00:00You were live blogging while you were on TV.
00:02Yes.
00:02What's your take?
00:03My take is that the iPhone number looks great.
00:06My take is that the Mac number looks amazing.
00:08My take is that service is a little soft,
00:10and the China number missed the estimate we have here on the Bloomberg terminal.
00:16But at the same time, that is pretty nice growth on an annual basis
00:20where they were sort of, I guess, in the toilet in China a couple years ago and last year,
00:24but they've totally rebounded there.
00:27It's going to be interesting to see how the foldable iPhone performs there as a status symbol,
00:30well north of $2,000.
00:32So I think it's going to be a hot product there,
00:33especially because foldables are taking over the smartphone market in China.
00:36Yeah, I know you're going to buy a foldable phone.
00:38Of course, I am.
00:39I'll be first in line.
00:41So is it the light services in China that's moving the stock lower?
00:44I mean, I know the stock was up to more than 22% going into this print.
00:47Yes.
00:48Yes.
00:48I mean, they smashed Mac, right?
00:50But I don't think investors have fully grasped the importance of the Mac at this point.
00:54I mean, it sort of feels like an afterthought compared to the iPhone and the iPad.
00:59The iPad is always light.
01:00Wearables have been light for a couple of years now because they haven't really done a ton there.
01:03But that is going to accelerate big time over the next three years with these AI devices.
01:08Glasses are going to shoot those numbers up.
01:11Do you think people will buy those?
01:12I do.
01:13I think you'll buy them too.
01:14Tell me about them.
01:17Well, Apple is not going necessarily after the smartphone market.
01:21They're looking to create glasses that people want to wear, just like the Apple Watch replaced.
01:26The traditional watch market, they think that their smart glasses are going to replace sort of the low-end to
01:31mid-tier glasses market.
01:33Not the Maison Bonet's of the world, but, you know, the SLR Luxottica's of the world.
01:39So they're really going to go after those brands there.
01:42They'll have cameras built in.
01:43They'll do all the stuff that Meta does, but a little bit more premium.
01:46And Apple-y because it'll integrate with your iPhone, whereas they've really held back iPhone integration with the Meta glasses
01:50over the past couple of years.
01:52Do they actually create something that is, you know, competitive in terms of share at the company that moves the
01:57needle in terms of the iPhone?
01:58Does something else finally come over in terms of contributing more to the bottom line and the top line?
02:05You know, I think Ternus will be CEO for the next 15 years unless, again, something goes wrong that we're
02:10not expecting.
02:10And someone asked me earlier today on one of the programs what's going to be the most important product in
02:15Ternus' tenure.
02:16And I, to their surprise, said the iPhone.
02:19I think it's going to be the case that we're always going to carry something in our pocket.
02:23The iPhone or something like it is always going to be at the center of everything.
02:27And then we're going to be augmented by glasses, watches, earbuds, you name it.
02:32But at some point, there will be a transition to be had.
02:35I just don't see it any time in the near future.
02:38Has Apple given up on the Vision Pro?
02:40Has Apple given up on the Vision Pro?
02:43It's on the back burners of all back burners at this point.
02:47There's a revamped version that's lighter in development.
02:52I don't anticipate it before the end of 28 or early 29.
02:55Could go further back from that because they have been heavily prioritizing this glasses push.
03:00Smart glasses with no display.
03:02Smart glasses with AR display.
03:03They've got a long roadmap of multiple generations ahead of both of those categories.
03:08And you'll see them introduce the glasses strategies early as June of next year.
03:12What do you want to hear on the call?
03:14I want to hear about the memory shortage.
03:16I know it's not sexy, but investors are interested in that.
03:20I want to hear about Tim Cook's thoughts on how the transition is going.
03:24Most importantly, I want to hear Ternus' vision for Apple.
03:28Are we going to hear that on this call?
03:29Are we going to hear that on the next call?
03:31Probably not.
03:31These guys don't really say anything.
03:33I'm laughing because, you know, you shared with us earlier about John Ternus and Tim Cook being dressed identically.
03:40Like, you know, his vision is going to be whatever Tim Cook says the vision is.
03:43Is it going to be?
03:44Is it?
03:44Is that what it's going to be?
03:46Yeah.
03:46No, I think that, I mean, he's going to come in and make major changes to the company.
03:50Just like, you know, Steve Jobs, arguably one of the greatest CEOs and visionaries of all time.
03:55Tim Cook came in there.
03:56It's not like he took a wrecking ball, but he shook things up pretty quickly.
03:59He was the one who instated the buyback program.
04:01He was the one who instated environmental initiatives.
04:04He was the one who instated tons of new product lines.
04:06And you can bet Ternus is going to do the same thing.
04:09And so we'll see how long that takes.
04:11But he's not going to come on and say he's going to do things differently than his predecessor.
04:14He's going to go on and say how incredible Tim Cook has done.
04:17And even if I do half of what you do, it'll be a success.
04:21Yeah.
04:21So.
04:23Five trillion dollar market cap.
04:24Pretty close to it.
04:25Expectations were high going into this print.
04:27What's the question that if you were able to ask a question on the call today, what would it be?
04:31If I were able to answer or ask a question, I would straight up ask Ternus, what is your vision
04:36for the future of this company?
04:39How are you going to get to this next stage of growth?
04:43And how are you going to create an AI devices strategy?
04:46Well, I mean, the good news is I don't get a question because the bad news is he wouldn't answer
04:50that.
04:51And just I was keeping track.
04:53That was three questions.
04:54Well, you know, I'm a journalist.
04:55That's what these analysts do, too.
04:56But if he's not going to answer a question about vision and you kind of know that, what else would
05:01you want to know?
05:02I would want to drill down into his operational expertise and get his viewpoint as someone who's not from the
05:06operations department about the memory shortage, how long he sees that running for, and what work is going on internally
05:12to solve that other than just hiking prices.
05:14What do analysts say about that?
05:15Do they all say 20, 30?
05:17You know, I don't mean to be rude, but, you know, they're just making it up.
05:21It's just guesses because nobody knows for sure, and anyone who tells you they know for sure is just making
05:26it up.
05:27Could Apple go to China and do—
05:29I believe they are.
05:30They're working with YMTC, CXMT.
05:33And is that moving the needle for them?
05:35It'll move the needle for them in, you know, one of their biggest markets, which is China.
05:40Some of the senators and other lawmakers in the U.S. seem to think that it's going to start in
05:43China, and then they'll start putting Chinese memory in iPhones, you know, sold globally.
05:49And that's all very scary for a lot of people.
05:51But then I think about it, and I realize, hmm, am I really that scared of Chinese memory in my
05:55phone when my phone is, wait, built in China?
05:57What is really the big difference there?
05:59Great point.
05:59Hey, on component inflation, I just want to mention Ian King on the live blog saying, looking at Apple's costs,
06:05important in a time of component inflation, the cost of product sales went up 8%.
06:09Revenue went up 18%.
06:10That shows some strength in supply chain management, the hallmark of Cook's tenure as it comes to a close, which
06:16feeds to, you want to know what the new guy's going to do, right?
06:19Exactly.
06:19In terms of operational and the supply chain.
06:21All right, Mark Gurman's got to go.
06:22Double dose of Mark Gurman.
06:24I guess he's got to fly back to Hawaii or something.
06:25Got to get on the live blog.
06:26Okay, oh, get on the live blog.
06:27That's what you got to do.
06:28I got the Apple earnings call in four minutes.
06:29All right, get out of here.
06:29Get out of here.
06:30Get out of here.
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