458: Weaving on a Thoughtful Basis

0:00:00[Music]

0:00:08From Relay FM, this is Upgrade, episode 458. Today's show is brought to you by ExpressVPN

0:00:16and Uni Pizza Ovens. My name is Mike Curley and I'm joined by Jason Snell. Hi Jason.

0:00:20Hi Mike.

0:00:21We're like less than a month away now from WWDC.

0:00:26I feel like it's all slotting into place. I don't know, there's something,

0:00:30it's been all kind of amorphous up to now, but now suddenly I feel like, you know, it's, it's

0:00:36next week we do this and next week we do that, yeah, week after we do this, and like it's,

0:00:40it's all kind of forming now. It's more real now, I think. It's coming. Yeah. But,

0:00:46tradition remains and I have a Snell Talk question for you. It comes from Ramona who wants to know,

0:00:52"Jason, which are your favorite pizza toppings and do you like to eat pizza crust?"

0:00:56Did we, have we not covered this?

0:00:59Oh, of course we have, but like, what, you think everyone that's listening now has been listening

0:01:04for the last five years? That's not how this works. People dip back into the archive for

0:01:10the pizza supercut that we should make now about all of our conversations about pizza.

0:01:14You could have changed, your topping choices could have changed.

0:01:19People do change, but my pizza preferences remain the same.

0:01:23Pepperoni's always been my favorite pizza topping.

0:01:26Easy.

0:01:27Yep.

0:01:27Always. Always been. Which is funny because like my kids, especially my son, is like,

0:01:33"Cheese pizza." He doesn't want any toppings on it at all, which I don't understand at all.

0:01:36But as a kid, you know, really I think you're offered two kinds of pizza. It's a little more

0:01:43sophisticated today, but back when I was a kid, there were two kinds of pizza. Cheese pizza and

0:01:48pepperoni pizza. And you could order special of stuff, but like if you're getting something for

0:01:54kids or you're just getting a slice, your choices are cheese or pepperoni. Those are the choices.

0:01:58And I always liked the pepperoni. I thought that was great. So in college, you experiment as you

0:02:06do, right? In college, it's a time in your young life when you're like, "Let's try new things. Let's

0:02:11try different things. Put different things inside our bodies and see how it makes us feel."

0:02:17Oh my God.

0:02:18And for whatever reason, while working at the, just let it go, Mike, working at the college

0:02:23newspaper, we would end up ordering pizza late because we were hungry and working all evening

0:02:29on the newspaper until like the early hours of the morning. And it was out of there that,

0:02:34and I don't know who ordered it or if I ordered it and thought it was a funny thing. I think somebody

0:02:39must have ordered it and I just had it. Somebody had a pepperoni with pineapple on it. And again,

0:02:46formative moments in my young life. I had the pepperoni with the pineapple. You got the salty,

0:02:53slightly spicy pepperoni, and you got that sweet pineapple flavor.

0:02:59The good texture of cooked pineapple too, I feel like.

0:03:02Yes. I was a changed man, Mike. That was the end of it. So since then, pepperoni and pineapple,

0:03:07which is funny because I did not, it wasn't like I had a Hawaiian pizza and said, "You know, this

0:03:12Canadian bacon on here, this ham would be better if it was pineapple or if it was pepperoni."

0:03:19That's not how I came to it. Maybe the person who ordered it came to it that way,

0:03:22or maybe the Domino's pizza we ordered from did not have Canadian bacon. Regardless,

0:03:29it became my favorite. So now that's what I get. I like other kinds of pizza though, I will say.

0:03:35Barbecue chicken pizza is really good. I know that there's some people out there, John Siracusa, who

0:03:40scoff at barbecue chicken pizza. I kind of love it. We were visiting Salt Lake City on our way to

0:03:47the eclipse a few years ago. We did a road trip to Idaho to see the eclipse. And we ate at a,

0:03:54it was like a underground pizza bar place that I think it was the summer, so there was not very

0:04:02many people there, but I think University of Utah people go to there. So it's like a college pizza

0:04:07place. And they had a barbecue chicken pizza with Gouda, with smoked Gouda on it, was maybe the best

0:04:16pizza I've ever had. Like it was amazing. So runner up barbecue chicken pizza, and if you're in Salt

0:04:24Lake City, find that college pizza dive, because oh my god, it was great. Do you eat the crust?

0:04:32Crust strategy. Yeah, I like the crust. Depends on how much I'm eating.

0:04:37If I'm ordering- It also depends on the quality of the pizza.

0:04:41And yeah, sure, right. I mean, lousy crust is lousy. There are times when I will, like, we will

0:04:48order a pizza and it's nice and hot now and we're probably not going to take it home, or it's like,

0:04:52it's personal sized enough that whatever is left you're not going to take home, and I will then,

0:04:57I will often prioritize the non-crust parts because it'll be like, well, I'm going to fill

0:05:03up on crust and I'd rather have more of the cheese and sauce, please. So it varies. At home, Lauren

0:05:11frequently doesn't eat the crust, and occasionally if it's a particularly good dough that I have made,

0:05:16I will eat her crust because that's real good crust and I'm not going for another piece.

0:05:21That's husband's prerogative, man. That's what you get.

0:05:23Yeah, exactly. It's, I made that crust and now I take it back and I'm going to eat it.

0:05:27So yeah, yeah, sure. Sometimes, sometimes not. If you're not, if I'm not hungry enough and I like

0:05:33the cheese, the pizza itself is filling enough, then the crust is the first to go. I'll put it

0:05:39that way. It's optional, but I do like it. Long time listeners will know that I have always been

0:05:45a fan of pepperoni too, and you turn me on to the ways of pineapple pepperoni, which I think is the

0:05:49perfect combo for a pizza. I will say the thing that has changed in my life is if, you know,

0:05:55something like pineapple is not available to you, you want to try something different. Spicy honey

0:06:00serves a lot of the like, the flavor balancing for pepperoni. So like pepperoni with like a spicy

0:06:06honey, it's very good because it adds a bit of sweet and also adds a bit of spice. So I'll add

0:06:10that in there too. Hot honey. A little hot honey. Yeah. The hot honey trend. It's very trendy,

0:06:14the hot honey, but I get it. I get it. I love honey also. So that might be an interesting way

0:06:21to do it. I'll, I'll keep that in mind. I don't know if I've seen a pizza place here that offers

0:06:25hot honey as a, as an, I should say, I, I, I eat other kinds of pizzas. Like, I mean, I don't mind

0:06:30mushrooms and I don't mind onions and I don't mind peppers and like, I don't mind other toppings,

0:06:38but I'm never going to prioritize them. I'll have them, right? If like, well, we, we just got this

0:06:43pizza that's mushroom and onion. I'll be like, okay, like fine. But I, I, I would not choose

0:06:49that. If you are, you know, you're the pizza holder, you're gonna, you're gonna make the

0:06:53decision. Plan a pepperoni. Right. Well, I mean, it depends. Yeah. Right. Do you get,

0:06:57one of the beautiful things about pizza is in most settings, you choose what your pizza is,

0:07:01right? It's only if you're like ordering a slice from a limited supply, or if you're like at an

0:07:06event or something where they have pizza and it's already been pre-selected for you, for you, like

0:07:11to choose the kinds and it's similar to having a slice where it's like, sorry, buddy, these are the

0:07:16kinds of pizza we've got. Then, you know, you compromise. I would like to thank Roman for

0:07:22sending in this question. It's a good question. I think it's Ramon according to the, uh,

0:07:25our show document. I think you've said Ramona and Roman. No, I said, I said Ramon the first time and

0:07:31it sounded like I, or Ramon, and it sounded like I added an A, but that was an unintentional sound

0:07:36that my mouth made. Just to be clear, thank you Ramon. And also real time follow up from Dan

0:07:41Morin reporting that the pepper, that he has a pizza place near him that has pepperoni and hot

0:07:46honey. So it has penetrated into the United States. If it, you know, if it's not here already,

0:07:51it will reach me soon. The first place I ever tried this combo was in Portland. Oh,

0:07:58of course it was. Well, all right, then I'll just, I'll look for it. I'll keep an eye on it,

0:08:02but if there's pineapple, I'm going to choose that instead. So thank you to Ramon for sending in.

0:08:07I'm just covering all bases at this point, Jason. Okay. Uh, so sending in that question,

0:08:13you can send it in a question of your own by going to upgradefeedback.com and send us a

0:08:17Snell Talk question to open a future episode of the show. I have quite a bit of follow up today.

0:08:23I have a lot of interesting things that people have written to us via the same feedback form.

0:08:27Upgradefeedback.com. We love, we love it. We love it. I actually have some Snell Talk feedback.

0:08:32David writes in and says 160 degrees? Four question marks. Four question marks. Does Jason

0:08:40have heat shielding in his mouth? My Ember mug has a maximum temperature of 145 degrees.

0:08:46Has Jason jailbroken his mug to allow hotter temperatures? What is happening here? So last

0:08:51week's Snell Talk question, I asked Jason what his preferred temperature was for his tea,

0:08:56and Jason said 160 degrees. Yes. I don't know about heat shielding. Is that what the,

0:09:02is that what the inside of your mouth is not meant to be? Is heat shielding? 160 degrees for me is

0:09:06fine. Um, it's a little bit on the hot side, but the thing is, uh, it doesn't stay there very long.

0:09:12And I think David is right here. I didn't check, but I now have a memory of finding my ideal

0:09:19temperature because the Ember mug prompted me to find it. And I found it. And then I found out that

0:09:24the Ember mug doesn't go that high. So I set it to as high as the Ember mug goes. Right. So when I

0:09:30serve myself at 160, what I'm basically getting is I can drink it then and it's really nice and

0:09:36piping hot, but then the Ember mug won't let it go too far away from that. Whatever that high,

0:09:41high point is, if it's 145 and it's not as good at 145 than it is at 160, but the Ember mug,

0:09:48I mean, like I've got half a cup right now. And if I were not using the Ember mug,

0:09:52it would probably be unpleasantly cool. And instead it's pretty warm. Yeah.

0:09:55Joe wrote in and said, Jason asked if watchOS 10 widgets will update without the paired iPhone

0:10:03in range. So the idea of if the widgets get added to the watch, uh, would we have to keep them

0:10:08together to get that information? Right. Because that's an issue with some current watch stuff.

0:10:12Joe said probably this will be the case because since watchOS 9 widget kit complications can make

0:10:22network calls and update without an iPhone. So that was one of the things that changed when they

0:10:27went from watch kit to widget kit. He says, and regarding stale complication data. So the

0:10:31information being out of date widget kit complications vastly improve this because

0:10:36they can make updates themselves. Clock kit complications relied on the app,

0:10:40waking in the background to refresh, which would lead to stale data when it failed.

0:10:45Widget kit has been a big improvement to watchOS and I look forward to see what's next.

0:10:49Uh, I'm I just, uh, swipe to my watch and I, uh, am looking at the weather, which is coming from

0:10:58carrot weather and what it is telling me, uh, there it did. Okay. It did update. I swiped over

0:11:04from a different face and it did update. It was telling me the weather the last time that face

0:11:09was on. And then after about 20 seconds it updated. So that's good. That's, that's not bad. That's,

0:11:16that's what I want, right? Is I just wanted to make an effort to stay updated. So this is great news.

0:11:20Um, that widget kit's already kind of doing this. And the idea, I mean, Apple has been trying very

0:11:25hard to get the watch to stand alone and do things itself because that's what you want, right? You

0:11:29want to be able to set up your watch using your iPhone if need be. And then if you've got the

0:11:33cellular model walk away and still have everything work, that's the goal here. So I hope that, uh,

0:11:42I hope it continues because I love having that stuff on there. And my biggest frustration with

0:11:47my Apple watch is when stuff doesn't update, especially when those complications don't update.

0:11:51It's very frustrating. Yeah. So I guess the hope would be that widget kit made a bunch of things

0:11:57better, uh, just kind of a fundamental layer. And you would hope that if they're continuing to push

0:12:02in that direction where it's like it's actual widgets now, maybe it would have gotten even

0:12:06better, right? Like this is just like the pathway is towards more and more independent data gathering

0:12:13from the watch and a more reliable update. Yeah. In fact, I think what we could probably say is

0:12:20watchOS has been on a path in this direction, but it's, it's got, there's a bunch of sort of, uh,

0:12:27technical debt or, or, or legacy tech technical stuff where there's stuff that's just kind of like

0:12:33from back in the day, if not the original Apple watch from early in the Apple watch,

0:12:36we're so dependent on the iPhone and new stuff is pushing the platform in this direction,

0:12:44which I think is great. Like, again, this is, this is what I'm sure Apple wants to,

0:12:48but the problem is you've got older apps and things kicking around in the system that, uh,

0:12:54maybe preclude some of this. So when we look at reports that say watchOS 10 is going to be much

0:12:59more widget forward, the encouraging way to look at that is by sweeping away the old stuff, but

0:13:07really by bringing the new stuff front and center, you're also motivating every app developer to

0:13:13update. And if all of those widgets are self updating and can reach out over the network and

0:13:19pull their data and don't have to rely on their app, then the net result is going to be that

0:13:25watchOS doesn't have to rely on the apps on the phone either. And the more of that, the better.

0:13:30So, you know, I'm just, I'm just a little hesitant only because I've been using an Apple watch since

0:13:34the beginning and it has been a painful process some of the time in terms of data, not getting,

0:13:40you know, data getting stale on the watch, but I'm hopeful that this is going to, is going to do

0:13:43that. I'm really, I mean, it's funny, Mike, you know, we go years where we're like, yeah,

0:13:47and watchOS, I guess I'll get an update, whatever. And we spent the last few weeks really kind of

0:13:51like nerding out on watchOS, but I think for good reason that this is really encouraging news of

0:13:57a rethink of parts of watchOS and I can't wait to see it.

0:14:01- And like, and I hope that all my expectation might be stuff like this might get better

0:14:05because they don't, they're supporting more modern watches now, right? If they've been able to start

0:14:10letting go some like the series three, for example, maybe there was some constraints with watchOS just

0:14:15because of battery life concerns that like, if you're constantly refreshing information,

0:14:20it's going to kill the battery, so. - Also widgetKit is something that should be

0:14:23familiar to a lot of developers because they're also using it on iOS. And so that's another one

0:14:28of those examples of Apple, again, they have to do it, right? Because they can't invent a new API

0:14:34for everything. They really can. They have to like reuse things in different places, but it's also a

0:14:39huge advantage because they'll be like, oh, widgets on Apple watch and everybody who's built widgets

0:14:44on iOS should go, oh yeah, okay, great. - You already know how to do it.

0:14:46- Yeah. - I've got a couple of pieces of anonymous

0:14:50feedback, some tips, some tips from tips. - I was listening to Connected last weekend,

0:14:55was surprised to discover that the Mike Hurley secret, double secret tip line had been established.

0:15:01- And I have two more pieces of anonymous feedback via the Mike Hurley tip line.

0:15:06You could just get in contact with me, find a way, you know, that's what these two people did,

0:15:12enterprising individuals. - upgradefeedback.com will also work.

0:15:14- It will also work and there is also possible to give anonymous feedback, but these people.

0:15:19- Do we need to create like a signal account for the show? Can you even do that? I don't know if

0:15:23you can. I think it's all good. - Well, the thing about these two

0:15:25pieces of feedback is I know who these two people are, but they are submitting.

0:15:29- Oh, I see. - You're keeping,

0:15:31they're your anonymous sources. - They're my.

0:15:32- None to you, but anonymous to us. - They're my informants.

0:15:34- Okay, good. - So informant number one wrote in to say,

0:15:39in regards to the journal app being closer in kind to Find My rather than, remember we were saying

0:15:45about like, oh, it's not a social network, the journaling app, or it's more like in the Find My

0:15:50department or something that Mike was talking about and talking about what capabilities it may

0:15:55have. Your devices already track which people you have close by to you, regardless of whether you're

0:16:02sharing Find My with them. This happens through a system called Rapport, R-A-P-P-O-R-T, Rapport.

0:16:09- Yeah, it's French like. - Rapport.

0:16:12The underlying protocol used for many things such as continuity, handoff, and airplay.

0:16:17Currently, it can detect when a contact's device is nearby, but it doesn't do anything with that

0:16:22information unless you activate AirDrop. It's completely local and relies on Bluetooth low

0:16:28energy and/or Wi-Fi. And I confirmed with this person that this is how, you know, if you're in

0:16:33somebody's home and you wanna get on their Wi-Fi and you get the Wi-Fi network password sharing,

0:16:38it works through this rapport system. So the idea, you know, like we were talking about, well,

0:16:43would I have to have all of my friends on Find My to see them in the journal app? In theory,

0:16:49they could do this. So like, you know, maybe I'm not friends with Bob and Mary and Alex, right?

0:16:58Like we're not in Find My together, but if we're hanging out, our phones will know that we were

0:17:03together because we share contact information. So maybe that is a way that I would then be able to

0:17:09add like, oh, I was with Bob and Mary and Alex today at the park to my journal. - And I would

0:17:13assume that would end up being like an opt-in thing of like share your proximity information

0:17:19with other people in your contacts list or something like that. - Well, maybe, but it's

0:17:23already doing it and we didn't opt into it. - Well, yeah, but it's the logging part of it.

0:17:27- Yeah, it's the logging part. - It would really require that, right? Because then it's,

0:17:31then you're, I think that that would be how they would build it is like, you would say, yes, sure.

0:17:35You know, you can share with Mike that I was near Mike when, you know, when we were near each other

0:17:41and have it be okay. You wouldn't want that if you're like spying on somebody from behind a bush

0:17:45or something. That would be less good. - This is one of those things where like, when I read,

0:17:48I was like, oh, of course, right? This system, of course it works, right? 'Cause like,

0:17:52how would airdrop from contacts only work? Like realistically, how does it do that? - Yeah, yeah.

0:17:58You have to exchange with nearby devices and find the ones that are in your contacts. - Which is

0:18:02fascinating this system exists and that it's all local. - Right, I wonder how that works. It must

0:18:09be like that there's a unique, like a hash or something attached to every phone number or Apple

0:18:16ID that it saves in your, maybe in your contacts. And then when it sees that it knows that that's a

0:18:24recognized device or something like that. I wonder, I mean, it's gotta work that way, right? Because

0:18:31you've gotta be able to see the devices around you and know what they are, even if they're not

0:18:35in your, right? They're not known to you. - Yeah, I expect you are broadcasting your Apple ID

0:18:42information and like maybe your phone number, right? Like outwardly. - It wouldn't be that

0:18:47though. It would be like a hash of it or something. - Yeah, that's what I mean. I don't mean like so

0:18:51clearly, but. - So when I add somebody to contacts, in the background, Apple is also downloading their

0:18:57unique kind of like blurb thing that they send out. And then when it sees that it goes, oh,

0:19:02I actually know that one. Interesting, I hadn't really thought about that, but yeah, they've

0:19:06gotta be doing stuff like that. Anyway, that would be, sure. I mean, being able to log when you were

0:19:09with friends and have it be kind of magical. Sorry, I guess that's a word Apple would probably use.

0:19:16But the idea there that at the end of the day, where you spent the day with friends,

0:19:19to have it say you were with Mike for four hours at this location, and then you can choose what

0:19:28you wanna do with that. It's pretty cool. It's like your phone knows that already, but like,

0:19:32do you want to write that down and have it be part of the record or not? That's fun. - 'Cause

0:19:39for me, I feel like if they wanna make this a feature, they have to find a way to do it.

0:19:44That doesn't mean that I have to become, find my friends with all of my friends. 'Cause I don't

0:19:48think that's gonna take off, but this could be the building blocks of that. - And for people who

0:19:53would accuse this of being an invasion of privacy, I would say when you're present around other

0:19:59people, is it an invasion of privacy? You're all present around other people. - You've decided to

0:20:02be together. - Exactly, so that the physical proximity is different. It's a log of your

0:20:08physical proximity where you already were proximate. That's very different than, I'm

0:20:12gonna make you a find my friend, and you're gonna see where I am forever, or until the end of the

0:20:20day, or whatever, right? It's a very different kind of thing. You're opting in. I mean, I know

0:20:25people can do bad behaviors here, but when you're in the same space as somebody, you know you're in

0:20:33the same space as somebody. And so it's basically a public record, I would argue. So I don't think

0:20:38it's that weird. In fact, yeah, the only way that this works is if you don't have to add everybody

0:20:43to your find my roster or something like that. - Mike Hurley, Tip Line Informant number two says

0:20:49about Keynote. So someone wrote in to ask if Apple uses Keynote for Keynotes. They wrote in to say,

0:20:57yes, we do use Keynote for Keynotes, but it is just one stage in the pipeline. Marketing bring

0:21:02their assets into the Keynote app. They arrange them the way that they want and export them as

0:21:07a video. This is then pulled into Final Cut or whatever the video team is using. And occasionally,

0:21:14the marketing team does still request new features that get added to Keynote so they can use them in

0:21:19their presentations. So it is what we expected. - I like that we got this more or less right,

0:21:25which is that they build it in Keynote and then they're doing an export because these final videos

0:21:29are a whole production and the screen isn't there or what's on it isn't there. It has to be part of

0:21:37the movie production workflow essentially for these videos that they do. But it starts life

0:21:43in Keynote, which is cool that it still does that and that they still ask for new features in Keynote.

0:21:47And that's one of the reasons Keynote is so good is because it really gets used by the people who

0:21:52make the product. And that's good stuff. Love it. Thank you, secret informants to the Mike Hurley

0:22:01tip line. Very exciting. - This one is not from my tip line. Ford CEO Jim Farley. Can you imagine?

0:22:08He just hit me up. - Hi Mike. - Ford CEO Jim Farley has told Joanna Stern at the Wall Street Journal

0:22:16that Ford is going to be sticking with car play. Farley says, "70% of our Ford customers in the

0:22:23US are Apple customers. Why would I go to an Apple customer and say, 'Good luck.' In terms of content,

0:22:29we kind of lost that battle 10 years ago. So like get real with it because you're not going to make

0:22:33a ton of money on content inside of the vehicle. It's going to be safety, security, partial autonomy

0:22:39and productivity in our eyes." - This is such a great statement. I mean, really you couldn't craft

0:22:45a better statement from an auto executive who seems to actually be in touch with reality than this.

0:22:52Whereas GM, I think, and we've made all these arguments before, is not in touch with reality.

0:22:58And that's the part, two things I wanted to focus on here. One is why would I go to an Apple customer

0:23:04and say, "Good luck." Right? It's so true, right? Which is you're used to having this thing, but

0:23:11forget it. You don't get it now. We've decided you don't get it now. It is baffling when Apple

0:23:17customers are such an important part of the new auto market in America. Like what? And then

0:23:24the realism of, in terms of content, we lost that battle 10 years ago. To say what we've been saying,

0:23:30which is really like, people love their smartphones and their smartphones are up to date

0:23:35and they've got their stuff on it. And their stuff, it comes from all sorts of different sources. And

0:23:39like, don't get between me and my smartphone, between me and my stuff. And then he says,

0:23:44quite rightly, "Okay, one, you're not going to make a ton of money on content inside the vehicle."

0:23:48I think there's a level of realism there that GM doesn't share. GM with its history, with things

0:23:53like OnStar, it's like, no, no, no, no, no. We offer them services and we charge them and we

0:23:58get them on an annual plan and we make it impossible to cancel it. And we get in with the

0:24:03insurance companies to say, give them a break when they pay for our services, which is a thing they

0:24:08do, by the way, with OnStar is that they have like a deal where if you have OnStar and you're

0:24:14sending all your safety information back to GM, your insurance company will give you a break on

0:24:20your insurance because they're looking at the data coming from your car. It's bananas, right?

0:24:25So like, I think maybe company culture-wise, GM just isn't there. The GM really does think

0:24:32that they've got to be making a ton of money on content inside the vehicle. And I think Ford looks

0:24:38at this and says, nah, it's not going to happen. And I think it's more realistic that it's not

0:24:42going to happen. And yet, second, it's going to be safety, security, partial autonomy, and

0:24:47productivity. The stuff that needs to be on the car will be on the car. And then carplay is for

0:24:51the other stuff. And that is a really reasonable split to me. The idea that your car stuff is in

0:24:58the car and your entertainment stuff is on your phone and the best car interfaces are going to

0:25:06have places for both, right? Which is what carplay already does, where there's a little entertainment

0:25:12spot and then wrapped around it is the car stuff. And I think that's perfectly reasonable. It's

0:25:17refreshing and a little shocking that it's so reasonable from a car industry CEO. It's amazing.

0:25:25This isn't really follow-up, but I'm just going to put it in follow-up anyway. Apple have launched

0:25:3120 new games for Apple Arcade, and there are some bangers in here. And I just wanted to let people

0:25:37know about some of these games. So they've done what they've done before, where they've added a

0:25:41bunch of existing hits. Games like Limbo and Temple Run get the plus treatment, right? Limbo Plus,

0:25:48Temple Run Plus. They take old hit games, remove all that purchase from them, make them compatible

0:25:54for all devices that are currently running, and put them on Apple Arcade. I think this is just

0:25:59like a fantastic way to bolster the service and you build a foundation. There's a bunch of just

0:26:04really good games in here. I'm just scoring through the press release now. Just a ton of

0:26:09classics that are in here. They've got, like I said, Limbo already, Hill Climb Racing, Getting

0:26:14Over It, Farming Simulator is in there, if that's your kind of thing. So there's a bunch of stuff

0:26:19there, but there's also new games. They've added a few, but I wanted to recommend two that I've

0:26:24started playing and really enjoying. One is Disney Spellstruck. It's just Disney Scrabble.

0:26:29Ah.

0:26:30And it's just good. It's like a good Scrabble game. And as you're playing it, it's like with

0:26:36a lot of these games, you can see where it was supposed to be in an in-app purchase focused game.

0:26:41But then Apple were like, "Hey, why don't you put it on Apple Arcade?"

0:26:46Because you can get these power-ups to help you out and they just randomly give them to you.

0:26:52That's not how it is supposed to go. I was supposed to buy those, but it's great.

0:26:56The other one is What the Car, which comes from the same people who made What the Golf.

0:27:01Oh, man.

0:27:02And it is equally excellent. And I'm going to make a prediction here.

0:27:06This could probably be a draft prediction, but I'm just going to say it now.

0:27:10The game company behind What the Golf and What the Car have made a VR game called What the Bat.

0:27:17And it's available on Oculus and...

0:27:21Oh.

0:27:21Like on Quest, sorry. And it's available on PlayStation.

0:27:24100% it's going to come to this device because it doesn't...

0:27:29This is a game that would work perfectly with hand tracking. Your hands are bats and you just

0:27:33have to just do things. You're just smashing things. So this team, this company clearly has

0:27:40a good relationship with Apple, right? Because this is now two games that have come to...

0:27:46It's arcade.

0:27:47Apple Arcade. And their third game is a VR game and Apple doesn't have anywhere for that right

0:27:52now. And I'm convinced it's going to come to Apple Arcade when games get added to the headset.

0:27:58I'm frightened to try Cityscape's Sim Builder.

0:28:01Ask my next one to try too.

0:28:03Because I loved Sim City so much. And I'm concerned that I will be swallowed whole by

0:28:11Cityscape's Sim Builder. But I mean, if this is the last you hear from me, know that I was

0:28:18doing what I love, which is apparently playing Cityscape's Sim Builder.

0:28:22If you try out What the Car and enjoy it, then I recommend you give What the Bat a go to.

0:28:31You haven't been to Quest 2, right?

0:28:32I mean, I love What the Golf. I love What the Golf. It was great. I played the whole thing.

0:28:35What the Car is incredibly absurd. I think it actually might be more absurd than What the Golf.

0:28:40So it's hard to believe.

0:28:43Yeah, it is cool.

0:28:44Great.

0:28:45And there's a lot of the game.

0:28:47So Mike, I'm still wasting all of my spare time playing Marvel Snap because of you.

0:28:53So thanks a lot for ruining my life.

0:28:55Oh really? I fell off Snap.

0:28:55Anytime.

0:28:56Oh God.

0:28:57Anytime.

0:28:57It's it's uh, yeah. Yep. Yep.

0:29:01We also wanted to remind the Upgradients that we do have a selection of on-demand

0:29:07t-shirts always available that you can get at upgradeyourwardrobe.com.

0:29:12This is probably a really good time to pick up your draft shirt.

0:29:15We have the WWDC draft coming up pretty soon.

0:29:18You can get yourself the upgrade draft t-shirt or hoodie.

0:29:21Sorry, t-shirt or sweatshirt or tank top or onesie.

0:29:25If you want to draft your baby, you could do that.

0:29:29So you can go ahead and check those out.

0:29:31We do have sweatshirts and hoodies, sweatshirts and hoodies.

0:29:34You can get both.

0:29:36And that also we have some upgrade logo tees available there and a Rumor Roundup t-shirt,

0:29:43which I am wearing today, which is one of my very favorites.

0:29:45It is just the Lasso Rumor Roundup.

0:29:48So is that upgradeyourwardrobe.com.

0:29:52You can go and check those out and there'll be a link in the show notes.

0:29:55If you want to go and buy yourself a very cool upgrade t-shirt.

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0:33:29Money, money, money, money, money, money, money, money, money.

0:33:33Money!

0:33:34It's money time.

0:33:35It's money time.

0:33:37It's money!

0:33:37Ching!

0:33:38Ching!

0:33:39It's Apple's Q2 2023 results.

0:33:44Let me give you some headlines and we'll dig into it.

0:33:48Okay.

0:33:49Revenue, $94.8 billion, down 3% year over year.

0:33:55This is the second largest Q2 in Apple's history.

0:33:58Obviously, you have the clues here to work out which was the largest.

0:34:02Profit was at $24.2 billion.

0:34:06That was down from $25 billion year over year.

0:34:08So my initial read on that is like margins was good though, right?

0:34:13Like the drop in profit is not the same as the drop in revenue.

0:34:18Um, iPhone, $51.3 billion up 2% year over year.

0:34:23This was a Q2 record for the iPhone.

0:34:26My question to you here was, do you think that this is the result of some sales being

0:34:33pushed on from shortages in previous quarters that we had?

0:34:37So like there was, there was some supply chain stuff, right?

0:34:40Do you think this may have been a push through?

0:34:41Yeah.

0:34:42It's possible.

0:34:43I mean, they were correcting it, but they, they did suffer in the holiday quarter for

0:34:47having problems with the pro phones.

0:34:49So it's possible that that's what it is.

0:34:51It's not, I mean, it's basically flat, but in a quarter where everything else was

0:34:55down, that the iPhone was able to do this, I think it's Apple's most important product.

0:34:59So having them be able to do this, um, I think that you have to look into the past

0:35:05for trying to understand all of these results, but for the iPhone, I'm not sure

0:35:10how much of this is retrieved from out of the past quarter shortages or whether it

0:35:15really is just that they, you know, soldiered on and yeah.

0:35:19So maybe the 2% is just, it's up a little bit for that, but I don't know.

0:35:23I don't think it was a huge thing.

0:35:24Cause I think that they started to get into balance by the end of last quarter.

0:35:27Yeah.

0:35:28Okay.

0:35:28Oh, by the way, I just wanted to note that the change in profit is actually about

0:35:34the same as roughly 3%.

0:35:37So it's, yeah, it is about the same.

0:35:39So I think margins were, were, although they, they report their margins.

0:35:42I don't actually know what the margins are, but they were, they were probably

0:35:44pretty similar.

0:35:45Appreciate the clarification.

0:35:46The Mac was at $7.2 billion down 31% year over year, making it the lowest quarter

0:35:56since 2020.

0:35:57Uh, very tough compare the iPad $6.7 billion down 13% year over year.

0:36:05So just flip those numbers 31 to 13.

0:36:08Also the lowest quarter since 2020 services is a 20.9 billion, which is up

0:36:135% year over year.

0:36:15It's also growth in the previous quarter, which.

0:36:17Yep.

0:36:18Uh, earlier in the year, late last year that had started to dip, right?

0:36:21Like there was something that I was talking about a lot.

0:36:23Was wondering what was going on there, but it seems like they're growing back

0:36:25again.

0:36:26Wearables home and accessories is at $8.8 billion down 1% year over year.

0:36:33Yeah, essentially flat.

0:36:35The Mac and iPad being way down.

0:36:37I think the only way like the Mac and the iPad have both been running at the

0:36:42high and I don't look at this and say, ah, now people have turned against the Mac

0:36:48and the iPad.

0:36:49Cause remember it's, it's changes in, in growth compared and sales compared to

0:36:54last year.

0:36:55It is at a high level, but not what it was last year.

0:36:59I feel like, like I have nothing in my heart that says, oh no, people are

0:37:04turning against the Mac and the iPad.

0:37:05I just don't.

0:37:06It's very clear to look at the history here and say, what happened is one, the

0:37:11pandemic, which sold a lot of computers and iPads because people were in

0:37:16lockdown and they're like, and they're and work adapted and they're like, oh

0:37:20geez, we need another computer at home or we need another tablet at home, or we

0:37:24need to update the old thing.

0:37:25And, and that drove sales.

0:37:27And that's one reason that the iPad and the Mac have done so well over the last

0:37:31couple of years.

0:37:32And that that's tailed off.

0:37:33Now I think that there's some truth in that, that the buying cycle was kind of

0:37:36short-circuited and now it needs to reset.

0:37:39And so you're going to have that, that a place where it's, I think the way that

0:37:43they often describe it metaphorically is that the sales were pulled forward

0:37:47essentially, right?

0:37:48That you took your, your three years of sales and it all went in the first year

0:37:52and a half.

0:37:52And I think that there's truth in that.

0:37:55And then for the Mac, you also had the arrival of Apple Silicon and there was a

0:37:59lot of pent up demand for Apple Silicon.

0:38:01Plus those M1 Macs, especially the reviews were so spectacularly good because

0:38:08they are spectacularly good.

0:38:09And a lot of people bought them and it drove a lot of sales in addition to the

0:38:12fact that there were pandemic changes in how we all worked.

0:38:15And so the Mac, I think has benefited from that twice, but you know, the M2

0:38:23again, nothing wrong with the M2, but if everybody who was waiting to buy a

0:38:27MacBook Pro waited for the M1 MacBook Pro to come out, then you're going to

0:38:32sell a lot of them.

0:38:33And then the next year they come out with the M2 and it's like, well, but so

0:38:36many people already bought the M1, so they're not going to buy the M2.

0:38:39And that was a high number.

0:38:41You know, you do the math and it's like, well, yeah, this is what you're going

0:38:44to see.

0:38:44It's going to go down because everybody was really excited about it.

0:38:48I think the Mac, like, if you look at the average Mac sale, like the Mac has

0:38:52never been stronger.

0:38:53Um, I think it, it will continue to be strong.

0:38:56I think this is an issue where they just have to deal with the fact that they're

0:39:01not going to reach those heights for a little while, and they're going to have

0:39:04to wait for the buying cycle to catch up with them.

0:39:07So David in the live chat, just go, which you can get access to.

0:39:11If you're a member, go to get upgrade plus.com and you can find out more

0:39:14about them has said, the narrative is strange to me.

0:39:17Apple had lots of success.

0:39:19Now that makes them look bad.

0:39:20The problem with Wall Street, which is what a lot of this is, right.

0:39:24They look at whatever you're doing now and they're betting on it being a

0:39:28trend, right?

0:39:29Like, right.

0:39:30Cause you sell loads of Macs.

0:39:31Cause it's all priced into the stock.

0:39:32Exactly.

0:39:32You sell loads of Macs.

0:39:34If you keep doing this, we will continue to be confident in your business to this

0:39:39level.

0:39:39But if it changes, it's going to go down.

0:39:41Like, right.

0:39:42They want to see growth.

0:39:44They always want to see growth and we can debate whether that's right or wrong,

0:39:47whether that's corrosive to have businesses are run spoiler alert for my

0:39:51opinion.

0:39:52Yes, it is corrosive.

0:39:54Uh, but that's how it works.

0:39:56And um, and it's the same thing I always tell people like when they're like, oh,

0:39:59Apple released results and they made all this money and their stock went down.

0:40:01Why is that?

0:40:02And the answer is because the expectation is priced into the stock.

0:40:06Apple, as we expect it is priced into the stock.

0:40:09The stock price is what it is because of everything we expect for Apple.

0:40:12So then it becomes what happens next.

0:40:14And if you give them, if they get growth, then that increases the future value of

0:40:19Apple.

0:40:19That increases everybody's estimation and the stock goes up.

0:40:22And if you say, oh, Apple's going to be flat for a while in the doldrums, then

0:40:26the stock will stay steady or go down, which is bad for investors.

0:40:29Doesn't necessarily mean it's bad for Apple as a business if it's throwing off

0:40:32all this profit and it's generating, uh, it's doing stock buybacks and it's

0:40:36generating dividends for its investors, which it is doing.

0:40:40And that's what, if you're a company that makes enormous profits and you're

0:40:44looking at your growth and saying, our growth is probably going to slow because

0:40:47we've been so successful for so long.

0:40:49This is what you do.

0:40:50And they identified this, like, I don't know, five, six, seven years ago, and

0:40:54just started buying back stock and doing dividends and giving, essentially

0:41:00giving money back to the shareholders because, uh, that's how you kind of

0:41:04counteract some of that fear of flatness is by saying, yes, but we're very

0:41:10profitable and you get to share in the profits.

0:41:12And so they've been doing a lot of that too.

0:41:13Tim Cook introduced a new catchphrase, the parade of horribles as a way to

0:41:21describe our current socioeconomic climate.

0:41:25Yeah, he's used a bunch.

0:41:26This is, this is apparently something that is out there.

0:41:28This is, this is a, a phrasing somebody told me that, that you've seen in other

0:41:32places, but Tim Cook has adopted it, which I find funny just because it was,

0:41:37uh, last year we had the cocktail of headwinds, which I thought had a little

0:41:40panache to it.

0:41:41The cocktail of headwinds served to you by, uh, Luca Maestri, the CFO.

0:41:46And he, he, it's a, probably an Italian cocktail of some sort, um, full of headwinds.

0:41:52Maybe those are bubbles.

0:41:53I don't know.

0:41:53Um, but the parade of horribles, I think it actually sounds kind of Willy Wonka

0:41:57like, right?

0:41:58Like, oh, there's a bunch of horrible, strange monsters that are coming down.

0:42:02But anyway, uh, Cook used it to say, uh, that, uh, yeah, there's bad stuff out

0:42:08there, but we're fine.

0:42:09Essentially.

0:42:10He was like, we have the luxury box at the parade of horribles.

0:42:13So, um, I think that that shows you how Apple has kind of gone from it saying,

0:42:19you know, things are bad out there and we're worried and we're concerned and

0:42:22we're trying to do what we can to being like, things are bad out there, but we've

0:42:26been fine.

0:42:27And so we're fine.

0:42:27And that is again, like we see this covering Apple like we do and looking to

0:42:35the wider technology industry, they're in a very different position.

0:42:39And like, you know, we, we have a lot of, you know, many, many times over the

0:42:44years, we've spoken about the idea of like, why do they just sit on this cash?

0:42:48Like, what are they doing with it?

0:42:50Well, it probably helps them in times where all of their, um, colleague

0:42:56companies in the industry are laying people off their front and center and

0:42:59Apple's not doing that because they have so much money.

0:43:02Yeah.

0:43:03I mean, that's, that's the truth of it.

0:43:04And I said this during the, um, during 2020, let's just say, we'll put it that

0:43:10way.

0:43:10Uh, I said, Apple actually looks a little embarrassed because they're doing so

0:43:15well when the world is so terrible.

0:43:17Yeah.

0:43:17I feel like we're coming out of it now where they're like, yep, we we've

0:43:21survived.

0:43:22We did it.

0:43:22Um, and we know that bad things have happened, but we, we, we feel like we're

0:43:26in a good, a good place and not gloating about it or anything, but they're able

0:43:29to say now, I think maybe with a little more confidence than they could back

0:43:32then, just cause they, everything was all messed up saying, you know, we're

0:43:37actually in a pretty good place right now.

0:43:39Now, of course, a down quarter is just the time when you need the CEO to say,

0:43:43we feel pretty good, right?

0:43:44Cause you want to make everybody feel good, but I, unless you are literally a

0:43:49bear.

0:43:49Investor who is out to get Apple because you want them to tank.

0:43:53I don't know how you look at Apple's last few years and, and not rationally

0:43:58understand the place that this business is in, especially as we've talked about

0:44:02many times before the mega cycle of the iPhone, because the iPhone more than

0:44:06half the revenue.

0:44:07And we know that the iPhone buying cycle is very visible because they do major

0:44:11revisions to the iPhone and it kicks sales.

0:44:13And that happens every three years ish.

0:44:15We'll see what happens this fall because whatever that iPhone is, this is when

0:44:19we might expect a new iPhone that will drive sales unclear, whether they're

0:44:23going to keep that strategy or whether they're going to kind of split up the

0:44:28new look iPhone into multiple releases over multiple years in multiple iPhone

0:44:32levels, right?

0:44:33Cause they've got more iPhones that they sell now different models, but yeah,

0:44:38hard, hard not to look at Apple's last few years and say, first off, you

0:44:41wouldn't even tell that there was a, you know, just a series of terrible

0:44:45economic conditions as well as a global pandemic.

0:44:49And that their factories got shut down.

0:44:52Like you couldn't even really tell.

0:44:54And that they're in a pretty strong position here, but you know,

0:44:58if I were a wall street investor and I was worried about where Apple was

0:45:00going in the future and where their stock was going, I would obviously be

0:45:03concerned about is the iPhone going to plateau, in which case they're an

0:45:07incredibly profitable company, but they're not growing anymore.

0:45:10Or growing very slowly, or are they going to have another kick?

0:45:14You know, can the Mac be taken up a notch?

0:45:17Can the iPhone still be taken up a notch?

0:45:19Can the iPad still be taken up a notch?

0:45:21And I think that there that's an open question there, which is why they

0:45:25started talking a lot more about emerging markets, I think this time,

0:45:28where they did better, Apple actually did better in emerging markets than

0:45:31they did in their existing established markets.

0:45:34And that's, that's a message that they want to send because they want to

0:45:37say, look, this is where the next growth spurt is going to come from.

0:45:40Especially when one of those emerging markets is as big as India, which is

0:45:44what they're talking about.

0:45:45I spent a lot of time talking about India.

0:45:47They saw some, they saw double digit sales growth in the region.

0:45:52Tim Cook says India is a major focus for the company and said, and I'll

0:45:57read a quote from Tim.

0:45:59There are a lot of people coming into the middle class, and I really feel

0:46:02that India is at a tipping point and it's great to be there.

0:46:06And I will now read a quote from Jason's Macworld article where Jason

0:46:10says, if this sounds familiar, it's because Cook said a lot of very

0:46:13similar things about China a decade ago.

0:46:17But when asked specifically to compare the potential in India to that in

0:46:20China of the past, Cook demurred a politically wise decision and said, I

0:46:25think each country is different and has its own journey.

0:46:27That emerging middle class line, I felt like I have massive flashbacks

0:46:33like to reading that.

0:46:34Cause that was what they said for years about China.

0:46:36Yeah.

0:46:37Yeah.

0:46:37No, it's exactly the same words.

0:46:38And then when pressed to sort of like say, can you draw a parallel

0:46:41between China and India?

0:46:42He's like, no, no, no, no, no, no.

0:46:43We'll never do that.

0:46:44Don't ever ask me again.

0:46:45No, no, no.

0:46:46And it's like, well, first off China and India don't really like each other.

0:46:48And they've got this thing where they're trying to diversify outside

0:46:51of China, including into India.

0:46:53And the last thing China wants to hear is Apple say, yeah, India is the

0:46:56next China, right?

0:46:57Like that you know, no, no, no, no, no.

0:46:59So instead he's like, everybody's on their journey together, but it's

0:47:02very hard not to see the parallels there where Apple is saying that in

0:47:07lots of, uh, lots of emerging markets.

0:47:09And they mentioned a bunch of them that Apple did really well, like set

0:47:13records in the last quarter.

0:47:15So that's what their message is.

0:47:18Now, what are the size of those markets?

0:47:20What's the potential of those markets?

0:47:22Is it just trying to get out some happy news for investors?

0:47:25Uh, when the truth is that those markets are relatively small, but it

0:47:28seems like India and I would say Tim Cook's visit to India right before

0:47:32this cannot have been a coincidence, right?

0:47:35Like this is all about making the narrative about Apple right now about

0:47:39potential future growth.

0:47:40It's kind of brilliant, assuming that this is all sort of part of a bigger

0:47:43plan that Apple going to India.

0:47:46It's about future growth and diversification.

0:47:49Um, I wonder what message it does send to China, but, um, Apple and

0:47:54China are pretty tight.

0:47:55So it's probably, you know, they, they, China knows what Apple's doing,

0:47:59but I think Apple's not abandoning China.

0:48:01It's just diversifying.

0:48:02And that's the message they're sending is we want to be in China, but we're

0:48:05going to be in other places too.

0:48:06And yeah, for, if you're an investor and you look at India and you say,

0:48:10wow, if India's middle-class can skyrocket like China's can, all those

0:48:14people are Apple buyers.

0:48:16And, uh, imagine another market like China's market, uh, where Apple can

0:48:22come in and has very little market share.

0:48:25And so there's enormous growth opportunity just by definition.

0:48:28So we were talking about, you know, looking at the overall product lines

0:48:33and you've got the Mac and the iPad are down, but the level, like, you know,

0:48:38when we're talking about like the iPhone as a, as a thing, if the iPhone

0:48:41starts to decline, like this quarter was saved by the fact that the iPhone

0:48:45was up a little bit and services were up a little bit, but it was mostly

0:48:49because the iPhone was up a little bit.

0:48:51So this idea of if the iPhone did start to significantly decline, like we

0:48:55started to see consistent decline, then the company's overall revenue

0:49:00declines just because, right?

0:49:02Again, what was it?

0:49:0354% of the revenue in the quarter was the iPhone.

0:49:07Like that's what people were looking for.

0:49:09So what, you know, Apple one is to sell iPhones in India and whatever

0:49:14it's going to take to do that.

0:49:15So Savra in the discord is a listener who's in India and they're like, well,

0:49:19the prices are going to change.

0:49:21And I can, we've heard of this before of like, and it's one of the reasons

0:49:24Apple's continued to push on the SE and had devices that were more price

0:49:29focused.

0:49:30And so my expectation is if Apple really does consider India to be this

0:49:35growth market, the overall pricing strategy of the iPhone may have to

0:49:40change to accommodate that.

0:49:42But we'll see.

0:49:44Yeah.

0:49:45Whether it's the iPhone SE or whether it's bringing down the price.

0:49:49I mean, they do have this freedom now, which they have not exercised, but

0:49:53this freedom with the iPhone and the iPhone pro split to make that iPhone

0:50:00more affordable than it's been.

0:50:01And what they've really done is sort of make it not really more affordable

0:50:05than it's been, but that the pro one is really expensive, but it does give

0:50:09them the ability to say, look, iPhone, whatever number and sell that into

0:50:13markets that are not seriously going to consider the iPhone pro, but the

0:50:16SE is the other way in there.

0:50:18And again, I I've been hearing for, you know, more than a decade now from

0:50:23people in India who are like Apple is kidding itself because the prices

0:50:26are just bananas and it doesn't make sense and they're hard to get and all

0:50:29that and like, sounds, sounds like Apple is, is focused on India now to a

0:50:34certain extent.

0:50:35So they're going to have to find a way to figure it out.

0:50:37Right.

0:50:37I doubt that they're delusional about what they're going to do, but what,

0:50:42what is that strategy going to be?

0:50:44And I don't know.

0:50:45I mean, I will also say though, there was, there was a time when Apple

0:50:48trying to sell iPhones in China or computers in China was seen as a

0:50:52bananas kind of decision where it's like, you're not gonna, you're not

0:50:56going to do that, like you're, you're, you're so expensive and this market

0:51:02can't handle it.

0:51:03And what happened in China is that the market changed and grew and it

0:51:09embraced Apple.

0:51:10And a lot of those people who now had way more money than they used to have

0:51:14spent some of it on Apple products.

0:51:16So I don't, that's where I think maybe the parallel is going to break down

0:51:21with India.

0:51:22But again, I'm sure Apple is paying more attention to it and some of the

0:51:26clueless decisions they've made in the past about India are probably going

0:51:30to change because it's got, you know, more senior.

0:51:35I mean, I've heard this before, like there's some people who are involved

0:51:38in Apple in certain countries where like nobody cares.

0:51:41And so they just sort of drift off and do their own thing.

0:51:43And then if Apple execs suddenly are like, no, this is a key market for

0:51:48us.

0:51:48Everything changes.

0:51:49Right.

0:51:49And so I would imagine that that's going on with India now.

0:51:52Yeah.

0:51:52If pricing has to change, they'll change the pricing.

0:51:55If that's what they think will grow the iPhone.

0:51:57Like we are where we are now with the iPhone being what it is partly almost

0:52:04because of the China market.

0:52:07Right.

0:52:08So huge.

0:52:09And so if they can add another one of those, be very happy.

0:52:12I'm reading again from your article Macworld.

0:52:15It's become clear that the Mac and iPad are victims of their own recent

0:52:19success, at least when it comes to sales trends.

0:52:21Both products sold well during the early days of the pandemic and the Mac

0:52:25also got a huge sales boost due to the arrival of Apple Silicon.

0:52:28Yeah.

0:52:29I think we already covered this.

0:52:31Yeah.

0:52:31But it's just like, I think it's just a nice way of summing it up of like,

0:52:35well, thank you.

0:52:36They are, it's hard to, it's that tough compare that we would talk about.

0:52:41There was a big boost and now we're back down to a more settled level, but

0:52:45that settled level was higher than they were before.

0:52:47It's higher.

0:52:47That's it.

0:52:48I mean, that's the, that's the story with Apple in the last decade is they

0:52:52get these huge growth spurts followed by a year or two where there's not a

0:52:56lot of growth and everybody rings their hands about it.

0:52:59But if you look at the numbers, you can see huge growth spurt followed by

0:53:04flat is establishing a whole new level for the product.

0:53:08And Apple has been really good at doing that.

0:53:10What you don't want to see is the huge growth spurt, and then it goes back

0:53:13to where it was, but Apple has never, well, has recent times Apple has not

0:53:18done that.

0:53:19Every time that these growth surges have happened, they've, they've reset

0:53:23the bar.

0:53:24There's been a new level they stay at, which means I think that suggests

0:53:28long-term growth opportunity continues to exist, but that people who are

0:53:33expecting it every quarter are kind of short-sighted.

0:53:37Last thing, this is a long quote, but there was some conversations about Tim

0:53:43Cook in regards to AI.

0:53:45So this is Tim.

0:53:47This is Tim.

0:53:48I do think it's very important to be deliberate and thoughtful in how you

0:53:52approach these things.

0:53:53And there's a number of issues that need to be sorted as is being talked

0:53:56about in a number of different places.

0:53:58But the potential is clearly very interesting.

0:54:00And we've obviously made enormous progress integrating AI and machine

0:54:03learning throughout our ecosystem.

0:54:05And we've weaved it into products and features for many years.

0:54:08You can see that in things like fall detection and crash detection and ECG.

0:54:12These things are not only great features, but they're also saving people's

0:54:15lives and it's absolutely remarkable.

0:54:18And so we view AI as huge and we'll continue weaving it into our products

0:54:22on a very thoughtful basis.

0:54:24This to me felt really similar about the ways that Tim would start talking

0:54:30about AR.

0:54:30Right?

0:54:32Of like, yeah, we think this is really important and we're going to keep

0:54:36working on this.

0:54:36Like, I feel like this is, as you would naturally assume, would be a front

0:54:41that Apple's going to continue to try and do more on.

0:54:43And at the moment, I think they are in, you know, with how much he went into

0:54:48detail here is clearly a prepared idea.

0:54:51They want to, I think, maybe try and turn the tide on the impression that

0:54:56they don't know what they're doing in this field.

0:54:58Where they can talk about, look at all these things that are shipping with

0:55:02what this AI actually is, which is just advanced machine learning.

0:55:06It's not artificial intelligence.

0:55:08I really wish that we, that that wasn't what we decided to call it, right?

0:55:11AI.

0:55:12Right.

0:55:12It's all just machine learning.

0:55:13It's ML.

0:55:14And Apple has been doing machine learning for a long time and they're good at

0:55:18it with the things that they're doing.

0:55:20But the problem is what we consider to be conversational machine learning,

0:55:24which is now what we think of the chat bots.

0:55:26They're not so good.

0:55:27Right.

0:55:28They're not doing a chat bot, which right.

0:55:30Like, well, Siri, I mean, like Siri, you have a conversation with, right?

0:55:33Well, you don't.

0:55:35Well, yes.

0:55:35The problem, but yes.

0:55:36Well, you do it with 20 people, 20 people you talk to.

0:55:38We know this now.

0:55:40So I think this is the perfect answer to give if you're Tim Cook, because

0:55:46what it says is, yes, there's a lot of potential we're being deliberate and

0:55:52thoughtful, right?

0:55:53He says, I think it's very important to be deliberate and thoughtful translation.

0:55:57We're being deliberate and thoughtful.

0:55:58There are issues that need to be sorted out and we're, you know, it's being

0:56:03talked about like, it's controversial.

0:56:04We know that too.

0:56:05Then it shifts gears and he says, he says, yes, it's very interesting, but

0:56:10we are already doing this.

0:56:11So now it's, he's sending the message.

0:56:13Like we have made enormous progress already in our ecosystem throughout.

0:56:20And he uses the phrase that I kind of appreciated.

0:56:23We weaved it into products and features for many years.

0:56:26Right.

0:56:27The point here is like, we're already doing this.

0:56:30And I, in conversations about this, I keep bringing this up too.

0:56:33People are like, Oh, Apple's behind.

0:56:34They haven't done any AI.

0:56:35And it's like all the object detection and photos is AI.

0:56:39It's ML, right?

0:56:41All the sensor processing and fall detection and crash detection in

0:56:45activity monitoring on the Apple watch.

0:56:48There's machine learning models there.

0:56:49The ECG apparently is using machine learning models as well.

0:56:52Like Apple has built a lot of machine learning models in, in a lot of places.

0:56:56What they haven't done is built it into Siri and they haven't released

0:57:00a beta chat bot on the web.

0:57:01And so then they're accused of being behind.

0:57:03It's like, maybe they're behind, but I'm not sure we've got enough

0:57:07evidence to suggest that.

0:57:08And that's what Tim Cook is saying here.

0:57:10It's like, we've been on this for a long time, but we're being careful and

0:57:13we're putting in places where it makes sense.

0:57:14Now, is he throwing shade a little bit?

0:57:16Yes.

0:57:17Is he doing that because it's an area of weakness for him?

0:57:21Maybe.

0:57:21I mean, maybe, or maybe there's some amazing thing behind the scenes

0:57:25that we don't know about, but we don't have the evidence for that.

0:57:28So, so we'll say maybe, maybe he's, he's running down the stuff that's

0:57:32out there that where Apple's behind.

0:57:33But pointing out all the other places where Apple has is using this and is

0:57:37weaving it into their ecosystem, which is one step away from the only Apple

0:57:42can do this, right?

0:57:43Which is we have hardware, we have software, we have our own processors

0:57:47that we design and we weave AI and machine learning throughout our ecosystem.

0:57:52Instead of just, you know, releasing a chat bot.

0:57:55That's sort of what he's saying here.

0:57:57And then he pivots from that back to, we think it's huge.

0:58:02We'll continue weaving on a thoughtful basis, which is his last little poke

0:58:07of like, we know this is controversial.

0:58:10We are also skeptical about the issues here.

0:58:12You know, look at us.

0:58:14We, we do it carefully, but we are doing it.

0:58:17Don't get upset.

0:58:18Don't get afraid.

0:58:20It's masterful.

0:58:21Like whether you believe it or not, like whether you believe that, I mean,

0:58:24I think that what he says is factual, but there's that whole underlying

0:58:28question, which is yeah, but like Siri is a good example, like, but you

0:58:31haven't woven it into Siri really.

0:58:34And we've seen what happens when you start, start having something

0:58:38that's sort of Siri-esque, but uses this tech and you haven't done it yet.

0:58:41So where is that?

0:58:42And maybe the answer is they're still working on it, but it's close.

0:58:45And maybe the answer is they've tried it and failed and it's a disaster.

0:58:48He's not going to say that, but like that's what's on people's minds.

0:58:51But I think he did as well with this question as you could possibly do,

0:58:55from the perspective of being the CEO of Apple.

0:58:59>> Because I feel like from my layman's view, they have done a good job of

0:59:07what is the fundamentals here, which is very large data sets and being able

0:59:12to draw information from them, right?

0:59:13Because that's what a large language model is, right?

0:59:16But they just don't have a shipping machine learning large language model

0:59:22thing.

0:59:22>> Yeah.

0:59:23>> But they are, I mean, you know, they're doing tons of stuff that their

0:59:28competitors are doing.

0:59:29They're doing a very good job in some cases, and they're doing it all on

0:59:32device, right?

0:59:33So like photo recognition stuff, being able to search for things in photos.

0:59:39I'm sure that live text is another example of this, right?

0:59:42So like all of these little pieces of information that come from their

0:59:47abilities in machine learning, plus the fact that they create their own

0:59:51silicon, which has machine learning processes on it.

0:59:53Like if they're able to line the pieces up, I can imagine that they can

0:59:58have that point on a presentation sometime that you just said of like,

1:00:01only Apple can do this.

1:00:02But they've got to do it.

1:00:05But I think what is telling to me here is they were willing to answer the

1:00:09question meaningfully.

1:00:11And to me, this feels very prepared.

1:00:15Like to mention fall detection, crash detection, and ECG, like those three

1:00:20specific features out of everything you could have mentioned, like they're

1:00:24really good ones.

1:00:25And I think it shows that they're considering it.

1:00:30And like if they're considering it and they're willing to engage with it and

1:00:33talk about like, it's huge.

1:00:35And you know, there's a lot of promise here.

1:00:36It feels like that they've got their eye turned towards it at least.

1:00:40- I don't know if Shannon Cross, who asked this question, who used to be

1:00:46out on her own and now works for Credit Suisse.

1:00:48She's been doing this a long time.

1:00:50She's been on Apple calls as long as I can remember.

1:00:52I don't know whether Apple said somebody from Apple nudged her and was like,

1:00:57you should ask them about AI or not.

1:00:59But I wouldn't be surprised if that was the case.

1:01:00- Yeah.

1:01:01- Certainly Apple was ready with this response.

1:01:03- They wanted someone to ask.

1:01:04- Figuring somebody would ask about AI, right?

1:01:06Certainly.

1:01:07Because this is, again, this is a setup.

1:01:09It's a perfect setup.

1:01:11I think Tim Cook's answer is very much put together and exactly what needs to

1:01:16be said here.

1:01:17And then we all can judge whether it's entirely.

1:01:19I mean, everything they do on this call is a self-serving statement.

1:01:22That's the whole point of it.

1:01:23- One of it.

1:01:23- Really?

1:01:24- Yeah.

1:01:24- But I think this was handled very well, portrays things really.

1:01:28The goal here is to say, we recognize that this is controversial.

1:01:31We also agree with everybody who thinks this could change the world.

1:01:34We have shipped lots of stuff that uses this and have for a long time.

1:01:39So don't portray us as being behind.

1:01:41And we're still on it.

1:01:43Next, right?

1:01:45Like that's exactly what Apple wants to say here.

1:01:49And then the question is just, is he saying that while he's hiding a decaying

1:01:53Siri team behind him?

1:01:56Or is he saying that knowing that they've actually got more stuff that people don't

1:01:59know about that is going to be great?

1:02:02And I don't know.

1:02:03I don't know which one of those it is.

1:02:04- But also I like tying a different thread through what you said of like,

1:02:08oh, we know it's controversial.

1:02:11We think, and people believe it could change the world.

1:02:14But the things he decided to speak about were the things that save people's lives.

1:02:18- Yep, that's true.

1:02:19- So like, we believe it can be helpful.

1:02:23Like what he's saying to me there is like, we believe that the ways that we will use

1:02:29this technology is the way we have been and will continue to, will have meaningful effect

1:02:32on the world as opposed to just like doing a Google search.

1:02:37- The headline is very important to be deliberate and thoughtful.

1:02:42- Yeah.

1:02:42- That's the message, right? Which is we are deliberate and thoughtful.

1:02:47Here are some examples.

1:02:48They didn't, he doesn't mention photos by the way, right?

1:02:51Because he really is leaning into things that'll save your life.

1:02:54Because AI can save your life.

1:02:56Great.

1:02:56And then thoughtful, he's not only saying, this is why you don't see us out there with

1:03:02stuff right now.

1:03:02We do stuff, but like when you're saying where's Apple's chat bot?

1:03:06This is why we're deliberate and thoughtful.

1:03:08We agree with all the people who are critics who are like, oh no, what's this going to

1:03:11be?

1:03:11It's like, yes, it's valuable, but you got to think about it.

1:03:14And then it's also taking a shot at the people and at competitors who are like just throwing

1:03:19stuff out there and saying, is this what we want?

1:03:21You know, is this the right way to do it?

1:03:23And again, if you're in a position where you don't have that, that is the right thing to

1:03:27do is to throw shade at that stuff.

1:03:30But it's also the right thing to do if you've got something in the works that you think

1:03:34is better.

1:03:34Like, I don't think we can really detect from this where the state of other machine learning

1:03:41projects are at Apple, but it's the right answer to give to say we're there, but also we're

1:03:47better than you because we're being more careful and thoughtful.

1:03:50It's a great answer.

1:03:52Great PR.

1:03:53I know this is what I want, right?

1:03:55Like I am intrigued and concerned in equal measures, sometimes more concerned about some

1:04:01of these AI tools.

1:04:02I would like the largest companies that are involved in this stuff to actually be really

1:04:10thoughtful and not just fast.

1:04:12Right, which I think is some of the problems we're falling into right now.

1:04:17I think Microsoft and Google are just trying to be quick in some cases to be the best rather

1:04:23than necessarily thinking about what is best for their users and for people at large.

1:04:28And so I hope that Apple will continue down that train, especially because they're the

1:04:31products that I use the most.

1:04:33Like when it comes to me, that's what I want to see.

1:04:39This episode is brought to you by ExpressVPN.

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1:06:47It is time for some Ask Upgrade Questions to finish out today's show.

1:06:54The first one comes from Ramon.

1:06:58Ramon again!

1:07:00Ramon is back!

1:07:01Ramon, yes.

1:07:03And says "Or is it a different one?

1:07:05Maybe one was Ramon and one was Ramon?

1:07:07Who could tell?"

1:07:08You know what I'm- I don't know.

1:07:10Anyway, last week's discussion of the rumors of changes to the upcoming health app made

1:07:15me wonder.

1:07:16So this is like the idea of more data, more processing, all that kind of stuff.

1:07:21Should we be concerned about Apple gathering so much of our data to grow their services

1:07:26business as we've been with Google in the past?

1:07:29Is the on-device argument enough to give them a pass?

1:07:32It's complicated.

1:07:35This is complicated.

1:07:36I would say I don't think Apple gathering data- I think that there is a functional difference

1:07:47between Apple building a profile of us on our device that is with us at all times.

1:07:54And it is complicated, right?

1:07:58Because I feel like, first off, the on-device argument is mostly about we don't need to

1:08:05pass all of your data up into our servers in order for us to know stuff about you.

1:08:09And I think that that's good.

1:08:11And I think that that's a separate thing.

1:08:13There's the commitment to privacy.

1:08:15The idea that we don't need to upload all your photos onto iCloud in order for us to

1:08:23analyze them and tell you whether there are dogs in them or whatever, right?

1:08:27Which is, I think, the right thing to do.

1:08:29So I'm less concerned about like, "Ah, yes, but now you're looking at that data on device.

1:08:34And also you've got on-device algorithms that are going to drive me into on-device

1:08:39purchases of services."

1:08:41I'm concerned about Apple pushing services on me that are really things that are just

1:08:49software features.

1:08:50And I went into a whole rant about this last week.

1:08:53The personal data that is being analyzed on devices is not part of my concern about it,

1:08:59I guess would be my answer.

1:09:00I feel like maybe it's interesting, but I think this is a conflation of things that

1:09:04I don't think need to be conflated.

1:09:06Mike, what do you think?

1:09:07I think it's complicated.

1:09:10I think it becomes more complicated because of the phrasing of Ramon's question to include

1:09:16Google in the discussion.

1:09:18Because as soon as you invoke Google or Amazon when talking about this stuff, people's brains

1:09:24go into a route, which is like, "They are going to take my information and sell it to

1:09:31advertisers."

1:09:32If you brought Meta into this conversation, right?

1:09:35And a lot of people, I think, have a fundamental misunderstanding of the way that some of this

1:09:39stuff works.

1:09:40Some people believe, and I think most of our listeners would know this, but some people

1:09:44believe that Meta and Google just give your phone number out to companies, right?

1:09:48But it's not like that.

1:09:49That's not what they do because they want to build a business where you have to come

1:09:52to them to buy access to demographics.

1:09:56And so they don't share that information.

1:09:58They keep it within Google or wherever.

1:10:01Well, within Meta.

1:10:01The only people that know that information are in theory the companies you're giving

1:10:05your information to.

1:10:07They're not spreading it out past that.

1:10:10But they're using it to sell ads that other people buy, but they're keeping a company

1:10:17confidential.

1:10:18So access to you is being sold.

1:10:21Your data...

1:10:22I mean, there are places where there are data brokers and there are apps that are leaking

1:10:25information and all that.

1:10:26But generally with these companies like Google and Meta, it is the crown jewels, right?

1:10:32It's that data.

1:10:33They don't want to give it away.

1:10:35They want to set a premium price for you to have access to the knowledge that they've

1:10:38got about you.

1:10:39So they're selling...

1:10:40In the end, it can still make you feel just as gross.

1:10:44But just let's be clear, they're not selling your data.

1:10:47They're selling access to you.

1:10:49Isn't that better?

1:10:51It's not.

1:10:51I think it's not.

1:10:52It's a little better, but it's still different.

1:10:55Yeah, right.

1:10:56It still should probably give you pause, but it's not the same as saying, would you like

1:11:00to know everything?

1:11:00Google is not, I believe, saying, hey, I've got all this information I built about Jason.

1:11:05I've got a dossier.

1:11:06Would you like to buy it?

1:11:08Instead, it's like, would you like to reach people who are like Jason?

1:11:11Because I know who they are.

1:11:13And then you have to pay to get access to them.

1:11:15Personally, I am fine with that.

1:11:17Like me, like I'm fine with that.

1:11:19But like, I know, I know that different people have different feelings about it, but I feel

1:11:22like if you really don't like that, don't use those services.

1:11:24Like, it seems pretty simple to me.

1:11:25Like if you really hate the meta do that, just don't use Facebook.

1:11:28Like it's...

1:11:29But anyway, that is not the conversation we're having.

1:11:31But my point is like, it's not that different, really.

1:11:37Like fundamentally, what's going on here?

1:11:39Because what Apple is doing is saying, give us all of your information and we'll do what

1:11:46we do with it.

1:11:48And while we may not be selling it to other companies, we're still using the fact that

1:11:52we have your information to sell you things, whether it's the next Apple Watch, like Fitness

1:11:57Plus or like whatever.

1:11:58So like realistically, it's just because Apple doesn't have the business model that meta

1:12:05and Google do.

1:12:06Let me see if I can draw a line here.

1:12:08If Apple were, and I don't think Apple will do this, but if Apple were to say, we've analyzed

1:12:15your health data on your device and oh boy, you really need to get healthier.

1:12:24Sign up for our service where we let you get healthier.

1:12:26Sign up for Fitness Plus or whatever.

1:12:28- How far away are we from something like that happening realistically?

1:12:31- Well, here's the thing.

1:12:32I don't think Apple will cross that line.

1:12:34So contrast that with Apple just says, hey, we've got a new service where we look at your

1:12:39health data and it's wrapped into Fitness Plus or it's a different service.

1:12:43'Cause we don't know, this is just a rumor that we are talking about.

1:12:47But this question of like, is it a service?

1:12:49Is it part of Fitness Plus?

1:12:50Is it something different?

1:12:51I think that that is actually a pretty strong dividing line, which is, is Apple looking

1:12:56at our data on our device and then using it to sell us things?

1:13:01Or is Apple just selling us things because we are who we are?

1:13:04And does it matter?

1:13:05'Cause then the next question is, does it matter that Apple's analyzing our personal

1:13:09data for marketing purposes for its own products on our device?

1:13:11It doesn't matter that it's on our device at that point if they're doing that analysis?

1:13:16And what I would say is, I think this is the lesson learned by the CSAM scanning that was

1:13:24gonna go on and that got canned, that was gonna go on when your device was about to

1:13:30upload something to iCloud, where it was using its algorithm to scan your photo to see if

1:13:36it was child sex abuse material before it got uploaded to iCloud.

1:13:41And everybody was like, what do you mean there's a cop on my phone now?

1:13:44And Apple's like, oh, yeah, backing off, right?

1:13:50So that's what I would say here is, if Apple's just doing what it does, which annoys people

1:13:55to no end, right?

1:13:56Which is marketing its services to you.

1:13:58Hey, we added some features to Fitness Plus, isn't that awesome?

1:14:01You should sign up.

1:14:01Or if you're already a Fitness Plus member, you should opt into this and we'll analyze

1:14:05your data and give you tips.

1:14:07And you say, yes, what they can't do, I think, is look at your data and then market it to

1:14:14you, right?

1:14:15Like, I think that's where I would draw the line is, I don't want you saying, hey, you

1:14:23got a problem and we're the solution and we know it because we've seen your data on

1:14:28this iPhone.

1:14:29But like, they do this with App Store ads, though, right?

1:14:31Yeah, the App Store is not your health data that's on your device.

1:14:34The App Store is in the cloud.

1:14:36Right, but it's still only a step.

1:14:38Well, my point is, like, if Apple continue pushing into advertising, which it seems like

1:14:42they are, right?

1:14:43There has been like, they are just trend they're going into advertising further and further.

1:14:47Where does it stop?

1:14:49Like, my point is that I agree with you that these things will be bad.

1:14:53I'm just not confident that they won't do them because they're a company we've just

1:14:59spoken about their earnings report and the services push like, enough is sent as a line

1:15:05and they'll be like, well, we're going to start recommending to customers.

1:15:10We don't know who they are because it's all on device, but we're going to start making

1:15:14these recommendations to people like, hey, why don't you check out this activity in

1:15:18Fitness Plus?

1:15:18So that's that's the question is what if App Store I mean, this is not the question that

1:15:23Ramon asked, but let's go down that path, which is what if Apple's App Store ads stopped

1:15:29being based on your cloud and iCloud and Apple ID data stuff that Apple has on its servers

1:15:37that it knows about?

1:15:38And what if it started being that all your ads in the App Store were based on on device

1:15:44behavior, right?

1:15:45Let's just walk down that path.

1:15:47So it doesn't on your device, your device could theoretically know what's on a home

1:15:54screen versus an app library.

1:15:55How often do apps get launched?

1:15:58What are those apps?

1:15:59How often are you using particular kinds of apps?

1:16:02And then all on device, it goes, oh, wow, Jason is playing Marvel Snap a lot on his

1:16:07iPad.

1:16:08What are other apps we could push at him that are like Marvel Snap?

1:16:11Because he's playing that one a lot, which is probably more than Apple has off device,

1:16:17right?

1:16:17I mean, maybe not.

1:16:18It depends on device metrics and all that, but they don't seem to be using that level

1:16:22of data to sell me things up in the App Store.

1:16:24So let's just go with it for a moment.

1:16:26Like, does that cross the line where it's like, well, wait a second.

1:16:29What apps?

1:16:30I feel like this about TikTok.

1:16:31Honestly, it's one of the things that repels me about TikTok is that if you pause and don't

1:16:37do anything to indicate I like this video, but you watch a lot of it or watch some of

1:16:44it, TikTok will be like, gotcha and log it.

1:16:48And that's what it does.

1:16:49It's watching your behavior, not your chosen.

1:16:53I am going to say I like this, but literally like, yeah, you said you didn't like it, but

1:16:57you watched it for 40 seconds.

1:16:58So we know you liked it, right?

1:17:00This is that kind of thing, which is my iPhone is now watching all of my behavior and you

1:17:07are using it to build a profile all on device, all on device, but it's using that and they

1:17:12build an algorithm so that now they can advertise to me more effectively.

1:17:16I doubt they would do that.

1:17:21I would have a problem with it, but I also see your point, which is, can you imagine

1:17:28a scenario where Apple continues down this path while searching for advertising revenue

1:17:32and services revenue?

1:17:33I would say I can envision it, but I feel like we've already learned some lessons about

1:17:39when people start to push back on what happens on device.

1:17:42When on device goes from being a privacy feature to being a surveillance feature, that's when

1:17:49it all falls apart.

1:17:50And I'm not sure Apple really wants to go down that path because they use on device

1:17:54as a shield to say, we do things on device and that means it's safer for you.

1:17:59And if they muddy the waters by saying, no, no, actually on device is spying, which it

1:18:03was sort of with the CSAM detection thing where, I mean, we talked about it last year.

1:18:08It's a detailed argument.

1:18:08It's very complex.

1:18:09But the idea was people walked away thinking there's a cop on my phone, right?

1:18:13The last thing you want is to say Apple is spying on me.

1:18:17Everything I do on my phone, Apple is watching and turning it into a product all on device,

1:18:22but still turning me into a product.

1:18:23I think people would really resist that and I think Apple would probably not stoop to

1:18:28that, but it's worth considering because the technology is there.

1:18:32You could do it.

1:18:33I agree with you.

1:18:34That situation that you've painted, if they did that, that would be terrible.

1:18:38I just feel like sometimes some of their ad stuff and like the, um,

1:18:43at tracking transparency stuff, like I had kind of a problem with that at the time.

1:18:47I still continue to, because it hasn't really changed anything, like, except like it's,

1:18:53it's made things maybe smaller, harder for smaller companies to try and do tracking.

1:18:59I think it's made things harder for Facebook, but you're right.

1:19:01It's also made things harder for anybody who is trying to use Facebook

1:19:04to reach people with their advertising.

1:19:08But like if Facebook's most recent earnings, they kind of seem to be like,

1:19:11"Oh, it's good now."

1:19:12It's like, oh, they've worked out their own thing, like whatever this is now to try and

1:19:18work out the segmentation again.

1:19:20My point is like Apple does a bunch of segmentation stuff.

1:19:22They do all the same things, right?

1:19:24Like they're not for like purchases and how they recommend ads.

1:19:27And they like, they put you into a bucket and they look at that bucket and they sell

1:19:32these buckets and all that kind of stuff.

1:19:34So my concern is that, as you say, like the on-device stuff is a shield.

1:19:39Hopefully they don't ever try and put ads behind that shield.

1:19:42But I do feel like from a fundamental level, they are still using your data to sell things

1:19:52to you.

1:19:53They just sell different things.

1:19:55Yeah.

1:19:56That they're not selling your information for necessarily people to advertise to you

1:20:01unless it's apps.

1:20:02Right.

1:20:04They're doing a similar kind of thing there.

1:20:06And a lot of the information that you put that's on device is weirdly used as like a

1:20:11lock-in to sell you more of their own products anyway.

1:20:14So it's all kind of comes down to what companies you feel most comfortable with.

1:20:21I feel most comfortable with Apple and giving them all of my information.

1:20:25Like I am most comfortable with them.

1:20:26But the idea that they are like fundamentally different from anyone else doesn't necessarily

1:20:34pass with me because ultimately it's still the same or it's still just your data.

1:20:39They're just using it to sell to you differently.

1:20:43And then you maybe you're just happy with that different.

1:20:45This is the, yeah, this taking a step back.

1:20:49The point here is that Apple has data that it's using to profile you and sell things

1:21:01like app store ads.

1:21:02Right.

1:21:03And while Apple's business is different, it's not that different.

1:21:07Right.

1:21:08It's the thing you and I have talked about a lot, which is like, there's a lot of reflexive

1:21:12ooga booga scary boogeyman stuff about Google and Facebook and Amazon.

1:21:18And like, and it's true, their business models do require a level of profiling and surveillance

1:21:24that maybe Apple's business model doesn't.

1:21:26But app tracking transparency in a way is just a self, although it's a privacy thing,

1:21:33that's how it's sold.

1:21:34What it really does is say, well, you should only collect data as a first party and Apple

1:21:41is the first party.

1:21:42And so Apple, because it runs the app store knows everything about your app store behavior.

1:21:47And they use that to sell ads.

1:21:48So although it's different than Google and Facebook, not that different.

1:21:55It's not that different.

1:21:56It's different, but it's not as different as you might think.

1:22:00And you need to go in with your eyes open.

1:22:02I guess I would just say, I think there's a point at which it goes from being, you know,

1:22:10we're using your data that you do on our servers to do ads.

1:22:17We're using your app store data to do ads in the app store is different.

1:22:23It's way different from the idea that like we're watching all your behavior on your iPhone.

1:22:26Let me use that for an array of different products.

1:22:28And I don't think they'll get there, but I think it's also important to point out that

1:22:35on device isn't necessarily a panacea that on device could potentially go from being

1:22:41this shield of we don't want to process all your photos unless you upload them to iCloud.

1:22:47You know, we don't want to see them and we're going to do things end to end, which means

1:22:50that it's going to be has to be on your device and like, that's all good.

1:22:54But you can flip that over and say, we've built stuff to spy on you for our profit and

1:23:00put it on your device.

1:23:01And that's the danger of that.

1:23:05So it's something for all of us to watch.

1:23:07Because as you mentioned a minute ago, they got very close to we built something to spy

1:23:13on you so we didn't have to worry about it.

1:23:15Right.

1:23:16They got super close to that.

1:23:18So it wasn't inconvenient for us.

1:23:20We made it inconvenient for you.

1:23:21And I should point out when we talk about app store, we should say, keep in mind, this

1:23:27is literally the only app store you can use, right?

1:23:31So they're using their power to say, we know everything about all software buying behavior

1:23:38on our platform, everything.

1:23:41And if you don't like that, it's not like photos where you can be like, no, I don't

1:23:45want to use iCloud photo library.

1:23:46And you still get those scanning features and it all still works because it's on device.

1:23:50With the app store, you have no choice but to be in their system.

1:23:55And it's a system where they're making money on ads.

1:23:58So I mean, I think app store ads are offensive.

1:24:02And this is one of the reasons I think they're offensive is because you can't really escape

1:24:06it and they degrade the user experience and they know everything you've bought so that

1:24:10they can customize those ads.

1:24:12Including in app purchases.

1:24:13So at the point where you as a person have become a customer of another company and are

1:24:19buying things within their app, Apple knows that information and uses that information

1:24:25to make more ads for you.

1:24:26Right.

1:24:26And doesn't consider you a customer of another company.

1:24:28They consider that purchase an Apple purchase, right?

1:24:30That's part of it too.

1:24:31It's like, it's all still first party because an in-app purchase in somebody's app is

1:24:35still a purchase through Apple.

1:24:37So you're still Apple's customer as far as they're concerned.

1:24:39And that's part of the story.

1:24:41There's a lot here.

1:24:42I don't entirely agree with Ramon's take, but I appreciate him having us explore this

1:24:48because I think that there's a lot of really interesting potential here.

1:24:51Yeah.

1:24:51I think Ramon is just concerned, right?

1:24:53And I get that concern because I think about it a lot.

1:24:56Right.

1:24:57On device, I love the, does the on device argument give them a pass?

1:25:01And I think the answer is no, that on device can be used for good or evil, right?

1:25:07And that's something that we all need to watch.

1:25:09And I think, again, I think maybe Apple learned that lesson in the reaction to the CSAM scanning.

1:25:14I think maybe Apple realized there are some things that if you do it on device, it blows

1:25:21their whole on device argument and they need to not do that.

1:25:24But you never say never, you know, you get a vice president somewhere who's being given

1:25:29an incentive to maximize revenue and they have enough pull to get a feature installed

1:25:33that does something like never say never.

1:25:36But I'm skeptical that they'll go down that path because I feel like maybe they learned

1:25:40a valuable lesson from this.

1:25:42But it doesn't change their business model in other places.

1:25:45Yeah.

1:25:46Chris asks, do you think Apple's headset will have a cellular connection or will it just

1:25:52be on wifi?

1:25:54This one, wifi.

1:25:55Long term cellular, right?

1:25:57Because long term you're going to want to do mixed reality and you're going to be out

1:26:00there, but in this one, it's just going to be wifi, right?

1:26:02Like this is an inside thing.

1:26:04And I think Apple considers inside spaces, wifi spaces.

1:26:07If you're in the hotel, you might have to log in with your browser in VR, put in your

1:26:12room number, whatever.

1:26:13But like, I think in the long run, obviously it's going to have to be cellular, but not

1:26:19in the short run.

1:26:19Hmm. Now you have one of those, like, you know, I was thinking you're in hotels and

1:26:24you had that like pop-up thing is put your room number in massive 70 foot, right in your

1:26:29view.

1:26:29Yeah, sure.

1:26:30You got to climb up onto the field, smash the button, type it in.

1:26:35Uh huh.

1:26:36Yep.

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1:27:48I've got to say, I'm coming around.

1:27:50I've come around on this.

1:27:52I really like the clips.

1:27:54Clips are good.

1:27:54I'm enjoying them.

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1:28:09Everybody enjoy your pizza.