00:00Despite the share react, the initial knee-jerk share reaction, Tony, we came into today with this stock on a
00:05pretty good run, up more than 20 percent over the past five weeks.
00:08And that seemed to be everyone looking at the income statement, the balance sheet, the cash flow statement and saying
00:12that, you know, when you stack it up against some of the other tech companies out there, it's pretty healthy.
00:17Does it still look healthy to you now that you've seen these numbers?
00:20Yeah, I think the numbers are good.
00:21I mean, I think that what really matters going forward is the outlook.
00:25And I think about it in two vectors.
00:27Probably one is the iPhone and the upgrade cycle.
00:31And I think this upgrade program that they're putting in place could be really powerful.
00:35I think that people have been keeping their iPhones by about, you know, quite an extended amount of time.
00:40And so this can nudge the upgrades for a better experience for consumers.
00:44And then also, like, they can essentially refurbish those phones when they're traded in.
00:49I think the big part of Apple is, like, that trading value is really, really quite, quite, quite good.
00:56So I think that, plus the services and unlocking Siri and the AI assistant, I think those are the two
01:01things I'm looking for.
01:03Well, talk to me a little bit about Siri.
01:05And we're going to ask Mark about this, too, because he's been covering this a lot here.
01:08But when we talk about their use of AI and the AI tools that will be available in that ecosystem,
01:15are you comfortable with the strategy, at least based on what's been publicly reported?
01:19Are you comfortable with the strategy that they're taking on that, which seems to be a little bit more reliant
01:24on third parties?
01:25Yeah, so it's a very capital-like strategy.
01:28So I think that's pretty differentiated.
01:31And, you know, when I think about Apple, they're really a product-led and ecosystem-led company.
01:35And so I don't think they necessarily need to own the Frontier model in order to implement it and, like,
01:42deliver good value to their customers.
01:44I think you can look at the search kind of example, like, they didn't have to own search in order
01:48to kind of deliver that for consumers and, you know, benefit from that.
01:53So to me, I think it's a different strategy, but I think it fits what they're trying to do specifically.
01:59And, you know, I think that's why, you know, implementing Siri is going to be a really big, big focus
02:06for the company.
02:08We're looking at Tim Cook in the release right now.
02:11He's saying Apple's proud to report our strongest June ever.
02:14But I want to look forward with you and just get your reaction to what you're going to be watching
02:19under a company that hasn't had a new leader for quite some time.
02:24What does John Ternus need to prove to investors like you?
02:27Well, I think, you know, there's probably a lot of continuity with this leadership transition.
02:32So I don't expect any, like, massive shift.
02:35But I do think John will try to, you know, he'll lead the company in a specific direction.
02:42You know, he is a very product-led person.
02:44So I think we'll be, you know, hearing about his thoughts on product and then implementation of AI.
02:49I think he's got a real focus on making great products.
02:52So essentially there's a new product that can come out.
02:55And so, yeah, I think there's, like, you know, I don't want to speak for him.
02:58You know, so I think everybody is looking forward to his remarks tonight.
03:03What do you make of the after-hours trading in the stock?
03:05It is down 2.4 percent.
03:07Obviously, it's only been a couple minutes.
03:08But are you surprised to see that reaction?
03:11You know, it's always hard to gauge what the, you know, initial reaction will be.
03:16I think that the earnings call often is what really matters in their outlook.
03:21And I think more context on how they're handling kind of the memory shortage situation and now getting gross margin.
03:28And I think that, you know, part of what's really impressive about the iPhone is that, you know, it is
03:32relatively inelastic probably.
03:34And then they can probably, you know, absorb costs and, like, with their supply chain and their inelasticity of the
03:39product relative to other competitors in the mobile market.
03:43All right.
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