00:00 Speaker A
Well, Apple unveiled its long awaited AI strategy, its iPhone duo event yesterday. Our Dan Halle is on the ground in Cupertino. All right, Dan. So, you know, we know Apple has taken some heat, Dan, right, from some quarters for being behind in AI. Now you were at the event, Dan, you were there in Cupertino at the Apple mothership. Uh you watched the event. So what do you think after watching that event? Do you come away thinking, you know what? Apple answered its critics. What do you think?
00:24 Dan Halle
I think they really generally did. Uh you know, they they explained how AI is going to be implemented across their various devices and services. Uh you know, they showed different use cases, whether that’s through the iPhone, uh being able to ask questions like, okay, you know, uh what game did Michael uh talk to me about this past week uh and it’ll go directly into your your texts uh and surface that information or your emails and service that information. Uh I’ve been using the beta myself for the uh new uh Siri AI artificial intelligence. Uh I got a uh try to call my hotel here
01:00 Dan Halle
uh in Cupertino. Uh and while I was uh it was ringing uh on speaker phone, it pulled up the confirmation code for the hotel itself on my phone. So this way, if they ask for it, I had it ready to go. So it’s, you know, things like that that I think are going to be very helpful for people. And then obviously you can ask Siri AI, uh you know, they call it broad world knowledge, uh which is basically just, you know, questions about, you know, how do I make salmon or something like that, right? Like just regular questions that that people may have.
01:21 Dan Halle
They also discussed how they’re implementing it uh across other products, whether that’s uh their max. I saw uh not only that, but I saw some of their max also set up to run local AI models, the Mac Mini and the Mac Studio. I saw an array of four Mac Studios put together running a one trillion parameter model. Uh you know, that’s a you know, almost one terabyte of uh memory, which is a lot. uh and I sure as heck would love to use that for video games, but it’s being used for AI, so whatever. Um but it’s it it shows that, you know, Apple is aware that people are interested in its products to build with AI as well. And then, you know, they had one product that uh had has AI built in. It’s a little odd. It’s the Apple Watch. Um, you know, some of the health features seem to be very good. There’s health insights, things along those lines, uh but it also will have a kind of listening mode uh where it can kind of provide you with uh broad oversights of conversations you’ve had throughout the day.
02:13 Dan Halle
Uh Apple says it doesn’t record uh or store any of that uh uh raw audio file. uh and what you get at the end of the day is kind of a general summary uh of what’s gone on. Uh there’s there’s no speaker attributions, things along those lines. Uh you know, we’ve seen kind of Silicon Valley leaning into this kind of product space. Uh Apple seems to be trying to go for kind of a security privacy uh approach here. I’m not certain how many people are actually going to want this
02:37 Dan Halle
uh kind of feature. It’s opt in. So if you don’t want it, you don’t have to use it. Uh but it it is kind of an odd place for for Apple to be playing in, but besides that, uh you know, they really did seem to to do a good job of selling their kind of overall AI showcase.
02:49 Speaker A
So let me ask you then the big investor question is, you know, do you think everything you’re describing here, right? All these AI features, the AI bells and whistles, do you think Dan, that is ultimately going to help sell more iPhones?
03:07 Dan Halle
Yeah, I mean, I don’t really think so. Uh you know, as far as it goes, the people want to buy the the hardware based on the hardware. And so if you see the the iPhone duo, you’re not probably not thinking to yourself, great, I get Siri AI. You’re thinking, cool, I have a foldable phone. Or if you’re looking at the 18 Pro, you’re thinking, cool, a great, you know, new hardware camera. Uh ditto the the the Apple Watch, the you know, the ultra. Uh the AirPods also got some AI capabilities
03:41 Dan Halle
largely from the phone itself obviously, but I don’t necessarily think that this is going to juice sales. and you know, I I spoke to one of the analysts over IDC. uh Francisco and basically uh you know, he he kind of backed that up uh as well. I spoke to some folks or emailed with some folks over at Counter Point. uh and they, you know, essentially said, look, Apple hasn’t really had a ton of AI to match what Samsung and Google have had up till till this point and it didn’t hurt iPhone sales at all. They they did very well.
04:06 Dan Halle
And so I think, you know, at a certain point it just has to be a a table stake almost. It’s it’s, you know, a tool similar to the internet where, you know, if if you don’t have it, over time, people will say, well, where is it? Um I I just don’t think though that it’s something where, you know, you’re going to have people going, gosh, I can’t wait to get my hands on on Apple intelligence, Siri AI. They’re going to say, gosh, I can’t wait to get my hands on those the new foldable iPhone or the the the new 18 Pro because they’re good hardware devices and that’s generally why people upgrade, not necessarily the software. Uh but as I say, in in the future, uh when every device has AI, or if every device has AI, then if it doesn’t have it, then that will be kind of a question of why. At that point, maybe people might not buy because of that. But for now, it seems as though the hardware is still the leading leading reason for people to want to upgrade.
05:22 Speaker A
Let me ask you, Dan, just since we were flashing the prices there, um you know, so the price of the new iPhones did go up, not surprising, Dan, you know, listen, we talked about that the two of us on the show a lot heading into the event. But I’m just curious, what did you make of the price increase, Dan? Um any risk in your opinion that potentially dents demand?
05:40 Dan Halle
I I don’t think so. It’s it’s 100 bucks, which look, you know, it’s 100 bucks is nothing to sneeze at, you know, that’s that’s still real money. Uh I think for a lot of folks though, what they they do is they they, you know, do kind of the payment plan. And so you’re going to see that as, you know, maybe a few bucks month to month, it’s not going to be something that, you know, absolutely burns a hole in your wallet. And so, you know, I I think that people will still upgrade. The folks who pay off the phone immediately, that sticker shock may be a bigger issue. But there there’s fewer of those people than of the folks who go out and do, you know, monthly payments through their their carrier or with some other, you know, buy now pay later plan. And so I don’t necessarily think that’s that’s going to be an issue and it’s just it seems as though the the kind of
06:30 Dan Halle
consumer base has has recognized that that’s going to be a problem. You know, we we look at the PC space uh and and sales are down but prices are higher. Uh and so that’s helping some of these companies weather the storm. And again, you know, there’s there’s really no telling when this will end. You know, if you speak to some of the the memory companies, they’ll say anywhere between 2027 and 2030, maybe beyond that. Also, it might help them to say that, you know, because they’re the ones selling it and that also helps their stock price. Um but, you know, it does appear as though this is going to be at least for for for the near term, uh a continued problem and I I expect to see more price increases throughout the the tech industry.
07:22 Speaker A
All right. Great reporting as always. Thank you, Dan, appreciate it.
