00:00You're really the person we turn to when you think about how they're innovating, where they're pushing forward.
00:05Were you surprised by the overall sales growth when many thought that iPhone 17 wasn't going to be the catalyst that we'd hoped for?
00:15I wasn't. And the reason is because, as I talked to you in the past, hardware refresh, when the actual hardware looks different, always drive upgrades.
00:26People still want to rely on the device that is in their pocket 24-7, but make it look different.
00:36And this year we got that with the Air, which is not the main seller for Apple, but it doesn't matter, is getting people back in the stores to see the rest of the portfolio.
00:48It was really interesting yesterday that Cook mentioned that supply issues on the 16 model, not just on the 17.
00:57And that is a good reminder that a new model every September brings people back in stores and upgrade to previous models as well.
01:08It's not just the latest. It's the portfolio with maybe some price adjustment and some carrier promotions that drive that upgrade.
01:16Fewer upgrades going on in China, though. What did you make of the pullback, the surprising pullback in that particular region?
01:25I think part of it is the economic situation in China. We have seen kind of hot and cold from a consumer perspective.
01:33The timing was later in the quarter, so it takes a little bit longer from a supply chain perspective.
01:39We also need to remember the supply chain has moved away from China, so there is some adjustment to make as well because of the U.S. and the production shifting to India.
01:54But the most important thing is what Tinkook said, which is signals towards the end of the quarter was positive.
02:02People were going back into the stores. But the big quarter for China is always Q1.
02:08That is Chinese New Year. By then, there's hope that the supply constraint that Apple has had, especially in the higher models,
02:16which is usually where China gravitates towards, will be resolved.
02:20And that's where the big quarter should come in.
02:24And if it doesn't, that's when I'm going to start worrying. But for now, I'm not worried.
02:28And then digest the eSIM situation as well. I spy a Cowboy Carter memorabilia behind you.
02:34I love that tour, too. Let's just talk about the services side. The music side is part of that.
02:39But services really is what drove the strength at the moment.
02:42Can that be reliable going forward when we think about the regulatory pressure on the App Store, for example?
02:47I think it can because more and more Israeli content and is also advertising.
02:54We've seen Apple close the deal with F1. So they'll start streaming F1, which is becoming more and more popular in the U.S.
03:02and across the globe, with a demographic that Apple is really, really keen in keeping and growing,
03:09which is Gen Zers and younger millennials.
03:12So I think that that is really the opportunity for Apple is on the content side, is the engagement side.
03:20And that also, over time, will come into play with Apple Vision Pro.
03:26I mean, very briefly, what about the AI side?
03:29Well, we have been promised an improved Siri coming in 2026.
03:34And as we discussed before, Apple has some time to figure this out.
03:40I think that most of us have figured out what AI can do for us in a productivity setting, but not yet on a personal way.
03:49And I think that's where Siri is going to play the most.
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