their generative fill and it was that they were standing in front of a tree.
01:16:01 ◼ ► And I remember Stephen Hackett wrote a blog post about this years ago that I'll find and put in the show notes asking Apple to do exactly this.
01:16:09 ◼ ► Because Apple has a thing that says extend, like you can extend the wallpaper, but it doesn't do a very good job.
01:16:20 ◼ ► So this is, I think, a really clever way of letting you kind of frame an image exactly the way that you would want.
01:16:27 ◼ ► I can't think of any other use case other than making a wallpaper, but I'm sure they'll try to show us some.
01:16:34 ◼ ► I mean, that's a nice, the idea, and yeah, Photoshop does this and it does a pretty good job to do this kind of like AI extension where it's looking at the contents at the edges and it's trying to extend.
01:16:53 ◼ ► And so if you've got an engine that can look at the content at the edges and the content of the photo so that you can have a photo that is placed properly, even though it wasn't quite framed right, I think this is a fun feature.
01:17:08 ◼ ► Like I've used it for a few custom thumbnails on incomparable episodes where I wanted to use an image from a movie we were doing and all the movies are widescreen and all the podcast artists square.
01:17:19 ◼ ► And it's like, you know, can I just, it's, it's the people in the Soylent Green factory.
01:17:35 ◼ ► And it solved a problem for me of like the pipes that are going up, go a little further up.
01:17:48 ◼ ► And in this case, it's Apple's UI saying, I, you, you want to use this photo, but you can't because it's not quite the right shape.
01:18:03 ◼ ► Apple intelligence powered editing to improve lighting and image quality and then reframe.
01:18:19 ◼ ► A photo of a car, for instance, could be adjusted from a front facing view to emphasize the side.
01:18:32 ◼ ► Like if you have more data from both cameras, maybe you can do more bold things and still kind of get them somewhat based in reality.
01:18:46 ◼ ► I mean, there's amazing things you can do with imagery to calculate ways of moving things.
01:18:54 ◼ ► Yeah, it's like, and then I, my assumption is this isn't like, oh, make your Vision Pro photos better.
01:19:10 ◼ ► But we're not taking spatial photos for our Vision Pro, especially when, as we've mentioned on this show, they have an algorithm now that is so good to make any photo spatial.
01:19:30 ◼ ► But again, it's like with all of these things, you have to pre-think that this is what you want from the image.
01:19:38 ◼ ► Where if you're editing, like you're reframing an image, it's because it wasn't right, but you had to have made that decision before you take the photo.
01:19:52 ◼ ► It's like, I'm interested to see how they can sell to me this idea of me using the spatial photos I don't currently take, you know, like for something later.
01:20:04 ◼ ► Mark is also reporting that Visual Intelligence will be receiving some big upgrades at WWDC.
01:20:15 ◼ ► It's likely to become branded as Siri mode and just live in the camera app now, rather than only being launched from camera control or the control center.
01:20:24 ◼ ► You'll be able to choose the Siri mode from the selector at the bottom of the UI, which I hope that they make better if they're going to put more options in there, to be able to point your phone and ask questions.
01:20:35 ◼ ► Basically, the way Mark describes it is it's like all the features that we currently have.
01:20:42 ◼ ► Do a reverse Google image search, and Apple will be adding some features like scanning nutrition labels, adding contact information.
01:20:48 ◼ ► This mode will show an Apple Intelligence logo instead of the shutter button in the camera app.
01:20:55 ◼ ► I just think that if you're going to do this, you're going to make it way better than the way it sounds here.
01:21:13 ◼ ► Like, I don't, like, I can imagine, I imagine these features being useful on a product that is already out in the world, right?
01:21:27 ◼ ► But at the moment that I'm taking my phone out of my pocket, I'm searching for this thing in another way, like I've been doing for decades at this point.
01:21:36 ◼ ► So, like, the idea of it being persistent feels good to me, but, like, I just, I don't know what I'm using this for.
01:21:48 ◼ ► Like, can I take a picture of this and it will show me the Amazon page so I can go buy that product.
01:21:58 ◼ ► Like, if you see somebody with a, you know, it's like everybody was looking up, like, what shirts and pants John Turnus and Tim Cook were wearing.
01:22:05 ◼ ► Like, if you're like, what is that shirt and you take a picture of it and it says, oh, you can buy this shirt here.
01:22:18 ◼ ► I think the problem is we all would need to change the way we think of how we use our phone and the camera to have it be a data gatherer and not just a photography thing.
01:22:43 ◼ ► And fortunately, they put a QR code reader in the Photos app that if it sees a QR code, it puts up a thing that says, this is a QR code.
01:22:53 ◼ ► So I think the challenge in part is just recalibrating what we think our camera is for.
01:23:02 ◼ ► And they have to, if they want to make this a thing, they kind of have to start getting it out there, right?
01:23:09 ◼ ► Like if they're going to try and build products around this, they want people to try and get used to it and they need to start developing it in some way and they can just put it in the camera app.
01:23:21 ◼ ► Like I just want it to be more flashy or interesting than the way it's being described here.
01:23:43 ◼ ► Like if I open my camera and I take it out and I'm looking at something, like the QR codes, like maybe it's not practical because of the amount of ML effort required.
01:24:02 ◼ ► Like, I'm not sure this is the use case that maybe is what would work the best, even if it's the use case that is doable today.
01:24:11 ◼ ► And I think that that's something that Apple should embrace is how do I make people want to use this feature?
01:24:21 ◼ ► It's like funny that you would put it in the camera app maybe to make it more visible when I have an actual hardware button on my phone that I just need to long press and it will open it.
01:24:31 ◼ ► So like, I don't, I don't know if putting it in the camera app is then going to make me go like, oh, I should use this because I haven't been.
01:24:38 ◼ ► In this report, Mark added a line at the end saying, quote, the changes come ahead of the iPhone 18 Pro this fall, which will include some of the biggest camera hardware upgrades in the lineup's history.
01:24:49 ◼ ► Wasn't any more data than this, but there information, I should say, but there has been previous reporting of a bunch of different things, including variable aperture on the Pro line this year.
01:25:00 ◼ ► I am curious to see what this will end up being and how much more painful it will make the camera system that will be on the folding phone because it's not going to be as good as the Pro and that's right.
01:25:11 ◼ ► And then speaking of the folding phone, Felipe Esposito at Macworlds is reporting that Apple has decided on the name iPhone Ultra for the upcoming model and that this branding will also come to future Mac models, most likely the touchscreen laptop.
01:25:29 ◼ ► While I understand it and I like the name, it's still, to me, everything that we think we know about the folding phone, it just doesn't match with Ultra for me because it isn't the best one.
01:25:51 ◼ ► We can question names and then they redefine them and everybody kind of accepts because they kind of these tags don't mean anything in a way other than how Apple defines them.
01:26:06 ◼ ► What strikes me about Ultra as a name is that you're using that name because you want to differentiate it from the Pro.
01:26:29 ◼ ► In the short term, I can understand how you might want to actually have a line above the MacBook Pro.
01:26:35 ◼ ► It might actually solve one of your problems of having those kind of, like, low-end MacBook Pros.
01:26:53 ◼ ► I understand that, like, if these touchscreen OLED laptops are coming out, that they're going to be expensive.
01:27:00 ◼ ► And that maybe there even is a reluctance to replace the MacBook Pro at the current price slot because you can't really hit that price.
01:27:08 ◼ ► But, like, are you committing Apple to having four laptop spots going forward instead of just having the Ultra be just the high-end Pro, and then, you know, over time it creeps down the line?
01:27:24 ◼ ► It seems, are they planning something where the MacBook Pro looks more like the iPad Pro and Air, where there's a very expensive high-end model that is great but is expensive?
01:27:43 ◼ ► And then there's a lower-end model that's actually still Pro and still pretty great and still does all those things.
01:27:54 ◼ ► That's what gives me pause about iPhone or about MacBook Ultra is, okay, yeah, you take the M6 with the touchscreen and the OLED and you call that Ultra.
01:28:07 ◼ ► Is the MacBook Ultra and the MacBook Pro, are they just separate at that point and the OLED only goes in the high-end model ever?
01:28:23 ◼ ► Or does the Pro get diluted to the point where, like, the Pro is more just those low-end models that aren't that interesting?
01:28:31 ◼ ► And then you've diluted your MacBook Pro model, which is, it's a pretty powerful product line that a lot of Pro users spend a lot of money on.
01:28:42 ◼ ► I'm not sure I buy that as a, not saying about this report, it's like, that doesn't sound like a good move to me in a way that calling the phone Ultra, like, fine, whatever.
01:28:52 ◼ ► The only way I could imagine making it work is if you gave it what I think is not a great name of the MacBook Pro Ultra, and it's only for the time until they merge the lines, right?
01:29:04 ◼ ► And so it's like, you have it as this really expensive one with the touchscreen in it until all the MacBook Pros get touchscreens, and then you can kind of just let that one go away.
01:29:14 ◼ ► Because you've got to give, because I do believe, as we spoke about on the show before, that is going to sit at a price point above the MacBook Pro.
01:29:44 ◼ ► Like, do you, do you, is the plan that you're going to make MacBook Neo, MacBook Air, MacBook Pro, MacBook Ultra, if that's not your plan into the long term, then don't do this.
01:29:59 ◼ ► Because you risk doing harm to MacBook Pro, when, if it's just going to be for a year or two, you know, just, just sell both versions and deal with it.
01:30:28 ◼ ► They are a design and development studio based in Vancouver, Canada, and they have been shipping iOS and Android apps for over 15 years.
01:30:36 ◼ ► Their clients are growing tech companies that care about mobile but do not have an in-house team to build something great.
01:30:43 ◼ ► Steam Clock works for companies to level up their apps so they can go from it's holding us back to it's pulling its weight.
01:30:49 ◼ ► Some of their clients discovered the hard way that Vibe Coding Your Way to the App Store is not a good product strategy.
01:31:00 ◼ ► It's that they'll help you figure out the right approach and give you an honest read on your situation before you commit to anything.
01:31:07 ◼ ► Their client apps have been downloaded over 10 million times and they've helped five of their clients through acquisitions.
01:31:14 ◼ ► If you're building something and need a mobile team that cares just as much as you do, Steam Clock is where you start.
01:31:37 ◼ ► Just for fun, imagine if John Ternus came to you wanting your suggestion on acquiring a company that will make a splash for him as the new CEO.
01:31:48 ◼ ► It doesn't have to be massive in keeping with Apple's long-standing tradition of acquiring smaller companies from time to time.
01:32:04 ◼ ► I am convinced Apple has tried to buy Procreate and it has not worked for them because they bought Pixelmator, right?
01:32:10 ◼ ► Procreate is, I think, the most popular iPad app and people love that app and Apple loves them.
01:32:31 ◼ ► I think Sonos are also their company that's not necessarily what they once was, so they might be a bit more purchasable than before.
01:32:49 ◼ ► That you would be benefiting from all of their knowledge on soundbars and getting their soundbars to speak to other speaker products.
01:33:08 ◼ ► So it's hard to know what companies, like there are products and then there's like, do you want the whole company and all of that?
01:33:20 ◼ ► I think if you're talking to John Ternus about his desire for Apple to play more in the home, I think Sonos would be a good choice, especially if you can get them on the cheap because they've had a bunch of trouble.
01:33:32 ◼ ► Because I think that that line of products would make perfect sense as either as Apple products or literally as Sonos products, like the Beat stuff that is run by Apple and that they're also building HomePods on the side as well.
01:33:45 ◼ ► Either way, I think having Apple be more in that market is a good idea that feels like a fit to me, honestly.
01:33:53 ◼ ► And if we want to see Apple do more in the home, one way you can do it is through purchases.
01:34:16 ◼ ► Like Aqara is interesting, but they're a Chinese, they're like a privately held Chinese company.
01:34:28 ◼ ► Um, even though they're, they do some interesting stuff and maybe there is something there.
01:34:34 ◼ ► Um, Ecobee, similarly, again, it's just a niche product of the, of the, um, smart thermostat, but it would add another piece to Apple.
01:35:16 ◼ ► Companies and say, maybe that's just a company we could acquire and add it to the portfolio that John Ternus is maybe trying to build.
01:35:28 ◼ ► I would imagine, like, did they sniff around affinity before it got bought by, um, by Canva?
01:35:36 ◼ ► Because that would have been maybe a nice product to have that would have allowed them more of a direct competition with Adobe than what they've got.
01:35:46 ◼ ► Um, because those, those apps are, are very much, um, duplicates of what Adobe offers basically.
01:36:08 ◼ ► Um, but if there are, if there's value out there that helps you get, which is why I focus on home is they've struggled and haven't really had much of a home strategy.
01:36:19 ◼ ► Could you make some tactical purchases that give you a home strategy or at least help lift your home strategy?
01:36:24 ◼ ► The, the, the challenge with some of these, like, we could talk about, like, home networking, but the challenge there is that those companies already got snapped up.
01:37:08 ◼ ► Those, I, I would say, right now, I would say I'd be interested in making some tactical investments, not necessarily even out-and-out purchases in AI companies.
01:37:42 ◼ ► And if it comes down to it that we, you know, we want your stuff at Apple, we'll, we'll, we'll make you all rich beyond your wildest dreams and we'll buy you.
01:37:50 ◼ ► I would do a lot of that kind of like seed money, get started, have a, have access to smart people who are building next gen AI stuff.
01:38:02 ◼ ► Ed writes in and says, if I remember correctly, when Tim Cook took the helm as CEO, the product roadmap was seemed to have been set for several years.
01:38:11 ◼ ► It seems like it was maybe around the third year before we really see Cook's influence on the company with products like the Apple Watch.
01:38:27 ◼ ► Maybe some new HR or corporate policy like Cook's, uh, Cook with the charity matching, that kind of thing.
01:38:38 ◼ ► Like there will be things that change the first month he's there and some of those may be visible.
01:38:43 ◼ ► And there are things that will be, there'll be years of debate about whether that's really a Tim Cook thing or a John Turner's thing.
01:38:51 ◼ ► Uh, it will be funny because there'll be new hardware and people will say, well, is that a Tim Cook thing or a John Turner's thing?
01:38:59 ◼ ► And it's like, well, before John Turner's was CEO, he was the guy in charge of the hardware development group.
01:39:11 ◼ ► It's like, I think Apple's going to start painting the picture of Turner's in charge from September this year.
01:39:17 ◼ ► Like I think he's going to play a significant role in the introduction of the folding iPhone.
01:39:28 ◼ ► And this is like the difference between Turner's and Cook is it's, I think, going to be harder to discern where his influence begins because he's already been influencing the things that we see anyway, which is the products.
01:39:42 ◼ ► And, you know, maybe like in a few years time, there will be stuff that he has driven through that otherwise he was getting blocked on or would have got blocked on, but we're not going to know.
01:39:55 ◼ ► I don't think we're going to have this like, and I don't think there's going to be all those questions of like, when's Ternus's revolutionary product going to appear?
01:40:11 ◼ ► Also, a lot of this, I mean, sorry to Ed, I'm not, I'm not trying to pick on Ed here, but I'll say a lot of this is nonsense, right?
01:40:25 ◼ ► I would say the closest you could come is, is approving a project that happens or approving that a product ships or, or killing a product.
01:40:34 ◼ ► So it doesn't happen or whatever those big decisions, like Tim Cook is responsible for Project Titan and for killing Project Titan.
01:40:54 ◼ ► There's the vagaries of like what's happening in the outside world, what they're capable of doing on the inside.
01:41:01 ◼ ► So I think there'll be policy changes and I'll be, I think there'll be a few big things where we'll say that sounds like it was, or there'll be reporting as like, this was always his baby.
01:41:09 ◼ ► This home strategy, you know, whether it works or not, like this was always his baby, that'll, that stuff will come out.
01:41:25 ◼ ► Sam wrote in and said, a lot of the coverage of Tim Cook announcing John Turner says his replacement, especially from people who've taken particular issue with some of Tim Cook's decisions,
01:41:40 ◼ ► But do we actually know enough about John Turner to think that he's not going to be maybe even more money focused than Tim or make even more decisions that developers and those passionate about Apple will take issue with?
01:42:04 ◼ ► Not all the details, but details because he's been working on hardware for a very long time, not just the last five years, either a very long time.
01:42:19 ◼ ► And I think it gives him a perspective that will, um, that will serve Apple well on a hardware side.
01:42:25 ◼ ► But as for the rest of it, I don't think the argument is Tim's going to, or, uh, John's going to be more focused on money than Tim or something or, or treat developers worse than Tim and all that.
01:42:37 ◼ ► I would say what, what I would flag is the, the danger is that if John Turner is less interested in the money than Tim Cook is, that he will delegate it to the money people and that the money people, Kevin Parik and the rest may make decisions that we don't like.
01:43:02 ◼ ► And part of his job, and this is going to be, I would say the most difficult part of his job is if your money expert, your CFO says, yeah, we need to do this thing, John, cause it's a lot of money.
01:43:21 ◼ ► The other option here, it's not even, you're saying the other option here is to do a thing that makes us less money.
01:43:41 ◼ ► And, and he needs to be, I mean, first off, I don't know that this, the money people at Apple actually work that way, uh, at that high level, hopefully you are thinking big picture too, but it's the CEO's job to think big picture.
01:43:53 ◼ ► So that's going to be a challenge, but I would say that's the greater danger is not that he's coming in and saying, let's screw those developers, whatever.
01:43:59 ◼ ► I think it's, it's far more likely that he's focused on this stuff and he delegates that to people and it's, it's, who do you delegate to and what do they think and what do you allow them to do?
01:44:09 ◼ ► And do you as the CEO have the ability to come in and say, I actually, the way you're looking at this is not how I want you to look at it because under, you know, under me as CEO, I want to look at this a little bit.
01:44:36 ◼ ► And what's that, what's the classic, I think it's a Steve jobs line of like Microsoft, let the salespeople be in charge.
01:44:41 ◼ ► Like don't let, don't let people who don't care about Apple, but only care about their little slice of it, make decisions that define Apple.
01:44:55 ◼ ► If you would like to send in a question for us to answer on a future episode of the show, please go to upgradefeedback.com and you can send your question in there along with any follow up you might have for the show.