Instant Reaction: Apple Earnings

Bloomberg Audio Studios, podcasts, radio news. 0:00:08.600 --> 0:00:12.239 You're listening to Bloomberg Business Week with krol Messer and 0:00:12.320 --> 0:00:16.400 Tim Stenebek on Bloomberg Radio and Television. All right here, 0:00:16.440 --> 0:00:19.160 the Apple numbers third quarter revenue coming in above estimates 0:00:19.160 --> 0:00:21.480 at eighty five point seven eight billion dollars. Estimates were 0:00:21.480 --> 0:00:24.040 for eighty four point four to six billion. Third quarter 0:00:24.079 --> 0:00:26.720 iPhone revenue coming in above estimates at thirty nine point 0:00:26.800 --> 0:00:29.360 three billion. Estimates are for thirty eight point nine to 0:00:29.400 --> 0:00:33.239 five billion third quarter Great Greater China revenue coming in 0:00:33.280 --> 0:00:36.720 below estimates. That one certainly watched very closely fourteen point 0:00:36.840 --> 0:00:39.520 seven three billion dollars. But we did see third quarter 0:00:39.600 --> 0:00:42.520 services revenue come in above estimates at twenty four point 0:00:42.560 --> 0:00:45.720 twenty one billion dollars. Shares of Apple bouncing around in 0:00:45.760 --> 0:00:47.720 the after hours. They were at first hire when these 0:00:47.800 --> 0:00:50.120 numbers first cross, now down about one percent. 0:00:50.320 --> 0:00:53.319 Yeah, they are bouncing kind of flat, if you will, right, 0:00:53.560 --> 0:00:55.440 They're bouncing around here. So we're trying to make sense 0:00:55.480 --> 0:00:56.760 of it. So let's get to it with our co 0:00:56.840 --> 0:00:59.920 host of Bloomberg Technology on Bloomberg Television, Ed La La. 0:01:00.080 --> 0:01:02.920 Here in our Bloomberg Interactive Broker studio up, Big Week, 0:01:03.000 --> 0:01:08.280 Big Day ed first Blush, What are you taking away from. 0:01:08.200 --> 0:01:10.040 THEE I kind of alluded to this in the preview 0:01:10.040 --> 0:01:12.400 in the top Live blog. Great beat for iPhone revenue 0:01:12.440 --> 0:01:15.480 in the quarter, which is interesting because we're pre sixteen. 0:01:15.680 --> 0:01:17.720 Yeah, like, why are people buying phones right now? They 0:01:17.720 --> 0:01:18.520 should be waiting right. 0:01:18.520 --> 0:01:20.720 There was a lot of waiting in markets like China 0:01:20.760 --> 0:01:23.360 that they were buying the fifteen generation with the intention 0:01:23.440 --> 0:01:24.840 of holding onto it. And then I go to the 0:01:24.840 --> 0:01:28.800 grater China revenue missing estimates and the third party data. 0:01:29.080 --> 0:01:31.720 Third party data is not always right, but he did 0:01:31.720 --> 0:01:33.760 tell us that Apple was slipping in greater China. 0:01:33.959 --> 0:01:36.240 Is the IDC data, the IDC data. 0:01:36.319 --> 0:01:39.080 There's counterpoint research, there's loads, But my point is that 0:01:39.160 --> 0:01:41.520 there was worried they would They did really face domestic 0:01:41.560 --> 0:01:44.360 pressure on the handset market there, and you always look 0:01:44.400 --> 0:01:46.520 to China as a point of focus. So you have 0:01:46.600 --> 0:01:49.000 to read between the lines because on the earnings call, 0:01:49.240 --> 0:01:52.440 CFO Lookame Street often addresses that issue head on how 0:01:52.520 --> 0:01:54.960 they did in the market in China, specifically. 0:01:54.840 --> 0:01:58.639 Erning's for share, earnings for share coming in one dollars 0:01:58.680 --> 0:02:02.000 and forty cents per share. That beat estimates of one 0:02:02.080 --> 0:02:03.800 dollar and thirty five cents, So a beat. 0:02:03.680 --> 0:02:04.160 There as well. 0:02:04.320 --> 0:02:06.400 Yeah, I don't know, you know, I'm looking at kind 0:02:06.400 --> 0:02:08.360 of our right through buyer mark Erman, you know, marking 0:02:08.400 --> 0:02:10.880 a return to revenue growth last quarter, he says, topping 0:02:10.919 --> 0:02:15.240 analyst estimates, indicating that upgraded iPads and a strong services 0:02:15.280 --> 0:02:17.800 business helped make up for some of those headwinds in China. 0:02:17.840 --> 0:02:20.320 So sales were up five percent to eighty five point 0:02:20.320 --> 0:02:23.840 eight billion in that fiscal third quarter, the iPhone maker, saying, 0:02:23.880 --> 0:02:26.119 putting out that statement, analyst had predicted eighty four point 0:02:26.200 --> 0:02:29.040 five So that's a beat. Three months ago, the CFO 0:02:29.160 --> 0:02:31.400 had said the company would grow by a percentage in 0:02:31.520 --> 0:02:36.240 the low single digits during the period. So some comparisons there. Again, 0:02:36.400 --> 0:02:40.639 just quick check on what Apple's doing here in the aftermarket, 0:02:40.800 --> 0:02:43.760 pulling it up here on my Bloomberg and because we 0:02:43.800 --> 0:02:45.760 said it's been bouncing around here, it's now up about 0:02:45.760 --> 0:02:48.320 two percent here in the aftermarket. Keep in mind, Apples 0:02:48.400 --> 0:02:50.639 up about thirteen percent so far in twenty twenty four. 0:02:50.760 --> 0:02:54.720 Okay, overall revenue beat, iPhone revenue beat, MAC revenue beat, 0:02:54.919 --> 0:02:59.359 iPad revenue beat, wearables, homes and accessories also beat, so 0:03:00.400 --> 0:03:03.400 looking pretty good. There was that miss on China. Of course, 0:03:03.840 --> 0:03:06.720 Tim Cook saying in a statement that Apple's reporting a 0:03:06.760 --> 0:03:09.680 new June quarter revenue record of eighty five point eight billion, 0:03:09.760 --> 0:03:12.639 up five percent from a year ago. Talking about announcing 0:03:13.040 --> 0:03:18.359 software platforms at WWDC, Apple Intelligence ed, Apple Intelligence, what's 0:03:18.440 --> 0:03:20.639 the question that investors are going to be looking to 0:03:20.720 --> 0:03:22.400 the answer for the fun the call. 0:03:22.520 --> 0:03:24.959 Actually important to us what investors are looking for a 0:03:25.040 --> 0:03:27.280 lot of people looked at what the Apple Intelligence was 0:03:27.320 --> 0:03:30.400 and said, actually, it's fantastic. They understand the logic that 0:03:30.680 --> 0:03:32.800 what Apple wants to do is make the things already 0:03:32.880 --> 0:03:35.400 on iOS better. That's based on the conversations I've had 0:03:35.440 --> 0:03:37.960 with investors. The thing is that they had already accepted 0:03:38.040 --> 0:03:40.240 to a large extent, because it's priced into the stock 0:03:40.640 --> 0:03:44.000 that it's not ready for the primetime. It's not like here, 0:03:44.520 --> 0:03:46.360 and so I do think that it's going to be 0:03:46.440 --> 0:03:49.800 interesting to get some very specific detail from the call 0:03:50.200 --> 0:03:53.240 on geographic rollout, generation of iPhone roll out. 0:03:53.280 --> 0:03:55.040 Mark German has reported on all of this right. 0:03:55.000 --> 0:04:00.840 The delay by a few weeks post iOS eighteen generation 0:04:01.000 --> 0:04:04.440 software update, But that's what investors are looking at. They're 0:04:04.440 --> 0:04:07.360 trying to do the math on what prompts and individuals 0:04:07.400 --> 0:04:11.040 buy a new iPhone or up their subscription to Apple services, 0:04:11.280 --> 0:04:13.240 because how compelling that product is. 0:04:13.440 --> 0:04:13.720 That's it. 0:04:14.040 --> 0:04:16.320 Yeah, exactly. Well, like you know, we said, I'm going 0:04:16.360 --> 0:04:18.000 to buy a new phone. I know, postling he's going 0:04:18.080 --> 0:04:18.800 to buy a new phone. 0:04:18.920 --> 0:04:19.160 I know. 0:04:19.360 --> 0:04:20.560 I look at the end of the year all the 0:04:20.600 --> 0:04:22.279 money that goes out to Apple and all the various 0:04:22.320 --> 0:04:24.520 services and cloud storage and so on and so far. 0:04:24.600 --> 0:04:27.000 Well, here the CFO taking notes right now, Carol. Two 0:04:27.080 --> 0:04:30.240 new phones will be sold in the fourth quarter or 0:04:30.279 --> 0:04:31.240 third quarter of the year. 0:04:31.400 --> 0:04:34.160 Now, it's kind of interesting, right exactly. And you know, 0:04:34.240 --> 0:04:36.200 I'm looking at our live blog too. There isn't a 0:04:36.279 --> 0:04:38.640 single mention of the Vision Pro and Apple's earnings release. 0:04:39.520 --> 0:04:42.240 The thirty five hundred dollar our headset is Apple's first 0:04:42.279 --> 0:04:44.800 major new product in nearly a decade. There's not a 0:04:45.320 --> 0:04:47.360 ton left in the cupboard in terms of innovation with 0:04:47.400 --> 0:04:49.720 the company canceling itself driving card Viebruary. That's coming from 0:04:49.720 --> 0:04:50.320 our Mark Garment. 0:04:50.440 --> 0:04:53.120 What's interesting is that there's a post from Ed Lovelow 0:04:53.240 --> 0:04:54.559 in the live blog. 0:04:54.720 --> 0:04:55.360 How did he do that? 0:04:55.480 --> 0:04:57.080 While he's here in our studio with us. 0:04:57.520 --> 0:05:00.160 Yeah, I mean the fingers move fast to and the 0:05:00.200 --> 0:05:00.800 mouth sometimes. 0:05:01.800 --> 0:05:04.440 How are you thinking about We've been talking with you 0:05:04.520 --> 0:05:07.360 throughout the week about the tech reporting set, you know, 0:05:07.520 --> 0:05:11.280 season and the big megacap tech companies that have reported. 0:05:11.720 --> 0:05:13.600 How are you thinking about them? I don't know that 0:05:13.640 --> 0:05:14.920 there's one trend line to do. 0:05:15.120 --> 0:05:18.400 There is a trend line excluding Apple, which is capital expenditures. 0:05:18.800 --> 0:05:20.640 And what's so interesting is, like I was talking a 0:05:20.680 --> 0:05:23.480 bit about this in the blog earlier, Apple's capex is 0:05:23.520 --> 0:05:26.679 always low. A lot of investors always bemoaned it's cash balance. 0:05:26.800 --> 0:05:29.360 You know, it's so ginormous, right. I look at the 0:05:29.440 --> 0:05:32.240 release and I see Apple's board of directors declares a 0:05:32.279 --> 0:05:34.960 cash dividends of twenty five cents per share. There's one 0:05:35.040 --> 0:05:36.680 really important thing when you cover a stock like this, 0:05:36.760 --> 0:05:39.280 you need to remind yourself how widely held is the 0:05:39.279 --> 0:05:40.200 stock around the world. 0:05:40.600 --> 0:05:41.360 Yes, there are many. 0:05:41.279 --> 0:05:43.840 Institutional investors that hold it in volume. One of them 0:05:43.960 --> 0:05:46.200 was on my show today, Denny Fish of Janis. Think 0:05:46.240 --> 0:05:48.960 all the individuals that buy Apple stock because they think 0:05:48.960 --> 0:05:52.320 it's prestigious. I always find that fascinating. So little divvy 0:05:52.520 --> 0:05:53.160 goes a long way. 0:05:53.320 --> 0:05:55.920 It does go a long way. Hey, listen, we've been 0:05:56.000 --> 0:05:58.280 reading his comments along with Ed's on the blog. We 0:05:58.360 --> 0:06:00.280 read a story on Apple. Let's bring a bit. Mark 0:06:00.320 --> 0:06:03.400 German is Bloomberg News chief technology correspondent. We call them 0:06:03.440 --> 0:06:06.840 our Apple guru joining us right now. Coming off of earnings, 0:06:07.600 --> 0:06:10.960 Mark walk us through what you think the Bloomberg audience 0:06:11.040 --> 0:06:13.000 needs to know about this release. 0:06:14.000 --> 0:06:16.279 Yeah, the through line here is that Apple be across 0:06:16.320 --> 0:06:20.240 the board in every product category iPhone, iPad, wearables, home 0:06:20.279 --> 0:06:24.760 and accessories, mac and services. So nice beats across the board. 0:06:24.800 --> 0:06:28.440 There still the iPhone one percent year of a year decline, 0:06:29.160 --> 0:06:32.360 not terrible, especially given that we are going into the 0:06:32.440 --> 0:06:35.600 new iPhone season. The other thing to note though is 0:06:35.760 --> 0:06:39.360 Greater China. Greater China's down about six percent. This came 0:06:39.440 --> 0:06:43.840 in both below expectations and obviously is an annual decline. 0:06:44.240 --> 0:06:46.000 That's something that I think a lot of analysts and 0:06:46.000 --> 0:06:47.680 investors are going to want to take a look at. 0:06:48.360 --> 0:06:52.760 Why is China's performance continuing to decline. Apple does say 0:06:52.839 --> 0:06:55.360 though that they still see this as an improvement over 0:06:55.480 --> 0:06:57.640 the China situation in the first half of the year, 0:06:58.360 --> 0:07:01.839 but still this is not great. Looking ahead, we're going 0:07:01.920 --> 0:07:05.200 to want to know any color that Apple may have 0:07:05.320 --> 0:07:07.480 on its call about how they're thinking they're going to 0:07:07.560 --> 0:07:10.080 do in the current quarter. The fourth quarter. The new 0:07:10.120 --> 0:07:12.880 iPhone line, the sixteen, will go on sale towards the 0:07:13.040 --> 0:07:15.240 very end of Q four, towards the end of September, 0:07:15.880 --> 0:07:18.400 so that's going to be a significant moment obviously contribute 0:07:18.920 --> 0:07:23.040 quite significantly to the bottom line in the current period, 0:07:23.040 --> 0:07:25.840 which obviously we're looking ahead at that. Another thing I 0:07:25.880 --> 0:07:28.720 want to call out is the iPad. iPad grew twenty 0:07:28.760 --> 0:07:32.520 four percent, not entirely a surprise. I'm surprised that Wall 0:07:32.560 --> 0:07:35.840 Street estimated so low on the iPad. Let's not forget 0:07:35.880 --> 0:07:38.560 that Apple hadn't released a new version of the iPad 0:07:38.680 --> 0:07:40.680 for about a year and a half and then released 0:07:40.720 --> 0:07:43.920 two major versions of the new iPad in May, along 0:07:44.000 --> 0:07:47.640 with major updates to their accessories. So no surprise there. 0:07:48.320 --> 0:07:52.880 Mark. They're not giving guidance anymore for the current quarter, 0:07:53.560 --> 0:07:56.239 But what do you expect them in terms of color 0:07:56.320 --> 0:07:58.720 to give about how sales are going to be in 0:07:58.760 --> 0:08:01.560 the current quarter. And then you know, obviously they're not 0:08:01.600 --> 0:08:04.040 going to talk about new iPhones that haven't been announced yet, 0:08:04.080 --> 0:08:06.400 but what kind of tidbits could we get. 0:08:07.560 --> 0:08:09.360 Well, it's anyone's guess what they're going to say. I'm 0:08:09.400 --> 0:08:12.480 not going to speculate. It really can go, you know, 0:08:12.680 --> 0:08:13.400 one way or another. 0:08:13.800 --> 0:08:14.160 They could. 0:08:14.480 --> 0:08:17.280 They're probably going to give some sort of indicator of 0:08:17.360 --> 0:08:19.320 how the iPhone is going to do in the fourth quarter, 0:08:19.600 --> 0:08:22.440 and there's really three options they're going to say. You know, 0:08:22.560 --> 0:08:24.760 let me take a step back. There's really two options 0:08:24.800 --> 0:08:26.040 of what they're going to say on the skull. Either 0:08:26.120 --> 0:08:28.280 going to say that the iPhone performance for Q four 0:08:28.400 --> 0:08:30.080 is going to be in line with iPhone performance in 0:08:30.120 --> 0:08:32.560 Q four last year, or they're going to say iPhone 0:08:32.559 --> 0:08:36.280 performance will accelerate in Q four in comparison to last year. 0:08:36.559 --> 0:08:38.440 If they don't say either of those things, I think 0:08:38.480 --> 0:08:40.720 it's a pretty good indicator that they think it's probably 0:08:40.760 --> 0:08:43.160 going to decline a little bit, or they're not entirely sure. 0:08:43.440 --> 0:08:45.040 They're probably not going to come out and say that 0:08:45.120 --> 0:08:46.840 in the iPhone launch cord or the iPhone is going 0:08:46.880 --> 0:08:49.280 to do more poorly than it did last year. 0:08:50.559 --> 0:08:53.120 Hey, Mark, it's unbelievable that you and I are speaking 0:08:53.200 --> 0:08:57.439 on Bloomberg Radio and simultaneously blogging live on the Bloomberg terminal. 0:08:57.679 --> 0:08:59.559 There are going to be terminals subscribers around the world 0:08:59.600 --> 0:09:02.760 that just understand what's happening. One thing I'd love to 0:09:02.800 --> 0:09:04.000 do with you, and I know it's hard, is the 0:09:04.080 --> 0:09:06.520 math on China. You know you get that three Q 0:09:06.760 --> 0:09:09.480 iPhone B and then the weakness in Greater China. 0:09:09.880 --> 0:09:10.880 Is it likely to be. 0:09:10.960 --> 0:09:15.079 Products specific in terms of iPhone or where does Apple 0:09:15.160 --> 0:09:17.320 tend to point to us when they have a specific 0:09:17.400 --> 0:09:18.360 geographic weakness. 0:09:19.520 --> 0:09:21.600 Well, the thing is is Apple never really gets into 0:09:21.840 --> 0:09:25.400 geographic weakness on a product ed product basis. What they 0:09:25.480 --> 0:09:27.800 have said over the past several quarters as people have 0:09:27.920 --> 0:09:30.840 asked about the declines in China is that these declines 0:09:30.920 --> 0:09:34.400 are not due to the iPhone. Now, they're not saying 0:09:34.440 --> 0:09:37.040 what those other products are that are contributing to the declines. 0:09:37.040 --> 0:09:39.800 Whether it's the iPad, whether it's the Math, whether it's wearables. 0:09:39.880 --> 0:09:43.600 They're not sharing that information, So who knows what they're 0:09:43.600 --> 0:09:46.520 going to tell us this time. I believe personally that 0:09:46.600 --> 0:09:48.480 it does have to do with the iPhone and some 0:09:48.600 --> 0:09:50.800 of the softness we're seeing there. A lot of people 0:09:50.840 --> 0:09:54.040 are buying Huawei Vivo Opah, the local phonemakers instead of 0:09:54.040 --> 0:09:55.880 the iPhone. At this point, so I would say this 0:09:56.000 --> 0:09:58.640 has to do with the iPhone this quarter. Whether or 0:09:58.640 --> 0:10:00.640 not Apple's going to come out and say that that's 0:10:00.679 --> 0:10:01.240 another story. 0:10:01.480 --> 0:10:03.959 We're talking with Mark German, We're talking with Ed Ludlow. 0:10:04.320 --> 0:10:06.839 Apple third quarter iPhone revenue that's a beat. Third quarter 0:10:06.920 --> 0:10:10.400 Greater China revenue that was a miss. Third quarter revenue overall, 0:10:10.800 --> 0:10:13.520 that was a beat. Mark in terms of AI and 0:10:13.640 --> 0:10:15.839 Apple Intelligence, which they showed off a lot at the 0:10:15.880 --> 0:10:18.839 Developers conference in June. What would be a question that 0:10:18.920 --> 0:10:21.240 you'd want to know about that. I know they're still developing, 0:10:21.280 --> 0:10:23.160 they're working on it, but what do you want to know? 0:10:24.640 --> 0:10:26.079 I want to know if they think it's going to 0:10:26.200 --> 0:10:28.439 drive sales, because I can tell you after using it 0:10:28.559 --> 0:10:30.679 for the past few days or so, I don't think 0:10:30.679 --> 0:10:33.080 there's any reason why anyone should buy a new iPhone 0:10:33.280 --> 0:10:36.320 based solely on the new features that are currently available 0:10:36.559 --> 0:10:38.640 or will be available from Apple Intelligence at the get go. 0:10:39.559 --> 0:10:42.240 I happen to think that Apple Intelligence is really a 0:10:42.440 --> 0:10:45.360 late twenty twenty five story, and maybe next year is 0:10:45.360 --> 0:10:47.120 one of that's going to drive sales, but the current 0:10:47.160 --> 0:10:51.480 incarnation it shouldn't be a sales driver. Quite frankly, based 0:10:51.520 --> 0:10:54.680 on their marketing and some some ridiculous comments I've seen 0:10:54.720 --> 0:10:57.840 from Wall Street analysts and others who cover Apple. Maybe 0:10:57.880 --> 0:10:59.839 they'll still grow based on it. Some people will be 0:10:59.840 --> 0:11:02.559 just appointed if they buy the iPhone based on Apple intelligence, 0:11:02.640 --> 0:11:03.640 at least from the beginning. 0:11:04.160 --> 0:11:05.800 Ed come on back in here to remind us about 0:11:05.840 --> 0:11:07.920 capex and why CAPEX should be looked at differently with 0:11:08.000 --> 0:11:11.320 Apple than with that Microsoft Alphabet, Amazon and Meta just. 0:11:11.360 --> 0:11:14.160 Because historically capital expenditures for Apple are just kind of 0:11:14.200 --> 0:11:16.520 a non event. They're not at the ten percentage point 0:11:16.559 --> 0:11:20.040 to twenty percentage point range that the hyperscalers have, particularly 0:11:20.080 --> 0:11:22.600 in the current environment. Right, It's just not a part 0:11:22.679 --> 0:11:25.280 of their story. And Mark always correct me if I'm wrong. 0:11:25.320 --> 0:11:27.880 But what I find so interesting about Apple strategy is 0:11:27.960 --> 0:11:29.720 the cost of where they're trying to get to, which 0:11:29.800 --> 0:11:30.800 is Apple intelligence. 0:11:31.080 --> 0:11:32.400 Think about the partnerships, right. 0:11:32.720 --> 0:11:35.880 You know, Apple is not as hyper focused on the 0:11:35.960 --> 0:11:38.120 building of its own large language model. It has some 0:11:38.240 --> 0:11:41.160 activity there, but it partners with open ai, so open 0:11:41.200 --> 0:11:43.680 ai takes the R and D cost. How does Apple 0:11:44.000 --> 0:11:48.000 facilitate its cloud It relies on GCP Google Cloud platform, 0:11:48.320 --> 0:11:50.079 you know, and Google does its own R and D 0:11:50.120 --> 0:11:52.760 investment on the silicon side, and I find that so interesting, 0:11:52.840 --> 0:11:54.760 And you know that's why I'm a tongue in you know, 0:11:54.960 --> 0:11:56.480 you guys know what I'm like, tongue in cheek. But 0:11:56.600 --> 0:11:59.439 it's why I post in the blog about the divvy 0:11:59.760 --> 0:12:03.720 and about cash generation and the growing balance sheet because 0:12:03.880 --> 0:12:06.040 investors always say, I wonder what they'll do with that 0:12:06.120 --> 0:12:06.480 one day. 0:12:06.559 --> 0:12:07.199 Do you know what I mean? 0:12:07.440 --> 0:12:09.440 Like, well, listen, they say, during the quarter of our 0:12:09.440 --> 0:12:13.080 record business performance generated EPs growth of eleven percent, nearly 0:12:13.160 --> 0:12:16.000 twenty nine billion in operating cash flow, allowing us to 0:12:16.000 --> 0:12:19.040 return over thirty two billion to shareholders. I mean, I 0:12:19.120 --> 0:12:21.040 always think about this mark whenever we talk with you, 0:12:21.160 --> 0:12:22.640 and whenever we talk with that I mean, just the 0:12:23.080 --> 0:12:26.920 law of large numbers when it comes to Apple specifically, 0:12:27.800 --> 0:12:31.440 as you continue to look at this this report and release, 0:12:31.960 --> 0:12:33.880 I don't know what should we leave our investors with. 0:12:34.040 --> 0:12:35.560 What do you think that they should be thinking at 0:12:35.600 --> 0:12:37.000 top of mind when it comes to Apple. 0:12:38.480 --> 0:12:42.720 I'll simplify it for you. From a financial standpoint, everything 0:12:42.880 --> 0:12:46.319 is just fine, right, a little bit of concern in China. 0:12:46.840 --> 0:12:50.439 But my concerns about Apple aren't the financials today. It's 0:12:50.520 --> 0:12:54.240 that this company is not pushing out products at the 0:12:54.320 --> 0:12:57.480 pace that they used to. I'm simply not seeing that 0:12:57.720 --> 0:13:00.880 game changing innovation that we used to see. I'm simply 0:13:01.000 --> 0:13:03.959 not seeing them leap frog ahead of the competition. I'm 0:13:04.000 --> 0:13:06.240 seeing a lot of response to the competition. Like with 0:13:06.320 --> 0:13:08.920 Apple Intelligence, I'm seeing something that's not as good as 0:13:08.960 --> 0:13:13.360 the competition with Apple Intelligence. I'm seeing them add features 0:13:13.400 --> 0:13:16.120 to iOS that Android has had for a number of years. 0:13:16.920 --> 0:13:20.200 I'm seeing really impressive new technology like the Vision Pro 0:13:20.720 --> 0:13:23.760 that's not a product, it's more of a prototype or 0:13:23.880 --> 0:13:24.520 developer kit. 0:13:24.679 --> 0:13:24.920 Yeah. 0:13:25.160 --> 0:13:29.600 So I'm concerned about Apple products right now, and obviously 0:13:30.080 --> 0:13:32.480 products hardware surprives this company. 0:13:33.360 --> 0:13:35.640 Yeah, so long term Mark, because you have such a 0:13:35.679 --> 0:13:37.920 good view into the pipeline, much to the chagrin of Apple, 0:13:37.960 --> 0:13:42.000 I imagine no car coming Vision Pro, as you mentioned 0:13:42.040 --> 0:13:44.880 the live blog, not even mentioned in this report. 0:13:44.960 --> 0:13:46.839 Is that right? That's right? 0:13:47.040 --> 0:13:50.760 So what is the big picture for the pipeline over 0:13:50.800 --> 0:13:51.600 the next five years. 0:13:53.280 --> 0:13:56.520 I think we're probably two or three years away from 0:13:58.320 --> 0:14:03.080 a bigger new product push, whether that's augmented reality glasses, 0:14:03.760 --> 0:14:08.880 foldable phones, new types of touchscreen devices, new home devices, 0:14:09.000 --> 0:14:11.600 new macs. But I'm not seeing anything in the next 0:14:11.679 --> 0:14:15.679 two to three years that you know is going to 0:14:17.000 --> 0:14:19.920 be a game changer, right, division pro technology is a 0:14:19.960 --> 0:14:22.760 game changer. Nobody wants it. It's too heavy, it's too expensive, 0:14:23.080 --> 0:14:23.840 there's no content. 0:14:24.400 --> 0:14:26.040 All Right, we're gonna leave it there. Listen your gem. 0:14:26.120 --> 0:14:28.560 You have so much going on and so appreciate it. Markerman, 0:14:28.560 --> 0:14:31.400 he's Bloomberg News chief technology correspondent joining us out there 0:14:31.480 --> 0:14:33.280 from the West Coast. We're not gonna let Ed lad 0:14:33.320 --> 0:14:36.120 logo yet because Ed, you know, we lean on you 0:14:36.240 --> 0:14:38.120 like we lean on Mark. I feel like we've been 0:14:38.160 --> 0:14:39.520 going through a lot of the tech news. 0:14:39.720 --> 0:14:41.080 That's why we flew him out to New York this 0:14:41.200 --> 0:14:42.480 week on the. 0:14:42.720 --> 0:14:47.080 On the Bloomberg Jet, the good and the bad of 0:14:47.200 --> 0:14:49.160 the big tech that have been reporting. 0:14:49.400 --> 0:14:51.200 Yeah, that's a really, really smart question. 0:14:51.480 --> 0:14:53.920 So there's one thing that I learned very quickly, which 0:14:54.000 --> 0:14:56.600 was Microsoft, do not miss Wall Street estimates. 0:14:56.920 --> 0:14:57.880 That won't go well for you. 0:14:58.000 --> 0:15:00.440 And I think that it's because we've just about the 0:15:00.520 --> 0:15:03.960 money machine, but now the investors are really starting to 0:15:04.000 --> 0:15:06.000 do the math on it. You know, the Capex number 0:15:06.080 --> 0:15:08.240 was everything. I think I even Heardy and King on 0:15:08.280 --> 0:15:10.920 the phone to you just say couples of expenditures and 0:15:11.040 --> 0:15:15.360 then hang up. It's because with that you can basically 0:15:16.160 --> 0:15:20.280 do the math on the timing of sales growth from 0:15:20.320 --> 0:15:23.320 bottom line growth from artificial intelligence, and then you can 0:15:23.400 --> 0:15:26.680 sort of extrapolay it out further afield. That's why Amazon's 0:15:26.680 --> 0:15:29.080 so interesting. Until the call, we're not really going to 0:15:29.160 --> 0:15:31.160 know if it's a capex issue for AI or if 0:15:31.160 --> 0:15:32.880 their retail business wasn't very good. 0:15:34.520 --> 0:15:36.320 It's a really great point. Yeah, right, Like you need 0:15:36.400 --> 0:15:37.720 to know these details. 0:15:37.800 --> 0:15:40.440 Amazon in the after hours. Now as we do wait 0:15:40.520 --> 0:15:43.280 for details from that call. Down five point seven percent. 0:15:44.240 --> 0:15:45.520 I'm like, do we want to they'll let them go? 0:15:45.560 --> 0:15:46.000 I guess we need to. 0:15:46.160 --> 0:15:47.840 Yeah, we gotta let them go because we got another 0:15:47.880 --> 0:15:48.360 interview to do. 0:15:48.840 --> 0:15:48.960 Well. 0:15:49.040 --> 0:15:51.440 I just got a day's point. So on the CFO call, 0:15:51.480 --> 0:15:54.760 there's a media call that's just started with Amazon. Amazon 0:15:54.840 --> 0:15:58.560 spent thirty five billion dollars on capital expenditures in the 0:15:58.760 --> 0:16:01.680 first half of twenty twenty four, So we don't have 0:16:02.240 --> 0:16:04.680 a number for the quarter, but it was thirty five 0:16:04.760 --> 0:16:07.080 billion in one h and it will be more than 0:16:07.160 --> 0:16:10.680 that in two h which is largely due to investments. 0:16:10.360 --> 0:16:13.160 In AWS infrastructure. So I think I answered that question. 0:16:13.440 --> 0:16:15.960 We did answer it. Astin answered all right, Kit, I listen. 0:16:16.080 --> 0:16:17.760 Thank you so much, So great to have him here 0:16:17.800 --> 0:16:19.840 on the East Coast this week, the co host of 0:16:19.840 --> 0:16:23.040 Bloomberg Technology on Bloomberg TV. Catch them eleven am Wall 0:16:23.040 --> 0:16:26.200 Street Time, Monday through Friday on Bloomberg Television. Of course, 0:16:26.200 --> 0:16:27.440 the one and only Edla Love