Full Interview: Bloomberg’s Mark Gurman on Apple’s AI Stack, Anthropic, and the Future of Siri

And without further ado, we have Mark Gurman, the German editor, managing editor of Bloomberg, in the Ultradome. Welcome to the show. Thank you so much for taking the.

0:00

Time to come on down.

0:11

Yeah, right here. We'll have this microphone for you. You have a Diet Coke. So you're locked in.

0:12

We're ready to go.

0:18

How have you been? How's your new year going so far?

0:19

Oh, freaking great.

0:21

Yeah. Yeah.

0:23

Had a. My wife and I had a baby last year.

0:24

Gong, gong, gong.

0:27

I need to get one of those things that you guys make on the Twitter and just me, the card baby. We'd be happy to do that. We're happy to do it.

0:32

We never.

0:41

We never.

0:41

Yeah, we never. We never know. Some people. Some people want to be, you know, more low key, but.

0:42

Oh, I am low key about it. I just figured, you know.

0:46

But how do you rate parenthood? How does it. How does it feel being in it versus, you know, all the expectations that.

0:48

People just taking care of this individual and they're being so reliant on us and getting to teach them, but shout out to my wife for being the one really pulling the strings there and taking care, so it's great.

0:56

Anywho, I feel like reporting and parenthood are especially hard to balance in some ways. Still a way. Yeah. No, I would just. Obviously, it's completely possible and you're clearly doing fine, but the nature of the work means that a story is happening and you want to be the first to provide the best coverage. And sometimes there's a baby's crying and.

1:16

You might not be able to pick up the phone, but you get through.

1:43

You know what? People have been hearing crying babies over the phone for. That's true for forever. So they'll have to deal with it. I just can't wait till we go on an airplane.

1:46

Oh, yeah.

1:56

I already told my wife we're getting banned from American Airlines.

1:57

I've said this on the show before. The funniest thing is, growing up, I assumed that when a baby was crying on the airplane, it means that the parents were bad parents. Like they were doing something wrong.

2:02

Totally, totally.

2:11

And in reality, babies just cry for a million reasons, and it's totally possible that there's no solution. Sometimes they just need a. Yeah, I.

2:12

Saw, like, an Instagram reel of a mother talking about her kid, and the kid was crying in the background. I was like, why would you take advice from her? Like, that's such a bad bomb. Yeah. It has nothing to do with that at all. Now it's like, baby's always crying.

2:20

It's crazy.

2:31

Hungry, they have gas, they don't like the sweater they're wearing. There's a million reasons, you know, they didn't like my article. Who knows? But anyways, anyway, let's talk about Apple.

2:32

Let's talk about Apple. I mean we've been talking about new Siri expectations there. The big news yesterday was Claude bought. Have you been, do you think there's anything about how. Have you been processing the cloudbot now Multbot story? What's possible there? Expectations around AI assistance feel sky high in the open source community. Do you think like anyone at Apple's like updating on claudebot and Multbot and what's possible?

2:42

Well, let me just take a step, please.

3:12

Yeah, yeah.

3:13

You know, with Apple and AI.

3:14

Yeah.

3:15

So in 20, was it 2018, they hired John Gianandrea. He was this high flyer at Google. He ran AI in search and Apple thought they had a coup here. Apple thought they would hire this guy and really just hit the ground running and be at the forefront of artificial intelligence. Just seven years earlier, they announced Siri in 2011. There was absolutely nothing like it. It was breakthrough, but then it just became utter junk. Right. Google Assistant lapped it, Alexa lapped it. So they thought they were going to bring this guy in and it'd be a game changer, turns out. And maybe this will be Tim Cook's fait accompli. But this was the biggest mistake, this hire of Tim Cook's tenure. I think it's easy to say Apple is so behind in AI. There's been so much ink spilled on this and so many conversations on this and I've written about it and talked about it half a million times. I think it does. You haven't even scratched the surface about how big of a problem this is for Apple. Right. They've completely screwed up AI in every which way and it comes down to just hiring the wrong people and entrusting the wrong people.

3:16

But is it a do nothing win scenario? Because I think we're seeing a situation now where the Mac Mini might end up selling out.

4:26

Boxing is fine or is it great hardware? Are you seeing like financial.

4:32

That's the problem, right? When you've had no real negative hit.

4:37

It'S hard to go wartime.

4:42

Go wartime and acknowledge that there's failure because all the numbers.

4:45

But it is, it is wartime, right? Yeah, the numbers are great. Tomorrow they might report their first $135 billion to $140 billion quarter. Right. Like I don't, you know, the Problem is how can you put $140 billion and Tim Cook needs to go retire in the same center?

4:49

You can't.

5:14

Yeah, exactly right. It doesn't make sen. But when you think about the long term, you think about the future, these things are going to need to get rectified. And I guess the good news is they are on a path to rectifying it to some extent. This Google Gemini deal is a breakthrough for Apple. It's embarrassing. I mean it's absolutely crazy that you.

5:14

Poach their guy and then years later you're paying them billions.

5:36

He screws you up, you pay him 25 million a year for eight years. Right. And then now you're paying basically 4x that, 8x that, maybe a little bit more in order to get the new good stuff. And so they'll announce a new Siri next month. The thing with this new Siri is basically a replay of everything they announced in June 2024. So it's basically everything they announced two years ago coming very late. Things like using what's on your screen to fulfill Siri queries, being able to control your apps. And then in June is when the good stuff launches. That's when Apple launches its first chatbot. It's interesting because they've spent the last two years saying nobody likes chatbots, everyone hates ChatGPT. It's terrible. It's ruining the world. Okay, then you have ChatGPT, nearly a billion active users. They're like, okay, we kind of got to do this or we're screwed. So they're doing it and it's actually going to run on Google servers, Google cloud platform, Google TPUs. This is great for Google too. And I think some people at Apple think this is going to be like a short term thing. We're going to partner with Google till we get our act together. No, I definitely think that this is more of a long term play unless these models continue to get commoditized, which they will eventually. But this is not a 12, 24, 36 month thing. This is, this is longer term, I think, than people expect.

5:40

And Apple can't just go rap llama because of the terms of service that meta's put around. Put that around. They said you can't.

6:59

Well, I don't think they want to use Llama. I don't think they want to work.

7:06

With Meta's open source model. So there aren't that many games in town.

7:10

Well, let's take a step back here. So they're using Google in the US but they're going to have to do something in China. And so you'll see them use a combination of Alibaba and I think it's Weibo or Tencent or one of those different AIs for different features. So they'll use them. And just because they're partnering with Google Gemini on Siri in this chatbot doesn't mean they're not using other players. There's a lot of OpenAI and a lot of applications. They launched their Creative Cloud competitor today and a lot of those AI features are powered by ChatGPT. Like some image generation stuff. I still think on an image generation side you're getting a little bit better on OpenAI than you're getting from Google. And then a lot of stuff internally like Apple runs on Anthropic at this point. Anthropic is powering a lot of the stuff Apple's doing internally in terms of product development, a lot of their internal tools. So that's a big one to watch. They have custom versions of Claude running on their own servers internally too. Because this Google deal, this just came together a few months ago. They were not going to use Google. Apple actually was going to rebuild Siri around Claude. But Anthropic, they were holding them over a barrel. They wanted a crap ton of money from them, several billion dollars a year and at a price that doubled on an annual basis as well for the next three years or so. From what I understand at the time, Google was really an afterthought because they were in the middle of the trial with the Department of Justice and then for some reason the judge ruled that Apple and Google's deal was kosher, even though everyone knows it's a huge issue and a monopoly and all that. I'm not here to be a judge. I write, I don't make judgments for legal proceedings. But anyways, Apple and Google get off scot free. They can do whatever they want now and they're not being held back at all. And then obviously OpenAI that is a real firestorm for Apple right now. OpenAI obviously they're working on these AirPods competitors, the ChatGPT built in.

7:13

Sweetpea, Sweet pea.

9:23

Jony I've is running the show and design there. That's a big frickin deal. He raided the whole design team, all of the Apple designers that were there under Jony. I've not all of them, 95% of them are gone. A ton of them are now working at LoveFrom and OpenAI and other companies. Some of them have retired. But the crux of it is how do you partner with a company that's trying to put you out of business? So there's no way that they were going to work with OpenAI, no matter how good the thing is.

9:25

What do you think about some of the projections that you've seen or estimates around? I forget, was it Foxconn was saying 45 million units? Yeah. Preparing to be able to produce something like that in the first year, it feels like a massive number, but at the same time you have a billion users.

9:55

Talking about the OpenAI earbuds. Yeah, the suite, you know, it's so interesting.

10:16

And one more thing there. Yeah, the earbuds. The benefit of them versus some of these other AI hardware is like, if you can just take calls and listen to music, like already you have some functionality that people are using all day long. So it's not the same as like wearing a pendant or having some other little gadget that actually serves no real use case or at least not a powerful use case. If I can just listen to calls or, sorry, take calls, listen to music, at least there's like some like base level functionality and then you layer on the AI and maybe it turns into this amazing, you know, super differentiated experience.

10:21

I just don't see it. I just don't see them selling 45 million units. I just don't see it being a success. The barrier to entry for a new hardware company, as you know, is extremely high. Like, can you even think of one hardware company that just came into being and became an immediate success? Like, I just don't see it. And I also think the reason they're doing earbuds is because it's more low hanging fruit, to your point, and it's easier to accomplish. Not what they wanted to do. What OpenAI wanted to do is they wanted to create an iPhone killer. Instead, now they're trying to create an AirPods killer and I don't think they're going to be able to accomplish that. Will they look nicer than the AirPods?

10:57

Probably.

11:31

Will they have better AI than the AirPods? That's an open question, right? What stops Apple from expanding this Gemini deal to its AirPods and just basically adding a bunch of AI functionality to the AirPods? They have very fast processors, very tight iPhone integration. Apple. Apple can replicate whatever OpenAI is going to do pretty quickly by relying on Google and Gemini and whatever they can cook up functionality wise there.

11:32

Do you think that AI, specifically products that we had the creator of Moltbot on yesterday and he was saying there's so Many applications. And he was referencing my fitness pal, do I really need MyFitnessPal? If I can just take a picture and just send it in to my agent and it'll track it. And so what I was thinking there is like, does that make the App Store, broadly, potentially less of a hurdle with OpenAI is launching, eventually launches a new phone and they have a new OS and they don't have an App Store. They don't have an App Store on day one.

11:57

Equivalence of apps on the fly.

12:32

Well, if you ask me, you know, we're already in territory where iOS and the app Store are legacy features. Right. Like the App Store is a legacy world. The iOS user experience, the Mac OS user experience, where jumping between applications, where you're going into something to get information, where you're going back to your home screen and launch another app. Apps are the past. AI agents are already here and that's the move forward. And whenever OpenAI comes out with a phone, and I do eventually anticipate them coming out with a phone, and when I say phone, I'm not talking necessarily about something you put to your ear, like a classic phone, like an iPhone. I'm talking about, I feel like people are always going to have some sort of slab in their pocket. Right. Because it's convenient. You get the display, you get the sensors, you get the battery, you get the cameras. It's not a replicable experience. No matter how many different gadgets they can put on your body, they can.

12:33

Make like a banana, like a plastic banana, smart banana.

13:27

That would be fun. Yeah. So, yeah, AI agents are where the world is going. And I totally expect Apple to move in this direction. This new Siri Campo that they're launching at the end of this year, that is a huge step towards the AI agentification of different features on the phone. And being able to, for instance, tell your phone, pull up this photo that I took at the studio, find photos where I have bottles of water and remove the bottle of water from the photo and email it or text it to Mark. Right. Like the AI agent ification of iOS is happening. Sure.

13:32

Yeah. And theoretically, Siri should have killed, like, the weather app a long time ago, because I don't like when you think about, like, if you're just going to navigate to the weather app and you're traveling somewhere and you're like, oh, where is this city? Oh, I don't have it saved. I'm going to search and add it. And then you're, like, finally looking at it, and it should just be a.

14:14

Prompt that you're firing, but then when you try and click a level deeper in the current Siri experience, you just can't get.

14:32

That is the big problem with Siri and the big difference from ChatGPT and Gemini is it has the going a level deeper problem. There's no back and forth. It forgets context very easily. It has no memory, it doesn't have that tight integration with applications because the app developers, they know Siri is so terrible. Here's a question. So what if I told you that you could call an Uber with Siri, right? Like, you guys probably know that, but like, does anyone use it? I don't have the data, but I can tell you that they announced support for that and they actually rolled out support for that 10 years ago. No, 10 years ago. 10 years ago. Okay. It doesn't work because nobody uses it because it's too cumbersome.

14:39

Totally.

15:18

Okay. Like, I'm very tech forward, as anyone watching this probably knows. You know, it's right up my alley to have Siri call my Uber for me. But like, I've never done it because you know what? I don't fricking trust it.

15:19

Trust it? Yep.

15:30

It's not. I don't think it's going to work and it's just going to be a time suck.

15:31

And People didn't trust ChatGPT with 3.5, but now on 5.2 Pro, I would.

15:35

Trust ChatGPT with ordering a new. I would trust ChatGPT with my life. But Siri.

15:40

Okay, so on the Siri rollout, it seems like there's a couple milestones that we're gonna be tracking throughout this year. When do you think I'll be able to go to Siri and just say a general googleable question, you know, give me the history of the Roman Empire. The type of thing that any LLM can just pull up a couple paragraphs on. But current Siri does not have that ability.

15:48

Okay, I can't tell you that you're going to be able to do it. I can tell you that you're supposed to be able to do it. How's that? I'll speak again.

16:13

I just mean, is that like, what's the goal? No, no, I just mean like there's knowledge retrieval end of March and then there's like agentification, like making, interacting with the apps, doing all the things like pulling what's in your camera roll together with your imessage and all that end of March. And that feels harder for both of those end of March, they're Supposed to.

16:19

Be end of March. Okay. But the latter in terms of the app manipulation and the AI agent, that's going to be split probably between.

16:37

Because that seems harder than just integrate Gemini and just give people the Gemini answers when they ask Siri for a question.

16:44

You know, it's so funny. I look back to WWC 2024 and obviously I made a big deal about all the delays because of course I did. But then you think about it, it's like, was anyone to use these in any of these features anyways? Like, we're talking about a few features that were delayed. And you look back at the announcement of these features at WWDC 2024, it's like Apple totally downplayed them too. Like they gave a few cool demos, but it's like this is some game changing stuff if it's marketed correctly.

16:51

Yeah.

17:19

So not only did they pre announce it, not only did they delay it, but like they didn't even market what they had in the hand correctly. Which I guess in hindsight like you should have realized that it wasn't that compelling or ready to go if they weren't going to market it. Because I'm telling you, they can market anything.

17:19

How do you see search fitting into Siri? Because so much of what people are using LLMs for is search now and you're seeing more commerce integrations. And I've always thought the lab's obsession with the browser was interesting because in many ways I feel like using LLMs at already feels like you're using a browser. It's just kind of a new experience. And a big question is like, okay, so Google's powering the new Siri. What happens when people start doing searches with high intent in Siri?

17:35

Do you Google search anymore?

18:10

I do.

18:11

I don't.

18:12

I specifically still Google search when doing like product research, shopping, et cetera.

18:13

I don't.

18:19

I still go to Google if it's something that I know is fastest in Google. So today I wanted to know what year the Avengers movie came out. And I know that that's half a millisecond in Google and I know that that's five seconds in any LLM and so I'll control T to go there, but for any level deeper. I also wanted to know about the VFX house that worked on it and what technology they used and when that happened. That was an LLM query.

18:20

Yeah, yeah, I don't really use Google anymore. I have my action button on my phone sent to ChatGPT and I'm just like living in ChatGPT. Sure, sure, sure. You can't ask it the weather can't ask it to do anything on your phone. Sure, sure. That's I guess the differentiator for what the new series is going to be. They've built a feature called World Knowledge answers the internal name and it's basically a perplexity ripoff or a web search ripoff in ChatGPT which is to bullet out summaries and information and give you citations and context.

18:47

Using Google directly for that or is it some other.

19:18

It's an Apple solution. It's an Apple solution. But what they've been trying to do now is under the hood change that to the Gemini model. Again all this stuff was supposed to.

19:21

Come out because Gemini is very good at Google search.

19:33

Gemini is very good at Google search but there's no Google services in this new Siri. It's literally a model. It's basically like they hired the Google DeepMind team to develop the model to power its AI in Siri.

19:36

Yeah. So I guess what I'm getting at is, is will I ever get if I'm doing using Siri to research a product, will I ever get an ad powered by like a Apple ad network because it is a high intent search like ever.

19:50

Yeah, I think the end game for all these guys is to put ads in this stuff.

20:05

Yeah.

20:09

You know one thing that I haven't talked about in a while and that's just.

20:09

And I just feel like that's been somewhat under discussed because people are so obsessed with just make Siri work that if it does end up working really well then you would have a effectively a search engine.

20:11

Well yeah, if it works they have all the tools to do a search engine and if it does work well yeah, they'll probably eventually put ads in it. A couple things haven't discussed in a while. One is they're working on a new Safari web browser and you're going to see AI search at the forefront of that. The other thing is the ads ification, the advertising of the Apple operating systems that starts this year. You're going to see them up the ad slots in the app store in search in particular. Let's give it up for more ads. Yeah, ads. Any sponsors we want to give a shout out to over here?

20:26

Don't tempt jump.

21:10

I will do it. And then you're gonna see ads in Apple Maps.

21:11

Oh, interesting. That's been one of the main differentiators in the apps.

21:15

It'll be all AI and it'll be targeted to based on things that you're searching. Like if you see a sushi restaurant, search for sushi, whatever. You may see some search results get elevated. It's kind of like what Yelp does. Right. By the way, it's so funny on Siri, there's this Japanese restaurant in the valley I like, and it's named after a city in Japan or province in Japan. It always gets painful. Take me to Chiba. Yeah, right? And I have been. That's the name of the place. Shout out to Chiba.

21:21

Okay, boss, you're gonna need to get in a boat.

21:49

Oh, my God. It immediately pops up 7,652 miles away. I'm like, I've been to this place 50 damn times. You should know by now, talking about the restaurant 20 miles away, not the city 8,000 miles away. It's really amazing.

21:51

Hiring, chartering an aircraft. Sir.

22:09

Yeah. I got a bunch of other stuff in the Apple ecosystem. First. Starlink is reportedly planning to integrate Apple's reportedly planning to integrate Starlink connectivity into the iPhone 18 Pro. How do you think about this?

22:11

You saw this stuff on Twitter the last couple days. Yeah, there's been no reporting on this recently. This is another. See, this is one of the downsides to AI. People just spew BS on Twitter.

22:25

Oh, interesting.

22:34

Okay, so Apple already does work with Starlink.

22:35

Yeah.

22:38

Right.

22:39

Yeah.

22:39

You can hook in. If you have a T mobile iPhone, you can get onto Starlink. So that already exists? Yeah, I have.

22:39

I've experienced. I experienced, I think during the fires last year. So now all the cell service was down.

22:47

I'm on Verizon.

22:53

If you want satellite.

22:54

Satellite on the 17th, but it's not what.

22:55

You don't want to be on Verizon.

22:58

Yeah, I should get off of it. But. But it's not. It's not Starlink. It's the old network on which.

22:59

On the Verizon one.

23:04

Yeah.

23:05

You're talking about the Apple network.

23:05

Yeah, yeah. If I'm in an emergency situation, I can get out like one text message. It's really, really slow. And it's clearly going with, like, I think, vias app.

23:07

The Apple network is just super legacy.

23:13

Yeah, it'.

23:15

Yeah, they've got to strip that down and partner and rebuild or something. Anyways, the iPhone 18 is going to have enhanced satellite connectivity, and they'll obviously work with Starlink and whoever. So that's coming. What else we got on our plate? You want to talk about John Ternus?

23:17

Absolutely.

23:32

Let's talk about.

23:33

Turn us around, John.

23:34

Yes, John.

23:35

Okay.

23:37

Yes. So I have a bunch of questions. Let's start with what is going on behind the scenes of this campaign. It feels like there's, it feels like intern politics. There could be like, people like pushing for him, pushing against him. There's this weird quote that keeps going out that people say he's never made a decision in his life.

23:38

Everybody keeps making the most underhanded compliments that I've ever seen. Yeah, it's like, it's like, yeah, he's shipped a lot of products, but he's.

23:55

Never had to make a hard decision.

24:06

But just wait for my profile. Bloomberg, okay. You'll get the real story. I'm not going to give it all away today, of course, but I'm here.

24:08

Yes.

24:15

For the company. Got to give the shout out. Stay tuned for the article.

24:15

Of course.

24:18

Subscribe to Power on our tech bundle. It's great value. Okay. Ternus. He's 50. Everyone else on the Apple executive team, late 50s through their mid-60s, turning 66 this year. In the case of Tim Cook, you're Apple's board. You like continuity. You like an insider. You like people who know what they're doing, have been there for a while. They know where the bodies are buried. Okay. These guys have hundreds of millions of dollars, if not more. Yeah. At 50, he's the only one who is. If let's say Tim Cook hangs out another three to five years, you're not gonna point another CEO who's 65, 70 years old, he's the only guy Apple, they get vast majority of the revenue from hardware. He's the hardware guy. Have they screwed up any hardware since he's been in charge? No. He's a steady hand, knows what he's doing. He's really the only choice. You know, there was this New York Times report a few weeks ago, basically saying that it could be Greg Joswiak, could be Eddie Q, could be Deirdre o', Brien, could be Craig Federighi. It's for sure not going to be Craig. It's not going to be Deirdre, it's not going to be Eddie, it's not going to be Jaws. The only category that makes sense is an operations person. Because you look at the current CEO, Tim obviously comes out of the ops world. You look at the guy who would have been CEO if Tim Cook didn't stay so long. I'm not saying he shouldn't have stayed so long. He's done, obviously, a fantastic job for shareholders and the employees and what have you. Would have been Jeff Williams, he was the coo. So Sabi Khan, he was named COO a few months ago, but he's really been in that job for the last half a decade, I would say. So anyways, it'll be Turnus or Sabi or someone completely out of left field. I don't think this is imminent, so we'll see what ultimately happens. But all signs are turning towards Ternus. Everyone has an opinion that Turnus is going to be the next CEO. Fine. I've been shouting this from rooftops for the last two years, but no one has given evidence. Like what is this based on? Right. Has there ever been a baton handoff? Is he getting more responsibility?

24:19

Well, they have like a big baton.

26:27

They've got one of these. You know what you have? You have white smoke coming out of the well. Actually, no, there's no smoke. It's very environmentally friendly environment friendly. So, you know, maybe out of the.

26:29

Reflection out of the sun. Solar panels. A glint off the solar panels.

26:40

Exactly. So what, you want evidence?

26:44

Yes.

26:47

You want to hear that he's been getting more responsibility? Okay. One few months ago, took full control of the Apple Watch engineering team that was co run with the old COO until he retired. Okay, there's something for you. When they started soft firing the head of AI, the guy we were talking about earlier, they took the robotic stuff away from him. They gave that to Ternus. And then the real news, as I broke last week, is that even though on paper Tim Cook is running the Apple design teams, it's not. It's Ternus. He took over at the end of last year for a variety of reasons. But you look at who's run design at Apple over the course of history. Well, like Steve Jobs, Tim cook himself between 15 and 17, Jeff Williams, who was the number two in heir apparent for a long time, and then obviously all heard of Jony. I've. Now you add John Ternus to that list, it's a big sign, It's a big indicator because you look at what Apple is known for as a company and its design, right. That design function. And it's not just hardware, it's hardware and software that he's overseeing as the manager of both of those teams. So I would say that is your first piece of evidence that he's getting some more material.

26:48

What does he have to do since he's the hardware guy to communicate that he has a steady hand on the tiller? As Apple transitions into the AI age, the narrative is that they have delivered on hardware. They have not delivered on AI.

28:04

No, they haven't.

28:19

And so how is he going to communicate that he's forward thinking and can be the one to keep them on.

28:20

The cutting a step back. You think about like succession at all of these big tech companies. Right. Like who's going to, who's going to take over Google one day, who's going to take over Microsoft one day, who's going to take over Amazon one day? Right. Like it's probably going to be the AI guys at all of these companies. Yeah, right. Apple doesn't really have an AI guy. They're trying to make Craig Federighi the AI guy but he's not CEO material. He's, he's voiced this himself. So don't get mad at me Craig. But yeah, Ternus, can he become the AI guy at Apple? I think it's too early to tell and I think that is a, that is a big question there. Like do you put a hardware person in charge of the AI era?

28:26

People have been speculating that Apple would do some big M and A deal to bring some AI native talent in house.

29:04

They want it to buy Perplexity.

29:13

Yeah.

29:15

So the origin story, they were really talking about it. Like Eddie Q was seriously considering Adrian Parik, other head of corp development M and A reports to Tim Cook. They were looking at this pretty closely. Then they pulled out. Why were they going to buy Perplexity to power the search stuff we were talking about earlier became less important after the Google deal was allowed to live.

29:15

And do you think they would have done it if Perplexity hadn't been marked up to oblivion?

29:39

I think they would have done Perplexity at a reasonable price.

29:47

Yeah, like Apple doesn't own. Yeah, that's the thing. Low single digit.

29:50

I think they would have done it up to 5 or 6 billion.

29:53

Yeah, yeah.

29:56

But like if it's 1520 and then perplexity started, you know, trying to say they're going to buy Google Chrome if it got divested and all that.

29:56

So.

30:05

And I think they would have done it if the Google search deal was torn apart in order to bring a search product to market faster. They like to buy companies to. I'm not trying to do Apple corporate speak here but this is like legit. They buy companies to accelerate their roadmap. You'll hear Tim Cook use those exact words tomorrow. Okay. By the way, but literally tomorrow. Apple earnings. Apple earnings. This guy, my God, come on, head in the game.

30:06

But is there specifically a deal that he'll be talking about tomorrow?

30:34

No, no, just in general, like people be asked about. I bet he'll mention the Gemini thing.

30:38

Because he was asked that in the last earnings, and everyone was like, why haven't you done a mega deal?

30:42

Why haven't you done a 10 deal?

30:46

Okay. So he just says it's just going to be more of the same.

30:47

Got it. You know what it is fair to say is their pace of deal making has decelerated significantly.

30:49

Interesting.

30:55

Significantly.

30:56

And so he will be. I mean, in the last earnings, he was sort of like, managing that and saying, like, oh, we're still doing deals, but we're selective and we only do it to.

30:56

He's like, well, they also don't care to announce, like, 95% of the deal.

31:04

If they're big enough, they have to, you know, like the Golden State warriors, they want Giannis, but they don't want to make a big trade. They don't want to give up other draft picks. Right. They're like, yeah, same with the Lakers. This is like my existential crisis. The Lakers, like, yeah, we'll trade the picks if the right guy becomes available. Yeah. And they know the right guy's not going to become available. Right. Just like Apple knows these companies are always going to be out of the price range they want to pay with. Apple is very frugal, money wise. Extremely frugal. The other thing is they've been burned countless times with acquisitions like that. Beats deal. Terrible process for integrating that company. Sure.

31:07

Well, even then, I think it was like a 3x revenue multiple. Weren't they doing it? Wasn't Beats doing like, a billion dollars?

31:44

Oh. From a financial standpoint, it was just like a home run. People criticized that deal, but they made it back in months.

31:49

Oh, interesting. Oh, Beats money. But it was a nightmare from.

31:55

No, but it's worth. It's worth noting because, like, even paying for perplexity at 5, 6 billion, it's gonna monetize that.

31:59

Probably. Yeah. I mean, Beats was monetized from day one. Obviously, you're selling the headphones, which are terrible, by the way, but everyone loves them. And then Apple music, they, you know.

32:09

Yeah.

32:17

Beats started the whole subscription services business at Apple. And so if you look at it, Beats is one of the most wildly successful technology acquisitions of all time. And then you compare it to how much criticism it got because it's, oh, Dr. Dre and Jimmy Iovine and whatever, whatever, whatever. And the headphones are crap. You know what? From a financial standpoint. Home run. Home run. You know, but integrating into Apple's culture is not easy.

32:18

Yeah. Speaking of hardware, what's going on with the robotic arm that will live in your kitchen.

32:45

Yeah, the Pixar lamp.

32:50

It's the Pixar lamp. Like I said, it's. You got this nine inch display. It's an iPad display on a robotic arm. It can float around your desk. It can twirl and turn around like. You know what we'll do a few years when this thing comes out, you'll have me back on and instead of me actually being here, you'll have this on here. Maybe, you know, leave my head floating around.

32:52

Yeah, I mean, Meta tried to do something like that with the.

33:12

Meta tried to do something like that. You know, these things are big in China.

33:14

They are.

33:17

It's a big thing in China right now. No one really talks about them, but it's. It's a category that has some potential. Okay. Yeah.

33:17

But it's years away. Just because.

33:25

Stay tuned.

33:28

Yeah. What about the foldable phone?

33:29

That's not years away.

33:30

That's closer.

33:32

Yeah. No, that's decades away. No, that's coming out in the fall.

33:32

Okay, that'll be fun.

33:36

I can't wait for that.

33:37

Yeah, that'll.

33:38

Are you, are you going to be.

33:39

A buy twenty two hundred dollars on it.

33:40

Oh, it's like going to be.

33:41

It'll be at least.

33:42

Is it going to be the highest tier, the biggest, the most powerful for Apple?

33:43

Yeah, that's going to. It's going to sit at the top.

33:48

It's going to sit at the top of the lineup.

33:49

Okay.

33:51

New status symbol.

33:51

Sorry, what were you.

33:52

I like that we had Ben Thompson on maybe before the end of the year.

33:53

Feel bad for Ben. You know, he's a big Milwaukee Bucks fan and they're about to ditch you on us.

33:57

The Milwaukee Bucks, that's sports team.

34:02

Really.

34:05

I do know it's a basketball team. I do know that it's Ben Thompson's favorite team.

34:08

He was talking yesterday, we didn't know what the. When the super bowl was.

34:11

He was talking about the Apple Vision Pro. I wanted to demo the. You know, you can watch the NBA live.

34:14

Basically.

34:20

You liked it.

34:21

Ben's pitch was like screw the. Yeah, screw the Apple produce. Highly produced. You know, they're cutting around all the time. And he's like, just, just invest the money to set up like the actual hardware in every single stadium.

34:21

Cameras.

34:36

The cameras. So that anybody can just drop in.

34:37

So you can just sit there, watch the game.

34:40

Like your don't need that. You don't need the. No voiceover because you can just look at the scoreboard.

34:41

You can replay.

34:46

Yeah. So he's saying strip the guys out of it. Yeah, look, I watched it. It was great.

34:48

You watched the whole thing?

34:53

Yeah, yeah, yeah. Trust me, people at home are not happy that night. Oh, you know, put that thing on.

34:54

Crying baby, crying baby.

35:00

And then you're completely isolated. I mean, I'm telling you, VR does not work for families.

35:02

It's true. Yeah.

35:07

It just doesn't.

35:08

It's really. Yeah, it is one of the major. Because then, I mean, the family people have the disposable income, more likely. So then they buy it, but they can't use it.

35:09

Doesn't work.

35:16

Yeah.

35:16

Okay, here's the problem.

35:17

Yeah.

35:18

It's like once a month, they've got like five games on the count.

35:18

Well, and that, and that was Ben's point is like, just set up the infrastructure and sell me a pass so that I can drop into any game and sit courtside.

35:21

Because right now they have to pull up with a production truck. They need editors, they need voiceovers, they.

35:29

Need like there's, there's, you know, basically one time fixed cost of like. He did the math, put them in all the NBA. Yeah. He said it's like 40 grand. It's like not like a huge amount of money. And you have no incremental cost per show. You're not dealing with producers and running a live product.

35:32

But they need to decide if this hardware is going to continue to exist before they keep investing in the content strategy. Right. It's a chicken and the egg problem. Right. How do you sell this thing if there's no content? But why invest millions in the content if you're not planning to sell this thing anyways and you're pivoting to smart glasses. Don't forget, they were supposed to come out with the Vision Air in 27 product called N100. I forgot when my article came out. Time is a blur. A few months ago, six months ago. And anyways, they killed that thing.

35:51

They killed it entirely.

36:20

Killed it. And the smart glasses, they shocked the Vision team on that.

36:21

By the way, the smart glasses, was that just completely reactionary to Meta?

36:24

Oh, yeah. They started toying with the smart glasses in terms of like this non AR smart glasses. First of all, AR smart glasses, that has been the vision from day one for a decade plus. But in terms of like this non display smart glasses, that is a concept that Meta has really popularized. And when these things started to gain a little bit of Steam in 22, 23 is when they started taking a very hard look at it. And they're going to do it and I think they're going to destroy meta with them. I'll be honest.

36:32

Yeah. Is it the styling, the pricing, the features, the integrations?

36:59

The integrations. To me the challenge is if you can't deliver me imessage.

37:03

Yeah. Apple has the ingredients because of their login to destroy any company in any hardware. It's just about them figuring out how to do it and get it done and not waiting too long. The biggest problem with them is they just take too long and over engineer everything. Like the Vision Pro is the most over engineered device ever. Right. They could have got that out three years earlier with a little bit less fit and finish and maybe it would be more successful today.

37:12

Yeah, yeah. It does feel like there was a cycle where the iPhone was ahead of the curve on so many things touchscreen. And then you. Then in that middle decade period you had the Android folks being like oh we've had this Apple feature for a year. We've had this. Yeah. Now it's like five years.

37:37

You know how many people wouldn't be caught dead with a non iPhone? You know, like it doesn't matter. But AI changes that equation. Sure, that changes the equation.

37:56

Especially if it's a Jony I've product and it's expensive.

38:04

Well, you know Jony I've obviously he's done amazing things and the new headphones or whatever they come out with are going to look amazing. Probably work amazing. It's just the barrier to entry on hardware is so high. There's so much risk there.

38:07

Yeah. I just, I still wonder if the like the Claude bot, these like open source agents, I don't know that everyone's going to adopt those but something like that, that sort of opens up the ecosystem just by brute forcing it. We were debating this earlier, like you can't get imessage notifications on the meta raid band displays which is.

38:21

I have them. Do you guys have them?

38:38

I think we do have some pairs around.

38:40

I've got one at home.

38:42

We've used the non displays a bunch and then we demoed the displays and have used them a fair amount and it's just a hard sell if you're an imessage user.

38:43

A hard sell if you're an imessage user. But the potential is just oozing with potential.

38:51

Yeah.

38:56

Like they've got a solid product there and like a couple iterations on that make them a little lighter, get the display resolution up, look better outdoors.

38:56

Yeah.

39:06

It's compelling.

39:06

And in a world where you have some sort of agent running on Your Mac Mini scraping all your imessages and then putting them into WhatsApp or something.

39:08

You know, maybe I'll do that. Maybe you guys will do that.

39:17

It's rare.

39:19

Yeah, it's rare. Nobody wants to deal with that.

39:20

Yeah.

39:23

You know, nobody wants to deal with.

39:23

Even if it's just an app that you download like Napster.

39:25

You don't think so? People don't have time for that.

39:27

Yeah, probably not.

39:30

What I feel like nobody cares about anything anymore. You know, I just feel like back.

39:32

In my day we used to care.

39:37

The world has changed.

39:38

Yeah.

39:39

You know, change. They just want everything in front of them. They want everything in their eyeballs. They all want it set up from the get go. They don't want to put any work in and they just want it to start working right. And I think that's been the Apple ethos from the beginning is just like give people what they need, let it get up and running and not deal with any of the bs.

39:40

What's going on in China?

39:55

Lots going on in China with Apple.

39:57

Are they shutting down more stores?

39:59

Shutting down more stores? No, not that I know of. I don't see Apple just shutting stores at this point. I think the retail arm still is extremely profitable and successful.

40:01

All the shutdowns, but in China there's less of the. You're not, Somebody's not embarrassed to not be using an iPhone problem.

40:12

Yes. The problem is, is that Apple hasn't done anything bad bespoke for the Chinese market. The competitiveness there is just unbelievably just. It's amazing. It's like no other part of the world.

40:21

Are there compelling AI hardware integration?

40:36

Yes. I mean, I mentioned the robotic thing. I mentioned. Well, like the foldables are taking over the universe there. Right. And so, you know, Apple's an American company launching American devices, European devices, and they're trying to shoehorn it into the Chinese market. And they've never really done anything just for the Chinese market or built around the Chinese market.

40:40

What about the sock?

41:01

I thought, okay, hey, maybe that was. I mean, I don't know.

41:02

But why it's such a massive market. Why not?

41:05

Because they're a global company. But I think the Foldable is going to do extremely well in China. You know, it might do better in China than it does here.

41:10

Interesting.

41:18

I don't know. I'll be having one, I'll tell you that much.

41:19

What's the future of the iPhone? Air.

41:21

It's like the price difference.

41:25

Sam Altman's got one.

41:28

Great.

41:30

But he doesn't care about money, the.

41:31

Price difference, he just breaks it and.

41:34

Buys a new one.

41:35

But he doesn't get paid by OpenAI.

41:36

He's probably got both. Yeah, yeah, he doesn't get paid. The iPhone Air and the iPhone Pro, it's like negligible pricing wise. It's the same price if you get the battery pack. Oh, yeah, right. It's like 999 plus 100. Sure. Right now you're gonna get the battery pack. So I don't know, like, you look at the features comparison, you look at the cameras, I mean, most people are gonna always pick the Pro over the air. There needs to be more of a price gap between the two and eventually, you know, those two lines are gonna merge. Take five years, but like, eventually you're gonna be able to get a Pro as thin as an AIR or an AIR with the same bells and whistles as a Pro. I mean, you look at the MacBook Pro and the MacBook Air today from.

41:37

A performance, these are different laptops and they're exactly the same.

42:22

Yeah. So what you've got, I have the air. The air. He's got the Pro and they're identical. It's the same thing because the chips. Right. The big differences between the two are it's a little lighter. Okay. The display is terrible on that thing compared to that thing. Like if you use like I tried out the 15 inch MacBook Air. Okay. Yeah. The thing is sleek and slick and awesome. But like, I've been ruined visually by how amazing the display is on the MacBook Pro.

42:25

Okay.

42:51

Maybe I gotta upgrade.

42:51

And so, you know, you have to think about the different changes. You want to talk about big things happening at Apple this year. It's that new MacBook Pro. Right? You got the OLED, you got the thinner, you got the touch. Cannot wait to drop $4,000 on that thing.

42:52

It's going to be a touch screen.

43:06

Yeah.

43:07

I cannot wait to get my fingerprints all over. If somebody's looking at my computer and they touch the screen, I'm just like.

43:08

Isn'T it the worst thing ever?

43:17

Like, I like, you gotta be carrying a polishing cloth.

43:18

You gotta be carrying the Apple official polishing cloth.

43:22

Maybe 20 bucks.

43:24

You know, Apple could make a Pixar lamp.

43:25

Well, Apple makes one of the funny.

43:27

Apple makes a Pixar lamp that just kind of polishes your touchscreen.

43:29

That'd be great in AI for screen cleaning. Yeah, yeah. You know, the Apple polishing cloth, they got so much, you know, flack for that thing. Like you would Think that it was $75, but it was $20. Come to think of it, like, it's really not that big of a deal.

43:32

Also, I know someone who is OCD and is obsessed with keeping their screen perfectly clean. And I was like, what's the secret? You must have some secret formula like Windex or something that you're using. And he's like, no, just the Apple polishing clothes, the one that works.

43:46

You know what, I need to get one of those.

43:58

I was like, that's glowing.

43:59

You know, one did come with my Vision Pro.

44:00

Yeah, there you go.

44:02

Try that.

44:03

They threw one in as a bonus.

44:04

Isn't that nice of them?

44:05

That's so nice of them.

44:06

Yes.

44:07

$34.99. You get a free polishing cloth.

44:07

That's 20 bucks off. Yeah. Maybe the Turnus narrative can center around like as the models commoditize, like the hardware becomes more important. You want to be able to run different models locally and so pushing that.

44:09

The hardware is great, chips are great. The software, I'll even tell you is maybe not. It's between good and great.

44:24

Sure.

44:32

Okay. I'm not going to say it's only good. I'm not going to say it's as great as the hardware, but it's good enough. How's that? The AI is like the worst in the industry.

44:33

Yeah. I mean, right now you're seeing people go out and buy Mac Minis to run AI.

44:41

Okay, let's think about it. You see these people on Twitter doing that, Right? How many extra Mac Minis do you think were sold because of all this jazz? I would guess I would put the over under on 500 units.

44:46

500 now, I thought it was 10,000.

44:56

I've seen it on Instagram.

44:58

There's 40,000 GitHub stars.

45:00

Okay, if it's on Instagram, maybe I'm wrong.

45:01

So there's 40,000 GitHub stars. It's clearly a big 60. Maybe it's in the thousands. But yes, I mean, it's a quarter million a quarter or something.

45:03

And I think so much of it is just performance.

45:09

Go on the Apple online store, go to the Mac Mini.

45:12

They're in stock.

45:15

Are they all in stock?

45:16

They're in stock.

45:16

Look at the ship dates.

45:17

Funny thing, two weeks ago, I go to the Pasadena, I go to the Pasadena Mac store. You know what's out of stock? Apple Vision Pros.

45:18

What?

45:27

To me, a lot of, a lot of the buying I think is purely status oriented and just on the evp. No, no, selling the Mac Mini and people just saying, I want to signal that I'm AI native. And I'm at. I'm at the.

45:29

They're going to use it for two weeks.

45:41

Y. Yeah, yeah.

45:42

And then forget about it.

45:43

I think that's going to be a real thing.

45:44

I mean how many people actually need to live in these type of workflows?

45:47

Not many, just the hackers, which is a niche community.

45:51

It's a niche community. It's a great community.

45:54

But it has made me think maybe I should start using Apple's native file system and like actually bring my data out of the cloud, out of drive and store it locally.

45:55

You don't need to because cloudbot will go and access your.

46:09

So what's the deal with the Mac Mini?

46:12

It's shipping order now, pick up in store today. It's available. Order by 3pm delivers two hours from the store.

46:14

They have them in all tomorrow.

46:21

It has, yeah, it's everywhere. They're widely available. They're widely available.

46:23

So maybe I am. Right.

46:27

Available tomorrow at the Americana brand.

46:28

Well, they sell like.

46:30

It'S literally available at every Apple.

46:34

Yeah, yeah, I think that's it. Yeah, yeah.

46:36

And so it doesn't take that many if they're projecting out, hey, we're going to sell. It's not like they. I would imagine they don't have all of them that they're going to sell this year sitting in stock already.

46:40

I'm curious how the Mac quarter is going to go tomorrow. Right. Like there might be a little bit of a drag on that.

46:51

Sure, yeah. What should people pay attention to?

46:58

Well, the China number, to your point, the iPhone number is basically everything tomorrow. Right. Either they grow 10% as they say they will, or they won't. Either Tim Cook gets to keep his job or he doesn't. No, I'm just joking. But you think about the product. They didn't do much iPad or Mac last year. This year is going to be the biggest year for the Mac a long time. Got new MacBook Pro is about to launch. Same design as those ones with the faster chips. You've got the iPhone, chip powered, low cost MacBook which is going to destroy PCs and Chromebooks and be an utter game changer. You've got the touchscreen MacBook Pro end of year. You've got a refresh Mac Mini, you've got a refreshed Mac Studio. You've got the M6 chip. You've got the first new monitors from Apple in four years.

47:01

Where will those sit?

47:58

The monitors?

47:59

Yeah.

48:00

In terms of they'll Sit on my desk. I'll take that one. Yeah, sure.

48:00

But is it going to displace the studio or the Pro xdr?

48:03

The one I know about is going to replace the studio. But there's a new XDR also.

48:09

Oh, okay.

48:14

Yeah.

48:15

Because the XDR remarkably long term. Like I cannot believe that.

48:16

Why is there no camera on that thing?

48:21

Because it was created 15 years ago. It's so old. And you go and you look at like you could YouTube search for the Pro display XDR right now and there's guarantee a new video. Why you should buy one in 2026. It's still good in 2026. Like it's still the best option.

48:23

I mean the display is remarkable.

48:40

It's just amazing that it didn't commoditize fast.

48:42

What are you guys using here? I see.

48:45

Oh, we have mostly studios.

48:46

Studios.

48:47

We don't have a lot of XDRs. But we have been eyeing that new Dell monitor that Michael Dell has been rapaciously pumping on Twitter. It's amazing. Why so enthusiastic about that thing?

48:47

I'm sure you've answered this a hundred times. And I'm sorry. Why would they never do a tv? Is it just commodity space?

48:58

Commodity margin differentiator?

49:07

You don't think people would happily spend.

49:11

They'Re gonna buy a Pixar lamp before they buy a tv. Oh, you got the Apple tv.

49:13

I've heard that stuff. Somebody who's been an Apple. I can't describe myself as an Apple fanboy anymore, but as a teenager and a kid, I was right.

49:18

What the hell happened?

49:27

The photos.

49:29

The Photos app. The Photos app ruined your.

49:30

It just like, you know, a 20 year relationship just over. But I do think there's enough people out in the world that if you made it 10, if you made the $10,000 TV that they would buy it.

49:33

You know the.

49:48

Because when I'm buying a computer, a tv, sure it's different, but when I'm buying a computer, it's not the upgrade cycle.

49:50

Look at the premium on the Samsung frame tv. Those line up the shelves and they're not better than an LG.

49:57

So my TV in my living room, I bought an 18. Yeah, what are we in 26 now? Eight years.

50:03

Yeah, but Apple would figure out a way to deprecate the hardware. This is what they do. They're the best in the world.

50:07

Well, if they did, they would do it. Yeah, they were, they were.

50:13

They're like. Tim's like where's my tv? He's like, sir, we haven't found a Way to deprecate the hardware.

50:16

They got pretty down the road on a TV about 10 years ago and they killed that thing. They had had teams working on it, it was a big deal. But then they went off and did a car and went off and did a Vision Pro. If you think about their two big moonshots over the last decade, they were both utter failures. The car obviously is just like your quintessential failure pretty much. But they did get some good stuff out of it. Right. I would say the saving grace for Apple's AI, and you've said this a few times now, has been the AI chip and the AI hardware. The only reason they have an AI chip, the Neural Engine they launched in 2017, was because of the Apple car that was designed to power the AI needed for a self driving car. And they shrunk it down for the phone. So if the Apple car project didn't get ignited back in 2014, 15, they would be even further behind in AI than they are today. And so give a shout out to the Apple car team legend and you know, I'm still pulling for the Vision.

50:22

Pro with a naturally aspirated V12.

51:19

Can you imagine be grays crazy real world gated manual.

51:21

Gated manual.

51:25

I think they would have just destroyed Tesla if they just didn't set their bar so high. When we talk about over engineering, can you imagine like a Model Y or a Model 3 or even an S whatever. Just like with that Apple interior and the Apple ecosystem, the Apple interface, like why did they have to go bananas, Remove the steering wheel, remove the pedals and everyone facing each other like why'd they have to go to. They overshot it. Why'd they have to go like all Apple on us? Right? Like why couldn't they just do, just do a car?

51:26

Just be a luxury brand. Just be a luxury brand.

51:54

Would have been amazing.

51:56

Yeah. And we got a sock instead.

51:57

We got a sock instead.

51:59

Those were the project shipped. Okay. So you got to give it did.

52:00

And you know what? That was a success.

52:04

Yes.

52:06

Sold out. Got people talking.

52:06

Yeah.

52:08

You know we did a review of the sock on, on Bloomberg and people ate that thing up. People love it, subscribed.

52:09

That's great.

52:15

Where's your sock?

52:16

Smashing down the.

52:17

I've got socks. I've got. You know what I have? I've got sushi socks on right now.

52:18

Oh, no way. Sushi fan.

52:21

No. Not from Apple. No. No.

52:24

Your favorite restaurant in the Valley.

52:26

No, no. These are from my mother in law. Yeah.

52:27

That's fantastic.

52:29

Yeah.

52:30

Well we kept you.

52:31

Yeah, we kept you longer, but thank you so much. This is so much fun. I'm so glad you're in la.

52:32

Do I get to do the Gong?

52:36

Of course.

52:37

Hit the Gong. Give us a number. How long you've been writing? How long you been following Apple writing?

52:37

Since 09.09.

52:44

Overnight success. There we go. Hit the golf.

52:45

There you go.

52:48

Boom. With authority for the Terminator.

52:48

The Terminator.

52:52

Thank you so much. Have a great rest of your day. Yeah, we gotta do this again.

52:54

We'll be following your coverage tomorrow.

52:59

Tomorrow?

53:01