What happened at the event yesterday, and what galvanizes it today. Right. So, I mean, I think I think we were very disappointed at the Apple generative AI stuff. First, they put it last. As you said, they talked for 65 minutes about new colours and new things. That itself felt like Snapchat type of functionality. And then in minute 65, they started talking about the only thing Wall Street cares about because this company has very anemic growth. They're going to report 1% revenue growth this year. And what we really wanted to hear was what's going on with generative that's going to force an iPhone replacement cycle to drive that 1% revenue growth higher to two, three, 4%. And there is nothing I felt that they'd announced that made consumers want to run out and replace their iPhone. And now we have to wait a year because they have an annual replacement cycle. So now if you didn't like what you heard

yesterday, you have to wait a year till
the next cool, generative AI stuff. So I mean, I thought it was a very
disappointing day, which is why the shares were down 2% as soon as they
finished speaking. Today, they're up 6%.
Maybe because the developers are finding cool ways that they can integrate these
functionality into their own individual apps.
Yeah, but I thought it was too little too late.
They continue to be way behind on generative A.I.
and they need to catch up and they seem to be trying to catch up with for now
third party relationships. What is the flow of money here, Laura
Because they're not going be charging us for the joy of being suddenly able to
use chatbots should we wish to do how much they could be paying in, opening
out, how much money are they going to be having to spend, or is it good that they
don't need their own GPU hole to

certain extent?
Yeah, they say they're going to be using their own servers within that to sort of
hold on to the iOS data in their own servers in the cloud over at Microsoft.
So I do think they are still continuing to focus on privacy.
But I think the way the money works is that they will the way these deals
typically work is that Apple will pay the Microsoft cloud in chat chips,
probably a fixed fee per month, and then they'll put it into your iPhone price.
So your iPhone price is going to go from 1400 dollars to 1500 dollars, and you'll
pay for it up front if they find they are heavy users.
My guess is they add a monthly tier. You know, I pay $20 a month right now
for GPT four. My guess is Apple gets that for a lower
price, but they probably a surcharge heavy users of that particular
functionality. I think a lot of people because of the
privacy issue will not use it will not

call out to the cloud to chat.
And then Apple doesn't. Isn't it's not costing Apple anymore for those users.
So maybe this key concern reference by Anonymous will be listened to by some in
the crowd. Laura, you the reason we love having you
on the show is the breadth of analysis you do across so many of the tech pairs
and entertainment. I'm interested as to who is winning the
charge of any of the actual device makers or operating system providers.
I mean, is Alphabet doing any better with the Google offering?
The only thing that's strategic position for Google Alphabet is better because
they have cloud, so they get it cheaper because they own it.
They have Android, which is the direct competitor to iOS.
They have an ad-driven business in search, which means they have a lot of
first-party data. They have YouTube and the World World's
moving to video. As we know, YouTube is the number one
streamer and makes a lot of money.

Now it's the largest subscription
streaming service, as well as the largest ad-driven service, which gives them
first-party data. So it feels like their strategic
position is a lot better, even if they're sort of inferior.
And every one of those things they do, the fact they do them all gives them
really strong, better data on you, and also more ways to make money from you.
And they don't feel like they're strategically in a box.
Apple feels to me like it's strategically in a box.
It can't participate in generative AI except for through its million,
1,000,000,005 users. And that isn't really true of Google.
It feels like it's going to participate across the globe in its 3 billion users
a day that come in for search.

Apple Did Too Little Too Late: Needham's Martin

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