00:00Let's talk about Apple, under Savannah's this morning, folding into the future.
00:05iPhone Duo brings an entirely new design while preserving everything you love and expect from iPhone.
00:11It gives you the largest display ever on an iPhone while still fitting easily in your pocket.
00:16It reflects extraordinarily complex engineering, yet feels effortless to use.
00:21And it makes new experiences possible.
00:24So here's the latest this morning.
00:26Apple's new CEO introducing the highly anticipated iPhone Duo, along with other product upgrades.
00:31Gene Munster of Deepwater Asset Management writing,
00:33I expect Apple to outperform big tech over the next week as the significance begins to sink in with investors.
00:39Gene joins us now for more.
00:40Gene, welcome to the program.
00:41Inevitable first question then.
00:43What is the significance about this?
00:44What are people missing?
00:46I think people are missing the consumer demand for content from the time you get up in the morning
00:53to the time you go to bed is insatiable.
00:56And that means, it sounds like kind of an odd place to start, but the reality is that bigger screens
01:01make those content experiences richer.
01:04And most people, as we kind of fast forward, when they think about a foldable phone, they think they don't
01:09want one.
01:10There's no need.
01:11It's a couple percent of the global smartphone market.
01:13And what I thought going into the event, we knew what was going to happen, credit Bloomberg's Mark Gurman, I
01:21mean, just his coverage in predicting what's going to happen is spectacular.
01:25So we knew about that, but I had, this is probably my fourth or fifth most important topic, the foldable
01:32phone, because I just didn't think it was going to resonate.
01:34But the piece that I think missed, people are missing, and I missed initially, was that if you look at
01:41the fit and finish of this,
01:42the thickness, the thickness, the quality, the crease, that bend in the middle, it's very hard to pick up on,
01:50if you put that together, I think this device is actually going to probably account for 10% of overall
01:58iPhone revenue.
01:59Now, going into the event, I thought it was going to be something like 5%, and so that kind of
02:04accounts for 5% of the business.
02:07And so, I mean, at the most basic level, John, I think what people miss is that even though this
02:12is a big price point,
02:14most people, I think, or many people, are going to try to find a way to get this to work
02:18for them.
02:19And again, I think it can account for 10% of iPhone sales.
02:23So this is big news for Apple.
02:27In particular, it's been a decade since they've come out with a new product that was AirPods back in December
02:33of 16
02:34that people really cared about.
02:36Vision Pro didn't do that.
02:37And so that's why I think that this is such a big deal, not only for the numbers, but also
02:41for the innovation side.
02:43Gina, I don't pretend to have visibility into the future, especially when it comes to technology.
02:47It's a massive blind spot for me, and I'd love you to provide some insight into how you think this
02:51plays out.
02:51I view this now as the vehicle for the potential software shift further down the road and the capabilities of
02:58AI that I just can't even imagine at this point.
03:01How do you think this might complement the future software upgrades we might see from this company?
03:07So you're picking up on something that they hinted to on the event yesterday, which is this idea that a
03:14new form factor,
03:15and really what this is is 50% bigger than the largest current, the Pro Max, that that opens up
03:21kind of a new canvas for app developers.
03:24And so what you can do, the types of applications when you have a device like this just opens up
03:29new potential.
03:30Why that matters is that these new applications are going to become increasingly agentic.
03:36And that's this whole concept of personalized AI, the ability of the machine to understand personal context, but also do
03:43work for you.
03:44That's why meta was up 7% yesterday as they talked about these agents that actually get things done.
03:49But this device is unique because since it is bigger, you're going to be able to build new applications around
03:55that.
03:55And I think when you put all this together, when you put kind of the duo in combination with what
04:01Apple is doing around their whole new Siri,
04:05I think what it positions Apple is to be the best positioned company when it comes to personalized AI, a
04:11whole theme that really hasn't started.
04:13What that means is people are going to buy more Apple devices and probably pay more for apps longer term.
04:18How much, Jane, can we take a look at this display and John Ternus' first news conference where he released
04:25a big product as really a John Ternus era versus the continuation of Tim Cook?
04:33Well, this was a Tim Cook product.
04:36I mean, this is something that they've been working on for the past decade.
04:38But I think what I think stood out, I mean, the biggest event yesterday related to Ternus was even before
04:45the prerecord started, he addressed people in Steve Jobs' theater.
04:49And he did just a really good job of emphasizing the excitement that he has around future products.
04:55And that's typically a well-traveled line for Apple is we're really excited about future products.
05:00But he said that in the midst of really downplaying what they were going to announce yesterday, kind of focusing
05:05really on that future.
05:06And so from my perspective, it's John Ternus is less about the foldable iPhone, more about ultimately what's going to
05:13come.
05:13And go back and credit Mark Gurman here, just to put into perspective how good he is, is that everything
05:19that was announced yesterday, he predicted.
05:21But he's also gone out and predicted what John is going to announce next year and even in 2028.
05:27And I think what you're going to see is a family, more family of AI-powered devices.
05:32This concept of devices that are listening all the time.
05:36We got a little bit of a preview of some of those features yesterday.
05:38This is a big deal in terms of how humanity thinks about how they interact with the world and how
05:44these devices capture audio.
05:46That's another big theme that I think Ternus is going to be aggressively going after.
05:49Gene, who's the biggest competitor for Apple right now?
05:51Is it the likes of Samsung and Google and the Pixel?
05:54Or is it the likes of Amazon and Meta who are trying to break into this space too?
06:00I mean, mathematically, it's Samsung.
06:02If you look at the global market share, the iPhone's just over 20% and Samsung has about 60%.
06:08So mathematically, it is Samsung.
06:10But when you think about it, this is the unique part.
06:12This is why Apple trades at such a premium and will continue, I think, to go higher, is that if
06:17you look at just how tightly their products are together.
06:20Yes, Samsung has individual products that line up with what Apple does.
06:24But none of them really fit together as well as Apple does.
06:28And then you put the services on.
06:29And I recognize that sounds like kind of the company talk, but that's the reality of something.
06:33So I would say in another way, I mean, really, Apple kind of stands alone when it comes to kind
06:39of fitting all this together.
06:41And in a world where we're increasingly bringing inputs from all of our devices together, that idea of tightly fitting
06:48together, I think, is going to become increasingly an advantage for Apple.
06:51Gene, always value your insight, particularly on this company.
06:54Thank you, sir.
06:55Gene Minster there of Deepwater Asset Management on Apple.
06:58Apple, Brammer, this morning.
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