We can get to the discussion about a supercycle about year-on-year generations of iPhone. But for me, the simple question is, does the consumer or iOS user understand how they're going to use artificial intelligence through Apple intelligence in their daily lives? And I think what's been happening all the time is the fact that, you know, they have it in the background. It's ambient, the ability to write better, the ability to take an image and have it actually transform into a picture, the ability to actually suggest, make suggestions for you grammatically. That's all been happening in the background. Apple's view on AI is very different than everyone else's. It's mass personalization at scale. It's privacy. And more important, it's the ability to actually do that in the background as an ambient experience. That's what makes it so special. And people trust them much more than other eyes. I find the chronology and timeline

of what's to happen interesting. I have an iPhone 15 pro. When we were here one year ago, I went out and upgraded. Will I upgrade in the 16? I don't know. But Apple intelligence will be available to me nonetheless. How do you interpret that? Yeah, I think it's really important. A mass of mass majority of subscribers are basically on a subscription model, and so they're just going to renew on that cycle. So every three years, every four years. That's going to be the area that you see that. So the move to 5G, that was actually one of the moves. The move to AI is going to be the next set of moves, and that's causing the refresh cycle. There's 1.3, 4 billion iPhones out there. And of course, it's going to be a 240 million reset refresh cycle, the 250 million refresh cycle, that's going to happen every 3 to 4 years, and

especially if you've got a carrier contract where you're paying a monthly fee and subscription revenue. Right. That cycle, you talk of those numbers that need updating and upgrading. They're not just in America, they're in China and they're in the EU. We've just heard about the limitations of Apple intelligence there and also the market that's being hoovered up by Huawei. What do you make of that competition? Yeah. So Huawei's competition is going to be limited. They won't be able to actually sell in the U.S. So even if they have 3 million orders, as they mentioned already and be small, that's going to change the market just in the outside markets outside of the U.S. But you also see Apple pushing hard into India and that growing market. I mean, it's a status symbol. It's a luxury device. It's not just a functional utility. So that's a very, very different market. And their pricing at different they're

coming in at some different price points and market points. There is something fascinating happening in China, which is very simple. Apple intelligence will not be available there, but they. Delighted nonetheless. So even if they can't access it now, they might upgrade because of the promise that it will come eventually. What is your research tell you about that phenomenon? I guess. No, we see that happening everywhere. People are looking forward to some of those features. I think at the end of the day, Apple's going to have to comply to country regulations. They're going have to do it for the EU. They're going to have to do it for China. Air regulations are going to be very regional. You might see that emerge as well in the Middle East. I'm headed out to the Middle East for the Global II summit and we're going to be talking about and hearing some of those things as well.

Why are you worried? It doesn't sound like you are. It sounds like even with a market no longer being the top five player in China for Apple and indeed some of these limitations in the EU, it sort of doesn't matter. You think there will be a supercycle no matter what? I definitely believe in that supercycle because all the forces of subscription, all the forces in terms of, you know, status symbol and of course the features that are going they might be they might be spec bumps. But the bottom line is consumers are going to stick with what they have given their ecosystem. Given the access to Apple services and more importantly, the fact that, you know, that is their only access point right now in terms of privacy. And I rea real quick, wearables refresh how important? Oh, I think the wearables that are important because that's the entry point for a lot of folks. So a watch refresh is going to be

important, and maybe we'll see something for AirPods.

A Look at Apple's iPhone 16, New Devices

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