00:00I do want to start off just overall with the smartphone market, because I thought it was kind of ailing
00:04a little bit.
00:04It seemed like the narrative was like people weren't upgrading to the same extent that they had been in the
00:09past,
00:09and maybe there wasn't enough innovation to get them back.
00:12A, is that true, and more importantly, what does the release last week of Samsung's new products
00:18and potentially the release of Apple's new products in a few weeks, what does that do for the market, if
00:22at all?
00:23Absolutely, you're right. So, you know, refresh cycles have been growing across the board.
00:27On top of that, you know, compounding, that has been the memory crisis, which has really taken and pulled the
00:31whole market down.
00:33We saw about 7% drop in the global market in Q2, and despite that, which is what's been a
00:39remarkable third consecutive quarter for Apple,
00:43has been the fact that Apple grew, and not just grew in a declining market, but grew double digits in
00:48terms of, of course, what we saw in iPhone revenue.
00:51But as per our data, 15% year-on-year-on shipment growth, which is, again, phenomenal, given, you know,
00:56the compounding challenges that we're seeing, both in terms of supply chain, memory crisis, and the fact that, you know,
01:02consumers are upgrading later and later. But everyone seems to be buying the latest iPhone, which was a 17.
01:07Well, I am curious about the next iteration and where pricing is going to be and whether that affects shipments.
01:13I mean, you know, if you believe some of the numbers, I mean, I already thought a $1,000 phone
01:18was kind of expensive,
01:19and now we're talking at least their high-end model were going to be over $2,000.
01:23And, you know, and obviously they're dealing with these higher component costs that I'm sure they're not going to want
01:27to eat.
01:28Is there enough consumer appetite to absorb that?
01:32So that's the interesting thing with Apple, right?
01:34It seems that despite whether it was a pandemic or other supply chain disruptions,
01:37and then now with the memory crisis, they have come ahead and it's kind of worked in their favor, right?
01:43So looking ahead, the question, of course, the past few quarters have been great,
01:47but everyone's asking, can Apple maintain this remarkable growth, right?
01:50What's going to happen, especially when they bump up prices for the iPhones, which they've yet to announce,
01:55but everyone's expecting it.
01:56So we're forecasting up to about $200 increase in the iPhone 18 Pro Max, so the 18 lineup, up to
02:05$200.
02:05So the Pro Max is going to get the brunt of the increase, but then they can.
02:09So, you know, the next question is, how is that going to impact their shipments and their performance, right?
02:15Because their first, I mean, aside from maintaining the growth in shipments,
02:18their other priority is, of course, to keep margins healthy, right?
02:21And they're industry-renowned for the best margins, so they definitely want to protect that.
02:26But now, post-price increase, is that going to impact?
02:28And our assumption is actually no.
02:30Well, I am curious, and Marcus McGurman has talked a lot about just kind of some of the strategies
02:35in terms of leasing and other things that maybe makes that $2,000 or whatever,
02:39it ends up being a little bit less of a bite.
02:41But I am curious about this foldable phone.
02:43I'm very curious about it, because Samsung's obviously been out the gate with this for a while now.
02:47I was very skeptical when they first came out with them.
02:50I'm starting to warm up to the idea.
02:51And as an iOS guy, I don't know if I want to spend $2,500 or whatever Mark said I'm
02:56going to have to pay for it.
02:56But do you think that with regards to these types of devices, which are new, they get you excited?
03:04Because I feel like the last few iPhone refreshes, like for me, who's not much of a tech guy,
03:07I mean, there was nothing exciting.
03:08I don't need another Pixel or whatever the heck they were trying to throw down my throat.
03:11But a foldable kind of gets me going.
03:13Does that excite the market, maybe, to have something that looks new and fresh?
03:16I mean, it's definitely exciting the fact that Apple is finally getting into the foldable space, right?
03:20So there's going to be headline-breaking news everywhere,
03:23and it's going to create excitement in the foldable market, which remains niche, right?
03:27Especially the biggest barrier to that market has been the high price.
03:30And now with Apple rumored or, you know, our estimates are it's going to hit about average selling price of
03:37$2,500,
03:37so even above, way above the $2,000 mark.
03:40Right.
03:40And is that going to generate demand, right?
03:42Are the consumers going to go out there and buy that?
03:44Or the other lineup, which is going to see a $200 increase.
03:48And our estimates are that, yes, just again, because Apple caters to a very, you know, premium consumer segment
03:55that tends to be insulated from the economic crisis.
03:58But more importantly than that, what will help drive and continue to drive their growth
04:02is the financing and the trade-ins, which are aggressive, right?
04:05So if you're buying most consumers, which is how they purchase it, not just in the U.S.,
04:09but globally through, you know, with interest-free or financing programs, at the end of the day,
04:15it amounts to a short bump, right, $3 or $5 bump on their monthly payment.
04:20So that's what helps keep driving the sales.
04:23Yeah.
04:23And, you know, I keep bringing up Mark Gurman.
04:25It'd be remiss to point out he's actually sitting right next to us.
04:27So I want to do bring him back into this conversation here because, I mean, you've been reporting on this
04:31a lot.
04:31And I do want to get to this idea of just a design or just having something that the market
04:36can get excited about.
04:37Regular folks, I know you get excited about everything here, but do you think that this foldable phone,
04:42at least based on what we know about it now, that that is going to be sort of one of
04:45these moments
04:46that we used to get back in the day when, you know, Steve Jobs would do the wait, you know,
04:50one more thing
04:51and, you know, everybody would clap and, you know, basically just throw cash at him?
04:55So the stock is now down almost 4% aftermarket.
04:58Let's see if my optimism around the foldable iPhone does something here.
05:01I have not been this excited for a new tech product in a very long time.
05:06I was using the Samsung, the new Fold 8 design about a week ago
05:11and just imagining that thing running iOS, running all my apps, running iMessage.
05:16I can't wait.
05:17People in the U.S. haven't seen a phone like this before until now.
05:20It's going to be super popular, super premium.
05:23Some people might not like that the camera is going to be inferior to the new cameras on the 18
05:28Pro and Pro Max.
05:29But just that ability to have a phone that's sized as a regular phone,
05:33that you open up and get an iPad-like screen, optimized for watching video, optimized for gaming, book reading,
05:38you name it, side-by-side apps, is going to be very compelling.
05:41The iPhone has essentially looked the same for its 20-year history.
05:45This is going to be the biggest change in the history of the phone.
05:47It doesn't necessarily matter that they're eight years late to the foldable party after Samsung.
05:52They're entering it in about year two of these foldables actually getting good.
05:56So they fix the durability concerns.
05:59They fix the concerns about sand getting in and destroying the display.
06:03They fix the concerns with the crease.
06:06So we'll see what happens, but I think it's going to be a hot seller, particularly in China, as a
06:10status symbol.
06:11That's actually what I was going to ask you, Nabila.
06:13How do you think this is going to perform in China when there's a ton of products already there
06:17that kind of emulate what Samsung has already done?
06:20Yeah, absolutely.
06:20And I agree with what Mark said, right?
06:22Especially in China, the foldable phone is going to be very important because China is the largest market for foldable
06:27devices
06:28with contributing to, what, 60% of the global foldable shipments.
06:31And there's a lot of competition there, right?
06:33And, of course, there's been a lot of criticism that Apple's behind and when is Apple going to join the
06:37party?
06:38And now with this phone, we expect them to do even better than what they have been doing.
06:43So it's really going to help them catch up, not just in the tech and the innovation aspect,
06:47but also grab some share from Huawei, who is the number one foldable player.
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