00:00We're also tracking breaking news here at home and Bloomberg's reporting that hit just moments
00:04ago that Apple is in early settlement talks with the DOJ to settle a 2024 antitrust lawsuit. For
00:12more, we turn now to Mark Gurman, our Apple guru, and one of the bylines on this story for more.
00:18So
00:18Mark, walk us through what the suit was about, how Apple may have already tried to address it,
00:23and what the settlement could look like. Yeah, so Apple was sued by the DOJ in 2024.
00:28The Biden administration at the time was going after all the big tech companies, Meta,
00:32everyone got swooped up in this. Apple antitrust violations related to a few things. One
00:38was the NFC chip. That's the payment chip inside the iPhone. The DOJ wanted that opened up for any
00:45iPhone app, wallet app, finance app to be able to use that chip, not only Apple Pay. Cloud streaming
00:52apps were banned, so streaming games over the cloud, the file not being installed on the phone
00:57itself. A few other factors related to super apps, so being able to build something like WeChat
01:03in the United States. They wanted more interoperability between third-party smartwatches
01:10and the iPhone to get some of the same tech you could use with an Apple Watch. Over the past
01:15two
01:15years, Apple has gone line by line, and it has resolved all of those complaints. And so now
01:21it wants to settle with the DOJ. And a settlement would look like Apple probably paying some sort
01:27of fine, combined with what Apple already did to even the playing field for consumers and rivals.
01:36Just like a rounding error for Apple? I mean, the stock's down 1%. Nobody seems too worried about
01:42this on the day that, at least for a moment, topped NVIDIA as the world's largest company.
01:47Yeah, I don't think investors have really cared about this lawsuit from the beginning.
01:51I'll be honest with you, it was kind of frivolous, given that three-fifths of the lawsuit was actually
01:56about things that Apple had already resolved by the time the lawsuit was filed. Since that happened,
02:01they've knocked out the other two over the past two years. And I'm referring to the five items that
02:05I listed out in terms of the main bullets as to why the DOJ was filing this suit.
02:10What do you make of the stock recently, Mark? It's not often we get Gurman on the air here. This
02:15is like a celebrity journalist who breaks news in his sleep. The fact of the matter is this company
02:20has been rewarded for not jumping into the pool and overspending on AI. At one point, people thought
02:26it had been left behind. Now it's being rewarded for not taking part? They're being rewarded for falling
02:32bleep backwards into not spending on AI. They've completely failed in artificial intelligence.
02:39They're only starting to pick up the pieces. I think there's a lot of optimism on the stock
02:46because we've been talking about this major new product portfolio that's coming. Got a foldable
02:50iPhone, new home devices, new AI wearables. And I think there's a lot of excitement about what's to
02:55come hardware wise. Remember, 80% of Apple revenue comes from the products, the devices that you can
03:00buy. And there's a lot to love about the upcoming stuff. Well, and of course, the purchase price of
03:07those devices is going to be higher because of the memory chip shortage. Right, Mark? Is there any
03:13indication that they're going to be able to backtrack on that? Or is Apple simply not able to get what
03:18it
03:19needs cheaply enough at this point? Yeah, the ship has sailed. Prices are not coming back down,
03:26even if the memory situation is resolved. They're going to get some pressure relief on that by
03:32moving to memory chips for China, sold phones in all likelihood from two of the Chinese memory
03:38suppliers. Apple has been trying to get sort of a quasi blessing for the Trump administration on that.
03:45I think they're good to go there. So they're testing that. We'll see if it ends up happening.
03:49The other factor here is that the products are going to get better. And the other thing to keep
03:53in mind is the consumer of iPhones, I don't really know that they care that the price is going to
03:59go
03:59up a couple hundred bucks in September. They'll pay on installments, they'll figure it out.
04:04It's a very... As long as the camera's better, right? Well, the camera, but also you got the
04:07foldable coming. That's pretty exciting.
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