00:00Numbers are phenomenal. Let's just start with the numbers themselves. Where on earth did that growth
00:03in China come from? I mean, look, that's, you know, it's pent-up demand and they're having
00:07success. I mean, iPhone 17, it's kind of, you know, it's been sleepy, but actually a pretty
00:13huge upgrade cycle. I think you see in the numbers, you know, obviously the stock reaction,
00:18look, I'd say it's a yawner because investors are just so laser focused on AI, right? In other words,
00:26like how they're going to monetize, what's that strategy? Cook talked about it a little,
00:30but in terms of the actual numbers and services and iPhone, look, it was sort of a best case
00:35scenario. And I think now it's really about showing how they're going to monetize on AI.
00:41That's going to be their story for 2026. Cost. We need to talk about cost as well.
00:45Something that typically doesn't come up, but it was anticipated this time around.
00:48Why are things getting more expensive? Yeah, just memory, right? I mean,
00:51if you look at, you know, everything you see, SanDisk and what's happened on chips,
00:55it's supply DRAM pricing, everything that's happened across the board. Look,
00:59but our view is like ultimately when it comes to iPhone 18, like they're going to have to raise
01:02prices probably by a hundred, $150. So it's something that we worry about less from a margin
01:08perspective. But look, the reality is, is that this stock being 325, 350 or where it is today,
01:16it's not going to be because of margins, because of iPhone, because of service. It's about showing
01:22truly that they have an AI strategy that they're going to actually roll out that they can monetize.
01:27Well, part of the big skepticism behind Apple and the reason why it's underperformed since December,
01:31since it hit a record, has been this question around, is it just an iPhone company? Has it
01:36been able to diversify in a meaningful way? Yes, you did see that $30 billion coming from services,
01:41but wearables, the Mac line, not seeing that same kind of growth. And I just wonder
01:45whether it's enough to just say that iPhone 18 is going to come out with some incredible AI
01:50innovation and that's going to change the trajectory and some of the concerns that they
01:55can't move away from this one product. Yeah. I mean, look, to your point, like the reality is like
02:00the core, the ingredients, the hearts and lungs of Apple are always going to be iPhone relative to as
02:06a percent of revenue. But I think their culture has definitely hurt them the last few years,
02:12especially because AI not doing acquisitions and maybe they've done, you know, like recently
02:16they've done one, a smaller one. But the problem is, is that investors, they're not going to give
02:22them credit, which speaks to our point. Like this is the year from Google to Siri to WWDC to rolling out.
02:28It's not going to be on the hardware side. It's going to be how they monetize subscription
02:32in AI for the 2.5 billion iOS devices.
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