00:00The one stock in focus in our morning calls, it's Apple.
00:03First up is Evercore, reiterating its outperform rating following the CEO shake-up,
00:07feeling encouraged by the potential for new AI features.
00:11Your second call from Morgan Stanley, maintaining its overweight view on the stock.
00:14The firm noting near-term changes are unlikely.
00:18And finally, Wedbush reiterating its outperform rating on the iPhone maker,
00:21highlighting growing pressure for a successful AI strategy.
00:25Sticking with Apple, Walt Pysik of Lightshed Partners has been calling
00:29for a change at the top of the iPhone maker for nearly a year.
00:33The suggestion that, like, only Tim Cook is the CEO to run this company is crazy.
00:40You clearly need someone that can move forward on a lot of the product development.
00:44If they don't have a succession in place today,
00:47a CEO internal at the company that can take over this company today,
00:52that in and of itself is a failure of the CEO of the company as well as the board.
00:56Walt, reacting to Cook's resignation, writing,
00:59Apple has stumbled embarrassingly on AI.
01:01This is clearly just a different skill set.
01:03And credit Cook for recognizing that and stepping aside.
01:07Walt joins us now for more.
01:08Walt, welcome back.
01:09And I messaged you yesterday, credit for making a call 12 months ago.
01:13Can we just reflect on that briefly?
01:14Walt, how much heat did you take when you published that almost a year ago?
01:20I took a lot of heat, I think, even from some of the experts on Bloomberg calling to call blasphemous.
01:26And how can you dare suggest that Tim Cook could step aside,
01:30even though we were going through this monumental change in AI?
01:34But that's fine.
01:34I mean, you know, that's part of the job.
01:38And the issue was never, like, look, we've recommended this stock in the past.
01:41Tim Cook obviously did an excellent job.
01:43And what they needed was someone that could crank out volumes and make those tweaks.
01:48You know, they missed out on some product cycles.
01:50And there's some growth issues.
01:52Like, you have more cyclical growth now at the company when people need to upgrade iPhones.
01:57So the whole point of the call, you know, last year was like, okay, you need it.
02:01And by the way, at the time, they're like, who's going to replace them?
02:03Who's going to replace them?
02:04Like, you know, like, thanks for playing those clips.
02:07Like, it's obvious.
02:08You generate someone internally.
02:10Like, and if you weren't, that shows a massive failure at a company.
02:13So obviously, the company didn't fail.
02:15They have Ternus here.
02:17The stock set, you know, has done exceptionally well, even since last year.
02:22But, you know, you're facing existential risks to the company, as many companies are,
02:29as we head into this AI era.
02:31Well, let's just piece that together.
02:32You use the word existential risk, existential risk.
02:36And yet, what I hear from a lot of your peers this morning is continuity and no near-term
02:41changes.
02:42Do you think this is the right person?
02:45I mean, I hope there's going to be some near-term changes in the, you know, what's going on at
02:50the company because, you know, they're clearly not on the right path in terms of an AI strategy.
02:57I mean, I think, you know, a couple of weeks ago or maybe a month ago when they opened up,
03:02who Siri can reference.
03:04And can we all agree that Siri just is still not good?
03:06I mean, we've been promised Siri is going to get better and it's still terrible relative
03:10to what you use in any of the AI LLMs today in terms of an audio interface.
03:16But a couple of months ago, you know, they added, you know, they opened it up because they only
03:20had open AI before, right, where Siri would theoretically forward you to open AI, you know,
03:26to chat in order to get answers.
03:28That implementation, anyone that tried it, they realized that was not good.
03:31All they're doing is adding additional LLMs.
03:34That's not 4D chess.
03:37People are calling that 4D chess.
03:38That's not 4D chess.
03:39That's just adding another LLM to a Siri that's just not good.
03:45So I think just because Ternus is taking over doesn't change things overnight.
03:49But hopefully with a new CEO, he can change the culture of the company and move in a path
03:55that prepares them for what's about to happen with AI.
03:58Walt, has a ship already sailed?
03:59Is there a competitor in the smartphone industry that already has gotten an upper hand in deploying
04:04AI in a better way than, say, Siri?
04:07I mean, it's hard to know.
04:09We'll know in a year or two whether the ship has sailed.
04:11But I mean, and I said this back, you know, a year ago, every day that they don't make a
04:15change
04:17is a day it's going to be harder for them to catch up or potentially get leapfrogged by someone.
04:22Obviously, Google is the major competitor in the space.
04:25This is 50% of their revenue is still iPhone.
04:28Services is still relying on iPhones.
04:30Android is obviously the major competitor.
04:33On the opposite side, their share has only gone up over the past year.
04:37However, you know, we have this new thing.
04:38You know, you have OpenClaw that has shown us what Agentic can do.
04:42This is a kind of a, you know, a nerdy thing that people do, but it shows you how close
04:47we're getting to Agentic.
04:48Anthropic and others will start integrating this in.
04:51How we interface with our phones is likely to change.
04:55When you go through major technological transitions like that, that's when industry leaders tend
05:01to potentially lose share, right?
05:04Now, it doesn't mean Apple can.
05:05Apple's in a tremendous position to maintain that share if they can execute an AI.
05:10But everything that they've done up to this point has just not delivered on any promises
05:14or shown you some belief that they can continue to succeed in this area.
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