June 9, 2025 • 40 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss Apple's software and AI goals as the company kicks off its annual Developers Conference in Cupertino. Plus, AI and tariffs top the agenda for China-US trade talks as discussions get underway in London. And, Warner Brothers Discovery splits its streaming and cable businesses.
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live
from coast to coast with Caroline Hide in New York
and Vlow in San Francisco.
Speaker 2 (00:22):
Live from New York, This is Bloomberg Technology Coming up.
Apple kicks off its annual Developers conference in Coupatino. Will
the event help ease or inflame? It struggles with artificial intelligence?
Plus the US and China trade talks get underway, tariffs,
rare earth minerals, and advanced technology topping the agenda, and
Warner Brothers Discovery separates into two publicly traded companies, splitting
(00:44):
its streaming and cable businesses. But first, what's happening over
the course of Apple and we head straight out to Kopatino,
of course, where.
Speaker 3 (00:53):
Our own led lud and Nudlow is standing by. We're
up for tens of a percent.
Speaker 2 (00:57):
Look, there is a lot of anxiety on investors' minds
at the moment, ed, and largely it's about AI.
Speaker 3 (01:02):
Will that get results today?
Speaker 4 (01:03):
Yeah, it's one of those situations where like expectations are
high that Apple will tell us something about AI strategy,
but actually it's highly unlikely to be the case. Right,
That's not the point of WWDC. You know, the main
thing with Mark Gumman's reporting in particular, I think, is
about third party developer access to Apple's llms. Right, If
you think about the work going on inside of open AI, Microsoft, Gemini,
(01:26):
at Google, a lot of the innovation is built on
that third party developer front. And for Apple it's critically important,
just as you look at the history of the App
Store and in its services offering, that's built on a
history of developer innovation. And so right, the stocks down
eighteen percent year today, it is underperforming its peers in
that context. But that trading year today has largely been
(01:49):
on the trade or tariff risk context, not about what's
happening with AI.
Speaker 5 (01:52):
And I think the point our colleagues are making on the.
Speaker 4 (01:54):
Bloomberg terminal this morning is well, what if today's the
day it changes? Because one year ago WWDC it was
that same high expectation and people on the AI side
didn't get.
Speaker 5 (02:03):
What they want. But Mark Gumman's good all the details right.
Speaker 2 (02:05):
He does at Ludlow hold on for a moment because
Mark German, who has broken so much news ahead of
what's expected from Apple today, joins us now in La
and Mark just walk us through whether any of that
AI well misstep can be walked back and can be
indeed invigorated today.
Speaker 3 (02:22):
Do you think they're going.
Speaker 6 (02:24):
To try to tell a good story on AI? Right,
They're going to come out full force, talk about how
they're different, talk about how they're highly integrated, talk about privacy,
talk about how the other companies are stealing your data. Right,
But the reality is they're not going to show much
of substance when it comes to AI. The big thing
is they're going to open up their Apple Intelligence they're
(02:46):
called the AFM or the Apple Foundation models to third
party developers, so developers will able to use Apple's AI
technology if they want to to build their apps and
build their features. There's going to be an upgraded version
of their shortcutsapp for con to allow customers end users
on the iPhone, iPad and Mac to create shortcuts or
little widgets and features themselves using AI. The biggest thing
(03:09):
when it comes to AI is that translation.
Speaker 7 (03:12):
Right.
Speaker 6 (03:12):
This is something Google has had for a couple of
decades now is now going to be a very core
system element, so you'll be able to live translate a
phone call you're speaking to someone in another language, you'll
be able to hear that back in your native language. Likewise,
in text messages, there's going to be changes in the
messages app, new backgrounds and polls to better compete with WhatsApp.
(03:35):
But the biggest announcements today will be around the user interface.
They're coming out with a new liquid glass digital material,
a new look for all of their operating systems across
all of their devices, and then the iPad getting a
big productivity lift to make it more usable like a Mac,
particularly for things like multitasking and PDF management.
Speaker 4 (03:58):
I think it's seen lag you by out of a
community right mark that the move from version to year
version labeling for the operating systems.
Speaker 5 (04:05):
That's kind of helpful.
Speaker 4 (04:06):
But when I read you're reporting around liquid glass, it's
almost as if there's a roadmap as well, down the
road to future generations of hardware.
Speaker 5 (04:15):
Could you explain that bit?
Speaker 7 (04:16):
So?
Speaker 6 (04:17):
The new user interface is very glassy, lots of use
of transparency, translucency throughout the operating system, letting your wallpaper
and light shine through different user interface elements. It's very
similar to the UI or seeing on the Vision Pro.
Apple's working on a new mostly glass iPhone for twenty
twenty seven, the iPhone twenty as I'm calling it, for
(04:40):
the twentieth anniversary of the iPhone, and so you're going
to see that hardware software really make it difficult to
understand where it begins, where it ends, more of a
unified product experience things that Apple's had in the past.
They've done the iPhone five C in twenty thirteen. The
idea was the same molding color from the operating system
(05:01):
to color on the phone. And so this is going
to be pretty exciting. And so yes, this portends to
some major hardware developments in the coming years, but in
terms of this year and the short term, nothing that
exciting coming from Apple other than the UI, I would.
Speaker 2 (05:16):
Say, and therefore mark the age old question is is
it going to be enough to really invigorate purchasing because
there's a laundry list of issues that Apple faces. And yes,
it's about AI and indeed the product is also about
the supply chain, and it's also about regulation here in
the United States.
Speaker 6 (05:35):
I mean, for this fall, you've got the iPhone seventeen
Pro that's going to have a redesigned back, a redesigned
camera area, and anytime Apple does a design change, whether
it's for usability or just aesthetic right, that gets lines flowing,
gets people interested. So I do think the iPhone seventeen
Pro will be a success. By then the AI features
will be a bit better. They're doing some fundamental changes
(05:58):
to the large language models themselves. But if you compare
and contrast what you've seen from Google and open AI
and Anthropic over the last several months to what you're
going to see from Apple today, it's going to be
very stark and it's going to be very clear that
Apple's behind. Of course, they're going to tell a very
good story, right, They're going to market their way through this.
But if you focus on the substance, you'll see the
(06:19):
big differences.
Speaker 2 (06:20):
Well, we'll see if that can change the opinion of
the investor base right now, Mark Germ and Ed Ludlow
as well, Thank you both so much.
Speaker 3 (06:27):
Now, coming up.
Speaker 2 (06:28):
US and China, they're trying to avoid a clash as
trade talks kickoff in London with a global tech supply
chain at the heart of discussions.
Speaker 3 (06:35):
We'll have the latest. This is Bloomberg Technology.
Speaker 2 (06:48):
Talks between the US and China. They are underway in
London in a bid to restore confidence that both sides
are well living up to commitments made back in Geneva,
with the US signaling actually a willingness to remove restrictions
on exports in exchange for assurances that China is easing
limits on rare earth shipments.
Speaker 3 (07:04):
Let's bring in Bloomberg's Amorhoden, who.
Speaker 2 (07:06):
Is in London live any signal this is going well.
Speaker 8 (07:10):
Well, Caroline. They have been in talks now since just
a little bit after one pm, so a few hours
and likely we could see these talks bleed into tomorrow,
which we saw actually happen a month ago in Geneva.
It does seem like things are going well if you
take the word from Kevin Hassett, the ANC director or
the President of the United States, who talked about this
on social media after he got off the phone from
(07:31):
President Shijiingping. As you said, the two big points here
that they really want to try to diffuse the tension
in these talks has to do with China's ability potentially
to get more semiconductors things that there's been export controls
on when it comes to some semiconductors as well as
jet engine chips. The question I have is what is
going to be the red line is the United States
(07:53):
willing potentially to ease the export controls on things as
in Vidia's advanced chip that had built basically to comply
with the Biden administration export controls when it comes to China,
and then with the United States wants out of all
of this is the easing of those restrictions for the
rare earths to magnets, the materials that you need for
(08:13):
mobile phones, for the defense industry and the high tech industry.
So coming out of this, we're really going to want
to part the details of what was agreed upon.
Speaker 3 (08:20):
Of course, reading.
Speaker 8 (08:21):
Through the tea leaves, potentially we can see other matters
agreed upon at this meeting. The President did say they
discussed potentially traveling to China or Shujing pain coming to
United States on that phone call. But we should just
note it's only been four weeks since the Geneva talks
and already we had to see Beijing and Washington sit
down again to de escalate.
Speaker 2 (08:42):
A Marie, I love that you point us towards the
semiconductor resilience and indeed what's been held back from China
going forward, the H twenty is not able to be
sent now from Nvidia into China. The fact that Howard
Lutnik is there is that key.
Speaker 8 (08:58):
Yeah, absolutely, the fact that you at Howard Lutnak join
this delegation. Remember in Geneva, it was just Secretary Scott
Besson of the Treasury and USTR representative Ambassador Jamison Greer
leading that delegation. Then following the phone call between Shiji
Ping and President Trump, you at Howard Lutnik added to
the delegation. So already everyone was speculating how far potentially
(09:21):
the United States would go on export controls because export
controls squarely lie within the Commerce Department. So clearly that's
why he's at the table. Clearly these export controls are
at the table. But really the key question is what
is the US red line when it comes to those
export controls and how far are they going to go?
And then, depending on what comes out of this meeting,
what does this mean for the future, because we have
(09:42):
seen the United States ratchet up export controls administration after
administration when it comes to China in the name of
national security.
Speaker 2 (09:50):
I'm Marie Holden live from London. We appreciate it so much.
Let's get more on the global tariff impact. What to
expect from today's trade talks. Ben Harberg's with us another
capital managing partner, Core Values Alpha portfolio Manager as well,
not the capital. It's a private fund managing over two
billion dollars in assets on management. But call for US
is Core Values, which brings particular exposure to Chinese companies.
(10:10):
Then will we see a walk back in restrictions of
a semiconductors and their access into China.
Speaker 9 (10:16):
I think we will, and I think there will be,
you know, a move from these kind of broad based
numerical sanctions and terror figures to something that's more pointed
and targeted. And we've seen already those levers being pulled
on both sides. Obviously the you know, the US imposing
the export restrictions on the Age twenty chips that could
impact four and a half billion dollars of sales of Nvidia,
(10:37):
the Chinese obviously restricting the magnets which are hitting everything
from electric vehicles to smartphones. The Americans retaliating with efforts,
you know, to block the Leap one sea engines that
are being used by commacs jets as China tries to
build its own aerospace industry. So there's a lot of
I think individual sectors or even specific companies that can
(10:58):
be sanctioned or named rather than the odd based sanctions,
and so I think if they can kind of carve
their way around those and get through some of these
very sensitive areas that really acutely pain the respective economies,
then we can start to make some progress that sensitivity.
Speaker 2 (11:14):
That fine line, though, Ben is one that you have
walked and talked about a lot. When I think about
what the core Values Alpha ETF family does, particularly the
Greater China Growth ETF, you basically say on the website,
it's accessing China Alpha without compromising American national security or
American values. How do we get this agreement with China
without compromising American national security?
Speaker 9 (11:36):
So I think there are specific Chinese companies and specific
Chinese verticals that are coming in direct competition with their
American counterparts that we're seeing that on chips, We're seeing
that in the aerospace and the event space.
Speaker 7 (11:47):
We're seeing that in.
Speaker 9 (11:48):
The critical mineral supply chains, We're seeing that in telecommunications.
Those are all verticals where there is direct Chinese threat
to American superior when it comes to leadership and those
technology verticals and what we really describe as kind of
the industries of the future. There are, of course, plenty
of Chinese companies and specific business lines that don't intersect
(12:10):
with American interests, for instance, Chinese e commerce companies that
are selling into developing markets, Chinese entertainment communication businesses, and
so that line needs to be walked very carefully, and
that can be done through these negotiations and through an
investment platform that enables you to access the high alpha
that Chinas generated both domestically and through its foreign kind
(12:34):
of counterparts, where it is the leading trade partner to
over one hundred and forty countries around the world. But
also it restricts America sending its most prize technological IP
towards the Chinese as they try to compete with us
in those industries of the future.
Speaker 2 (12:48):
What's so interesting, though, is that maybe some of those
entertainment and e commerce companies that you talk of have
been embroiled and what's deemed national security threats. We think
about what Tencent was painted as in some way, ben
is this the art or lack of art around negotiation
and diplomacy. Our company is going to get dragged in
rightly or wrongly, that may not have a direct exposure
(13:09):
to national security.
Speaker 9 (13:12):
China, through you know It's its own initiative, has recognized
that these these large scale businesses, the Ali Baba's, the
ten Cents, the byteedances, the Matwons of the world, became
bloated and had too many business lines under one hood
that stretch from innocuous you know, grocery delivery all the
way to you know, to web you know, to to
(13:34):
military applications in the aerospace and defense, you know, maps,
geospatial et cetera. And so even they, I think are
starting to piece apart those businesses and start to require
that some of those are divested or spun off, and
that the kind of core assets are left alone. And
I think that will actually aid them as they work
to negotiate with the Americans, because it's easier than to
(13:55):
sanction those specific verticals rather than the entire company getting
caught up in one dragonet. So it's it's beneficial for
anti trust, anti monopoly efforts domestically in China as well
as for US trade and sanctioned talks.
Speaker 2 (14:07):
What does therefore, a portfolio with exposure to Chinese names
look like in the future for you, ben, what should
be accessed, Which bets should you be making at this time?
Speaker 9 (14:18):
Well, I think there will continue to be verticals where
the United States and China are not going to be
directly competitive.
Speaker 5 (14:23):
It's it's it's very.
Speaker 9 (14:24):
Hard for America today to build, for instance, a low
cost handset that competes with the Shaomi's, Opos and Vivos
of the world. We've we've seen the likes of Apple
pricing themselves significantly outside of those companies at you know,
and at a point where that was kind of next
billion consumers that are in say Africa, Southeast Asia, South
Asia just simply cannot pay. And so there will be
(14:47):
continue to be verticals where China, through low cost, high
end manufacturing of consumer facing products, will continue to grow
in market leadership, but not directly intersect American national secure
or strategic comparatives. America, for its part, has huge leadership
and a head start in the in the AI space
and obviously the chipset space, historically in aerospace and defense,
(15:10):
and so those are verticals that should stay very much
within the American camp and whose supply chains need to
be reinforced such that there isn't dependence in the future
Chinese magnets or other key inputs to fortify those supply chains.
Speaker 2 (15:23):
Ben Will there be any change to global supply chains
when it comes to air US in the future, though
for now it is incredibly dependent on China. How quickly
can that turn around? Should you want to have them
accessed here in the United States?
Speaker 9 (15:35):
Absolutely we should. And this is one of the biggest
problems that we face and why we needed change and
why Donald Trump was elected. He's you know, the objective
of this Trump administration is to tear down a lot
of those barriers that were impeding growth of the American industry.
And we're seeing a resurgence of American aerospace defense and
then this accounting company supply chain there was a result
(15:56):
of the President coming to office. Silicon Valley historically has
been almost entirely aligned behind this Trip administration because they
see that he's tearing down a lot of those barriers,
be it EPA or other forms of barrier, ensuring that
there are stimulus and other forms of support, ensuring that
procurement is done in an efficient way without the kind
of cost plus archaic methods that we're used historically. We
(16:19):
have a lot of these natural resources within our own borders,
but we weren't extracting them because of environmental concerns and
other DEI issues that got in the way of that.
And so I think that that will be unlocked and
must be unlocked to ensure American national security.
Speaker 3 (16:32):
Ben Habag ofv Nova Capital, thanks for your time today.
Speaker 2 (16:41):
Let's go back to today's main tech story, Apple's Developers Conference,
where our own ed Ludlow is standing by Ed.
Speaker 4 (16:47):
Yeah, WWDC is a developers conference, and I kind of
want to get to that conversation with Creative Strategies, Princeville
analysts and President Curly In a milianacy like I always.
Speaker 5 (16:56):
Remind myself, why are we here. We're here for the developers.
Speaker 4 (17:00):
In terms of expectation, right, what the reporting tells us
is that Apple will open up the lllms it's been
working on to third party developers. That seems very important.
Speaker 10 (17:09):
It is absolutely critical because that's at the end of
the day, how developers will take advantage of the core
of Apple intelligence going forward, and how they can do
that on device in a private and secure way if
it wants so, and differentiate what they can do with
others like CHURCHIPD open AI and so forth.
Speaker 4 (17:27):
If you accept that Apple is behind in AI, why
would the step of opening up access to developers to
the work.
Speaker 5 (17:35):
It has done in AI remedy.
Speaker 10 (17:37):
That I don't know if your remedies, but it preps
for the future, right. It is about allowing developers to
take advantage of AI within their applications. And if there's
one thing that I think we can all agree with,
it's about the ecosystem from a developer perspective, that Apple
has always been the thing that got consumers engage with
their devices and kept them where they are.
Speaker 4 (17:58):
So it's important today for a reason and everything that's
inside of.
Speaker 10 (18:02):
It, absolutely, and that's what Apple is trying to do
to continue especially as the pressure. If you're thinking about
what Microsoft is trying to do, you know they're very
clear that coming out or Build last month, they want
developers to look at Microsoft as the future of development.
Speaker 5 (18:19):
Let's think about specifics.
Speaker 4 (18:21):
One of the things we might hear today is translation
across imssage calls and live simultaneous translation. But the good
thing about talking to you on WWDC days is you
and I go to all the same conferences, particularly developers conferences,
and I've got Daja view or at least I distinctly
remember Meta talking about exactly the same thing.
Speaker 5 (18:41):
They've done it.
Speaker 10 (18:42):
And Google did too at some level, right, So I
think part of it is catching up. Part of it
is trying to give consumers what they want. If you're
looking specifically at the US market, there are a lot
of people who are bilingual, and so translation of all
week sometimes just narrow down to all when I go
on holiday somewhere is actually more important on day to day.
Speaker 4 (19:04):
What we're expecting are largely interface changes. What will that
tell us about how Apple thinks, consumers, knowledge workers, engage
where they are in the future from like a human
to device perspective.
Speaker 10 (19:18):
Yeah, it's interesting because I do think that there are
probably two things, that maybe three things where they're trying
to address. One, there were some changes that came last
year that consumers were not particularly happy with. Photo is
a good example for instance, and so and the second
thing is that this is probably the biggest redesign, as
Mark was saying, since iOS seven, So it's been a
(19:42):
long time, which means that for some users, this is
the first time that they're going to use iOS and
other os is in a different way. So trying to
take away friction, but not actually changing things so that
you have a learning curve all of a sudden is
going to be one thing. The other part is there's
much more cross device usage, so trying to make that
(20:04):
easier so that AI actually is useful across all Apple
devices and getting out of a way so that AI
can actually shine.
Speaker 4 (20:13):
We go from iOS version number to IOOS year version number.
It's just like the car companies do. And just like
the car companies, they always go one year ahead. So
what we might get is the twenty twenty six year.
How do you feel about that?
Speaker 10 (20:27):
I think that with AI we're going to see changes
on a faster cadence as we are seen with all
the models that have been released over the past six months,
So you know, anchoring in what the core of DOS
is going to do for a year and then having
updates throughout the years.
Speaker 4 (20:46):
Yes, absolutely, creative strategies. Principal analysts President Carly and Midlanacy.
Good to be back on the road with you.
Speaker 3 (20:58):
Welcome back to tech.
Speaker 2 (21:00):
I'm Caroline Hyde and New York.
Speaker 3 (21:02):
We've got a new look for you.
Speaker 2 (21:03):
But Tesla is basically trading lower, but only slightly. We're
coming off of what had been a sell off a
more than a percentage point earlier in trade. And why
was that Well, because the company had been seeing not one,
but two downgrades from certain analysts. Let's dig into that
particular move. We've got Argus Research on one side, we
have BED on the other. This is the ev maker
really received the downgrades on the back of anxiety around
(21:26):
the ongoing feud between Trump and Elon Musk. Of course
that had been darved back somewhat, but we also have
BED and the others really shining light on what has
been anxiety around Robotaxi as well. Blue Begg's round Rstelica
is joining us. Now you've written up the fact that
we had these two downngrades. We're actually just seeing Tesla
stock price stabilize at the moment, Ryan, But what do
(21:47):
you make of the reasons for their concerns?
Speaker 5 (21:50):
Hey, good morning, thank you for having me.
Speaker 11 (21:52):
Well.
Speaker 12 (21:52):
I guess one thinking say is that it is not
too surprising, given just sort of how high profile and
sort of just the blow up was between Elon Musk
and Donald Trump last week. It's not surprising to see
a bunch of anamals kind of taking stock of this
and say, what is the real impact of this kind
of you know, political uncertainty, this kind of fallout. It's
(22:13):
extremely difficult to sort of assess what could happen next.
I've spoken to a few investors and analysts and they
all kind of say that this sort of situation is
basically unprecedented, having this kind of personal attack between a
CEO who is the richest person on the world, and
then the president. So obviously, when you have a situation
like this, it's very difficult to know what comes next.
(22:33):
And that's why you saw two analysts so far downgrade
to stock, basically saying the level of uncertainty and the
outlook here is just too clouded to feel comfortable with
more overweight position.
Speaker 2 (22:43):
Today we are only down by a tenth of a percent,
but then we look at what's happened here to date,
twenty seven percent lower. Can you put that into the
context of other MAGS seven and just how negative analysts
have gone.
Speaker 12 (22:55):
Yeah, So, with respect to the MAG seven, I believe
Tesla is now the worst performing of them. I believe
Apple was underperforming it a couple of weeks ago. Given
the recent weakness, the double digit drop, it's on the
wake of the big blow up. Believe Tesla is now
the worst performing stock it saw very significantly from the
peak it saw in the immediate aftermath of the election
in November. I believe the stock peaked in December found
(23:18):
forty percent or so since then, So there are some
growing concerns out there. With respect to the analyst consensus,
Tesla is the least loved of the MAGS seven stocks.
I believe fewer than half of the analysts that Bloomberg
tracks recommends buying it. That is well below the rates
that you see at other major companies. It's pretty low
for large cap in general. In general, analysts tend to
be pretty positive on the companies they cover, but Tesla
(23:40):
a bit of a unique outlier in this example.
Speaker 3 (23:43):
Man Vacelica, we thank you so much.
Speaker 2 (23:46):
Another stock that's had analysts not loving it so much
is Apple. Let's go back to his developers conference, where
our own ed Ludlow is standing by with a developer.
Speaker 4 (23:54):
Yeah, it's about time we got the perspective of a developer.
Paul Hudson is the creator of Hacking with Swift as developer,
but his whole points, his whole raisin detray is to
help teach people how to develop within iOS and the
broader Apples ecosystem. So let's just start by asking the
simple question, what is it you want to see?
Speaker 5 (24:13):
What is it you want to hear? What is it
you want to learn?
Speaker 7 (24:15):
Yeah? So fair enough. Developers right now streaming in and
mostly saying the same thing. Is this the year we
got another big leap forward for generating stuff with AI? Code, text, images, sound,
something with AI one device in the cloud. We don't
really mind, but just something forward basically.
Speaker 4 (24:32):
So, based on current reporting, I think the answer is no.
But what we are expecting is that Apple basically opens
up access to your community, third party developers, to its
own LMS, its own proprietary working AI.
Speaker 5 (24:49):
Why would you welcome something like that if at all?
Speaker 7 (24:51):
So, Apple normally does a thing internally where they dog
food the AP I would call it eternally. They're trying
things out and then okay, this is good, We're ready
now a go to developers and hopefully that's today, and
so things like last year we had the writing tools
to rewrite or summarize or bullet point or whatever really
good stuff, but we couldn't do it from our code.
We had to let the user do it directly in
the UI. So hopefully today we can finally have that
(25:14):
and add a whole bunch of layers to what apps.
You know, it's a real force multiplier, that kind of functionality.
Speaker 4 (25:18):
It is a force multiplier in the sense if you
think about the history of the App Store and what
you can do across not just iOS but mac os,
that's how things generally get built. Yeah, but it's distinct
from whatever Apple will tell us or not tell us
with Siri and Apple Intelligence, as one uses it with
their their handset, Why would you want to know about
(25:41):
their own work and their own success.
Speaker 7 (25:43):
Well, look, last year they a lanced to the big
Apple Intelligence push, right they did. That was the first
part of the story, because you know, there's two parts
to it. We all want the deep conversational Siri thing
going on, but for that to work, us app developers
have to expose our logic, our data, our function It's
a system and last year Apple announced a whole bunch
of code just for that. So now we've been working.
(26:06):
There's tens of thousands of developers using this stuff now
called app intents. They all work, they'll work the great
now hopefully today, Apple, go right, we've got your data.
Let's go for it and strip something great.
Speaker 4 (26:16):
All being well, how much of a networking effect literal
networking is WWDC? Like all of you and your your
peers are kind of gathered in one place and you
wait to hear what Apple will tell you. But I
also find it interesting and like the kind of access
part of it to each other, but also to the
team at Apple that are working on the on the
codebase that you killed off.
Speaker 7 (26:36):
Yeah, so all the sort of Apple indie developer heroes
are here. There's a new game, the Art of Fauna
love It. He's here, The Haylight team here, the Slopes
team here. They're all here. So you can go and
meet your heroes and get your selfies and stuff. Lot
of fun. But there's also the labs with Apple own engineers,
Whereas here's a Swift UI team, here's the data team,
here's the Metal team or whatever.
Speaker 4 (26:55):
The labs almost happen in parallel with WWDC. So for
the uninitiated, what is it and why is it?
Speaker 5 (27:00):
Evaluated?
Speaker 7 (27:01):
So today, in specially the special event Apple Park is
the in person labs right where the teams who make
stuff who are mostly locked away in this building behind us, right,
get to come out normally.
Speaker 5 (27:10):
Right, I know, right.
Speaker 7 (27:12):
Once year it's like, oh, it's developers and they talk
to us and we throw our questions at them and
they get answers straight to our face, which is really nice.
They enjoy it too. They love it because they can
meet us and see how we use their code and
write weird and wonderful ways, and that's really special. But
then the rest of the week there's also online labs
you can book which are very helpful. It's for our
WebEx call and this year is new they have group labs,
so you guy as a group go together like twenty
(27:33):
or thirty folks and bounce questions off one engine someone
lucky engineer to get our questions and learn via other
folks questions too.
Speaker 5 (27:40):
Paul, what's your biggest frustration with Apple at the moment?
Speaker 4 (27:43):
I have no franspetionis for Apple at all now, just kidding,
there aren't that many of them standing behind the camera.
Just be honest, Like, if you are a developer and
you are developing for an os, Okay, So.
Speaker 7 (27:53):
The biggest thing right now, it's actually quite interesting. It
is about revenue. So we have this thing the Small
Business program, okay, where if you earn less than a
million dollars, which is most developers, Yes, right, you pay
only fifteen percent towards Apple. What a brilliant scheme. And
that includes now support API's credit card access, all that
download stuff, all down fifty percent. Good deal. But if
you weren't a million and one dollars, it's not progressive.
Speaker 5 (28:15):
So now we're getting into epic games territory a little bit.
Speaker 7 (28:17):
Well, a million one dollars isn't quite a big game,
but yeah, but when you hit a million and one,
it's not progressive. For that one dollar, you lose the
previous million as well for all future years, so you've
increasingly you lose fifty percent extra every year. So that's
not great. I know a lot of folks that like
see that fixed.
Speaker 4 (28:32):
A lot of what we expect to come today. And
again this is based on reporting bad boom bogs, Mark Gumman, But.
Speaker 5 (28:37):
It's just interface changes.
Speaker 4 (28:40):
Within that you can look for hints about how Apple
sees the future, about how we interrate rapped with hardware.
Speaker 5 (28:45):
Right, I have an iPhone app at a Mac. How
do you think about that and approach that?
Speaker 7 (28:50):
So one of the nice things about Apple's big push
towards their swifty Wi framework is in theory, we just say,
give me a button, give me an image, give me
a whenever you want slider, and it adapts to the
system correctly. So we'll find out in about an hour
or so. But I'm kind of hoping I just press
build an excode and it's going to look great and
glassy automatically. And if that's true, then iOS, Macaws, vision
(29:11):
of Wes, whatever platforms they choose to unify will just work.
Speaker 4 (29:15):
You kind of give the impression, Paul that it's the
people behind the scenes that you're most excited about. But
when you think about the keynote, who is it from
Apples kind of more leadership.
Speaker 5 (29:24):
Focused teams that you get excited.
Speaker 7 (29:27):
But honestly, if you're in Apple Park with a special event,
everyone loves to see Craig okay, because he's a massive
fan favorite the Silver Fox, right, everyone loves Craig. The
selfie with Kraig and stuff. And from a technology perspective,
he's a massive coder. Okay, I mean like Craig, I'm sorry, Craig,
you're He's a super geek. He personally reviews a lot
of work going out. He reviews xcode every year. He's
very very in detailed APIs. You wouldn't believe it because
(29:48):
given how he is, but he's very serious about code.
Speaker 5 (29:51):
I love that you seem upbeat.
Speaker 4 (29:53):
You've got us energized and ready, like Paulson as the
creator of hacking with Swift, and we're here in WWDC
and Coubertino character.
Speaker 2 (30:01):
I'm so psyched the energy from Koupertino. We love it
at Thank You. Meanwhile, coming up right here in New York,
we talk about Warner Brothers Discovery. It's plans to split
its businesses but separately into two traded stocks. Details behind
the company's efforts to split TV and streaming.
Speaker 3 (30:16):
This is Bloomberg Tech.
Speaker 2 (30:27):
Warner Brothers Discovery when it plans to separate more formally,
it's streaming of movie.
Speaker 3 (30:31):
Divisions from TV network operations.
Speaker 2 (30:33):
They're going to create two publicly traded operations by the
middle of next year. For more, Bloomberg's Felix Jewett joins us.
Speaker 3 (30:39):
Now, oh what a surprise. Never seen that one before.
Speaker 13 (30:42):
Yeah, yeah, a little bit of deja vous. I mean
Comcast just did the same move, essentially spinning off its
cable networks. In fact, you can go back to twenty
nineteen when Rupert Murdoch broke up his empire and sold
the studios and the IP and the franchises at Disney
and then spun off you know, the legacy networks, the news,
the sports. So yeah, we're basically seeing consolidation into two
(31:07):
different markets, one being the legacy traditional cable networks and
then the other being streaming and content production.
Speaker 2 (31:15):
David Sazanov keeps the content production, the streaming, you get
your CFO kind of videfield taking over as the leader.
Speaker 3 (31:21):
Of the other business. We had to get the names.
But one analyst reaction caught my attention in your.
Speaker 2 (31:27):
Guys story, like the recent pivot back to HBO Max,
this move reveals a company fumbling its way through disruption.
Speaker 5 (31:34):
Yeah, fambiling.
Speaker 13 (31:34):
Yeah, I mean, I think it's an admission that the
entire rationale for this merger of assets to begin with
three years ago hasn't worked out, right. I mean, you
think about the deal in twenty twenty two at and T.
We're going to spin off WarnerMedia. We're going to combine
it with Discovery. You're going to get the premium content
production you're going to get the reality TV from Discovery.
You're going to create this huge streaming colossus that's going
(31:55):
to take on Netflix, and you know, we're going to
change it from HBO Max to Max. And now three
years later, you're saying that we're going to go back
to HBO Max, we're going to make it a premium,
we're going to get rid of this low cost streaming,
and you know from Discovery that people aren't watching on
the service.
Speaker 7 (32:13):
So yeah, it's kind of unwinding.
Speaker 13 (32:15):
Everything that's happened over the past three years. And you know,
the value of the company has you know, dropped by
sixty percent since then, so it's not a huge surprise.
Speaker 2 (32:22):
So when you put that into the context, so many
would say the investors love it today, it's the best
performing stock on the nasat one hundred. The shares spike,
but in the longer term context, it has just been
so under pressure because of these underperforming assets as a whole.
Speaker 13 (32:36):
Yeah, and now I think you know, people are thinking, well,
it will set up both companies.
Speaker 5 (32:41):
For better m and a positioning.
Speaker 3 (32:43):
Okay, so that's the gross story.
Speaker 13 (32:44):
Yeah, I think so at this point, because someone's going
to come along probably in the next couple of years
and consolidate all the cable networks. You would think Comcasts
having spun off theirs, you know, you have Fox, which
is again pure like entertainment network news at this point.
Speaker 5 (33:00):
And then on the other side, Yeah, I.
Speaker 13 (33:02):
Mean it's interesting to hear the company talk about their
new streaming strategy, which is basically, Okay, Netflix and Amazon
have essentially won all things for all people business, and
what we really offer is a premium streaming option with
HBO and so we're an add on service. And again,
you know, paramount Better merger you know, is up up
(33:24):
in the air at this point. So I think there
is going to be a lot more consolidation. I think
investors are probably thinking, Okay, this move sets up both
companies for bettermine either as a buyer as a seller.
Speaker 2 (33:36):
At this one, we know about David Sazdev and m
and A thoughts, but what about what do we know
about kind of vitem filst what do we know about
the CFO.
Speaker 13 (33:44):
I mean, he's been responsible for cutting costs. There's been
all these layoffs, consolidations over the past three years, paying
down the debt, which they've done a great job of.
You know, twenty billion dollars paying down the debts in
the past three years. I think he's going to be
in charge of managing these assets, which are still profitable,
but they're all losing subscribers, losing audience. It's a downward trajectory,
(34:09):
So how do you manage that. It's going to be
managing costs.
Speaker 2 (34:14):
Meanwhile, they say they're going to raise a bridge loan
from JP Morgan of seventeen and a half billion, but
going to recapitalize that before the split Clix Jollette.
Speaker 3 (34:28):
It's time now for talking tech.
Speaker 2 (34:29):
First up Meta is set to invest in Scale AI
with potentially more than ten billion dollars, making one of
the largest private company funding projects of all time now.
According to Bloomberg Reporting, It's Scale generated about eight hundred
and seventy million dollars in revenue twenty twenty four expects
to make two billion dollars in revenue this year. Rus
ion Q has agreed to buy UK startup Oxford Ionics
(34:50):
in a one point zero eight billion dollar deal.
Speaker 7 (34:53):
Now.
Speaker 2 (34:53):
The takeover will bring together ion q's quantum hardware and
software capabilities with Oxford ionics quantum chip technology. Transaction is
expected to close in twenty twenty five, subject to regulatory approvals,
and Qualcom has agreed to buy semiconductor company Alpha Way
for about two point four billion dollars in cash. That's
a ninety six percent premium into Alpha Wave's shares price in.
Speaker 3 (35:14):
March thirty first.
Speaker 2 (35:16):
The deal is expected to close in the first quarter
of twenty twenty six, pending regulatory and shareholder approval. Now,
let's head back to Apple's developers conference.
Speaker 4 (35:24):
Ed, you're standing by, Yeah, And even if the news
flow isn't about Apple Intelligence specifically, there's still the reader
cross of what we hear today and how it drives
adoption of the ecosystem and sales of the iPhone. And
that's why I'm delighted to speak with IDC's senior research
director and Abila Papal Like, that's how I think about it.
(35:45):
So the reporting tells us that it will be largely
interface changers. It will be some developer access to Apple's
work in AI that will drive some innovation. How does
that translate to the iPhone?
Speaker 11 (36:00):
Thank you? And it's nice to be here. I think
those are you know, really still big steps. You know,
it's very important, it's going to help Even if there
aren't really those big revolutionary announcements in AI. Those two
things that you mentioned are going to help drive steps towards,
you know, moving Apple in the right direction, right like
(36:21):
opening apples it models to the developers, which they haven't
done before. Are going to create innovation, even if it's
from the community and not you know, driven by Apple.
I think that's a big step. And that's also an
innovative step, even if it's different.
Speaker 5 (36:33):
Right.
Speaker 11 (36:34):
And the changes to the operating system across platforms, I
think that's also very important, and that's going to do
two big things right. One is going to give users
a new experience because the last time day of the
design overhaul was especially with io has a decade ago.
And then two, it's going to unify the experience and increase.
Speaker 3 (36:56):
The user's sickness.
Speaker 11 (36:56):
So if there are some potential users thinking to move over,
it's going to make that even more difficult.
Speaker 4 (37:02):
How to consumers respond to OS labeling where they go
from version iOS seventeen eighteen to year OS twenty six
point blah blah blah blah blah.
Speaker 11 (37:12):
I think it's going to make it easier, right, It's
before like that before there was just so much confusion
between the different platforms, and we see users using.
Speaker 5 (37:21):
More devices you mean iOS, mac os, etcetera.
Speaker 11 (37:24):
Between different devices, Right, we have more use consumers having
multiple devices, and it's harder to attract what's the different version,
even though consumers are not that much focused in terms
of what's the software and what version it's on. It's
going to make that much easier for the average consumer
to follow. And we're used to that with other products, right,
(37:45):
other consumer products. So I think it's a really good
move and simplifying.
Speaker 4 (37:49):
What's the kind of IDC must watch lists for today?
What are the top three things that you want to
hear from the company?
Speaker 11 (37:56):
Well, I do you know, I know that even though
we're not going to get the big announcements around uh
kind of Apple Intelligence, and that will appease Apple II critics,
but I'm still eager to hear what the announcements will
be around Apple Intelligence. I do still think they will
(38:16):
address those to you know, signify that they are making
those even if there are smaller steps, that they are
still pacing towards that and they're you know, they have
not dropped the ball. So I think that that that's
I'm eager to see that. I'm also eager to see
what kind of design. You know, we did hear some
different obviously, rumors about the design changes about some liquid
(38:39):
liquid glass. So I'm very interested to see how that looks.
Because Apple, even though sometimes they make simple and small changes,
it's always it's always really brilliant, brilliant.
Speaker 4 (38:49):
I'm eager to see that there's some functionality discussion as well.
Live translation in I message calls and through air pods
is something that we may hear about.
Speaker 5 (38:58):
But I also think about.
Speaker 4 (38:59):
The DISCUSSI I've had quite recently with Meta who have
been working on this across different form factors of hardware.
Google's been working on translation for a really long time.
Apple's going to catch up there.
Speaker 5 (39:11):
Well, you know, there's.
Speaker 11 (39:11):
Always again, the critics are always going to be saying
like be saying that, oh, you know, Android has had
this for so and so many years. But we have
to think about the ecosystem of Apple users. I mean,
I have friends that the average Apple consumer doesn't really
know what's been announced on Google Io or Microsoft Build
or they don't really know. To them, it's their Apple universe,
and to them this is going to be revolutionary and
(39:33):
life translation is one of the biggest AI features that's
been used. It's really popular in the you know where
it's so to the Apple consumer, they're going to be
really happy about that. And if that does get announced
and really it's going to be very well received.
Speaker 5 (39:48):
Just really quickly.
Speaker 4 (39:48):
How uncertain is it right now for Apple in particular
the smartphone or iPhone context with.
Speaker 5 (39:53):
Tariffs et cetera.
Speaker 11 (39:55):
Of course the terriff question, there is definitely a lot
of uncertainty. But regardless so where the terraffs land. And
you know, despite the high uncertainty that we've seen, even
you've seen with our latest forecast, we still expect a
growth for Apple because we've seen even with the pandemic
right in times of high uncertainty, we see that the
Apple consumer segment is still pretty resilient. So we'd still
(40:16):
expect a low single digit growth for Apple this year.
Speaker 4 (40:19):
Nabila popeow IDC Research here at Cubatino at Apple's WWDC Carroc.
Speaker 2 (40:24):
Still so much to come, you're reporting throughout the day
or an extraordinary event that's about to unfold, now, does it?
For this edition a Bloomberg Tech do not forget.
Speaker 3 (40:32):
To check out our podcast.
Speaker 2 (40:34):
You find it on the terminal as well as online
on Apple, Spotify, and iHeart Do. Go back to Coopatino
with Ed a little bit later throughout our programming, This
is Bloomberg.
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live
from coast to coast with Caroline Hide in New York
and Vlow in San Francisco.
Speaker 2 (00:22):
Live from New York, This is Bloomberg Technology Coming up.
Apple kicks off its annual Developers conference in Coupatino. Will
the event help ease or inflame? It struggles with artificial intelligence?
Plus the US and China trade talks get underway, tariffs,
rare earth minerals, and advanced technology topping the agenda, and
Warner Brothers Discovery separates into two publicly traded companies, splitting
(00:44):
its streaming and cable businesses. But first, what's happening over
the course of Apple and we head straight out to Kopatino,
of course, where.
Speaker 3 (00:53):
Our own led lud and Nudlow is standing by. We're
up for tens of a percent.
Speaker 2 (00:57):
Look, there is a lot of anxiety on investors' minds
at the moment, ed, and largely it's about AI.
Speaker 3 (01:02):
Will that get results today?
Speaker 4 (01:03):
Yeah, it's one of those situations where like expectations are
high that Apple will tell us something about AI strategy,
but actually it's highly unlikely to be the case. Right,
That's not the point of WWDC. You know, the main
thing with Mark Gumman's reporting in particular, I think, is
about third party developer access to Apple's llms. Right, If
you think about the work going on inside of open AI, Microsoft, Gemini,
(01:26):
at Google, a lot of the innovation is built on
that third party developer front. And for Apple it's critically important,
just as you look at the history of the App
Store and in its services offering, that's built on a
history of developer innovation. And so right, the stocks down
eighteen percent year today, it is underperforming its peers in
that context. But that trading year today has largely been
(01:49):
on the trade or tariff risk context, not about what's
happening with AI.
Speaker 5 (01:52):
And I think the point our colleagues are making on the.
Speaker 4 (01:54):
Bloomberg terminal this morning is well, what if today's the
day it changes? Because one year ago WWDC it was
that same high expectation and people on the AI side
didn't get.
Speaker 5 (02:03):
What they want. But Mark Gumman's good all the details right.
Speaker 2 (02:05):
He does at Ludlow hold on for a moment because
Mark German, who has broken so much news ahead of
what's expected from Apple today, joins us now in La
and Mark just walk us through whether any of that
AI well misstep can be walked back and can be
indeed invigorated today.
Speaker 3 (02:22):
Do you think they're going.
Speaker 6 (02:24):
To try to tell a good story on AI? Right,
They're going to come out full force, talk about how
they're different, talk about how they're highly integrated, talk about privacy,
talk about how the other companies are stealing your data. Right,
But the reality is they're not going to show much
of substance when it comes to AI. The big thing
is they're going to open up their Apple Intelligence they're
(02:46):
called the AFM or the Apple Foundation models to third
party developers, so developers will able to use Apple's AI
technology if they want to to build their apps and
build their features. There's going to be an upgraded version
of their shortcutsapp for con to allow customers end users
on the iPhone, iPad and Mac to create shortcuts or
little widgets and features themselves using AI. The biggest thing
(03:09):
when it comes to AI is that translation.
Speaker 7 (03:12):
Right.
Speaker 6 (03:12):
This is something Google has had for a couple of
decades now is now going to be a very core
system element, so you'll be able to live translate a
phone call you're speaking to someone in another language, you'll
be able to hear that back in your native language. Likewise,
in text messages, there's going to be changes in the
messages app, new backgrounds and polls to better compete with WhatsApp.
(03:35):
But the biggest announcements today will be around the user interface.
They're coming out with a new liquid glass digital material,
a new look for all of their operating systems across
all of their devices, and then the iPad getting a
big productivity lift to make it more usable like a Mac,
particularly for things like multitasking and PDF management.
Speaker 4 (03:58):
I think it's seen lag you by out of a
community right mark that the move from version to year
version labeling for the operating systems.
Speaker 5 (04:05):
That's kind of helpful.
Speaker 4 (04:06):
But when I read you're reporting around liquid glass, it's
almost as if there's a roadmap as well, down the
road to future generations of hardware.
Speaker 5 (04:15):
Could you explain that bit?
Speaker 7 (04:16):
So?
Speaker 6 (04:17):
The new user interface is very glassy, lots of use
of transparency, translucency throughout the operating system, letting your wallpaper
and light shine through different user interface elements. It's very
similar to the UI or seeing on the Vision Pro.
Apple's working on a new mostly glass iPhone for twenty
twenty seven, the iPhone twenty as I'm calling it, for
(04:40):
the twentieth anniversary of the iPhone, and so you're going
to see that hardware software really make it difficult to
understand where it begins, where it ends, more of a
unified product experience things that Apple's had in the past.
They've done the iPhone five C in twenty thirteen. The
idea was the same molding color from the operating system
(05:01):
to color on the phone. And so this is going
to be pretty exciting. And so yes, this portends to
some major hardware developments in the coming years, but in
terms of this year and the short term, nothing that
exciting coming from Apple other than the UI, I would.
Speaker 2 (05:16):
Say, and therefore mark the age old question is is
it going to be enough to really invigorate purchasing because
there's a laundry list of issues that Apple faces. And yes,
it's about AI and indeed the product is also about
the supply chain, and it's also about regulation here in
the United States.
Speaker 6 (05:35):
I mean, for this fall, you've got the iPhone seventeen
Pro that's going to have a redesigned back, a redesigned
camera area, and anytime Apple does a design change, whether
it's for usability or just aesthetic right, that gets lines flowing,
gets people interested. So I do think the iPhone seventeen
Pro will be a success. By then the AI features
will be a bit better. They're doing some fundamental changes
(05:58):
to the large language models themselves. But if you compare
and contrast what you've seen from Google and open AI
and Anthropic over the last several months to what you're
going to see from Apple today, it's going to be
very stark and it's going to be very clear that
Apple's behind. Of course, they're going to tell a very
good story, right, They're going to market their way through this.
But if you focus on the substance, you'll see the
(06:19):
big differences.
Speaker 2 (06:20):
Well, we'll see if that can change the opinion of
the investor base right now, Mark Germ and Ed Ludlow
as well, Thank you both so much.
Speaker 3 (06:27):
Now, coming up.
Speaker 2 (06:28):
US and China, they're trying to avoid a clash as
trade talks kickoff in London with a global tech supply
chain at the heart of discussions.
Speaker 3 (06:35):
We'll have the latest. This is Bloomberg Technology.
Speaker 2 (06:48):
Talks between the US and China. They are underway in
London in a bid to restore confidence that both sides
are well living up to commitments made back in Geneva,
with the US signaling actually a willingness to remove restrictions
on exports in exchange for assurances that China is easing
limits on rare earth shipments.
Speaker 3 (07:04):
Let's bring in Bloomberg's Amorhoden, who.
Speaker 2 (07:06):
Is in London live any signal this is going well.
Speaker 8 (07:10):
Well, Caroline. They have been in talks now since just
a little bit after one pm, so a few hours
and likely we could see these talks bleed into tomorrow,
which we saw actually happen a month ago in Geneva.
It does seem like things are going well if you
take the word from Kevin Hassett, the ANC director or
the President of the United States, who talked about this
on social media after he got off the phone from
(07:31):
President Shijiingping. As you said, the two big points here
that they really want to try to diffuse the tension
in these talks has to do with China's ability potentially
to get more semiconductors things that there's been export controls
on when it comes to some semiconductors as well as
jet engine chips. The question I have is what is
going to be the red line is the United States
(07:53):
willing potentially to ease the export controls on things as
in Vidia's advanced chip that had built basically to comply
with the Biden administration export controls when it comes to China,
and then with the United States wants out of all
of this is the easing of those restrictions for the
rare earths to magnets, the materials that you need for
(08:13):
mobile phones, for the defense industry and the high tech industry.
So coming out of this, we're really going to want
to part the details of what was agreed upon.
Speaker 3 (08:20):
Of course, reading.
Speaker 8 (08:21):
Through the tea leaves, potentially we can see other matters
agreed upon at this meeting. The President did say they
discussed potentially traveling to China or Shujing pain coming to
United States on that phone call. But we should just
note it's only been four weeks since the Geneva talks
and already we had to see Beijing and Washington sit
down again to de escalate.
Speaker 2 (08:42):
A Marie, I love that you point us towards the
semiconductor resilience and indeed what's been held back from China
going forward, the H twenty is not able to be
sent now from Nvidia into China. The fact that Howard
Lutnik is there is that key.
Speaker 8 (08:58):
Yeah, absolutely, the fact that you at Howard Lutnak join
this delegation. Remember in Geneva, it was just Secretary Scott
Besson of the Treasury and USTR representative Ambassador Jamison Greer
leading that delegation. Then following the phone call between Shiji
Ping and President Trump, you at Howard Lutnik added to
the delegation. So already everyone was speculating how far potentially
(09:21):
the United States would go on export controls because export
controls squarely lie within the Commerce Department. So clearly that's
why he's at the table. Clearly these export controls are
at the table. But really the key question is what
is the US red line when it comes to those
export controls and how far are they going to go?
And then, depending on what comes out of this meeting,
what does this mean for the future, because we have
(09:42):
seen the United States ratchet up export controls administration after
administration when it comes to China in the name of
national security.
Speaker 2 (09:50):
I'm Marie Holden live from London. We appreciate it so much.
Let's get more on the global tariff impact. What to
expect from today's trade talks. Ben Harberg's with us another
capital managing partner, Core Values Alpha portfolio Manager as well,
not the capital. It's a private fund managing over two
billion dollars in assets on management. But call for US
is Core Values, which brings particular exposure to Chinese companies.
(10:10):
Then will we see a walk back in restrictions of
a semiconductors and their access into China.
Speaker 9 (10:16):
I think we will, and I think there will be,
you know, a move from these kind of broad based
numerical sanctions and terror figures to something that's more pointed
and targeted. And we've seen already those levers being pulled
on both sides. Obviously the you know, the US imposing
the export restrictions on the Age twenty chips that could
impact four and a half billion dollars of sales of Nvidia,
(10:37):
the Chinese obviously restricting the magnets which are hitting everything
from electric vehicles to smartphones. The Americans retaliating with efforts,
you know, to block the Leap one sea engines that
are being used by commacs jets as China tries to
build its own aerospace industry. So there's a lot of
I think individual sectors or even specific companies that can
(10:58):
be sanctioned or named rather than the odd based sanctions,
and so I think if they can kind of carve
their way around those and get through some of these
very sensitive areas that really acutely pain the respective economies,
then we can start to make some progress that sensitivity.
Speaker 2 (11:14):
That fine line, though, Ben is one that you have
walked and talked about a lot. When I think about
what the core Values Alpha ETF family does, particularly the
Greater China Growth ETF, you basically say on the website,
it's accessing China Alpha without compromising American national security or
American values. How do we get this agreement with China
without compromising American national security?
Speaker 9 (11:36):
So I think there are specific Chinese companies and specific
Chinese verticals that are coming in direct competition with their
American counterparts that we're seeing that on chips, We're seeing
that in the aerospace and the event space.
Speaker 7 (11:47):
We're seeing that in.
Speaker 9 (11:48):
The critical mineral supply chains, We're seeing that in telecommunications.
Those are all verticals where there is direct Chinese threat
to American superior when it comes to leadership and those
technology verticals and what we really describe as kind of
the industries of the future. There are, of course, plenty
of Chinese companies and specific business lines that don't intersect
(12:10):
with American interests, for instance, Chinese e commerce companies that
are selling into developing markets, Chinese entertainment communication businesses, and
so that line needs to be walked very carefully, and
that can be done through these negotiations and through an
investment platform that enables you to access the high alpha
that Chinas generated both domestically and through its foreign kind
(12:34):
of counterparts, where it is the leading trade partner to
over one hundred and forty countries around the world. But
also it restricts America sending its most prize technological IP
towards the Chinese as they try to compete with us
in those industries of the future.
Speaker 2 (12:48):
What's so interesting, though, is that maybe some of those
entertainment and e commerce companies that you talk of have
been embroiled and what's deemed national security threats. We think
about what Tencent was painted as in some way, ben
is this the art or lack of art around negotiation
and diplomacy. Our company is going to get dragged in
rightly or wrongly, that may not have a direct exposure
(13:09):
to national security.
Speaker 9 (13:12):
China, through you know It's its own initiative, has recognized
that these these large scale businesses, the Ali Baba's, the
ten Cents, the byteedances, the Matwons of the world, became
bloated and had too many business lines under one hood
that stretch from innocuous you know, grocery delivery all the
way to you know, to web you know, to to
(13:34):
military applications in the aerospace and defense, you know, maps,
geospatial et cetera. And so even they, I think are
starting to piece apart those businesses and start to require
that some of those are divested or spun off, and
that the kind of core assets are left alone. And
I think that will actually aid them as they work
to negotiate with the Americans, because it's easier than to
(13:55):
sanction those specific verticals rather than the entire company getting
caught up in one dragonet. So it's it's beneficial for
anti trust, anti monopoly efforts domestically in China as well
as for US trade and sanctioned talks.
Speaker 2 (14:07):
What does therefore, a portfolio with exposure to Chinese names
look like in the future for you, ben, what should
be accessed, Which bets should you be making at this time?
Speaker 9 (14:18):
Well, I think there will continue to be verticals where
the United States and China are not going to be
directly competitive.
Speaker 5 (14:23):
It's it's it's very.
Speaker 9 (14:24):
Hard for America today to build, for instance, a low
cost handset that competes with the Shaomi's, Opos and Vivos
of the world. We've we've seen the likes of Apple
pricing themselves significantly outside of those companies at you know,
and at a point where that was kind of next
billion consumers that are in say Africa, Southeast Asia, South
Asia just simply cannot pay. And so there will be
(14:47):
continue to be verticals where China, through low cost, high
end manufacturing of consumer facing products, will continue to grow
in market leadership, but not directly intersect American national secure
or strategic comparatives. America, for its part, has huge leadership
and a head start in the in the AI space
and obviously the chipset space, historically in aerospace and defense,
(15:10):
and so those are verticals that should stay very much
within the American camp and whose supply chains need to
be reinforced such that there isn't dependence in the future
Chinese magnets or other key inputs to fortify those supply chains.
Speaker 2 (15:23):
Ben Will there be any change to global supply chains
when it comes to air US in the future, though
for now it is incredibly dependent on China. How quickly
can that turn around? Should you want to have them
accessed here in the United States?
Speaker 9 (15:35):
Absolutely we should. And this is one of the biggest
problems that we face and why we needed change and
why Donald Trump was elected. He's you know, the objective
of this Trump administration is to tear down a lot
of those barriers that were impeding growth of the American industry.
And we're seeing a resurgence of American aerospace defense and
then this accounting company supply chain there was a result
(15:56):
of the President coming to office. Silicon Valley historically has
been almost entirely aligned behind this Trip administration because they
see that he's tearing down a lot of those barriers,
be it EPA or other forms of barrier, ensuring that
there are stimulus and other forms of support, ensuring that
procurement is done in an efficient way without the kind
of cost plus archaic methods that we're used historically. We
(16:19):
have a lot of these natural resources within our own borders,
but we weren't extracting them because of environmental concerns and
other DEI issues that got in the way of that.
And so I think that that will be unlocked and
must be unlocked to ensure American national security.
Speaker 3 (16:32):
Ben Habag ofv Nova Capital, thanks for your time today.
Speaker 2 (16:41):
Let's go back to today's main tech story, Apple's Developers Conference,
where our own ed Ludlow is standing by Ed.
Speaker 4 (16:47):
Yeah, WWDC is a developers conference, and I kind of
want to get to that conversation with Creative Strategies, Princeville
analysts and President Curly In a milianacy like I always.
Speaker 5 (16:56):
Remind myself, why are we here. We're here for the developers.
Speaker 4 (17:00):
In terms of expectation, right, what the reporting tells us
is that Apple will open up the lllms it's been
working on to third party developers. That seems very important.
Speaker 10 (17:09):
It is absolutely critical because that's at the end of
the day, how developers will take advantage of the core
of Apple intelligence going forward, and how they can do
that on device in a private and secure way if
it wants so, and differentiate what they can do with
others like CHURCHIPD open AI and so forth.
Speaker 4 (17:27):
If you accept that Apple is behind in AI, why
would the step of opening up access to developers to
the work.
Speaker 5 (17:35):
It has done in AI remedy.
Speaker 10 (17:37):
That I don't know if your remedies, but it preps
for the future, right. It is about allowing developers to
take advantage of AI within their applications. And if there's
one thing that I think we can all agree with,
it's about the ecosystem from a developer perspective, that Apple
has always been the thing that got consumers engage with
their devices and kept them where they are.
Speaker 4 (17:58):
So it's important today for a reason and everything that's
inside of.
Speaker 10 (18:02):
It, absolutely, and that's what Apple is trying to do
to continue especially as the pressure. If you're thinking about
what Microsoft is trying to do, you know they're very
clear that coming out or Build last month, they want
developers to look at Microsoft as the future of development.
Speaker 5 (18:19):
Let's think about specifics.
Speaker 4 (18:21):
One of the things we might hear today is translation
across imssage calls and live simultaneous translation. But the good
thing about talking to you on WWDC days is you
and I go to all the same conferences, particularly developers conferences,
and I've got Daja view or at least I distinctly
remember Meta talking about exactly the same thing.
Speaker 5 (18:41):
They've done it.
Speaker 10 (18:42):
And Google did too at some level, right, So I
think part of it is catching up. Part of it
is trying to give consumers what they want. If you're
looking specifically at the US market, there are a lot
of people who are bilingual, and so translation of all
week sometimes just narrow down to all when I go
on holiday somewhere is actually more important on day to day.
Speaker 4 (19:04):
What we're expecting are largely interface changes. What will that
tell us about how Apple thinks, consumers, knowledge workers, engage
where they are in the future from like a human
to device perspective.
Speaker 10 (19:18):
Yeah, it's interesting because I do think that there are
probably two things, that maybe three things where they're trying
to address. One, there were some changes that came last
year that consumers were not particularly happy with. Photo is
a good example for instance, and so and the second
thing is that this is probably the biggest redesign, as
Mark was saying, since iOS seven, So it's been a
(19:42):
long time, which means that for some users, this is
the first time that they're going to use iOS and
other os is in a different way. So trying to
take away friction, but not actually changing things so that
you have a learning curve all of a sudden is
going to be one thing. The other part is there's
much more cross device usage, so trying to make that
(20:04):
easier so that AI actually is useful across all Apple
devices and getting out of a way so that AI
can actually shine.
Speaker 4 (20:13):
We go from iOS version number to IOOS year version number.
It's just like the car companies do. And just like
the car companies, they always go one year ahead. So
what we might get is the twenty twenty six year.
How do you feel about that?
Speaker 10 (20:27):
I think that with AI we're going to see changes
on a faster cadence as we are seen with all
the models that have been released over the past six months,
So you know, anchoring in what the core of DOS
is going to do for a year and then having
updates throughout the years.
Speaker 4 (20:46):
Yes, absolutely, creative strategies. Principal analysts President Carly and Midlanacy.
Good to be back on the road with you.
Speaker 3 (20:58):
Welcome back to tech.
Speaker 2 (21:00):
I'm Caroline Hyde and New York.
Speaker 3 (21:02):
We've got a new look for you.
Speaker 2 (21:03):
But Tesla is basically trading lower, but only slightly. We're
coming off of what had been a sell off a
more than a percentage point earlier in trade. And why
was that Well, because the company had been seeing not one,
but two downgrades from certain analysts. Let's dig into that
particular move. We've got Argus Research on one side, we
have BED on the other. This is the ev maker
really received the downgrades on the back of anxiety around
(21:26):
the ongoing feud between Trump and Elon Musk. Of course
that had been darved back somewhat, but we also have
BED and the others really shining light on what has
been anxiety around Robotaxi as well. Blue Begg's round Rstelica
is joining us. Now you've written up the fact that
we had these two downngrades. We're actually just seeing Tesla
stock price stabilize at the moment, Ryan, But what do
(21:47):
you make of the reasons for their concerns?
Speaker 5 (21:50):
Hey, good morning, thank you for having me.
Speaker 11 (21:52):
Well.
Speaker 12 (21:52):
I guess one thinking say is that it is not
too surprising, given just sort of how high profile and
sort of just the blow up was between Elon Musk
and Donald Trump last week. It's not surprising to see
a bunch of anamals kind of taking stock of this
and say, what is the real impact of this kind
of you know, political uncertainty, this kind of fallout. It's
(22:13):
extremely difficult to sort of assess what could happen next.
I've spoken to a few investors and analysts and they
all kind of say that this sort of situation is
basically unprecedented, having this kind of personal attack between a
CEO who is the richest person on the world, and
then the president. So obviously, when you have a situation
like this, it's very difficult to know what comes next.
(22:33):
And that's why you saw two analysts so far downgrade
to stock, basically saying the level of uncertainty and the
outlook here is just too clouded to feel comfortable with
more overweight position.
Speaker 2 (22:43):
Today we are only down by a tenth of a percent,
but then we look at what's happened here to date,
twenty seven percent lower. Can you put that into the
context of other MAGS seven and just how negative analysts
have gone.
Speaker 12 (22:55):
Yeah, So, with respect to the MAG seven, I believe
Tesla is now the worst performing of them. I believe
Apple was underperforming it a couple of weeks ago. Given
the recent weakness, the double digit drop, it's on the
wake of the big blow up. Believe Tesla is now
the worst performing stock it saw very significantly from the
peak it saw in the immediate aftermath of the election
in November. I believe the stock peaked in December found
(23:18):
forty percent or so since then, So there are some
growing concerns out there. With respect to the analyst consensus,
Tesla is the least loved of the MAGS seven stocks.
I believe fewer than half of the analysts that Bloomberg
tracks recommends buying it. That is well below the rates
that you see at other major companies. It's pretty low
for large cap in general. In general, analysts tend to
be pretty positive on the companies they cover, but Tesla
(23:40):
a bit of a unique outlier in this example.
Speaker 3 (23:43):
Man Vacelica, we thank you so much.
Speaker 2 (23:46):
Another stock that's had analysts not loving it so much
is Apple. Let's go back to his developers conference, where
our own ed Ludlow is standing by with a developer.
Speaker 4 (23:54):
Yeah, it's about time we got the perspective of a developer.
Paul Hudson is the creator of Hacking with Swift as developer,
but his whole points, his whole raisin detray is to
help teach people how to develop within iOS and the
broader Apples ecosystem. So let's just start by asking the
simple question, what is it you want to see?
Speaker 5 (24:13):
What is it you want to hear? What is it
you want to learn?
Speaker 7 (24:15):
Yeah? So fair enough. Developers right now streaming in and
mostly saying the same thing. Is this the year we
got another big leap forward for generating stuff with AI? Code, text, images, sound,
something with AI one device in the cloud. We don't
really mind, but just something forward basically.
Speaker 4 (24:32):
So, based on current reporting, I think the answer is no.
But what we are expecting is that Apple basically opens
up access to your community, third party developers, to its
own LMS, its own proprietary working AI.
Speaker 5 (24:49):
Why would you welcome something like that if at all?
Speaker 7 (24:51):
So, Apple normally does a thing internally where they dog
food the AP I would call it eternally. They're trying
things out and then okay, this is good, We're ready
now a go to developers and hopefully that's today, and
so things like last year we had the writing tools
to rewrite or summarize or bullet point or whatever really
good stuff, but we couldn't do it from our code.
We had to let the user do it directly in
the UI. So hopefully today we can finally have that
(25:14):
and add a whole bunch of layers to what apps.
You know, it's a real force multiplier, that kind of functionality.
Speaker 4 (25:18):
It is a force multiplier in the sense if you
think about the history of the App Store and what
you can do across not just iOS but mac os,
that's how things generally get built. Yeah, but it's distinct
from whatever Apple will tell us or not tell us
with Siri and Apple Intelligence, as one uses it with
their their handset, Why would you want to know about
(25:41):
their own work and their own success.
Speaker 7 (25:43):
Well, look, last year they a lanced to the big
Apple Intelligence push, right they did. That was the first
part of the story, because you know, there's two parts
to it. We all want the deep conversational Siri thing
going on, but for that to work, us app developers
have to expose our logic, our data, our function It's
a system and last year Apple announced a whole bunch
of code just for that. So now we've been working.
(26:06):
There's tens of thousands of developers using this stuff now
called app intents. They all work, they'll work the great
now hopefully today, Apple, go right, we've got your data.
Let's go for it and strip something great.
Speaker 4 (26:16):
All being well, how much of a networking effect literal
networking is WWDC? Like all of you and your your
peers are kind of gathered in one place and you
wait to hear what Apple will tell you. But I
also find it interesting and like the kind of access
part of it to each other, but also to the
team at Apple that are working on the on the
codebase that you killed off.
Speaker 7 (26:36):
Yeah, so all the sort of Apple indie developer heroes
are here. There's a new game, the Art of Fauna
love It. He's here, The Haylight team here, the Slopes
team here. They're all here. So you can go and
meet your heroes and get your selfies and stuff. Lot
of fun. But there's also the labs with Apple own engineers,
Whereas here's a Swift UI team, here's the data team,
here's the Metal team or whatever.
Speaker 4 (26:55):
The labs almost happen in parallel with WWDC. So for
the uninitiated, what is it and why is it?
Speaker 5 (27:00):
Evaluated?
Speaker 7 (27:01):
So today, in specially the special event Apple Park is
the in person labs right where the teams who make
stuff who are mostly locked away in this building behind us, right,
get to come out normally.
Speaker 5 (27:10):
Right, I know, right.
Speaker 7 (27:12):
Once year it's like, oh, it's developers and they talk
to us and we throw our questions at them and
they get answers straight to our face, which is really nice.
They enjoy it too. They love it because they can
meet us and see how we use their code and
write weird and wonderful ways, and that's really special. But
then the rest of the week there's also online labs
you can book which are very helpful. It's for our
WebEx call and this year is new they have group labs,
so you guy as a group go together like twenty
(27:33):
or thirty folks and bounce questions off one engine someone
lucky engineer to get our questions and learn via other
folks questions too.
Speaker 5 (27:40):
Paul, what's your biggest frustration with Apple at the moment?
Speaker 4 (27:43):
I have no franspetionis for Apple at all now, just kidding,
there aren't that many of them standing behind the camera.
Just be honest, Like, if you are a developer and
you are developing for an os, Okay, So.
Speaker 7 (27:53):
The biggest thing right now, it's actually quite interesting. It
is about revenue. So we have this thing the Small
Business program, okay, where if you earn less than a
million dollars, which is most developers, Yes, right, you pay
only fifteen percent towards Apple. What a brilliant scheme. And
that includes now support API's credit card access, all that
download stuff, all down fifty percent. Good deal. But if
you weren't a million and one dollars, it's not progressive.
Speaker 5 (28:15):
So now we're getting into epic games territory a little bit.
Speaker 7 (28:17):
Well, a million one dollars isn't quite a big game,
but yeah, but when you hit a million and one,
it's not progressive. For that one dollar, you lose the
previous million as well for all future years, so you've
increasingly you lose fifty percent extra every year. So that's
not great. I know a lot of folks that like
see that fixed.
Speaker 4 (28:32):
A lot of what we expect to come today. And
again this is based on reporting bad boom bogs, Mark Gumman, But.
Speaker 5 (28:37):
It's just interface changes.
Speaker 4 (28:40):
Within that you can look for hints about how Apple
sees the future, about how we interrate rapped with hardware.
Speaker 5 (28:45):
Right, I have an iPhone app at a Mac. How
do you think about that and approach that?
Speaker 7 (28:50):
So one of the nice things about Apple's big push
towards their swifty Wi framework is in theory, we just say,
give me a button, give me an image, give me
a whenever you want slider, and it adapts to the
system correctly. So we'll find out in about an hour
or so. But I'm kind of hoping I just press
build an excode and it's going to look great and
glassy automatically. And if that's true, then iOS, Macaws, vision
(29:11):
of Wes, whatever platforms they choose to unify will just work.
Speaker 4 (29:15):
You kind of give the impression, Paul that it's the
people behind the scenes that you're most excited about. But
when you think about the keynote, who is it from
Apples kind of more leadership.
Speaker 5 (29:24):
Focused teams that you get excited.
Speaker 7 (29:27):
But honestly, if you're in Apple Park with a special event,
everyone loves to see Craig okay, because he's a massive
fan favorite the Silver Fox, right, everyone loves Craig. The
selfie with Kraig and stuff. And from a technology perspective,
he's a massive coder. Okay, I mean like Craig, I'm sorry, Craig,
you're He's a super geek. He personally reviews a lot
of work going out. He reviews xcode every year. He's
very very in detailed APIs. You wouldn't believe it because
(29:48):
given how he is, but he's very serious about code.
Speaker 5 (29:51):
I love that you seem upbeat.
Speaker 4 (29:53):
You've got us energized and ready, like Paulson as the
creator of hacking with Swift, and we're here in WWDC
and Coubertino character.
Speaker 2 (30:01):
I'm so psyched the energy from Koupertino. We love it
at Thank You. Meanwhile, coming up right here in New York,
we talk about Warner Brothers Discovery. It's plans to split
its businesses but separately into two traded stocks. Details behind
the company's efforts to split TV and streaming.
Speaker 3 (30:16):
This is Bloomberg Tech.
Speaker 2 (30:27):
Warner Brothers Discovery when it plans to separate more formally,
it's streaming of movie.
Speaker 3 (30:31):
Divisions from TV network operations.
Speaker 2 (30:33):
They're going to create two publicly traded operations by the
middle of next year. For more, Bloomberg's Felix Jewett joins us.
Speaker 3 (30:39):
Now, oh what a surprise. Never seen that one before.
Speaker 13 (30:42):
Yeah, yeah, a little bit of deja vous. I mean
Comcast just did the same move, essentially spinning off its
cable networks. In fact, you can go back to twenty
nineteen when Rupert Murdoch broke up his empire and sold
the studios and the IP and the franchises at Disney
and then spun off you know, the legacy networks, the news,
the sports. So yeah, we're basically seeing consolidation into two
(31:07):
different markets, one being the legacy traditional cable networks and
then the other being streaming and content production.
Speaker 2 (31:15):
David Sazanov keeps the content production, the streaming, you get
your CFO kind of videfield taking over as the leader.
Speaker 3 (31:21):
Of the other business. We had to get the names.
But one analyst reaction caught my attention in your.
Speaker 2 (31:27):
Guys story, like the recent pivot back to HBO Max,
this move reveals a company fumbling its way through disruption.
Speaker 5 (31:34):
Yeah, fambiling.
Speaker 13 (31:34):
Yeah, I mean, I think it's an admission that the
entire rationale for this merger of assets to begin with
three years ago hasn't worked out, right. I mean, you
think about the deal in twenty twenty two at and T.
We're going to spin off WarnerMedia. We're going to combine
it with Discovery. You're going to get the premium content
production you're going to get the reality TV from Discovery.
You're going to create this huge streaming colossus that's going
(31:55):
to take on Netflix, and you know, we're going to
change it from HBO Max to Max. And now three
years later, you're saying that we're going to go back
to HBO Max, we're going to make it a premium,
we're going to get rid of this low cost streaming,
and you know from Discovery that people aren't watching on
the service.
Speaker 7 (32:13):
So yeah, it's kind of unwinding.
Speaker 13 (32:15):
Everything that's happened over the past three years. And you know,
the value of the company has you know, dropped by
sixty percent since then, so it's not a huge surprise.
Speaker 2 (32:22):
So when you put that into the context, so many
would say the investors love it today, it's the best
performing stock on the nasat one hundred. The shares spike,
but in the longer term context, it has just been
so under pressure because of these underperforming assets as a whole.
Speaker 13 (32:36):
Yeah, and now I think you know, people are thinking, well,
it will set up both companies.
Speaker 5 (32:41):
For better m and a positioning.
Speaker 3 (32:43):
Okay, so that's the gross story.
Speaker 13 (32:44):
Yeah, I think so at this point, because someone's going
to come along probably in the next couple of years
and consolidate all the cable networks. You would think Comcasts
having spun off theirs, you know, you have Fox, which
is again pure like entertainment network news at this point.
Speaker 5 (33:00):
And then on the other side, Yeah, I.
Speaker 13 (33:02):
Mean it's interesting to hear the company talk about their
new streaming strategy, which is basically, Okay, Netflix and Amazon
have essentially won all things for all people business, and
what we really offer is a premium streaming option with
HBO and so we're an add on service. And again,
you know, paramount Better merger you know, is up up
(33:24):
in the air at this point. So I think there
is going to be a lot more consolidation. I think
investors are probably thinking, Okay, this move sets up both
companies for bettermine either as a buyer as a seller.
Speaker 2 (33:36):
At this one, we know about David Sazdev and m
and A thoughts, but what about what do we know
about kind of vitem filst what do we know about
the CFO.
Speaker 13 (33:44):
I mean, he's been responsible for cutting costs. There's been
all these layoffs, consolidations over the past three years, paying
down the debt, which they've done a great job of.
You know, twenty billion dollars paying down the debts in
the past three years. I think he's going to be
in charge of managing these assets, which are still profitable,
but they're all losing subscribers, losing audience. It's a downward trajectory,
(34:09):
So how do you manage that. It's going to be
managing costs.
Speaker 2 (34:14):
Meanwhile, they say they're going to raise a bridge loan
from JP Morgan of seventeen and a half billion, but
going to recapitalize that before the split Clix Jollette.
Speaker 3 (34:28):
It's time now for talking tech.
Speaker 2 (34:29):
First up Meta is set to invest in Scale AI
with potentially more than ten billion dollars, making one of
the largest private company funding projects of all time now.
According to Bloomberg Reporting, It's Scale generated about eight hundred
and seventy million dollars in revenue twenty twenty four expects
to make two billion dollars in revenue this year. Rus
ion Q has agreed to buy UK startup Oxford Ionics
(34:50):
in a one point zero eight billion dollar deal.
Speaker 7 (34:53):
Now.
Speaker 2 (34:53):
The takeover will bring together ion q's quantum hardware and
software capabilities with Oxford ionics quantum chip technology. Transaction is
expected to close in twenty twenty five, subject to regulatory approvals,
and Qualcom has agreed to buy semiconductor company Alpha Way
for about two point four billion dollars in cash. That's
a ninety six percent premium into Alpha Wave's shares price in.
Speaker 3 (35:14):
March thirty first.
Speaker 2 (35:16):
The deal is expected to close in the first quarter
of twenty twenty six, pending regulatory and shareholder approval. Now,
let's head back to Apple's developers conference.
Speaker 4 (35:24):
Ed, you're standing by, Yeah, And even if the news
flow isn't about Apple Intelligence specifically, there's still the reader
cross of what we hear today and how it drives
adoption of the ecosystem and sales of the iPhone. And
that's why I'm delighted to speak with IDC's senior research
director and Abila Papal Like, that's how I think about it.
(35:45):
So the reporting tells us that it will be largely
interface changers. It will be some developer access to Apple's
work in AI that will drive some innovation. How does
that translate to the iPhone?
Speaker 11 (36:00):
Thank you? And it's nice to be here. I think
those are you know, really still big steps. You know,
it's very important, it's going to help Even if there
aren't really those big revolutionary announcements in AI. Those two
things that you mentioned are going to help drive steps towards,
you know, moving Apple in the right direction, right like
(36:21):
opening apples it models to the developers, which they haven't
done before. Are going to create innovation, even if it's
from the community and not you know, driven by Apple.
I think that's a big step. And that's also an
innovative step, even if it's different.
Speaker 5 (36:33):
Right.
Speaker 11 (36:34):
And the changes to the operating system across platforms, I
think that's also very important, and that's going to do
two big things right. One is going to give users
a new experience because the last time day of the
design overhaul was especially with io has a decade ago.
And then two, it's going to unify the experience and increase.
Speaker 3 (36:56):
The user's sickness.
Speaker 11 (36:56):
So if there are some potential users thinking to move over,
it's going to make that even more difficult.
Speaker 4 (37:02):
How to consumers respond to OS labeling where they go
from version iOS seventeen eighteen to year OS twenty six
point blah blah blah blah blah.
Speaker 11 (37:12):
I think it's going to make it easier, right, It's
before like that before there was just so much confusion
between the different platforms, and we see users using.
Speaker 5 (37:21):
More devices you mean iOS, mac os, etcetera.
Speaker 11 (37:24):
Between different devices, Right, we have more use consumers having
multiple devices, and it's harder to attract what's the different version,
even though consumers are not that much focused in terms
of what's the software and what version it's on. It's
going to make that much easier for the average consumer
to follow. And we're used to that with other products, right,
(37:45):
other consumer products. So I think it's a really good
move and simplifying.
Speaker 4 (37:49):
What's the kind of IDC must watch lists for today?
What are the top three things that you want to
hear from the company?
Speaker 11 (37:56):
Well, I do you know, I know that even though
we're not going to get the big announcements around uh
kind of Apple Intelligence, and that will appease Apple II critics,
but I'm still eager to hear what the announcements will
be around Apple Intelligence. I do still think they will
(38:16):
address those to you know, signify that they are making
those even if there are smaller steps, that they are
still pacing towards that and they're you know, they have
not dropped the ball. So I think that that that's
I'm eager to see that. I'm also eager to see
what kind of design. You know, we did hear some
different obviously, rumors about the design changes about some liquid
(38:39):
liquid glass. So I'm very interested to see how that looks.
Because Apple, even though sometimes they make simple and small changes,
it's always it's always really brilliant, brilliant.
Speaker 4 (38:49):
I'm eager to see that there's some functionality discussion as well.
Live translation in I message calls and through air pods
is something that we may hear about.
Speaker 5 (38:58):
But I also think about.
Speaker 4 (38:59):
The DISCUSSI I've had quite recently with Meta who have
been working on this across different form factors of hardware.
Google's been working on translation for a really long time.
Apple's going to catch up there.
Speaker 5 (39:11):
Well, you know, there's.
Speaker 11 (39:11):
Always again, the critics are always going to be saying
like be saying that, oh, you know, Android has had
this for so and so many years. But we have
to think about the ecosystem of Apple users. I mean,
I have friends that the average Apple consumer doesn't really
know what's been announced on Google Io or Microsoft Build
or they don't really know. To them, it's their Apple universe,
and to them this is going to be revolutionary and
(39:33):
life translation is one of the biggest AI features that's
been used. It's really popular in the you know where
it's so to the Apple consumer, they're going to be
really happy about that. And if that does get announced
and really it's going to be very well received.
Speaker 5 (39:48):
Just really quickly.
Speaker 4 (39:48):
How uncertain is it right now for Apple in particular
the smartphone or iPhone context with.
Speaker 5 (39:53):
Tariffs et cetera.
Speaker 11 (39:55):
Of course the terriff question, there is definitely a lot
of uncertainty. But regardless so where the terraffs land. And
you know, despite the high uncertainty that we've seen, even
you've seen with our latest forecast, we still expect a
growth for Apple because we've seen even with the pandemic
right in times of high uncertainty, we see that the
Apple consumer segment is still pretty resilient. So we'd still
(40:16):
expect a low single digit growth for Apple this year.
Speaker 4 (40:19):
Nabila popeow IDC Research here at Cubatino at Apple's WWDC Carroc.
Speaker 2 (40:24):
Still so much to come, you're reporting throughout the day
or an extraordinary event that's about to unfold, now, does it?
For this edition a Bloomberg Tech do not forget.
Speaker 3 (40:32):
To check out our podcast.
Speaker 2 (40:34):
You find it on the terminal as well as online
on Apple, Spotify, and iHeart Do. Go back to Coopatino
with Ed a little bit later throughout our programming, This
is Bloomberg.
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