418: Cocktail of Headwinds


00:00:00   [Music]

00:00:12   From Relay FM, this is Upgrade, Episode 418.

00:00:16   Today's show is brought to you by Sourcegraph, Bombas, and Capital One.

00:00:21   My name is Myke Hurley, I'm joined by Jason Snow. Hi, Jason.

00:00:24   Hi, Myke.

00:00:25   Oh, hi, Jason.

00:00:26   How are you?

00:00:27   I'm good. That was very, like, mellow introduction.

00:00:30   I just, you know, you said hi-- I was ready for a "Hi Jason" Snell,

00:00:33   and I was gonna do my "Hi Myke" early, and then you're like, "Hi Jason."

00:00:36   I'm like, "Oh, hi Myke."

00:00:36   Keep you guessing.

00:00:37   How's it going?

00:00:38   Sure.

00:00:39   I have a #SnellTalk question for you. It comes from Savva, who wants to know,

00:00:42   "Jason, do you brew multiple pots of tea with the same tea leaves,

00:00:46   or do you replace the leaves after every pot of tea?"

00:00:50   I replace the leaves with every pot of tea.

00:00:52   You could-- you can do it. They don't taste as good.

00:00:55   They're weaker and sometimes they can be more bitter.

00:00:58   And I've decided that if I'm like,

00:01:02   I buy loose tea in bulk,

00:01:05   I can afford to just make another pot of tea

00:01:08   with fresh leaves.

00:01:09   So the old leaves go in the little compost can

00:01:12   and the new leaves go in the tea robot

00:01:14   and I make another pot of tea.

00:01:17   That's how we do it.

00:01:19   - La-di-da, look at you, you know?

00:01:21   - Yeah, yeah.

00:01:23   I mean, in a pit, I used to not,

00:01:25   but then it's better this way, so I just do it. It's fine. Again, I buy it in bulk. Like,

00:01:30   it helps to buy it in bulk. I understand when you're in situations where you have limited

00:01:35   tea or you've got a tea bag and you just use it and like, "Can I use it again?" The answer

00:01:39   is you can use it again. It's not as good, but you can. I don't, though, anymore.

00:01:45   If you would like to help us open an episode of the show and learn more about Jason Snow,

00:01:49   you can always send in tweets.

00:01:51   Oh boy.

00:01:52   the hashtag snow talk or use question mark snow talk in the relay FM members

00:01:56   discord I mean ultimately it's just what this is right like this is people

00:02:00   trying to learn more about you yeah I mean it can really be it's it's AMA it's

00:02:05   a it's a world slowest low MA yeah I like that that's what it is

00:02:10   speaking of a maze it's something we started doing for relay FM members

00:02:14   there's a new show called spotlight we mentioned before you've been done an

00:02:18   episode and Christina Warren's done an episode. This is content which is given

00:02:22   out to all Relay FM members in the crossover feed but you can get access to

00:02:26   this and also Upgrade Plus if you go to getupgradeplus.com you will get

00:02:31   longer episodes of upgraded bonus content just $5 a month or $50 a year.

00:02:36   We have some, I don't know, this is interesting for me anyway and maybe it's

00:02:41   interesting for other people. We have some a change here on the upgrade

00:02:46   program, I am no longer editing the upgrade program.

00:02:49   Mm.

00:02:50   Uh, we are now handed over the brains to Jim Metzendorf.

00:02:55   Uh, Jim edits a ton of content at Relay FM, like Rocket with Simone, Brianna, and

00:03:02   Christina, Roboism with Alex and Kathy, Mac Power users David and Steven, and

00:03:06   Tanwa Ibracul- he does some of my shows, uh, Analog and Remaster for some of them.

00:03:11   I've edited Upgrade for 100 years, eight years,

00:03:16   seven years, seven, eight years.

00:03:19   - Since the beginning, since episode one.

00:03:21   - Yeah, and I need to make some changes in my schedule.

00:03:25   And I'm here until very late every Monday.

00:03:30   And so Jim is gonna be doing it.

00:03:33   If I sound weird today,

00:03:34   I'm a little emotional about this, Jason.

00:03:35   It's quite a complicated thing for me.

00:03:39   - I just went through this

00:03:40   because I edited The Incomparable for 11 years.

00:03:44   And earlier this year, I handed that off to Steven Schapansky

00:03:48   and it is great.

00:03:50   So when you came to me and said,

00:03:51   "I'm thinking of not editing the show anymore,"

00:03:53   I thought, "Well, it worked really well for me.

00:03:57   It's gonna work well for you."

00:03:58   It is one of those things.

00:04:00   I know I've told this on the show before,

00:04:02   but in January, I did my little offsite

00:04:04   in where I went to Sonoma for a couple of days

00:04:06   and I just thought about my business

00:04:07   and like big picture stuff instead of the nitty gritty.

00:04:10   And one of the things that I realized

00:04:11   is that after seven plus years of doing a small business,

00:04:16   there are things you do when you start a small business

00:04:17   because who else is there to do it?

00:04:19   So you do them all.

00:04:20   And then seven years pass and you think,

00:04:22   why am I still doing this?

00:04:23   I can do this, but should I be doing this?

00:04:27   And that led me to divest myself of a bunch of tasks

00:04:30   that I didn't need to be doing anymore,

00:04:32   including editing the incomparable every week.

00:04:35   and it is the best thing.

00:04:38   And so I think this is gonna be really good for you.

00:04:40   I think reclaiming that time,

00:04:41   it's hard because you're giving away your control

00:04:43   of the final product,

00:04:44   which was hard for me for the incomparable.

00:04:47   We talked about your note-taking apparatus that you have

00:04:50   to give yourself notes about what we say

00:04:52   and when we cross talk and all of those things

00:04:55   that you're gonna have to sort of adapt your process there.

00:04:57   But it also means that when we're done,

00:05:01   you're done with upgrade.

00:05:03   And I'll tell you, I see these incomparable episodes go out

00:05:06   on a Friday morning now, and I like think to myself,

00:05:10   oh yeah, right.

00:05:11   Because it's just, it's that one layer of remove

00:05:14   where I haven't spent five hours sweating over it.

00:05:17   Instead, it's just, it just happens and it's out there

00:05:20   and it's a great feeling.

00:05:21   So good for you for promoting

00:05:23   your work-life balance a little bit.

00:05:27   - Yeah, it's a weird thing.

00:05:28   I don't want to let it go, but I think I need to.

00:05:31   But it's just very strange.

00:05:33   "Yeah, well, that's how I felt about 'Incomparable'

00:05:36   is the same thing."

00:05:36   Which is, I really don't, I still don't like the fact

00:05:40   that I don't have very specific control

00:05:43   over exactly what the episode is.

00:05:45   And Steven and Erica, his wife, went on a road trip

00:05:49   and I had to edit the "Incomparable" the other week.

00:05:51   And it was one of those things where on the one hand,

00:05:54   it was really kind of delightful.

00:05:55   It was like, "Oh yes, I can take complete control

00:05:57   of this episode again."

00:05:58   And also every minute I did it, I thought,

00:06:00   "Wow, I don't need to do this anymore."

00:06:04   So it'll be good.

00:06:06   Also, as an aside, we did a verticals episode last week,

00:06:09   which was because we couldn't record on the Monday.

00:06:12   We prerecorded the verticals episode

00:06:15   where we interviewed people and that was a lot of fun.

00:06:18   And we got a lot of really positive feedback about it

00:06:20   from people who were very happy

00:06:21   that we talked to our three guests

00:06:22   and got a lot of feedback of like,

00:06:25   "Oh, that was great.

00:06:26   You guys should do more guests."

00:06:27   And more guests,

00:06:29   Guest is a lot of work, scheduling guest's work,

00:06:32   interviewing guest's work, it's a lot of extra work.

00:06:34   However, you know what, I feel like we might,

00:06:38   I'm not committing to anything now,

00:06:39   but I feel like we're more capable of doing something

00:06:41   like having more guests on from time to time,

00:06:44   now that you're not editing the show every week.

00:06:47   - One of the reasons we would so seldom have guests

00:06:50   on the show is 'cause I don't like to edit guest audio.

00:06:53   - Yeah, no simple answer, right, there it is.

00:06:56   - It's much more complicated, you know,

00:06:58   considering the time, because it was,

00:07:01   the issue for me has always been

00:07:03   that the edit starts really late.

00:07:05   The edit starts for me kind of maybe

00:07:07   around 8 p.m. on a Monday.

00:07:09   And if you added a guest in,

00:07:13   you've probably doubled the edit time.

00:07:16   Especially if you're waiting on audio

00:07:19   to come through with some people.

00:07:21   It can, yeah, so it's just like a whole thing.

00:07:23   And so to not have to have potential issues,

00:07:27   I would kind of discourage having guests

00:07:31   because I just couldn't add it in very often

00:07:34   unless it was all planned out well in advance.

00:07:37   But now that's not so much of a concern anymore

00:07:40   which is why we actually have another guest segment

00:07:43   later on in this episode

00:07:44   and then we have some more later on in a month.

00:07:47   And so, yeah.

00:07:49   So that's some of our fun though, but we will do more.

00:07:51   I think we'll be able to do more outside of that.

00:07:53   - Yeah, I think it has been something

00:07:55   that we've tried to really limit ourselves

00:07:57   to sort of those special Apple guest opportunities

00:07:59   and some Summer of Fun stuff.

00:08:00   And maybe we'll do some more of it.

00:08:04   We're definitely gonna do more of it this summer.

00:08:06   And then we'll just see how it goes and how it progresses.

00:08:09   But I know it's a big step

00:08:10   and I know that it probably is uncomfortable for you,

00:08:13   but I think it's gonna be good.

00:08:15   And if the show sounds different

00:08:18   and there are weird things about it,

00:08:19   we're working on it.

00:08:20   It's the beginning of a new era on the production side.

00:08:23   Hopefully it just doesn't matter and you don't notice

00:08:25   and it's all fine.

00:08:27   And thank you to Jim.

00:08:28   - Thanks, Jim.

00:08:29   - Yeah.

00:08:30   - And also to finish follow up this week,

00:08:33   everyone here at the Outgrade Program

00:08:34   would like to congratulate the Morin family

00:08:36   on the birth of their son.

00:08:38   - Yes.

00:08:39   Dan and Kat had a baby

00:08:41   and Dan also published his book the same week.

00:08:44   So, what a week. - Because why not?

00:08:47   If you're gonna do both things,

00:08:48   why not do them at the same time?

00:08:50   - Yeah.

00:08:51   It means I'm all alone over at Six Colors.

00:08:54   I'm like, this is the summer of solitude for me over there now.

00:08:57   Yeah.

00:08:58   You're the one really struggling right now.

00:09:00   Yeah, oh yeah, it's really about me.

00:09:02   Not about like a baby, whatever, you know, whatever.

00:09:06   But I am blogging alone.

00:09:09   The big problem is that Six Colors podcast that members get

00:09:13   because that's me and Dan.

00:09:14   And I've gotten guests the last two weeks.

00:09:18   I'm not planning that out as much as I should.

00:09:20   It's like, geez, what am I going to do this week?

00:09:22   Friends, I don't know what I'm gonna do this week. No idea, but we'll figure it out. I'll

00:09:27   figure it out.

00:09:28   I'm waiting for the call up. I know it's gonna come at some point.

00:09:31   Yeah. Oh, it undoubtedly will. Like, I mean, how many people do I even know? They're all

00:09:37   gonna get the call at some point.

00:09:38   Actually, you're gonna have to run out.

00:09:41   Yeah.

00:09:42   Rumor round up, Jason Snell.

00:09:44   Okay.

00:09:45   Got a couple of little things this week, all coming from the Sheriff himself across various

00:09:50   avenues. The first is an interview, some tidbits from an interview that Mark Gurman did with

00:09:57   YouTuber Max Tech, I think has become a bit more prominent recently in our circle, I think

00:10:04   is doing a lot of the thermal tests of various computers. But very successful YouTuber, but

00:10:10   sometimes these people just come into our like remit somehow and this is it. Anyway,

00:10:16   one of the some of the things Mark said Apple had an M1 Pro Mac Pro ready so

00:10:24   like that was something that they had set they were ready to go on it but

00:10:28   decided to hold off until M2 I don't know why they made that decision but I

00:10:32   think that was actually the right decision. Mark is now expecting the Mac

00:10:36   Pro with an M2 chip in it or M2 based chip in it not M2 can you imagine the

00:10:43   Mac Pro of an M2. It's like, how's your phone was now? But no, with an M2 based something.

00:10:50   M2 Extreme, M2 Max maybe. This is now expected to be announced later this year, shipping

00:10:57   sometime in 2023. Fine. Okay, sure. Mark Gurman doesn't expect there to be a redesign of the

00:11:05   Mac Mini. Just for there to be spec bumps in the future. I think that makes a lot of

00:11:10   sense considering the way the Mac Studio looks.

00:11:12   Yeah, the redesigned Mac Mini rumors were about the Mac Studio, so, and to Mark Gurman's

00:11:17   credit, I think he got that right, that when he said it was like a new thing that looks

00:11:20   like a tall mini Mac Pro.

00:11:22   Right, but there were people that were saying it was going to have like plexiglass on the

00:11:26   top and all that kind of stuff.

00:11:28   Yeah, those were the weird rumors, but I think Gurman did a pretty good job of zeroing in

00:11:32   on the Mac Studio, even though he, I think he described it as being a tall Mac Mini or

00:11:37   a mini Mac Pro and I think he was probably more right than wrong there. So yeah, sure,

00:11:43   Mac Mini is fine. It doesn't need to be reinvented.

00:11:49   And once again saying that an iMac Pro is currently in active development and he expects

00:11:54   it to be available next year sometime.

00:11:58   Sure sounds like the bigger iMac is going to be an iMac Pro, at least in his mind. I

00:12:03   think that there's marketing questions there, but I think it's interesting that that's

00:12:07   That's how he refers to it.

00:12:08   I mean, I wouldn't, I mean, we've had this conversation a million times and we'll have

00:12:12   a million times more.

00:12:13   I don't know why you would do a bigger Amek and not call it the Amek Pro.

00:12:17   Yeah, no, it makes sense.

00:12:18   Given what, how they name their products, it's going to be more expensive.

00:12:21   It's probably going to have more capability in terms of the chips that are available on

00:12:25   it.

00:12:26   And so sure, why wouldn't you?

00:12:29   Speaking of products that might get bigger and potentially called Pro, the rugged Apple

00:12:33   Apple Watch Extreme as we've called it around here but could be called Apple Watch Pro apparently

00:12:39   is one of the names being suggested.

00:12:41   In Mark's Power On newsletter he gave a few more details about this.

00:12:45   So we spoke some time ago whether it was last week or the week before I don't remember because

00:12:51   we prerecorded that the rugged Apple Watch would be made of metal which wasn't what we

00:12:57   were expecting.

00:12:58   We were thinking we had Casio G-Shock in our minds right?

00:13:01   Cover that thing in silicon.

00:13:03   but no, they will be made of metal,

00:13:05   and Mark is now expecting it to be some adjusted formulation

00:13:09   of titanium to make it even more durable.

00:13:12   -Yeah, see?

00:13:14   It's the pro-materials, pro-watch.

00:13:18   -I'm listening to "After Steve," the book about --

00:13:23   I thought it was about Johnny Ive,

00:13:25   but it's also about Tim Cook.

00:13:26   I don't know why my brain -- -It's 'cause of the marketing.

00:13:29   -I think you're right, right?

00:13:30   Like all of the excerpts seem to be about Johnny Ive.

00:13:33   And so it's about the both of them.

00:13:35   But one of the things they were,

00:13:37   I just heard a couple of days ago when listening to it,

00:13:39   they were talking about how they reformulated,

00:13:42   like formulated their own gold for the Apple Watch.

00:13:46   And I also remember, and I've heard over time,

00:13:50   that Apple, because of the Apple Watch,

00:13:52   kind of hired and then created their own like

00:13:55   metallurgy team.

00:13:56   And so like, this is a thing for them.

00:13:59   Like they create new formulations of metals

00:14:02   to do what they need them to do.

00:14:05   - Yeah, they were already, I mean,

00:14:06   I read something at some point that said that

00:14:08   Apple might have the best collection of people

00:14:11   who understand how to use aluminum in the world.

00:14:14   - Yeah.

00:14:14   - That they had already, and it makes sense, right?

00:14:16   Like they've been basing their computers on aluminum

00:14:19   for 12, 13, I mean, it's been a long time now

00:14:24   and I've heard that that is one of the things

00:14:26   that they have gotten very good at

00:14:28   is exactly what kind of aluminum they want.

00:14:31   And then remember, they started boasting

00:14:33   about this specific kind of stainless steel they used

00:14:37   in the Apple Watch or in the ring around the iPhone Pro.

00:14:40   Like they have metallurgy opinions.

00:14:44   And so was it surprising that they might do

00:14:46   a reformulated titanium that they feel

00:14:48   they can boast about on stage

00:14:50   as being extra rugged and resilient?

00:14:52   I'm not surprised at all.

00:14:53   - Mark also said that this Apple Watch will be a quote,

00:14:57   good bit bigger so it might only appeal to a subset of customers. I wonder what the story

00:15:04   is going to be for the size change because like just as I think about it, I don't understand

00:15:08   why a watch for extreme sports needs to be bigger. So I'm intrigued what they're going

00:15:14   to say as to why that is.

00:15:17   I think it's not going to be that complicated. I really don't. I was having this chat with

00:15:20   somebody else the other day. I think that if we think of this as Apple Watch Pro and

00:15:26   we think of it as a bigger Apple Watch, everything else falls into place, which is why is it

00:15:31   bigger? Well, because we're giving you three different versions now. There's the two smaller

00:15:36   versions and then there's the Apple Watch Pro, which is bigger. It has more battery.

00:15:39   It has a bigger screen. You can see more stuff. Yay. Like, I really think that that's all

00:15:44   the explanation that there's going to be is now we have three sizes of watch. And the

00:15:48   most expensive one is this big fancy one with the great materials. And let me tell you the

00:15:53   story about, you know, why it's great, but I don't know if there'll be more of a size

00:15:59   change than that, then that it's a bigger screen and more battery and those are things

00:16:04   that people like.

00:16:05   I 100% think that you are right there, but I'm just intrigued if they're gonna have some

00:16:10   other like reason that they, you know, maybe there's something that they're gonna do in

00:16:16   software where you can see more of the workout or whatever, I don't know.

00:16:21   I don't know. I think the thing to keep your eye on,

00:16:24   I think as we're all watching this event,

00:16:26   when it unfolds in September, presumably like the sixth,

00:16:31   maybe the 13th, something like that.

00:16:34   I haven't heard a rumor about that yet,

00:16:37   but it's always about the same time.

00:16:39   The thing to watch is how they talk about

00:16:43   the sport component of it versus the just,

00:16:47   it's an Apple Watch component of it.

00:16:48   because if it's Apple Watch Pro,

00:16:51   I think it's still gonna have

00:16:53   a little bit of a sport narrative to it,

00:16:56   but not the only narrative to it.

00:16:58   That they're gonna boast about,

00:17:00   well, what can we do with this battery life?

00:17:02   Well, the answer is, and we made it more resilient,

00:17:05   which is great for people who use it in sports,

00:17:07   which they already use the Apple Watch in sports.

00:17:09   You could argue that all Apple Watches

00:17:10   are kind of sports watches, kind of,

00:17:13   and so this is also that.

00:17:14   But if they do something like is rumored,

00:17:16   where they do a wilderness mode or whatever,

00:17:20   where it goes into extreme battery saving,

00:17:22   but it's still doing logging and you can crank it up

00:17:26   and crank it down as needed.

00:17:28   And the extra battery life allows it to do that.

00:17:31   And maybe this is the one that does the wacky

00:17:34   kind of emergency signal to the satellite

00:17:37   and all of that stuff.

00:17:38   There's a story they can tell about that,

00:17:40   but I think they have to balance it

00:17:41   with not wanting to come across as this is a sports watch

00:17:45   because I don't think they want to do that because I think they probably envision that

00:17:50   a lot of people are going to buy it because they like the most expensive thing and bigger

00:17:55   is better and more battery life and they don't want to turn them away like, "Are you an extreme

00:18:01   sports enthusiast?" "No." "Well, then you can't buy our expensive watch."

00:18:04   - Yeah, I think you're right actually because also as I'm thinking, you know, for those

00:18:08   of us that have been around for long enough, the aluminium one used to be called sport.

00:18:14   did. Right and so like the reasoning there was like it's the cheapest,

00:18:19   the lightest, you can ding it the most, it's you know like it's for sports so

00:18:23   it'd be strange now to be like hey this one's for sports and it's the most

00:18:27   expensive one you know so I think I'm coming around now even though I

00:18:32   will always miss it if they don't call it extremes because I think that's funny

00:18:36   but calling it pro is like hey if you're an athlete you can use this if you are

00:18:43   work in 26 hour days you can use this and it's gonna protect you about you

00:18:48   know you and I have the battery life that you want like maybe just pro as in

00:18:52   biggest bestest is probably what they'll go with because that's what they do. I

00:18:56   think it's the most logical way to approach this especially if it's

00:19:00   titanium and is gonna look like a big Apple watch and not look kind of weird

00:19:04   and different then it's just an addition to the product line I think that's all

00:19:09   it is. Zach in the Discord says Apple Watch Max which could also fill the

00:19:13   fulfill the same thing especially if it's gonna be physically bigger because

00:19:17   then that matches what the iPhone will be because it's probably hmm I wonder

00:19:25   what they'll do you think they'll call the bigger regular one iPhone 14 Max? Yes.

00:19:32   So then that Apple Watch Max could work just as nicely. Could be, could be. I also

00:19:37   wonder how it's going to be positioned in relationship to the other Apple

00:19:41   watches, because you could also say we have three sizes of Apple Watch now and

00:19:45   just say that. Probably not. They'll probably differentiate in some way. So

00:19:50   yeah, Apple Watch Max could be. Could be. But I think Sport is, you know, Sport is

00:19:55   probably not on the agenda for this one. An evolution of the current rectangular

00:19:59   shape, no flat size. Yeah. This is, this is just gonna be a big Apple Watch with a

00:20:04   a big screen and a big battery,

00:20:07   and then maybe some features that are enabled.

00:20:10   Like I said, I keep coming back to David Smith

00:20:13   trying to take an Apple Watch out in the woods for a week

00:20:16   and thinking there's a story,

00:20:18   there's some software that you add

00:20:20   and you use the big battery,

00:20:22   and now you've got a story to tell about it

00:20:24   as a thing you can take hiking or whatever,

00:20:27   but it's just one part of the story of like,

00:20:30   it's also just an Apple Watch, that's nice.

00:20:32   and on a redesign, adding in a new watch this year

00:20:36   gives them another year until they need to do a redesign.

00:20:38   Right, like they can just be like,

00:20:40   hey, we added a new one

00:20:42   and they can just keep pushing that redesign off

00:20:44   into the distance, which makes me sad.

00:20:46   - Yep.

00:20:47   - This episode of Upgrade is brought to you

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00:22:33   Apple earnings time Jason Snell charts day big charts day around here what what

00:22:42   they was this Thursday of last week I think yes yeah that's it so let me give

00:22:49   some top-line reporting and we can break into some of this 83 billion dollars in

00:22:56   revenue that is up 2% year-over-year 19.4 billion dollars in profit that's

00:23:02   It's down from $21.7 billion this time last year,

00:23:07   this quarter last year.

00:23:09   iPhone was up 3%, the Mac was down 10%,

00:23:12   the iPad was down 2%, services up 12%,

00:23:17   but for the first time, it is down $200 million in revenue

00:23:23   from the previous quarter.

00:23:26   I wanna dig into that in a little bit in a minute.

00:23:29   Wearables were also down 8% year over year.

00:23:32   It's not the first time, by the way.

00:23:33   Two years ago, they had a sequential drop

00:23:35   between Q2 and Q3.

00:23:37   So it hasn't gone down, but it is not the first time

00:23:42   that it's had a little bit of a sequential drop.

00:23:44   It hasn't done a year over year drop

00:23:46   since we've been watching it.

00:23:48   But it did do a sequential drop two years ago

00:23:50   at the same time.

00:23:51   So it seems to be a thing that happens

00:23:53   is that Q3 is just weaker than Q2 for services.

00:23:56   - Interesting.

00:23:57   It's just interesting to see now

00:23:58   because it's been multiple years

00:24:00   of this just like massive, just continual growth.

00:24:05   That was where it stuck out to me

00:24:08   and I didn't notice that one.

00:24:08   So thank you for the correction there, Jason Snow.

00:24:11   - It was a very similar one two years ago.

00:24:12   They were 13% year over year up,

00:24:15   but down sequentially just a little bit.

00:24:17   - I'll be keen to see if this continues

00:24:20   the way we would normally expect it to,

00:24:22   which is just to keep going up.

00:24:23   And it's just for some reason,

00:24:24   we just ignore this one that goes down.

00:24:26   But it stuck out to me as it's been multiple years then,

00:24:29   not never, but it's been multiple years

00:24:30   since we've had this.

00:24:32   And it's one of those things where I kind of can't

00:24:35   put my finger on why.

00:24:37   - So I think they said that part of services,

00:24:42   believe it or not, is ad revenue from search ads.

00:24:48   - Oh, I do believe it, yeah.

00:24:50   - So I think that they say that that is where

00:24:53   some of this came from,

00:24:56   is that there was weakness in the ad market.

00:24:58   - This makes me annoyed 'cause I hadn't considered this.

00:25:01   'Cause did you see last week that they're adding ads?

00:25:06   - More ads.

00:25:06   - In the App Store in more places now?

00:25:09   - Yes.

00:25:10   - And now I'm expecting that this is in response to that.

00:25:13   - Could be.

00:25:14   - And that makes me just, just stop Apple, come on.

00:25:18   - I hate ads in the App Store, I hate it.

00:25:21   - I shouldn't do this.

00:25:22   - They spin it, somebody asked them on the call,

00:25:24   it was in my little Mac world piece,

00:25:25   I gave some awards out.

00:25:28   I like to occasionally give awards out to analysts

00:25:31   for the various attempts they do

00:25:32   to make Apple answer their questions,

00:25:36   which they don't answer.

00:25:37   But I wanted to give Richard Kramer of REACH Research

00:25:42   a little gold star.

00:25:46   He asked a very pointed question about app,

00:25:48   he may be not asked back after this,

00:25:52   about app tracking transparency

00:25:54   and how it was related directly

00:25:56   to Apple's own App Store search advertising, right?

00:26:00   'Cause it's not a third party ad

00:26:02   if we serve it to you ourselves, right?

00:26:06   So, you know, that's the argument

00:26:07   about Apple's policy toward Facebook is that,

00:26:10   although they talk about privacy being a human right,

00:26:12   the other thing they're doing

00:26:13   is basically making the only place you can market apps

00:26:16   be in the App Store and Apple sells all the ads there.

00:26:19   And so this was a pointed question,

00:26:22   I think a good question.

00:26:24   And Tim Cook's response was, he read the boilerplate

00:26:26   about privacy being a fundamental human right.

00:26:28   And then he said, "Search ads are great for the developers

00:26:31   because they can reach people who are looking for apps."

00:26:35   That was it, that was all he said.

00:26:36   And I think search ads are awful

00:26:39   and they're only good for Apple.

00:26:41   And because the reason I think they're awful

00:26:44   is because it means that if you're a developer,

00:26:46   you can't just develop your app.

00:26:47   You actually have to take some of the money

00:26:49   that you make from your app

00:26:50   in order to advertise on the name of your app

00:26:55   in order to have your app come up

00:26:58   when people search for your app.

00:27:01   And I think it's offensive and stupid.

00:27:03   And it is, yeah, it's one of my least favorite things

00:27:07   that Apple does is App Store ad revenue.

00:27:09   And yes, they are doubling down.

00:27:10   They have now added, if you scroll down

00:27:12   in an app's description page, not on search,

00:27:15   and it's down toward the bottom,

00:27:17   but you literally, there are ads down there.

00:27:19   There's like other apps from this developer,

00:27:21   and then right below it is basically,

00:27:23   these are ads, probably for their competitors.

00:27:26   - But then I think the worst that they're adding

00:27:28   is they're going to be adding the ability

00:27:30   for somebody to have an ad in the Today page.

00:27:35   And you can kind of, and it kind of looks like

00:27:39   Apple's official content that they make.

00:27:42   Like it's got one of those big squares.

00:27:44   - Yeah, but it's an ad.

00:27:46   It annoys me because all advertising is advertising

00:27:50   and I really don't like these two things happening at once.

00:27:54   I don't like the way it looks, right?

00:27:56   Like I don't like Apple kind of kneecapping other companies

00:28:01   and then also increasing their own ad opportunities.

00:28:07   - No, it's quite a racket.

00:28:08   I mean, I'm sure I'm aware of the arguments

00:28:11   for doing App Store advertising,

00:28:14   but fundamentally, I think it is Apple applying

00:28:17   an additional tax to its own developers.

00:28:21   And as much as it boasts about,

00:28:23   Apple will boast about advertising revenue,

00:28:26   and it will boast about the money it gives to developers

00:28:29   as part of the, you know, and I phrase it that way,

00:28:31   I guess, on purpose,

00:28:32   'cause Apple does sometimes view it as being

00:28:34   that they're giving it to developers.

00:28:35   The developers earned it, and then Apple took a percentage,

00:28:37   and then the rest of it goes to developers.

00:28:39   But my point here is, those two things are related,

00:28:42   'cause all that money that they're getting in ad revenue

00:28:45   for app advertising, it's coming out of that pot.

00:28:48   It's deducted essentially

00:28:51   from what the app makers are making.

00:28:54   So it's a way for Apple to eat even more

00:28:57   into the business of app developers.

00:29:00   And it's because they've got

00:29:01   an increasingly captive audience, right?

00:29:05   Because marketing your app on Facebook

00:29:07   doesn't really work anymore

00:29:08   in the era of app tracking transparency.

00:29:10   You really have to go to the source, which is Apple.

00:29:12   And while that is more private,

00:29:14   it also is awfully good for Apple.

00:29:16   - But anyway, getting back to the topic at hand,

00:29:20   this is the Q3, for the Q3 2022 results.

00:29:25   49% of the revenue was iPhone, 24% services,

00:29:30   10% wearables, and a Mac and iPad, but 9% each.

00:29:34   So this was again, another record set in quarter for Apple,

00:29:38   but it doesn't really feel like one to celebrate.

00:29:42   - Right, it's a, I mean, the Wall Street response

00:29:46   seemed to be relief because there's been so much difficulty

00:29:49   in Wall Street, in the stock market,

00:29:53   in the tech sector of the stock market especially,

00:29:56   that Apple coming out with results that are fine

00:29:59   was a relief 'cause they were afraid

00:30:01   they were gonna be not fine.

00:30:02   And the fact that the iPhone posted a 2% year over year gain

00:30:06   that you could hear the size from Wall Street, right?

00:30:09   (laughing)

00:30:10   'Cause it's the most important product

00:30:11   for the most valuable company, and it didn't take a dive,

00:30:15   and they were really relieved.

00:30:17   And if you listen on the call, what Tim Cook said was,

00:30:22   if you look at the iPhone and try to imagine

00:30:25   what are the macroeconomic conditions,

00:30:27   what are the headwinds, as they like to say,

00:30:28   what are all the problems,

00:30:30   do we see any evidence in the iPhone

00:30:33   that there are lots of troubles globally, economically?

00:30:37   And he said, there are none.

00:30:39   If you just look at the, he says,

00:30:41   I'm not saying there aren't.

00:30:42   I'm saying that if you were to look at the numbers,

00:30:45   you can't see it.

00:30:46   It was just a good iPhone quarter.

00:30:50   Other categories you could see it, but not,

00:30:52   wearables, he said specifically,

00:30:54   like if they feel like the macroeconomic conditions

00:30:56   really are what whacked wearables.

00:30:58   And wearables had its worst quarter in ages.

00:31:01   It's been up every quarter year over year for years now,

00:31:05   and it was down.

00:31:06   But the iPhone did okay.

00:31:08   And honestly, so much of how Wall Street views Apple

00:31:12   and Apple's business, rightfully so,

00:31:13   'cause it's half or more of Apple's business, it's iPhone.

00:31:17   And so if iPhone did okay, they're like,

00:31:19   "Okay, all right, it's gonna be okay.

00:31:21   iPhone's okay, everybody, it's okay."

00:31:23   - So Apple had previously forecast

00:31:25   that they would lose somewhere

00:31:27   between four to $8 billion in sales this quarter

00:31:30   for just stuff they couldn't fulfill.

00:31:32   But it ended up being just shy of that 4 billion.

00:31:35   So it was even better.

00:31:37   as is typical for them, like they make a regent

00:31:41   and then they always perform slightly better.

00:31:43   - I mean, they do some sandbagging.

00:31:45   I think that this was legit though.

00:31:46   I think that they were surprised when they made their,

00:31:50   it's not really a forecast,

00:31:51   but when they made their statements three months ago,

00:31:53   they were in the midst of,

00:31:55   or just coming out of shutdowns in Shanghai.

00:31:58   There were COVID shutdowns in Shanghai

00:31:59   at the factories there.

00:32:00   And they were really concerned about supply.

00:32:04   Because again, this is a number,

00:32:05   four to eight billion is what they said.

00:32:06   It was literally, there's $4 to $8 billion

00:32:09   we're gonna leave on the table

00:32:10   where people wanna buy our products

00:32:11   and we can't sell them products

00:32:13   'cause we don't have them in our hands to give them.

00:32:15   And what ends up happening,

00:32:19   I thought one of the other telling moments

00:32:21   in the analyst call afterward is,

00:32:25   so the Mac gets assembled there.

00:32:27   The bulk of Macs are assembled in Shanghai.

00:32:29   So unlike other Apple products that are put together

00:32:33   in other places in China, we think of China as a monolith,

00:32:36   but it's not, there are factories

00:32:37   in all sorts of different places.

00:32:38   Most Mac assemblies in Shanghai,

00:32:41   and the Shanghai shutdowns happen is really bad for Apple,

00:32:44   really kind of stopped Mac production.

00:32:46   We all know, you order a Mac the last few months,

00:32:49   it's been like, good luck,

00:32:50   you'll get it in two months or three months.

00:32:53   It sounds like what happened is that those things

00:32:56   have started to resolve and they resolve faster

00:32:58   maybe than Apple had anticipated

00:33:00   when they made the $4 to $8 billion prediction.

00:33:02   And this all comes out of a statement that Tim Cook made

00:33:04   when somebody said, "Geez, the Mac had a really good run

00:33:08   there, but now it's down 10% this quarter.

00:33:11   What's going on?"

00:33:13   And Tim Cook's response was something like,

00:33:15   "Ha ha, oh, you should have seen it before.

00:33:18   We were really happy to get it to 10%."

00:33:20   So apparently the Mac was really down.

00:33:23   And then at the very end, they kind of pulled it out.

00:33:25   And I think that's probably where the,

00:33:27   we ended up under 4 billion in terms of stuff

00:33:30   we left on the table.

00:33:31   I think that maybe is where it came from,

00:33:33   is that the Mac bounced back a little bit faster

00:33:36   than they had feared.

00:33:37   And so what a way to spin a 10% down year over year number

00:33:40   for the Mac is to basically say,

00:33:42   "Look, this is not about Mac demand.

00:33:44   This is entirely about Mac supply."

00:33:46   And somebody said, "Well, what's the demand like?"

00:33:48   And they're like, "Huh, can't measure demand

00:33:51   if you don't have any supply.

00:33:52   Like we literally couldn't even tell you.

00:33:55   We're just guessing."

00:33:56   So I wouldn't say it was a bad quarter from the Mac

00:33:59   in that way, because I think that people wanted to buy Macs

00:34:03   and they just couldn't.

00:34:04   And then the only question is, did they lose those people?

00:34:06   Did those people not buy a Mac

00:34:08   and buy something else instead?

00:34:09   Or are they just in the queue waiting for their Mac to ship?

00:34:13   - CFO Luca Maestri created a great band name,

00:34:16   Cocktail of Headwinds.

00:34:18   That was how Luca-- - Yep, the Cocktail

00:34:20   of Headwinds.

00:34:21   - Described the various issues.

00:34:25   - It's quite a mixed metaphor, Cocktail of Headwinds.

00:34:28   How do you put wind in a cocktail?

00:34:29   And the ingredients of the cocktail,

00:34:31   It's year over year sales in Russia,

00:34:34   because there's no sales in Russia anymore.

00:34:36   They kept referring to it as like the situation in Russia

00:34:38   or whatever, but it's like they shut down in Russia.

00:34:41   So that's one.

00:34:43   It is supply chain, but that's broken in two.

00:34:45   It's the factory assembly supply chain stuff

00:34:48   that they dealt with that we just talked about.

00:34:50   And also the ongoing Silicon shortage as they call it,

00:34:54   or as we like to call it here, the legacy nodes.

00:34:57   - Legacy nodes.

00:34:58   - Those legacy nodes,

00:34:59   They're just out there being legacy nodes

00:35:01   and it's sometimes hard to get that Bluetooth chip

00:35:04   that you want or that wifi chip that you want

00:35:08   or whatever it is that's just a not interesting piece

00:35:11   of silicon, but they're hard to come by right now.

00:35:14   So those are part of the headwinds.

00:35:16   Foreign exchange is a headwind.

00:35:18   The dollar is very strong right now.

00:35:20   You may have noticed this, Myke.

00:35:22   Dollar's very strong right now.

00:35:24   - Yeah, I got a pay bump.

00:35:26   - Yeah, it's nice, nice for you.

00:35:28   - It's good for me.

00:35:29   It's bad for Apple in the sense that it makes

00:35:31   Apple's products either more expensive elsewhere

00:35:34   or less profitable.

00:35:36   - I wouldn't say it's bad.

00:35:37   Like what I will say is yes,

00:35:39   I'm sure that's a thing for them.

00:35:41   I would argue that Apple way over adjusts sometimes.

00:35:44   Like some of the product prices when you do the dollar

00:35:47   to like the pound to dollar conversion,

00:35:49   they are making good money.

00:35:51   - I agree.

00:35:52   But the point is that when the dollar gets stronger,

00:35:54   that good money becomes less good.

00:35:57   - Yeah, but they just adjust it.

00:35:59   - They don't worry about that. - So this is what I'm saying.

00:36:01   This is exactly what I'm saying.

00:36:03   Either they adjust their prices in market,

00:36:04   which makes the product less attractive,

00:36:08   or they're eating profit, and those are their choices.

00:36:11   So what they do is they do stuff like they hedge,

00:36:14   they buy a bunch of foreign currency

00:36:15   so that if the bad stuff goes up,

00:36:18   their other stuff goes down,

00:36:19   or reverse, if the bad stuff goes down,

00:36:21   their stuff goes up, and they kind of level it out.

00:36:23   They're making a bet on foreign currency

00:36:26   basically to just counteract the effects.

00:36:28   But foreign exchange is a headwind, it's in the cocktail,

00:36:30   and they said it could be as much as like $5 billion

00:36:33   difference to their bottom line next quarter,

00:36:36   because the dollar is so strong right now.

00:36:38   And if you're an American company trying to sell products

00:36:40   overseas, a strong dollar is not the best for you.

00:36:43   So yes, they're doing okay, but it is a headwind, right?

00:36:47   Because it makes everything a little more difficult

00:36:49   'cause your product is either more expensive

00:36:51   or less profitable.

00:36:53   And those aren't good, those aren't what companies want.

00:36:56   - And of course, you know, talking about the demand side,

00:37:00   they are not aware of the fact right now

00:37:03   as if inflation or what do we call it, economic downturn,

00:37:08   is potentially affecting the demand

00:37:10   of some of these products, right?

00:37:11   'Cause they can't supply them anyway,

00:37:13   so they don't even know.

00:37:14   - They don't know, right?

00:37:15   If you saw flagging interest in a MacBook Air

00:37:17   or something like that,

00:37:18   you would have to have MacBook Airs to sell.

00:37:21   Otherwise you can't measure that.

00:37:23   and they're only coming back now to being able to do that.

00:37:27   - Yeah, like I just, I looked at it,

00:37:28   I priced out like a MacBook Air today,

00:37:30   or kind of middling spec, end of August,

00:37:33   what you, before you'd get it.

00:37:35   - Yep.

00:37:36   - Apple is expecting less supply constraints

00:37:38   in the coming quarter,

00:37:40   which would be Q4, and that won't include iPhones, will it?

00:37:47   - It will probably only include a very small amount,

00:37:52   it depends on when they ship, but a very small amount.

00:37:53   It could include the first orders, right?

00:37:57   It could.

00:37:58   Like the pre-orders?

00:37:59   Depends on when they ship, when that quarter closes,

00:38:02   'cause that quarter will close in late September.

00:38:04   So probably not a lot, a little bit, but not a lot.

00:38:07   And then the rest of them go into the holiday quarter,

00:38:09   which is their age quarter.

00:38:10   Into the holidays, yeah.

00:38:12   Okay, so it could, but what it will include

00:38:15   is MacBook Airs, right?

00:38:17   'Cause they're not in this.

00:38:18   They missed the Q3 quarter we're talking about.

00:38:22   - Okay, Tim Cook told Emily Chang of Bloomberg

00:38:26   that Apple is going to be deliberate with spending

00:38:30   with the threat of recession looming,

00:38:32   but Apple believes in investing through downturns,

00:38:36   which I guess you can do if you have all the money.

00:38:39   (laughing)

00:38:40   - Well, that is a classic Apple line.

00:38:42   And it's also, I mean, this is the good investment advice,

00:38:44   which is when the stocks go down,

00:38:47   if you've got the ability, buy more stock

00:38:49   because you're supposed to buy it when it's low, right?

00:38:52   And how do you beat your competitors?

00:38:54   As well, if they're all tightening their belts

00:38:56   during the downturn,

00:38:57   and you've got a lot of cash laying around,

00:39:00   you can hire those people

00:39:02   and get ahead on the next product cycle,

00:39:05   and all your competitors have slowed down

00:39:06   and you are not.

00:39:09   I feel like this is all an act.

00:39:11   I feel like this is Tim Cook wanting to seem

00:39:15   like he's responsible for Wall Street.

00:39:18   But what they're not saying is that

00:39:20   they're laying people off.

00:39:21   they're saying that they'll be deliberate with hiring and maybe they won't expand as

00:39:25   fast. I saw a story that said like Apple...

00:39:28   I didn't see layoffs but I've seen hiring freezes.

00:39:31   Yeah, Apple has been increasing headcount by a lot and maybe they won't do that. I still

00:39:36   don't entirely buy that because one, I think it's kind of dumb because Apple has lots of

00:39:41   money and it's not like Apple... I mean Apple should be investing through the downturn.

00:39:47   This is when you go for the jugular of your competitors. It's like, we got all the money,

00:39:51   we can just sail right through this.

00:39:53   So I think it's walking a line of like wanting

00:39:55   to be responsible and seem responsible,

00:39:58   but also not missing an opportunity.

00:40:00   So I'm sure in key areas,

00:40:01   they are gonna keep hiring as they need to,

00:40:04   but maybe in less key areas, they'll slow it down

00:40:07   and that's fine.

00:40:09   - There are a lot of just in tech right now,

00:40:12   there are a lot of company acquisitions happening.

00:40:14   So there could be some of that kind of stuff.

00:40:16   Apple makes lots of small acquisitions

00:40:18   and this is a time to do that. - From time to time,

00:40:20   as they say.

00:40:21   - Actually, that was another little tea leaf reading thing

00:40:23   that happened is they get asked the question

00:40:26   about acquisitions all the time.

00:40:28   And this time they got asked that question

00:40:30   and his response was a little different.

00:40:32   He was sort of like, well, you know,

00:40:35   we look at stuff big and little, and we continue to do that.

00:40:39   It was this weirdly like way more noncommittal

00:40:43   than we usually get.

00:40:45   And maybe, you know, Tim was just in a mood, maybe.

00:40:49   - He was mad to be there.

00:40:50   But I definitely saw, or maybe he was just feeling fine,

00:40:54   feeling calm.

00:40:55   And so he was like, yeah, whatever.

00:40:57   But I definitely saw several people on Twitter who were like,

00:40:59   wait a second, did other people hear what I heard?

00:41:02   And it's like, I heard the tone difference.

00:41:04   It might not mean anything,

00:41:05   but if you're reading the tea leaves,

00:41:06   you gotta at least consider the possibility

00:41:08   that maybe what he was saying is,

00:41:11   well, maybe what he's saying is,

00:41:12   yeah, we are or have seriously considered larger

00:41:15   and larger acquisitions.

00:41:17   'Cause that's the other thing they could do, right?

00:41:18   is if there's a competitor who Apple can swallow

00:41:23   that normally would be too expensive

00:41:25   but their stock took a hit, like, I mean, Netflix,

00:41:29   they could do it.

00:41:31   - Please, can we not go back?

00:41:33   - I know, I don't wanna go back there,

00:41:35   but that's the thing.

00:41:37   And I think maybe this is the answer

00:41:38   is maybe Apple doesn't wanna go back there either,

00:41:40   but you're Apple, you got all the money,

00:41:43   Netflix takes a huge stock hit.

00:41:45   You gotta look, right?

00:41:47   You gotta kick the tires and say,

00:41:48   "Well, should we do this?"

00:41:49   And maybe that's what Tim Cook's tone was.

00:41:51   It's not like we don't consider it,

00:41:53   but we generally don't do it.

00:41:55   And they don't, Beets was their big acquisition, right?

00:41:58   So I don't know, I'm just saying,

00:42:01   I thought that was interesting that they talked about it.

00:42:03   And when you talk about investing through a downturn,

00:42:05   that is one thing you could potentially see Apple doing

00:42:08   is if there is a competitor or a good fit

00:42:12   that looked too expensive for Apple,

00:42:15   and then they get hammered in their stock,

00:42:17   Guess what?

00:42:18   That's a good time for Apple to come in

00:42:20   and swallow them whole,

00:42:22   which they could do if they wanted to.

00:42:24   - Outside of Netflix,

00:42:25   is there anyone that you would consider for them?

00:42:29   - I don't know.

00:42:30   I mean, I feel like their entertainment stuff,

00:42:35   it's possible that they could buy somebody

00:42:40   who's got a big catalog of content

00:42:42   and intellectual property.

00:42:44   They would have to divest of a lot of legacy stuff

00:42:46   like TV stations and stuff.

00:42:48   So that's out there.

00:42:50   Look at areas where they're interested,

00:42:51   where they think that they could add something.

00:42:53   I mean, Netflix is a place where they are playing,

00:42:55   so it's possible.

00:42:57   If you look at, somebody in the Discord mentioned Peloton,

00:43:01   like maybe, right?

00:43:06   If they're really kind of feeling crappy

00:43:09   and Apple thinks that there's value to sort of suck them in

00:43:11   and turn that into more Apple fitness,

00:43:14   Peloton already announced that they're gonna

00:43:15   outsource the making of the bikes too so you could literally turn it into a

00:43:18   service business and and work with partners and walk away. I'm not sure that

00:43:23   I'm not sure Peloton I don't think Apple Peloton makes a good fit I think Amazon

00:43:27   Peloton is a better fit or Google. Yeah oh for sure I I mean let me just put it

00:43:32   this way I don't think anything's a good fit for Apple I really don't I don't

00:43:37   think anything's a good fit for Apple because Apple is so specific somebody in

00:43:43   I mean, Joe Steele mentioned Paramount.

00:43:46   It's like, yes, I think that Paramount or NBC Universal

00:43:49   or something like that, where it's like,

00:43:51   somebody just wants to unload or sell

00:43:53   and Apple will write a big check.

00:43:54   Although I think Apple's right now content

00:43:56   to write big checks for sports rights

00:43:58   and other stuff like that.

00:43:58   - And just content in general.

00:44:00   I don't think they need to buy catalogs.

00:44:01   I think they're happy just bidding a lot of money

00:44:03   for movies and TV shows.

00:44:05   - Right, the only thing would come

00:44:07   if they wanted a franchise,

00:44:08   if they wanted to own some franchises and stuff like that.

00:44:10   But like, they don't want to own CBS, right?

00:44:12   They don't want that.

00:44:13   They don't want a TV network.

00:44:15   So I don't know about that.

00:44:17   And yeah, Peloton or Netflix,

00:44:20   like would they be good fits at Apple?

00:44:21   I don't think they would be.

00:44:23   I'll throw in another one that somebody mentioned

00:44:25   in the Discord that I think is actually

00:44:27   might be a better fit for Apple.

00:44:30   I don't think it'll ever happen, but it's Tesla.

00:44:33   Like if Apple really wants to be in cars, there's a--

00:44:35   - I was gonna say a car company, right?

00:44:37   Like-- - Yeah.

00:44:38   - Yeah, or Rivian. - Yeah.

00:44:40   - You know, especially if their stock is really down,

00:44:43   Because the advantage is, well, Polestar is owned by a traditional car company, though.

00:44:47   But Tesla and Rivian are kind of out there on their own.

00:44:50   And again, if the purchase price was right, because that stock got hammered for some reason,

00:44:57   and Apple wants to be in cars, well, guess what?

00:45:01   Like, there are already two, at least, tech startup, maybe three if you throw in Lucid,

00:45:08   Tech startup, Apple's former PR head,

00:45:12   is the PR head at Lucid by the way.

00:45:14   Natalie, wow, she changed her name back to her maiden name.

00:45:19   Anyway, she's there, so she knows all about it.

00:45:22   You could do something like that, right?

00:45:24   Where Project Titan's like, "Oh, I don't know."

00:45:25   It's like, well, there are other companies

00:45:26   that are actually selling cars today

00:45:28   that are kind of Apple-y, kind of,

00:45:30   but doing their own thing that you could bring in

00:45:32   if you really wanted to do that.

00:45:34   But I think this is the fallacy of Apple acquisition talk,

00:45:36   which is most of them are bad ideas.

00:45:38   I'm sure they all get thrown around in Tim Cook's office

00:45:41   and then they go, nah, and then they move on.

00:45:44   And then what Apple really prefers to do

00:45:45   is those strategic buyouts.

00:45:48   But never say never, right?

00:45:49   Like if there is, everything's got a price, right?

00:45:52   I am sure, I'm sure there's a stock price

00:45:57   at which Apple would say,

00:45:59   maybe we should buy Netflix or Tesla or whoever, right?

00:46:03   I'm sure there is,

00:46:04   but it's probably lower than you think it is.

00:46:07   Probably Apple is not willing to go as high as you think

00:46:09   because the cost of integration is really high.

00:46:12   Apple has a very specific culture.

00:46:14   Apple has very rarely played that kind of game

00:46:18   where they like to buy people in technology

00:46:22   that are smart and integrate them into the Apple machine,

00:46:24   not just take something off of a retail shelf

00:46:27   and say, "Oh, it's Apple now."

00:46:28   - I don't want to be that guy 'cause I'm reading a book,

00:46:30   but I just wanted to bring this up

00:46:32   because it came up in the book, the After Steve book,

00:46:34   where they are talking about the Beats acquisition, right?

00:46:37   And that one made a lot of sense

00:46:41   because what they wanted was Beats Music

00:46:43   because Apple was starting to fall behind

00:46:45   and they apparently were trying to build

00:46:47   their own streaming music service

00:46:49   and it wasn't really getting far enough

00:46:53   and Tim Cook liked Beats Music and they just wanted that

00:46:56   but Jimmy Iovine wanted Apple to take all of it

00:47:00   they could get a lot of money out of that. And so they just packaged the whole thing

00:47:04   up and bought it. And then they got Beats and it's just like they've been able to, I

00:47:08   think they've actually been able to benefit from that quite a lot. And then they also

00:47:12   got Beats Music, which they turned into Apple Music. And so for me, I could only ever really

00:47:18   imagine them making a very large, splashy acquisition with that idea in mind. That's

00:47:23   why I don't think Netflix, because I don't think Apple owning Netflix would really help

00:47:30   them in the ways that they want Apple TV to be.

00:47:33   Right. And then they would have to be, you know, then they would be running the Netflix

00:47:37   business.

00:47:38   Which I don't think they want to do.

00:47:39   They, I don't think is necessary. I agree. In fact, what you just described sounds much

00:47:43   more like an electric car company, right?

00:47:45   Yes. And that's why I was bringing it up.

00:47:46   Which I think they've been trying and trying and trying to do when they haven't succeeded.

00:47:49   By the way, it's a follow-up.

00:47:50   And they need to follow up. And they need technology. And they don't have it right now.

00:47:53   And you could just pick it up and suddenly you've got factories and cars.

00:47:57   Yep.

00:47:58   and a technology stack that you can keep or throw away

00:48:00   as you see fit.

00:48:02   So Polestar, by the way, was owned entirely by Volvo

00:48:06   and they took it public.

00:48:08   So I'm sure Volvo still has very close ties

00:48:10   and owns a lot of it, but okay,

00:48:11   we'll throw that on the list, that's fine.

00:48:13   But like that, something like that is, I don't know.

00:48:15   I mean, we're gonna, our next segment is all about CarPlay

00:48:20   and Apple's ambitions in the auto,

00:48:25   But I will throw that out there just as an aside

00:48:29   that if there's any place I could see Apple making

00:48:31   a big high profile acquisition, it is cars,

00:48:36   just because I think there are some car companies out there

00:48:39   that are kind of independent

00:48:41   and sort of what Apple's trying to do

00:48:45   and that Apple might use as a shortcut

00:48:47   to get where it wants to go.

00:48:48   I'm not saying it's likely,

00:48:49   I'm just saying that maybe that's a better fit

00:48:51   than something like Netflix,

00:48:52   which again, I feel like if Netflix is down in the dumps,

00:48:55   Apple looks at it just to say, "Well, should we?" but I don't see why they would.

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00:50:53   All right, it is time for an upgrade, some fun vertical about CarPlay. And joining me

00:51:00   now is Sam Abouel-Samid, who is the host of the Wheel Bearings podcast and somebody who

00:51:06   knows a lot about the auto industry. Sam, welcome.

00:51:12   Thank you, Jason. It's a pleasure to be here with you today.

00:51:14   good you've been listening to my various podcasts and sending me emails and

00:51:18   we've talked about this stuff and I wanted to just get you on upgrade to

00:51:20   talk about all the carplay things that Apple dropped at WWDC which are almost

00:51:25   like science fiction right it's like eventually at the end of next year you

00:51:30   might start to see cars with whatever this thing is that they didn't really

00:51:34   even give a name other than to say it's next-generation carplay it's kind of

00:51:38   interesting I guess the timeframes when you're talking about the auto industry

00:51:41   are a little bit like that right there they're more out there than maybe

00:51:44   the tech industry is used to? Yeah, you know, a big, you know, one of the big issues with anything

00:51:50   automotive is safety concerns. You know, compared to, you know, a consumer electronics device like

00:51:56   a smartphone or a tablet, you have to factor in safety validation for a lot of things because

00:52:04   when things go wrong, the consequences of mistakes can be life or death. You know, rarely if you're,

00:52:10   if Instagram crashes on you, will it result in you dying?

00:52:14   Or at least hopefully.

00:52:16   But if things go wrong with software in a car,

00:52:19   the consequences can be very severe.

00:52:21   And so they do tend to spend more time on safety validation.

00:52:26   And especially when you're looking at something

00:52:28   like this new version of CarPlay,

00:52:30   there's also regulatory concerns,

00:52:33   particularly around the instrument cluster.

00:52:36   - That's one of the things that struck me about it

00:52:37   is that they are saying the new generation of CarPlay

00:52:41   is going to show,

00:52:42   it's gonna be able to basically control the car

00:52:44   and also show status live from the car,

00:52:48   which obviously modern CarPlay doesn't really do that.

00:52:52   Modern CarPlay is just sort of a phone interface,

00:52:56   not a car interface, if that makes sense.

00:52:59   And this is something very different.

00:53:02   We'll start with what was your first reaction

00:53:07   when you saw Apple doing this, were you thinking,

00:53:09   this is interesting?

00:53:10   Were you skeptical of it?

00:53:12   I mean, it's so far out there that we have lots of time

00:53:14   to form opinions about what they dropped in June.

00:53:18   - Yeah, both really interesting and some skepticism,

00:53:22   particularly as I read what little information

00:53:25   they actually provided and rewatch the video

00:53:28   because they haven't actually told us a whole lot,

00:53:30   but there are a couple of important details

00:53:32   in what they did say.

00:53:34   One is the focus that this is still running on your device.

00:53:39   And this is where the skepticism comes from.

00:53:41   The idea of redesigning the interface to enable it

00:53:46   to work across different display form factors in the car

00:53:51   is an important thing because what we're seeing now

00:53:53   as we get into new vehicles is a lot more variation

00:53:58   in the form factor.

00:53:59   It used to be that you would have an instrument cluster

00:54:02   directly in front of the driver

00:54:03   And then somewhere in the middle of the car,

00:54:05   you would have a display screen,

00:54:07   modern vehicles, it's usually a touchscreen, but not always.

00:54:11   And one rectangular, usually landscape display in the middle

00:54:16   that was used for your infotainment system.

00:54:19   And that's where CarPlay, and much of what I'm about to say

00:54:23   also applies to Android Auto.

00:54:25   They project information on there,

00:54:27   as well as whatever is built into the car

00:54:29   is also displayed on there.

00:54:32   And the thing to remember about both CarPlay and Android Auto, as opposed to Android Automotive,

00:54:37   which is something different, is that the way you can think about these two systems

00:54:44   is they act sort of like device driver layers.

00:54:50   Because different vehicles, you know, a lot of vehicles today have touch screens, but

00:54:54   not all of them.

00:54:55   Some of them have some sort of central control knob.

00:54:57   Some of them have gesture controls.

00:54:58   You know, you've got a variety of different interface systems.

00:55:04   And what CarPlay and Android Auto do is they translate whatever the control signals are

00:55:11   from the driver, whatever bit of hardware they have, whether it's a touch interface

00:55:16   or a touchpad or a mouse-like device, into a common set of signals that the phone understands.

00:55:24   And that interfaces with the apps on the phone.

00:55:26   And then the phone projects back what is going to be displayed on the screen.

00:55:31   So it acts as that intermediary.

00:55:35   And my understanding of what little they've said so far, and I don't know if you've

00:55:41   from any of the conversations you've had with Apple, they haven't responded to my

00:55:44   inquiries, but if they've told you anything different, is that this next generation is

00:55:50   still a smartphone projection system.

00:55:52   the same type of approach, but tailored to be able to reformat itself to different display

00:56:01   interfaces, so to project onto the instrument cluster, which is more and more often now

00:56:07   a digital, an LCD display, and to portrait displays and landscape displays, and even

00:56:15   one of the renders they showed that showed a pillar-to-pillar display across the entire

00:56:21   dashboard, which is funny, listening to a lot of different podcasts, I heard a lot of

00:56:25   people express skepticism about that one. You know, "Oh, that's, you know, something

00:56:29   like that's never going to happen." Well, actually, that's actually already in production

00:56:32   now in China on the new Lincoln Zephyr sedan, and it's coming to other vehicles as well.

00:56:38   So that type of display does exist today and will be coming to more vehicles.

00:56:43   Yeah. So one of the things about the—I had some theories, and I'm curious what your

00:56:49   your theories are, but I think we should at least touch

00:56:51   on Android Automotive for people who don't know about it

00:56:54   and the differences there.

00:56:56   And the way I got to thinking about Android Automotive

00:56:59   and whether Apple would ever consider doing something

00:57:02   like that is when I started to think about the fact

00:57:05   that you can't ship a car without a brain

00:57:09   and say, bring your own brain,

00:57:11   bring your own smartphone, right?

00:57:13   You can't do it. - Correct.

00:57:14   - And not just the low level stuff,

00:57:16   but like you can't say this car has no interface

00:57:19   unless you bring a smartphone, whether it's a rental car,

00:57:21   what like you need to be able to turn it on and use it.

00:57:24   And something needs to run that.

00:57:26   And if you've got a big touch screen on,

00:57:29   or even just a display that's not a touch interface,

00:57:32   all that stuff has to be driven from somewhere.

00:57:34   And what Google did is build Android Automotive,

00:57:38   which is this lower level operating system

00:57:42   that is integrated into the car.

00:57:44   It doesn't come with your phone, right?

00:57:46   it's in the car and that that is a different approach.

00:57:50   That's the bottom up, I guess, a little bit more

00:57:52   than top-down approach that Apple has done

00:57:54   and that Google has done with Android Auto.

00:57:57   Have I summarized it right?

00:57:58   Like what Android Automotive is?

00:58:00   - Yeah, so today, most cars on the road built

00:58:04   in the last decade use either BlackBerry's QNX

00:58:08   or some flavor of Linux to power their infotainment systems

00:58:13   and also instrument clusters.

00:58:15   And these are generally set up

00:58:18   as real-time operating systems,

00:58:19   especially for the cluster.

00:58:20   For the cluster, it has to be a real-time operating system.

00:58:23   So that means that everything is tied to time slices.

00:58:28   You don't need that necessarily for the infotainment.

00:58:31   If something happens a few milliseconds

00:58:34   or 100 milliseconds or a second later,

00:58:36   it doesn't matter so much for what's on that center screen.

00:58:39   But the stuff that's in front of you,

00:58:42   that stuff has to be real time.

00:58:44   And this is where the regulatory part comes in

00:58:46   because there are certain requirements

00:58:48   for things that have to be displayed.

00:58:52   Like for example, alert warning,

00:58:55   diagnostic warning lamps.

00:58:57   When you start up your car today,

00:59:00   you'll see a bunch of lamps that will flash on

00:59:02   for a couple of seconds.

00:59:03   That's part of the power on self test.

00:59:05   And then assuming everything's okay,

00:59:07   then most of those go out.

00:59:09   And then when a problem is detected

00:59:12   in some system in the vehicle,

00:59:13   then it'll turn on one or more of those lamps

00:59:16   and say, "Hey, here's what's going on."

00:59:19   That same sort of stuff, that stuff is mandated by law.

00:59:24   And so that has to be there.

00:59:25   So there has to be, as you said,

00:59:27   at least a minimal interface to begin with.

00:59:30   You cannot assume that there is going to be

00:59:33   any particular device that a driver's gonna bring along

00:59:35   and plug into the car.

00:59:37   - Right, and if I wanna turn on my windshield wipers,

00:59:40   I can't be like, "Sorry, that's a feature

00:59:41   "only available with a smartphone."

00:59:42   You can't do it. - Exactly, yes.

00:59:44   - So there has to be something there.

00:59:46   And so what Google did is say, "All right,

00:59:48   "can we get in there?"

00:59:51   I wanna mention, by the way, you mentioned QNX

00:59:53   and BlackBerry, and people may laugh a little bit

00:59:56   at BlackBerry, it's the old times.

00:59:57   QNX, yeah, it's absolutely used in this.

00:59:59   And I'll just point out, Apple set up a whole,

01:00:03   this is a story people may forget,

01:00:04   Apple set up a whole building next door to QNX,

01:00:08   and they didn't ever talk about why,

01:00:10   and everybody assumes it's Project Titan, the car project.

01:00:12   But Apple definitely at some point

01:00:16   was very much interested in people

01:00:19   who had experience building real-time operating systems.

01:00:22   Whether they still have those people,

01:00:24   who knows that Project Titan stuff

01:00:26   has gone through 80 different iterations,

01:00:29   but I'm just saying it's not impossible

01:00:32   that Apple has had a program to build its own version

01:00:36   of a real-time operating system for cars at some point,

01:00:40   whether they have it, whether they did it,

01:00:41   whether they gave up, I have no idea,

01:00:43   but they set up an office in Canada right next to QNX,

01:00:47   where they had the QNX people working.

01:00:49   So it's definitely been on their radar at least,

01:00:52   even if it's, I mean, who knows about today,

01:00:55   but it's definitely been out there.

01:00:56   - Yeah, absolutely.

01:00:58   And QNX, long before it was owned by BlackBerry,

01:01:00   or I think it was still called Research in Motion

01:01:03   when they purchased it, when they acquired it.

01:01:05   And QNX goes way back and it was designed

01:01:08   from the ground up as a super reliable

01:01:11   and secure operating, real-time operating system.

01:01:14   So it's used in all kinds of applications

01:01:17   that go well beyond consumer electronics devices or cars.

01:01:21   It's used in things like clear reactors

01:01:24   and all kinds of other stuff where reliability is paramount.

01:01:28   - Where you can't have a bad acting app

01:01:29   sort of prevent your speedometer from updating

01:01:32   or your nuclear reactor from working properly.

01:01:33   Yeah, it's important.

01:01:35   It's kind of important.

01:01:36   So what do you think?

01:01:38   Knowing what we know about Apple,

01:01:40   and we don't know everything, right?

01:01:42   'Cause we don't know about Project Titan,

01:01:43   and we don't know what their ultimate goal is,

01:01:45   and we don't know what all they've tried

01:01:47   and what they've ruled out.

01:01:49   But I have to say, when I looked at this, I thought,

01:01:52   are they gonna do their own version of Android Auto?

01:01:55   And Android Auto is open source,

01:01:56   and you can just take it and walk away with it

01:01:58   and do stuff with it.

01:01:59   and it's a very Google-y kind of thing,

01:02:01   and I can't envision Apple ever doing that.

01:02:03   I don't know, can you envision Apple going to automakers

01:02:08   and saying, "Well, you know, we're not gonna let you

01:02:12   "take the code, you know, take all,"

01:02:14   or maybe some of the source code, but it's not open source,

01:02:16   but like, but we're gonna go and say,

01:02:18   "Why don't you use our thing instead,

01:02:20   "'cause our thing is nicer, and it still does

01:02:22   "all the things that Android Automotive does."

01:02:24   Is that even plausible?

01:02:27   I think it's plausible, but I think it's unlikely.

01:02:30   And I'll tell you why.

01:02:31   One of the things that they talked about

01:02:36   during the presentation was they brought up this statistic

01:02:40   that 79% of new car buyers insist on having

01:02:43   Apple CarPlay in their vehicles.

01:02:45   And that is true up to a point.

01:02:48   What it's implying is that new car,

01:02:52   yes, the reality is most of the people that buy new cars

01:02:57   probably do want carplay.

01:02:58   But you also have to consider the fact

01:03:01   that the vast majority of people

01:03:03   don't actually buy new cars.

01:03:04   Most people never buy a new car in their lifespan.

01:03:06   Most people only buy used cars.

01:03:08   And used car sales outnumber new car sales every year

01:03:11   by about three to four to one.

01:03:15   And when you look at the, you know,

01:03:18   downstream at the market, you know,

01:03:20   once you get past the new car buyers,

01:03:22   used car buyers are probably, you know,

01:03:26   more likely to use an Android device, you know, because they're, you know, they're more concerned

01:03:30   about how much they're spending. And, you know, let's be honest, you know, I'm an Android user,

01:03:34   but I know that, you know, cost is a factor and is one of the main factors in why a lot of people

01:03:40   use Android. It's, you know, it's not necessarily my main factor, but for a lot of people it is.

01:03:46   But, and they still want to be able to have this kind of capability. And for automakers,

01:03:52   Yes, they want to be able to sell those new cars to people that want to use iPhones, but

01:03:59   they also are concerned about the used car buyers because that impacts what we call the

01:04:05   residual value of the car, the resale value of the car.

01:04:09   Once the car gets sold, once the original owner trades it in or sells it, it's going

01:04:16   to be bought by somebody else.

01:04:18   person may very well want to use Android Auto. And so if they did a full-blown operating

01:04:28   system like Android Automotive, if Apple did this, it would really need to support Android

01:04:35   Auto as well. Because if it doesn't, then that's going to have an impact on residual

01:04:44   values, which impacts the automakers in terms of how they can do their lease pricing, for

01:04:50   example, because that's how they figure out your payments for a lease.

01:04:54   Because they're knowing the residual value they get back when they put that in a fleet,

01:04:59   sell it to CarMax or whatever they need to do after the lease is over.

01:05:02   Right. And I have a hard time believing that Apple would want to support Android Auto on

01:05:08   their fancy new operating system.

01:05:11   To be fair, Android Automotive does support CarPlay.

01:05:18   So I feel like that almost there's this universal player thing, which is attaching it to a brain,

01:05:24   and that maybe even – that's a great open question.

01:05:28   If Apple's going to do this and get carmakers to sign on, they've got to support Android

01:05:33   Auto.

01:05:34   I think they would.

01:05:35   If that was the only issue, I think they'd be like, "It's fine.

01:05:37   It's going to be…"

01:05:38   One of those typical Apple things where it's going to be like, "Well, it's better with

01:05:41   an iPhone, but sure, sure, you can use your Android phone, but it's better with an iPhone,

01:05:45   of course, and you should have that. All right, so possible, but not necessarily super plausible.

01:05:51   I had a thought, which is like another way where Apple could do this, which is theming,

01:05:58   which is like, okay, Apple's showing us a bunch of stuff, and they said, "Oh, you've

01:06:04   got all these different controls you can use." And I kept thinking, like, is it all carplay,

01:06:10   Or is there a scenario here where Apple basically is going to have its onboard iPhone brain,

01:06:17   and then also it works with car makers to have sort of compatible themes that will make

01:06:26   it seem like a seamless whole even though it's actually kind of not?

01:06:31   I was trying to think like, "How else could you do this?"

01:06:33   And that was one of the thoughts I had.

01:06:34   It's like, "Oh, I know that that looks--oh look, I change it here and it changes it there."

01:06:39   "Yeah, but is that still CarPlay or is it using the different CarPlay theme that the

01:06:45   car maker has installed on their real-time operating system?"

01:06:48   Yeah, no, the theming is absolutely a possibility and actually that's more plausible, I think,

01:06:55   than some of the other things. Because even today, a lot of automakers already provide

01:07:01   the ability to select different themes for your instrument cluster. And when you go through

01:07:07   the drive modes, for example, and you go through your eco mode or your normal or comfort mode

01:07:11   or your sport mode, you'll see the instrument cluster completely change the way it looks,

01:07:16   you know, with different color schemes and everything.

01:07:19   So I can definitely see a world where, you know, this next generation of CarPlay projects

01:07:27   different themes, you know, that would integrate with whatever OS the automaker is running.

01:07:33   So all the stuff that's in the cluster is still coming directly from the car.

01:07:38   It doesn't have to go back through the phone and then back into the car again, but it's

01:07:45   using the phone to figure out what is, for lack of a better term, what is the style sheet

01:07:51   we want to apply to this data?

01:07:53   And so that, I think, is a real plausible scenario.

01:07:58   Because obviously this is not the kind of thing where Apple is going to roll in and

01:08:04   say, "Oh, we've hacked into your system and replaced it."

01:08:08   These are all like, "We're working with the car makers.

01:08:11   We're going to have partners here."

01:08:13   So I'm glad that you think that this is a possibility because that was when I was getting

01:08:17   into my conspiracy theories about this.

01:08:19   That was kind of where I ended up is, sure, it could be Project Titan and it could be

01:08:23   a real-time operating system.

01:08:24   I mean, it's possible, but you could do this by making partnerships with automakers and

01:08:31   having something like theming or some, and maybe even a special kind of, depending on

01:08:37   what operating system they're using, and that this is a year out, year plus out, some kind

01:08:43   of a data channel or a back channel or something where there's special stuff that the iPhone

01:08:48   can pass on to whatever operating system it's running.

01:08:51   there's some sort of a, I don't know a lot about those RTOSs, but like a

01:08:54   plugin architecture or a version that has the ability to communicate with the

01:08:59   iPhone at a deeper level and give it more detail and have the iPhone

01:09:04   send things to it, including themes and all of that, where it's more like where

01:09:09   CarPlay 2.0 or whatever this is, CarPlay Advanced, is more tightly

01:09:16   integrated with the car's existing real-time operating system if it's a

01:09:20   partner that has worked with Apple on that. And the advantage of that for the

01:09:25   car maker is they look good working with Apple without having to give up that

01:09:31   part of their car to Apple because it opens up that can of worms of like well

01:09:36   then what does it look like when the Apple product isn't there? Is it super

01:09:39   generic? What about Android? Is that the most plausible scenario of what Apple is

01:09:45   not describing when they show this and don't tell us what's happening? Is that

01:09:48   the most plausible scenario? I think so and and you know to give you an example of how

01:09:53   that might work, last fall GM announced something that they call Altify, which is their new

01:10:00   application platform for vehicles and it's rolling out next year starting with the new

01:10:03   Chevy Blazer EV. And essentially what this is, you know, if you know how Android is structured,

01:10:10   it's running Linux underneath and there's this layer, this application, this API layer

01:10:17   But, and I think iOS is fairly similar.

01:10:22   You've got the kernel underneath, and then there's this layer of APIs that applications

01:10:27   can get data from and then send commands to.

01:10:32   And this is what GM is doing as they move to a more centralized computer architecture.

01:10:37   Today, vehicles, most vehicles have anywhere from 50 to 100 or more individual computers

01:10:44   scattered around the vehicles for all the different functions, because it's been kind

01:10:47   of put together piecemeal over the last 30 or 40 years.

01:10:51   And so they're transitioning to consolidating that into a few large compute clusters.

01:10:56   And running on this for Altify, it's going to be running on Red Hat Linux underneath

01:11:02   with this Altify layer that all the applications, all the stuff that used to run on all these

01:11:07   discrete ECUs is now going to be running on one computer and instead of those applications

01:11:15   directly accessing the sensor data or the actuators, it'll do it by an API call to

01:11:21   Altify, which will give the data back and then it'll send a command back for what

01:11:24   to do.

01:11:26   And this is, I think this is kind of the way that you might see this next generation CarPlay

01:11:32   implemented where it has direct access through APIs to vehicle data. It can send through

01:11:41   style sheets or themes. And this could also be how you might do things like,

01:11:47   one of the things they talked about was operating your climate control using Siri or doing other

01:11:56   functions, other vehicle functions through Siri, you would use your wake word and then

01:12:03   it would send that request into the Altify layer and execute it that way.

01:12:08   Right. It's something like sending your thermostat on the touchscreen, another thing

01:12:13   where it could be an overlay that is actually from the car or it could be that if it's

01:12:20   something that doesn't really require the real-time component, that it's just a…

01:12:25   In the end, it's talking to the car operating system and saying, "What's the current thermostat?"

01:12:30   and now, like, "Here's a new setting for you."

01:12:33   Which sounds, again, why you need partners, right?

01:12:35   Because unless there's a big standard, which there could be, but it sounds to me more like

01:12:40   the kind of thing where they shake hands and say, "Okay, we're going to follow your spec,"

01:12:44   or "You're going to follow our spec," or "We're going to find a place to do that in common."

01:12:48   That Ultify thing is really interesting because that's the idea of GM saying, "All right,

01:12:54   We need to have a tech strategy that doesn't integrate a bunch of OEM parts. Like for the

01:12:59   21st century, what is our car base? So many of the reasons you know better than everyone

01:13:05   as somebody who is focused on the auto industry, the worst user experiences about cars, at

01:13:12   least in my – tell me if I'm right or wrong – I find the worst user experience

01:13:16   about cars is all because things aren't integrated properly. And you end up with the

01:13:20   proverbial dashboard with three on/off buttons on it?

01:13:24   Oh, it's only going to get better, Jason. Right now, there are cars you can get that

01:13:30   you can simultaneously run three different digital voice assistants.

01:13:34   Oh, yeah, yeah. Oh, right. That's right.

01:13:36   You know, driving a Ford vehicle right now, you can go out and you can use the built-in

01:13:44   voice recognition for a whole bunch of functions.

01:13:47   They also now have built in Alexa voice services.

01:13:52   So you can say, "Madame A, please raise the temperature,"

01:13:57   or "Madame A, please play your favorite band

01:14:01   from Amazon Music," or whatever.

01:14:04   Or at the same time, I can also just say,

01:14:08   "Hey G, do many of the same things."

01:14:12   and on GM cars that have Android automotive now,

01:14:16   I can jump back and forth

01:14:18   and use any of the three wake words to do this.

01:14:21   And then if you have an iPhone plugged in instead

01:14:26   into an Android automotive vehicle,

01:14:27   now you have a fourth with, hey, Schlomo.

01:14:31   - Yeah, I mean, I guess the opposite extreme

01:14:34   would be something like Tesla,

01:14:36   where they've just decided, which on the one hand,

01:14:39   Tesla, what I appreciate about that

01:14:41   is the whole widget kind of approach that Tesla has taken

01:14:44   where it's like, no, no, no, we're doing this.

01:14:46   It's gonna be unified.

01:14:46   We're thinking about this from the top down

01:14:50   and it's gonna be what it is.

01:14:51   The downside of that is,

01:14:53   yeah, there aren't three voice assistants on the Tesla.

01:14:56   I don't think there are any, but they also refuse-

01:14:59   - There is some voice rack, but it doesn't work very well.

01:15:01   - Right, well, and they refuse to use Android Auto

01:15:06   or CarPlay, which I also find infuriating

01:15:09   because again, I think it's a user experience problem

01:15:13   on the other side, which is like, look, it's my phone.

01:15:15   Like having driven a Tesla for a couple of weeks last year,

01:15:19   I have my podcasts in Overcast

01:15:21   and I would like to play them with that interface.

01:15:24   And Tesla's like, no, use Bluetooth.

01:15:28   Or I have Apple music.

01:15:29   It's like, well, we got a Spotify app here.

01:15:31   You could switch to Spotify for your car.

01:15:33   No, I'm not gonna do that.

01:15:35   So that's a frustration,

01:15:36   But at least they have that kind of high level of,

01:15:39   we're taking care of everything.

01:15:41   Whereas a lot of the cars, it feels very much like,

01:15:43   for obvious reasons, it's been built up over years

01:15:46   and years and years.

01:15:47   And the whole idea of like, I take this part from over here

01:15:50   and I take this part from over there, and it's like,

01:15:51   oh, now we've got a computer in this part.

01:15:53   Well, we've got one in this part too,

01:15:55   but they don't really talk to each other.

01:15:57   And that gets back to the thing that I get in my mom's car.

01:16:00   And I try to turn off the radio

01:16:02   when I turn off the air conditioning,

01:16:03   because there's two identically sized power buttons

01:16:07   right next to each other.

01:16:09   But they run completely different systems.

01:16:11   - That integration is something that's starting to happen.

01:16:14   And approaches like Ultify

01:16:17   and some other manufacturers are doing

01:16:19   will help with that by bringing it all together

01:16:23   on a common computing platform.

01:16:25   And I think that's gonna be a key going forward

01:16:28   as we move into this era of electric vehicles.

01:16:32   in the past, product differentiation used to come through the way a car looked, the

01:16:37   way a car handled and rode, the way the engine performed and sounded.

01:16:42   And at least from a ride and handling and powertrain perspective, a lot of that falls

01:16:46   away with electrification because all electric motors basically feel the same.

01:16:52   And so now they want to find different ways to create some differentiation.

01:16:57   And part of that is allowing the user to personalize their experience in the vehicle and by giving

01:17:04   them options.

01:17:05   You know, the reality is that, yeah, you may have three or four assistants available to

01:17:09   you in the vehicle going forward, but you're probably going to pick one and go with that

01:17:14   one.

01:17:15   And that's fine.

01:17:16   And it works just fine.

01:17:18   Pick the one that you like and that works best for you.

01:17:21   And I think that's actually a good solution.

01:17:24   that extends to doing things like themes,

01:17:26   different graphics schemes and so on.

01:17:30   - Well, in the end, I mean, this is a tech analysis of it

01:17:35   but I think it works when you talk about user experience

01:17:38   in general, which is nobody cares.

01:17:42   I know there are people listening to this podcast

01:17:43   who do care, but for the most part,

01:17:47   nobody cares about how that happened.

01:17:50   They just care that it happened.

01:17:51   And so like if you step into a car in 2024,

01:17:56   and it's got CarPlay on the dash,

01:17:58   and it's got the Apple design theme that you chose,

01:18:01   and it lights up all the dashboard items,

01:18:04   and you're like, "Ah, yes, CarPlay is everywhere."

01:18:07   It doesn't really matter

01:18:08   what the underlying operating system is,

01:18:11   and whether it's that the map that's in that screen

01:18:14   that I grabbed from the keynote of like Apple Maps

01:18:17   is running right behind the steering wheel,

01:18:19   but there's the fact that it's in Drive,

01:18:21   and the miles per hour are on it.

01:18:23   And like, okay, well, those are actually coming

01:18:26   from the real-time operating system

01:18:28   and the map is being sent by Apple

01:18:31   and being composited by the operating system.

01:18:33   And like, nobody cares.

01:18:34   If it feels like when I step into my car,

01:18:38   oh, it's my car, it's the way I want it

01:18:40   and everything is being run based on my settings

01:18:43   on my iPhone, like that's, or your Android phone.

01:18:47   But like, that's, I think that's in the end what matters.

01:18:50   And I think it's better not to feel like

01:18:54   I'm running three different things

01:18:56   in three different screens, right?

01:18:57   Like that's awful.

01:18:58   So if Apple's initiative here ends up

01:19:01   having this kind of integrated feel, that's great.

01:19:04   It's just like, we need to be realistic

01:19:07   that there's not gonna be,

01:19:09   if you don't have a phone and you step into a car,

01:19:12   the valet is gonna park your car

01:19:14   and it's just like a gray screen.

01:19:15   Like you can't, it can't be that.

01:19:18   So it has to be something else.

01:19:20   - Yeah, absolutely right.

01:19:21   - What, give me some odds of how you think

01:19:26   this is gonna go.

01:19:27   What's the, is it gonna, is this gonna be a thing

01:19:29   that Apple makes a big fanfare about

01:19:31   and then it kind of quietly doesn't happen?

01:19:33   Or do you think that something more than like a handful

01:19:36   of car models is gonna happen with Apple and car makers?

01:19:40   - I think something's definitely gonna happen.

01:19:42   You know, I've been working in the auto industry

01:19:44   for over 30 years as an engineer and a writer

01:19:48   and podcaster and an analyst.

01:19:51   And this is the most interesting time of my career.

01:19:54   It's funny, I was recently doing a project for Motor Trend

01:19:59   on software-defined vehicles and talking to some people.

01:20:02   And this idea, we've moved from,

01:20:05   we've had software in cars since the 1970s.

01:20:07   I was working on software in the early '90s

01:20:10   for ABS and traction control.

01:20:14   We were writing code in Intel assembler for an ADC 196 microcontroller.

01:20:21   Boy was that fun.

01:20:22   And we've gone from software enabled to software defined.

01:20:26   This idea that I talked about with customizing the user experience and being able to do things,

01:20:33   having a base set of hardware and adding software to create new experiences or new functionality,

01:20:40   I think is really fascinating.

01:20:43   it's gonna be an interesting time. And it's gonna be a challenging time for a lot of people

01:20:48   too, especially as you've got companies that want to start charging you a monthly subscription

01:20:51   for heated seats. We don't need to go down that path right now.

01:20:56   Yeah, tech ruins everything, doesn't it? Well, thank you so much for being on Upgrade

01:21:02   as a vertical guest in the automotive vertical, a true vertical, not just a sarcastic upgrade

01:21:08   vertical but an actual vertical. I should say, so principal analyst for e-mobility research

01:21:13   with Guidehouse Insights, the Wheel Bearings podcast, wheelbearings.media, if you want

01:21:18   to check that out. Are those the best places for people to find you?

01:21:21   Yeah, and you know, just Google my name, you know, I'm on Twitter. I don't do Facebook.

01:21:26   I quit Facebook multiple years ago. But yeah, that's probably the best places to find me.

01:21:32   All right. Thank you so much for being here.

01:21:34   I'm happy to be here. Thanks, Jason.

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01:23:05   It is time for #AskUpgrade.

01:23:07   I have a bunch of questions from Upgradients.

01:23:14   The first, John who asks, "With the added functionality for the lock screen in iOS 16,

01:23:21   do you expect that you'll be changing your background photo more often?"

01:23:26   I did change mine.

01:23:27   I have used the same image for like two years and it didn't look as good as I wanted and

01:23:34   And so I ended up changing to a really good photo I have of my wife, Adina, and I like

01:23:38   it way more.

01:23:39   It just fits way more with the overall aesthetics of what Apple's going for, I think.

01:23:44   I think that that's really people and buildings, I think, ideally what you want to be doing

01:23:54   and what I think Apple would like to promote you to do.

01:23:57   I think I'm going to change the picture on my lock screen more often.

01:24:03   I wish, and I know that this has changed in the betas,

01:24:06   but I don't consider the wallpaper behind my home screen

01:24:10   the same as my lock screen.

01:24:11   I think they're very different

01:24:13   and they have different purposes.

01:24:14   And I want like things to appear on the lock screen,

01:24:16   whereas I want the home screen to be pretty neutral.

01:24:19   And one of the things that really bothers me

01:24:21   about the beta implementation of this feature

01:24:23   is that it constantly wants you to override your wallpaper

01:24:27   when you change your lock screen.

01:24:29   And I just wanna be able to say no thanks

01:24:31   because I kinda like my wallpaper

01:24:34   and I don't need it to be changed.

01:24:35   - It's easier to do that now,

01:24:37   but still it makes you do it and I wish that it did.

01:24:40   - I hate it.

01:24:41   - Yeah, I don't need to go through that

01:24:43   every time I change anything.

01:24:45   - I edit a widget and it says,

01:24:48   "Great, would you like to change your wallpaper?"

01:24:50   I was like, "No, I, no."

01:24:51   - If I'm changing my wallpaper, fine, you can ask me,

01:24:54   but if I'm editing a widget, leave me alone.

01:24:57   I don't need to change my background anymore.

01:24:59   - Make it stop.

01:25:01   So that's where I draw it all in.

01:25:02   But yes, I think on the having multiple lock screens

01:25:05   with different images on them, I think is a lot of fun too.

01:25:08   And so like Apple Watch Faces,

01:25:11   you have the ability to switch between them

01:25:12   and that fundamentally will mean

01:25:14   that the background pictures change more.

01:25:16   - And then Jay Young asks,

01:25:21   what widgets or complications are you currently using

01:25:24   on your iOS 16 lock screens?

01:25:27   - Oh, I have a scriptable widget

01:25:32   that shows my current temperature and conditions

01:25:34   at my house.

01:25:35   - I wanna talk, we're gonna talk about this

01:25:36   in more detail at some point in the next few weeks.

01:25:38   I wanna get into what you've been up to.

01:25:40   - It's early, but yeah, I do have that, which is great.

01:25:43   So that's the one right now.

01:25:44   I imagine I'll do more.

01:25:46   I haven't gotten back to that,

01:25:47   but that was the first one where I had a little,

01:25:50   there's a scriptable beta where I can actually do widgets

01:25:52   that are on the lock screen and that is fun.

01:25:55   'cause I've been using them for the home screen

01:25:58   for a while now, but the lock screen is now supported

01:26:01   in the beta of Scriptable,

01:26:03   and I'm just getting started with that.

01:26:06   But having the live like temperature,

01:26:08   the same temperature that's in my menu bar of my Mac

01:26:10   is now on the lock screen of my iPhone, and that's awesome.

01:26:14   - So I'm using a bunch, obviously, you know me.

01:26:18   The one that goes on top of the time,

01:26:21   I think it's called Inline.

01:26:23   just text. I'm using Apple's calendar right now. I like it because it tells me to date

01:26:27   and my next appointment. Eventually I hope to change this to Fantastic Al. I hope that

01:26:34   they will also have this same configuration. I like it. I then have weather. I will eventually

01:26:41   change this to Carrot Weather. And that's in the one that's got a bunch of text. It's

01:26:44   like the long rectangle one. It's giving me the current conditions. And I expect that

01:26:51   But Cara Weather will let me choose everything that goes there, the same as they do with

01:26:55   widgets.

01:26:56   Then I'm using a Timery, current time tracker one.

01:27:01   And then a pedometer app thing.

01:27:06   I'm not saying where, because that's all in beta.

01:27:12   The Timery one's in beta, but they've spoken about it publicly.

01:27:15   But I also have my steps being counted as well, which I like.

01:27:18   That's what I have right now.

01:27:20   I don't know what it will look like when I actually get more of these from the apps that

01:27:24   I use.

01:27:25   I only have two apps right now that I'm on the beta for that have this included in them.

01:27:31   One is Tymerean and the other is the one that showed me my steps.

01:27:36   That's what I have right now.

01:27:37   And I don't know how much more I'll change except for where I've said like I'll swap

01:27:42   things out for the actual apps that I use.

01:27:45   That's what I'm waiting for is I'm waiting for the other apps that I used so that I can

01:27:48   and browse through those and see if there are ones there

01:27:50   that I wanna integrate too.

01:27:51   But I'm also okay, at this point, I'm also okay

01:27:54   with the fact that I can build my own if I need to,

01:27:56   which is kind of fun.

01:27:57   - But that kind of, the kind of information

01:28:00   I have there right now is the kind of information

01:28:03   that I would want on my lock screen.

01:28:06   That's the kind of stuff.

01:28:07   - A calendar thing for sure.

01:28:08   I'm just, I don't wanna use Apple's calendar stuff.

01:28:10   So I'm waiting for fantastic help in the fall.

01:28:14   And I will definitely add that somewhere.

01:28:17   A question of where, right?

01:28:18   'Cause that up by the date is really powerful

01:28:21   and yet it's also really limited

01:28:23   'cause it's just that little inline text snippet.

01:28:25   - I think that for me, that's perfect.

01:28:27   If, because I like that I can also get

01:28:30   that added piece of information on the lock screen,

01:28:32   which is the date.

01:28:34   I like that.

01:28:35   - Sure.

01:28:36   - I like that being there.

01:28:37   Eric asks, "I needed to get an M1 iMac for a family member

01:28:42   and they are way back ordered or unavailable.

01:28:45   Do you think this is supply chain related

01:28:47   or do you think there's a pending update?

01:28:50   - I think it's supply chain related.

01:28:51   Mark Gurman is to be believed.

01:28:54   They're not even worried about an M2 iMac right now.

01:28:57   And maybe I hope there is an M2 iMac,

01:29:00   but I feel like this is supply chain related

01:29:02   and factory shutdowns.

01:29:03   And they were probably prioritizing the laptops

01:29:05   and that's why.

01:29:07   - Yeah, I think like going back

01:29:08   to what we were talking about earlier,

01:29:10   clearly the Mac is most impacted right now.

01:29:12   And as you said, they're probably,

01:29:15   if it's legacy node related,

01:29:16   they're probably cannibalizing some chips

01:29:18   to go in other places, you know, like.

01:29:21   - I think, yeah, I think selling a lot of MacBook Airs

01:29:24   that are very, very popular

01:29:25   is gonna take more money off the table

01:29:28   than having a bunch of iMacs in inventory, right?

01:29:31   So I think that's it.

01:29:32   I mean, Apple loves all its computers equally,

01:29:35   but you know, if you have to choose

01:29:38   getting that new MacBook Air out there

01:29:40   or prioritizing the iMac, I know which one I would choose.

01:29:44   And Ramon asks, what do you think about replacing

01:29:48   the potential of Apple replacing the 13 inch MacBook Pro

01:29:52   with a 12 inch MacBook Pro that has a new design?

01:29:55   Perhaps there's some options to put faster chips in

01:29:59   or maybe a better screen, that kind of thing.

01:30:01   - Don't think Apple is gonna do a 12 inch Pro.

01:30:06   12 inch Air, yes.

01:30:10   12 inch Pro, I don't think so.

01:30:12   I think smaller, packing more heat into a smaller area,

01:30:15   it's just not a thing that they're gonna wanna do.

01:30:17   So I think, I just don't think that's likely.

01:30:21   I think that the 14 is the new 13

01:30:24   and the 13 is a weird outlier computer

01:30:26   that will go away at some point.

01:30:28   And then the MacBook Pro will be the 14 and the 16.

01:30:30   - Yeah, I'm thinking we're more likely to see

01:30:34   the removal of that product completely

01:30:38   and replaced with more MacBook Air options

01:30:41   and bringing the prices down over all over time

01:30:46   and then that just reshuffles and that thing disappears.

01:30:49   I think that's it.

01:30:51   If you would like to send in a question of your own

01:30:54   for us to answer on the show, just send out a tweet with the hashtag #AskUpgrade

01:30:58   or use question mark #AskUpgrade in the Real FM members discord.

01:31:02   I would like to thank Capital One, Bombas and Sourcegraph for the support of this episode

01:31:06   and of course thank you for listening and a special thanks to our members

01:31:11   who subscribe to Upgrade Plus. If you want to find Jason online in the

01:31:15   meantime until next week's episode you can find him at sixcolors.com

01:31:19   the incomparable.com and Jason hosts many more shows here at Relay FM just

01:31:24   like I do you go to relay.fm/shows and find

01:31:27   a new podcast put in your queue. I am @imike and we'll be back

01:31:33   next week. Until then Jason Snow. Say goodbye.

01:31:38   Goodbye everybody.

01:31:39   [music]

01:31:45   [ Silence ]