Loading summary
Transcript96 lines
- [00:00]
A
Data threats don't knock. They sneak in quietly make themselves right at home. But when you partner with Veeam, you can spot threats before they're a threat to your business. Whatever the world throws at your data, it's all good. Get data resilient@veeam.com that's ve. Com these days, AI can help you adopt better time management, but it can't stop colleagues booking meetings during lunch. But how about being able to easily adopt industrial AI to streamline your business? Siemens Xcelerator helps you find the right AI providers and easily understand what they offer so you can use modular solutions to quickly scale up and grow your business. That's AI for real from the global market leader in industrial AI, Siemens. Learn more on USA.siemens.com AI running small and medium sized businesses is hard work because business owners need to be sure their ads are working just as hard as they do. Amazon Streaming TV ads makes your marketing dollar work harder. With Amazon ads, trillions of insights help small and medium businesses reach the right customers that matter. Your ads will show up during the shows the people are actually watching and.
- [01:13]
B
Measurement tools show you what's working the hardest.
- [01:16]
A
Gain the edge with Amazon Ads Bloomberg Audio Studios Podcasts Radio News Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech. I'm Caroline Hine in New York.
- [01:44]
C
And Ahmed Ludlow live in Cupertino from Apple is the company's biggest product launch event of the year and we're waiting for the next generation of iPhone, smartwatches and much more.
- [01:54]
A
Carrie and let's just talk about what Apple is already pricing in from a market valuation perspective. Ed I'm looking at Apple off by 6, 10% as perhaps we bought the news into this unveil. Usually stock does sink after a product launch and this one is the iPhone 17. Ed but let's look at it on a longer term basis. This company has added $430 billion in market capitalization since the end of July alone. We have really rallied. Not enough to bring it green in a year to date perspective though. Ed but that's because we continue to worry about trade and so overhangs.
- [02:29]
C
The way I think about it. World's third most valuable company Half of revenue is iPhone. Apple's biggest product launch of the year is today and the company, which has fallen behind in the generative AI race, will focus on hardware. Show off the new iPhone 17 range let's bring in Bloomberg's global consumer tech managing editor Mark Gurman, the Basics 17 base model through Pro and Pro Max. And in The Middle A17 per your reporting, explain the features that come with the 17 air mark. But also why does that matter?
- [03:00]
D
The 17 air, that's going to be the big deal today. This is a slimmed down phone. On paper, it's a third thinner than the other new iPhones that you're going to see today. And this is an entirely new industrial design. It's something brand new for the company. They have not done an air phone to this point. Obviously there's the MacBook Air, there's the iPad air, and now there's going to be the iPhone air. This is going to be a pricey phone, not as pricey as the pro models, but it's going to be quite expensive, right? Somewhere between 900 and around $1,000 give or take. It's going to only have one camera. It's going to have drastically less battery life than the pro models. But this is going to be exciting. It's going to get people really interested in the phones this year. It's going to help draw people to Apple stores. It's going to give Apple a way to have a big marketing push going to the holiday season. But in my view, as I've written, the most popular phones will still remain the pro phones and those pro phones will also still be the most practical new iPhones because of the better battery life performance and cameras.
- [04:02]
A
A lot of this, as you told us yesterday, is sort of a warm up act to a foldable phone. Having to make it as slim as possible and redesigning that camera. Tell us about some of the health perks that we're going to be getting. You've got a whole new lineup of smartwatches. We've also got AirPods really lifting their game.
- [04:17]
D
So the AirPods Pro 3, that is going to be a health centric upgrade. Last year they added hearing health features. This year they're adding heart health features. So you're going to have a heart rate monitor in the AirPods for the first time. This is interesting for people who want to work out with their earbuds, which obviously is an extraordinarily common use case. But people who don't have Apple watches, right, the Apple watch, right. If you're like me, you have an Apple watch, it has a heart rate monitor on there. But the total addressable market because of the price and the more ubiquitous nature of the earbuds category will bring heart rate to more Apple customers. And if you're an Android user, right you might find that to be an easier way to get into the Apple ecosystem as well through the AirPods. So definitely a big upgrade there. The smartwatches, you're going to see the biggest overhaul to the Apple Watch lineup in three years. You're going to see updates to the SE which is their low cost sub$300 watch. You're going to see a series 11 minor after the big series 10 overhaul last year and then a pretty big update, the biggest update ever to the Apple Watch Ultra. Slightly bigger screen, 5G red cap, so faster Internet connectivity, big thing satellite capabilities. So if you are on the go in a mountain range without cellular connectivity and you don't have your phone with satellite, now your watch, the Ultra watch will have it. Apple is going squarely today after Fitbit and Garmin.
- [05:39]
C
Mark, pricing is going to be a story either way, right? Either Apple raises prices, passes it on to the consumer or they don't. They eat that cost largely relating to tariffs and then the carriers come in with trade in deals. What do we know about those three factors?
- [05:55]
D
Yeah, so the pricing is interesting. You're right. Either way it's, it's going to be good. Noteworthy. It's interesting because Samsung and Google both recently rolled out new phones and they did not increase their prices. So the precedent is not set there for Apple to raise the prices. Even though they do have the air cover of tariffs. If they do raise prices, they're not really going to get into it. But if they did, my bet would be they explain it away as this is the first redesign. Major camera upgrades, new processors, whatever, whatever, whatever. They're not going to blame Trump in tariffs because we, as we all know that is a no no with this administration. In terms of carrier deals, I am expecting an extraordinary amount of trade in specials and deals from all the major carriers in the U.S. apple has been working the last several months with these carriers to ensure that that there are major deals in place. To me that implies there will be some tweaks to the pricing strategy and this could be positioned as a way to offset any of those changes.
- [06:50]
C
Bloomberg's Mark Gurman who will be with us on the network for coverage out throughout the day. Thank you very much. Let's get more. Carolina Millionaires president and principal analyst at Creative Strategies. You have a Galaxy S25 edge handset. It is the Samsung Slim Thin phone. Yeah, it is a segment. So you've got Marks reporting there on A17 air. Again, why does it matter?
- [07:13]
E
For Samsung, it was clearly a stepping stone to a much thinner fold 7. They didn't put a lot of marketing behind the product. To your point is a segment. It's not. Consumers are screaming for thinner phones, but we also haven't seen much difference in design for a long time. You know, all the phones kind of look the same. The thing that changes the most is the back where the camera is. So it'd be interesting to see if the rumors are right that Apple is changing that part of the phone because it's going to be very obvious that you have a new model of your iPhone. But yes, the thinner phone is something that vendors seem to be doing to lead their way to a foldable. Which would make me wrong about Apple doing a foldable iPad before an iPhone affordable iPhone, which was always my theory.
- [08:01]
A
Your theory unfoldable though is one that we listen to because eventually we do anticipate a foldable phone from Apple. But they lag there behind competition and of course everyone says they lag behind on generative AI. Does that matter to a consumer?
- [08:14]
E
I don't think that consumers are going into a store asking for AI and I think what plays in Apple's favor, although they don't have a ton of time, is the fact that there's the assurance that when they're ready, the software will come with all the phones that you already have. So if consumers are drawn to this year's models because of the change in hardware design, they know they have peace of mind in going in and buying now, knowing that when Apple intelligence redesign will happen, they will have access to it.
- [08:50]
C
Carolina, what do we know from third party data from Consumer Trends about what happened after iPhone 16 launch, particularly on Pro, you heard Mark explain that whatever happens with pricing, the carriers will come out and say trade in your handset. Lots of people get really frustrated, particularly in the USA where they say I only just got a 616 Pro. Is there going to be enough in the capability to drive me even with a trade in to upgrade?
- [09:16]
E
Yes. Last year's upgrade from the carriers were very aggressive. The trade in pricing was really good for consumers. I think as as always you have a segment of the market that is going to hold on to their phone no matter what. The where it really makes a difference is the early adopters that will get that bump. Usually the hardware redesign really drives a lot of upgrades and I think that between what we've seen as rumor colors and then the fin design people will get into the store. Whether or not they'll decide to buy, we'll see depending on pricing. As you just discussed with Mark, May.
- [09:51]
C
I ask, in a quick fire round, how many iPhone events have you been to?
- [09:54]
E
Oh my God. Since 2007 so many times we always.
- [09:59]
C
Say this is the biggest event for Apple in the year. I put it back to basics. IPhone is more than half of revenue but this idea of a 17 generation with a thin and air thrown in the middle, where do you think that ranks in the history of the sort of storied Apple launches?
- [10:14]
E
I think is to me true that this is a stepping stone to foldable is a moment that is going to redefine the next generation. It'll be interesting to see how much they get into the architecture of the actual device, what they change, how they redesign. Making something thin is really hard when it comes to the phone from you know, battery size to not compromise your battery life which was the biggest drawback for Samsung. And then the camera, the camera capability. You cannot have the same camera set as you do on a Pro Max. So how do you reinvent your camera to make sure that there's no compromise for people that care?
- [10:53]
A
Carolina, talk to us about caring on wearables. How important are the new iterations of AirPods of the watch is going to be for you?
- [11:03]
E
I think they're really important and there is a reason why Apple always does these three products together because it is the trifecta of what Beam Mobile is. I do think that the art rate monitoring on the AirPods if true is going to be really interesting for Apple. There are people who don't want to wear a watch or people that cannot afford for to add that to their list of products that they own. And so having AirPods allowing you to work out and do what you need you will see my guess is is a strong Upgrade from regular AirPods to Airport Pro and so nice revenue uptake for Apple.
- [11:41]
A
What about to the bottom line? What about pushing up the price points of these?
- [11:47]
E
It'll be interesting to see if they pushing up the price point. I agree totally with Mark that they cannot blame me on tariff if they do there is the president of both Google and Samsung not raising prices so it'll be really hard for them to do that. I also do think that there are moment where they want to make sure that their install base upgrades to the latest devices so that they have the latest chipset. That at the end of the day is what is going to matter for for Apple intelligence and AI in general.
- [12:18]
C
Carolina, when you're sat in the Steve Jobs theater, what is the one thing, the absolute focus for you in that moment that you're tracking.
- [12:25]
E
I'm still looking at how Apple brings everything together so that consumers stay tied to the ecosystem that is going to be their biggest ticket to winning when it comes to AI.
- [12:36]
A
Carolina Melanese, President Principal Analyst at Creative Strategies. She's going to be back on Bloomberg again after Apple's keynote this afternoon, so stay tuned. Meanwhile, coming up, Europe's infrastructure company Nebby is soaring after it said it will provide Microsoft access to GPU infrastructure capacity. This is Bloomberg Tech Data threats don't knock. They sneak in quietly, make themselves right at home. But when you partner with Veeam, you you can spot threats before they're a threat to your business. Whatever the world throws at your data, it's all good. Get data resilient@veeam.com that's V E E A M.com Every business has an ambition. PayPal Open is the platform designed to help you grow into yours with business loans so you can expand and access to hundreds of millions of PayPal customers worldwide. And your customers can pay all the ways they want with PayPal, Venmo pay later and all major cards so you can focus on scaling up when it's time to get growing. There's one platform for all business PayPal open grow today at paypalopen.com loans subject to approval in available locations.
- [13:50]
F
Your next product launch is coming fast. Don't let billing slow you down. Legacy systems can't handle usage based billing. That means your team is stuck gluing code together, piecing through spreadsheets and running ad hoc queries just to figure out what to bill. With Metronome, you can roll new pricing in minutes instead of months, whether it's usage based, seat based or a hybrid model. Visit metronome.com to see how companies like OpenAI and Anthropic launch billing as fast as they launch products. That's metronome.com.
- [14:26]
A
Nvidia it plans to offer a new product design to make certain types of AI work more efficient, such as video generation and software creation. Now the product, called Ruben CPX, will debut at the end of 2026 and will be offered in the form of cards that can be incorporated into existing server computer designs or used in discrete computers that can operate separately alongside other hardware in datacenters.
- [14:49]
C
Ed elsewhere in AI a massive infrastructure deal between Microsoft and Europe's Nebulous, worth as much as $19.4 billion. Neo Cloud Nebius, recently spun off from Russia's tech giant Yandex, will provide COMPUTE to Microsoft from a data center in New Jersey. Let's get out to Bloomberg's Matt Day who covers Microsoft for us. And Matt, let's start with what Microsoft gets out of this cloud arrangement.
- [15:15]
F
So they get access to a whole bunch of Nvidia GPUs that nebulous is set to receive and fire up in New Jersey. They also get, you know, some optionality, right. They've been spending a ton of money on their own data center construction. They've also been throwing some to partners. This is maybe a way for them to grow that portfolio without so much of the risk if they'd been buying all the stuff themselves.
- [15:34]
A
Meanwhile, Nebulous really making its name in NIO cloud offering extraordinary storied business where it spun out of Yandex, of course, post Russia's invasion of Ukraine, the CEO backs away and now has this new European based juggernaut that's all things I.
- [15:52]
F
Out of nowhere, right? And it's a huge vote of confidence in the index brass and some of the staffers who left Russia to, to set up this, this rebranded holding company. Quite a, quite a bet on a name that just didn't have a whole lot going for it here a couple of years ago.
- [16:08]
C
Matt, you got to get back to your desk because in the time you've been in the seat, some news from Microsoft, a change in RTO policy. Do you have the details?
- [16:16]
F
Yeah, it looks like three days a week starting in Puget Sound, rolling out later to the rest of the US and then, and then abroad. Microsoft have been a pretty, a pretty lax hand on this sort of recommending two days a week. But it really varied by team. Some teams had an RTO'd at all. So it's like they're kind of following some of the, some of the folks like Amazon who have taken a harder line on getting folks back into the office.
- [16:34]
A
I mean it doesn't seem to set them back in terms of market valuation in terms of performance thus far. Matt. But how much is there? The fierce talent wars upon Microsoft Way as well as some of the other names that we think about.
- [16:46]
F
Oh, for sure. And I think for, for some who would argue that Microsoft's previous range was working well, it's been a recruiting advantage for them, particularly here in Seattle where both Microsoft and Amazon are based. You know, you could say hey listen, if you don't want to have to commute to the office five days a week, Microsoft's your bet. A little bit less advantage there, but they still are relatively flexible by big tech standards.
- [17:04]
A
Bloomberg's Matt Day all things Microsoft and Nevius we appreciate it. Look, let's talk about the. The Dutch chipmaking equipment company ASML now is investing one and a half billion dollars in France's Mistral AI. This is pretty unusual move. It's going to allow ASML to incorporate Mistral's generative AI services in its own machinery and operations. Makes ASML the largest shareholder in mistral with an 11% stake. Bloomberg's Benoit Butler is here for more from Paris. It is the pin up generative AI business, Mistral for France. ASML coming in, taking such a stake, what does it mean for the French government?
- [17:40]
G
It's obviously super important to French and I would say to European tech because now Mistral is probably the only European tech startup that's doing language models, AI language models and that has a full suite of products also doing computing here. So it's definitely key. And key is also the fact that it's a European tech giant. ASMO investing in. In Mistral. Mistral previously got backing from US venture funds. People were doubting that they could continue to grow and raise capital with European backers. And this is the case now. And it's important for Mistral because obviously we've got these giants like OpenAI and X etc. Doing the leading language models now, but there are European companies choosing to cut deals with Mistral because they're European and they see it as a sovereignty or strategic independence issue to make this contract. And it's important for them for this reason. So. So it's extremely key for. For that reason. Yeah.
- [18:57]
C
Benoit. ASML participated in that broader funding round, valuing mistral at almost 12 billion euros. That's the finance part. But there's a technology story here too, right? What is it that each company is partnering on in the technology sense?
- [19:14]
G
So in a way they are on both ends of the AI value chain, right? ASML is really at the top of the value chain, really doing these very powerful and sophisticated machines, the only one in the world to do these machines, allowing chip makers to do very advanced chips. They have Nvidia, they are powering Nvidia, for example, and Mistral is really at the end selling AI products. So Mistral, for example, he's a customer of Nvidia because they've got data centers that they're building in Europe to train their models. So what they say of this deal, it's a bit of a surprising deal in a way, what they say on ISML sides is that it's going to be for them a way to incorporate AI into the whole company. And asml is going to use Mistral AI to improve the scanning of data, to improve, improve really the score products to improve efficiency. So that's what they're telling for now. But it's going to be interesting to, to follow what they're going to do. And they might use other companies, but they choose Mistral and they choose to back this, this company.
- [20:28]
A
Well, it immediately made everyone think maybe ASML eventually wants to buy it. But there was pushback from the CEO on that.
- [20:36]
G
Yeah, he said they don't want to incorporate, operate every technology they use. They don't want to integrate that into their company. So it looks like a pushback for sure. The founders of Mistral and employees, Mistral says they still have the majority of the company. So for sure it doesn't seem to be on the garden. It's already a very sizable investment for ASML because they haven't done that, that kind of venture deals before. So it's already something unusual for them in a way to do.
- [21:10]
C
Bloomberg's Benoit but Tolo in Paris, thank you very much.
- [21:19]
A
A tech association funded by the likes of Apple, Google and other major tech companies when it's launching a new initiative to strengthen the frayed relationship between Democrats and Silicon Valley, all ahead of the 2026 midterm elections. And Bloomberg's Emily Bambam, who covers corporate lobbying for us, has that story. Look, support for the Trump administration, it has spiked among tech executives. So what does the Chamber of Progress hope to achieve here? Yes, they say that that movement, that rightward shift in Silicon Valley is in part due to a reaction to the Biden administration's policies, which were much more skeptical and critical of big tech and AI companies that so they say we're here to do some relationship counseling. You know, Silicon Valley was once associated with Democrats. They want to bring us back to that more Obama tech friendly era.
- [22:10]
C
Emily, I'm live here at Apple park and Cupertino and in the story we note that Apple is one of a number of technology companies helping to fund this association. In the last week we've seen Tim Cook at the table with the president. Tim, discussing the almost quid pro quo of investing in America in return for sort of policy relief. I gave you that backdrop. So I just want to understand who's involved here on the company side and the Democratic side, away from, from the association itself.
- [22:41]
A
Yes, the association has hired a Democrat who has relationships with tech companies. So that's Dave Borland from the Department of Defense. And when I asked which companies specifically signed off on this Democratic Project held under the Chamber of Progress. They said they couldn't say specifically but they pointed to their members. They said their members have, you know, they are also interested in looking ahead to a potentially more democratically controlled Washington and they want to start thinking about what it's going to look like when Trump is no longer in power. Emily, it's going to be quite a major reset because you just go back to the previous administration and how CEO after CEO really felt that they were either being investigated or being fined. What's the next steps to rectify it? Well, you know, different people have different opinions on this. It's contest, you know, it's contested within the Democratic Party. If this is something to fix. But you know, if you're Chamber of Progress, if you're a tech friendly Democrat, then I think first steps would be at least hearing out industry more. There was kind of a blanket policy in the Biden administration not to even speak to tech on issues that might impact them for fear of corporate capture. I think it would also be, you know, not having as strong M and A policies and things like that.
- [24:09]
C
Bloomberg's Emily Birnbaum, thank you very much.
- [24:17]
A
Welcome back to Bloomberg Tech and Caroline Hyde in New York.
- [24:21]
C
And I'm at Ludlow Live in Cupertino. From Apple, it is iPhone day. I think it's worth thinking about the stock car, right? It's normal not just to see the stock treading water in advance of the presentation but for it to be a seller, the news kind of event. Overall year to date the Stock's down almost 6% but since the end of July Apple's had a big rally. Some of the political issues behind it, some of the tariff questions partly put to bed but not completely. And now the overhang is what happens with AI. We don't expect anything from that today. I'm also thinking about what historically happens on iPhone day. Yes, sell the news but in the 30 day or 60 day period afterwards we do sometimes see that. So stock rally where the handset of that generation has had a warm reception with the consumer. We're in the fiscal fourth quarter. We're entering the holiday period of fiscal first quarter. That's why we're here tracking the third most valuable company in the world and the latest handsets. What you looking at?
- [25:15]
A
Looking at another stock that's rallied hard going into today, Oracle. Its earnings are out after the bell. Bloomberg Intelligence senior software analyst Anuragrana writing that solid recent results from Microsoft, Microsoft and Core Weave. They bode well for Oracle's own cloud Infrastructure business when it reports earnings and joins us now for more. The key question is whether the news is going to be strong enough to vindicate the run up in the stock. What strength do you want on fundamentals?
- [25:40]
F
Anarak yeah, I think that is absolutely right. We really have a lot of that's already baked into expectations going in. But the big question is going to be how much capital expenditures I have to go up in order to take care of these, you know, backlog that is going to be extremely strong. When article reports tonight, you know, what kind of funding they need. Well, you know, when will it go live? So there's a lot of supply chain as well as financing questions, not so much demand issues at this point.
- [26:09]
C
Anurag Oracle to me has been a bit of a surprise story. The relationship with Open Air and Stargate. It's also just sort of getting a lot of wins. How much has it surprised you when you put it in the context of that broader field of let's call them hyperscalers.
- [26:24]
F
Yeah, no, that's absolutely true. So when you go back to 2018 when we started looking at the OCI infrastructure build up, you know, we were surprised that why Larry is spending so much money, why not just, you know, work with the hyperscalers to expand its database business, which is the cash cow and the high margin business. But frankly speaking, his bet was right because right now the question is where can I get compute? And frankly speaking, they are now the fourth largest cloud providers in terms of size. The next few years they're going to generate 20, 30 billion dollars from it. So it's a, it's fairly lucrative business. Right now the margins are low, but over time we anticipate that to improve as well.
- [27:03]
A
I mean going back to their last earnings we Learned to the $30 billion per year run rate we're going to get from one client alone. We will anticipate, of course that was OpenAI. Are we going to hear any major victories once again in terms of new clients or is it going to be more just showing the proof in the infrastructure revenue growth?
- [27:21]
F
You know, Oracle is very good at detailing the number of customers it has gained every quarter. So we do anticipate a laundry list of that. But frankly speaking, the biggest question is when can you get these data centers up and live and running and when do you start recognizing this backlog into revenue and improve on the growth rate which has already gone from, you know, there was a time they were growing at subpar 55% and now it's going to be low Double digits moving towards middle double digit growth rate. So very good for Oracle shareholders and, you know, management team Anuragrana at Bloomberg.
- [27:54]
C
Intelligence setting us up for Oracle after the bell. Thank you very much. It is iPhone day here in Cupertino at Apple. Samantha Kelly recently joining Bloomberg. So consumer tech team. We have this squad now, but you know how this works. Let's start with the basics. What is it that you are looking out for and that you think is going to be the big story here?
- [28:13]
H
Yeah, thank you for having me. So Apple is a master of, you know, stagery, basically. You know, I just walked in a little while ago, everyone said enjoy the show. And I think it's a reminder that this day is as almost about theatrics as it is about the tech aspect. So we're here to, you know, listen to what they have to unveil.
- [28:32]
A
Go.
- [28:32]
H
We test it out and we kind of decipher, you know, there's a lot of hype around it. Sometimes they might say, you know, a certain feature might represent, you know, the whole new wave of what's to expect. But is that the case? How does that translate to why is it impactful to people? Will it really impact the industry and does it really actually matter?
- [28:50]
A
When it comes to questioning if it really matters, many feel it's the air that really matters to show the next leap forward in a foldable phone. Is that right for you, Sami? Excited to get your hand on the air?
- [29:01]
H
I'm definitely excited to see it, that's for sure. I do think whether or not it translates to whether people actually need something like that again, it's going to be a lot slimmer. But what does that mean for battery life? What does it mean for the camera system? Kind of will sit in this like murky spot in between the entry level iPhone and higher end iPhone. But of course, you know, why does it exist anyway? Could perhaps lead the way to thinner, perhaps foldable devices down the line. So definitely interested to see how the form factor impacts the functionality as well.
- [29:32]
C
We perhaps assume or take for granted that everyone knows what's going to happen, but the basics are 10am local time, 1pm New York time. A keynote, a presentation, take it from there. How does Apple usually do it? Do they just sort of come up front and say, okay, here's all the stuff? Do they tease things out?
- [29:49]
A
Yeah.
- [29:50]
H
What's interesting thing is it's changed in recent years. Before COVID we used to come out here and it was a live presentation. A lot of excitement around that. You know, what Will they announce? Will the demo even work more authentic? During COVID they did. They switched to live streams. A lot of other companies did that. A lot of companies have since switched back. But Apple is still doing the prerecorded streaming. So depends. You know, wherever you are in the world watching, you're going to see what we're sitting in the lawn chairs watching. So it's different. Here is Tim Cook usually addresses the audience as a few words. We watch the livestream and then we get funneled into another room. We're able to try out have some minutes with the devices for the first time and that allows us to see sort of what they're conveying and how it translates to touch.
- [30:36]
A
Sam People love the people behind these stories and we know that actually a lot of key talent has been being lost from our Apple, but largely in the AI sphere. Who are we going to see getting up on a prerecorded stage today? Who's going to be making an impact?
- [30:53]
H
Yes, that's a great question. So of course it'll be introductions by Tim Cook who will be throughout the entire presentation and then the leads around the different products. So again, we're we're expecting new iPhones, we're expecting Apple watches, We might see some new AirPods pods. Home pods of the respective leads will join. But what's interesting too is sort of before the event, you can kind of see some key players in the audience. Last year I remember there was some buzz about whether or not there's going to be an open air partnership and just moments before the live stream we saw Sam Altman walking around the grounds. So it's always really kind of exciting to see sort of who might play a part and what that means for the announcements later in the day.
- [31:36]
A
Samantha Kelly, we so appreciate you being live for us from Cupertino today, ready to get your hands on some of the new devices. Meanwhile, coming up, we're going to be joined by the Cisco Chief Product officer discuss the company's latest agent announcements. This is Bloomberg Tech. Every business has an ambition. PayPal open is the platform designed to help you grow into yours with business loans so you can expand and access to hundreds of millions of PayPal customers worldwide. And your customers can pay all the ways they want with PayPal, Venmo, pay later and all major cards so you can focus on scaling up when it's time to get growing. There's one platform for all business PayPal open grow today at paypalopen.com loans subject to approval in available locations.
- [32:27]
F
Your next product Launch is coming fast. Don't let billing slow you down. Legacy systems can't handle usage based billing. That means your team is stuck gluing code together, piecing through spreadsheets and running ad hoc queries just to figure out what to bill. With Metronome, you can roll out new pricing in minutes instead of months, whether it's usage based, seat based, or a hybrid model. Visit metronome.com to see how companies like OpenAI and Anthropic launch billing as fast as they launch products.
- [32:55]
A
That's metronome.com Hiscock Small Business Insurance knows there is no business like your business. Across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for protection. Find flexible coverage that adapts to the needs of your small business with a fast, easy online'@hiscox.com that's his c o x.com there's no business like small business. Hiscox Small Business Insurance. Now, amid the frenzy of demand for infrastructure, companies are focused on monitoring its impact. Crucially, the security and the cost of their application stack. That's including infrastructure, but also LMS and agents. Now, Cisco is today unveiling new Splunk Enterprise Solutions to do just this. Eighteen months after Cisco's acquisition of Splunk, the teams are revealing further product innovation focused on actionable AI. And here to discuss it all, Cisco's Chief Product Officer, Jitu Patel at Splunk's user conference G2. What is it that you really think Cisco can offer? A world in which AI agents are going to be running left, right and center.
- [34:11]
I
Caroline, it's good to see you again. Thank you for having me on the show. Look, if you take a step back, we are probably witnessing one of the most seismic shifts that we've seen in humanity with AI. And we are now squarely in the second phase of AI, where you're moving from these chat bots that intelligently answered questions to agents that are going to conduct tasks and jobs almost fully autonomously to automate workflows. Now, as that happens, you know, we start to think about like, what are the constraints and impediments that might actually really limit the growth of AI? And we think there are three big constraints. First one is infrastructure, where you just don't have enough power, compute, network working, you know, bandwidth to go out and, you know, sort of satiate the demand for.
- [34:52]
A
Yeah.
- [34:53]
I
The second is a trust deficit. If you don't trust these systems, you're not going to use them. And so you have to make sure that the safety and security is really well thought through. And the third one is a data gap. And in all these three areas, Splunk actually plays a pretty big role. We happen to be at the user conference of Splunk in Boston and we've just made some pretty amazing announcements around what we're going to be able to do specifically around machine data. And like, so far, AI has been really good with human data and training models and human kind of human generated data that's publicly available on the Internet. What they've not been good at as good at is machine data.
- [35:35]
A
Yeah.
- [35:35]
I
And so what we want to do is make sure that we can actually have the Time series machine machine data also be used to train these models. And we're excited about all the, all the innovations that we've had.
- [35:44]
A
So I mean, due to, as the product innovator here, how is it that you, what is the technological feats that you have to do working alongside Sprung? What is it that you have to drive that's different from others?
- [35:56]
I
I feel like that formula is pretty simple, Caroline. It's like, you know, in tech you just have to be relentlessly obsessed about continuing to innovate and making sure that you keep listening to customers and creating solutions that are at least an order of magnitude better than what's available in the market. No one switches to you for 10% better. You have to be at least an order of magnitude better. And so we have this rule internally called be 10x better. And you're going to actually make sure the customers will get excited. And we saw that level of palpable energy today and at the event where all of our customers. We're just completely excited about the Machine Data Lake announcement we made. We made an announcement around an open source model for time series data. These are all really hard problems that actually require a level of assistance so that organizations can harness the full potential of AI because of the way that they can use data.
- [36:48]
C
G2, is there evidence that Splunk's historic customers are using Cisco's other products and signing on for deals on that side and vice versa. Since you guys have closed, we've actually.
- [37:02]
I
Seen a lot of great evidence around it. In fact, just last quarter we closed, you know, one of the large financial services organizations that happened to be a great Cisco customer is also a Splunk customer. And now, now. And they had actually we replaced another competitor in that account with Splunk. And let me tell you the reason why. If you really think about where Splunk Shines is correlating data across multiple different sources. And if you start thinking about the kind of data that we have when you, if you assume that the attacker is already in your network and what you're trying to do is prevent lateral movement, who has the most amount of data about the network? Cisco does. The telemetry from that network. Hydrating Splunk actually gives Plank meaningful insights. The telemetry from users and devices and the security firewalls that we might have. All of these pieces add value to Splunk. So what ends up happening is customers, when they're starting to use Cisco technology with Splunk actually find them to not only be able to drive insights that were not able to be derived before, but you also get to be very economical in the way that you use it. And we made this one big and announcement around Cisco firewall telemetry getting ingested in Splunk for free. And so that actually provides incentives from a financial perspective to, to our customers as well.
- [38:28]
C
Gc, when I speak to industry, they say it's you personally that's responsible for bringing Cisco into this era. So very quickly to end, I wanted to ask where you feel Cisco is today versus where you want it to be in three to five years time now that Splunk's being integrated?
- [38:46]
I
Well, let me just start by saying that it's, it is not just me. There's a wonderful team of people behind me that do all the work and so I'm just lucky to be a small part of it. Where we see AI, you know, moving forward is we are now and squarely in the second phase and we're helping companies out with massive data center build outs, whether it be hyperscalers or neo clouds or service providers or the enterprise. And the fact that we serve all those four constituencies helps each one of the constituencies from the learnings that we get from each one of them. So that's the first area that we're really helping in a big way. And you know, low latency, high performance, energy efficient networking is one of our core value propositions there. Second, we're really helping with making sure that AI is safe and secure. And by the way, what I mean by that is not just using AI for security, but securing AI itself. That's a really, really important area that we are. We've got a tremendous amount of offerings that are helping customers out. And the third one is this notion of if 55% of the growth of data is coming from machine data and the market has not really gone out and figured out how to use machine data effectively with AI. That's the problem that we want to solve and that's where we've actually made these announcements with Splunk. And so the combination of those three technologies coming together in a unified platform is where we can really shine. And very few companies in the world have the level of breadth and depth of technology that we do. So we feel pretty fortunate about that.
- [40:14]
C
Cisco's Chief Product Officer, G2 Patel. Thank you. I'm joined now by Nabila Popal, senior research director at IDC where she focuses on smartphones and consumer electronics. Smartphone is key. And Nabila, it's good to see you again. I want to get something we haven't yet discussed in the show, which is upgrade cycle and what it will take the capability of an iPhone 17 generation, the features to drive an upgrade cycle. Have you modeled for that?
- [40:47]
B
Absolutely. That's what we've been talking about for I guess as long as I can, you know, the past few years. When is the next upgrade cycle going to come? And you know, we are right now looking at about a 40 plus so almost 4 year upgrade cycle for iPhones and this is what primes the iPhone 17. Regardless, obviously there's big upgrades to the phone and device itself in terms of hardware and of course the very anticipated and exciting excitement around iPhone 17 Air. But regardless of all the that or on top of all that, the Apple devices themselves are looking at a major upgrade cycle coming up because we're approaching that four year mark. So that's what we're looking making that in.
- [41:27]
C
Bloomberg's Mark Gurman reports that an iPhone 17 thin 5.5 millimeter thickness phone will be esim. And he talks about how ESIM in the Chinese market. Very interesting. Why is that an important factor sector?
- [41:43]
B
That's important because that makes it a barrier. Right? Because the Chinese market right now, on top of all the other challenges that Apple is facing in terms of competition, being very driven with all the features that they have been marketing to the hill. Right. That's, that's a big, big challenge for Apple. On top of the accelerated growth of Huawei and the support that they have from the government as well as the consumer, consumer loyalty, the ECM feature, despite the excitement that the consumers have with the ultra SIM device, ultra slim device, the fact that it doesn't is not going to support that is going to be another challenge. So yes, the Chinese market we're still expecting again, regardless of, you know, on top of despite the great upgrades that the 17 will bring, there is excitement in the Chinese market but we're still expecting a decline. So it's still going to be a tough uphill battle for Apple in China.
- [42:37]
A
Nomina, how price sensitive are. Well, China, if you even call it an emerging market now, but India, they'd be making scale there. How much is price and ability to move higher on some of these newer and the ones you're excited about, the slimmer versions.
- [42:53]
B
So I'm glad, you know you've brought India and some of these emerging markets up. I think the what's interesting is that despite these markets being extremely price sensitive traditionally. Right. We've seen the opposite trend. We've seen especially in India, the largest ASP growth in history for the Indian market in 20 in Q2 right now we saw 10% growth and the largest ASP for smartphones ever. And Apple has been seeing double digit growth. So regardless of where the price, despite the price increases and even with the new devices that we'll see, Apple is seeing tremendous growth and that is because of the support from financing programs that we're seeing in all of these markets.
- [43:35]
A
What will steal the show? Is it all about the slimmer versions or will the Pro still be the standout? Will ultimately people go for more power, more battery life versus trying out something that's incredibly slim but might be better for a next generation?
- [43:51]
B
So again, great question and you know, for me I think it depends. It's going to be a combination. I think that's what Apple is doing really well and it's ingenious move because with the Slim they've gotten the buzz, the marketing and a great, you know, lead up to the event because the Slim will hit the mark with a lot of consumers or with few consumers actually than the majority of consumers who are looking for camera better performance. So the Pro will hit the majority of consumers, will generate more volume and certainly more revenue for Apple, but the Slim device will also hit the mark. So I think combined is what will lead to a bigger upgrade cycle for Apple this year. And that's why as a result for Total, so if you look at the 17 series, we're expecting them to do bigger volume.
- [44:42]
C
You'll be very, very quickly trade ins. How big a factor will that be particularly in America? Very quick.
- [44:47]
B
Huge. Enormous.
- [44:50]
C
That succinct. Carrie, you had it there.
- [44:52]
A
Nabila profile. It's so good to have you back on the show. Senior research director at idc. We love their number crunching. Meanwhile Ed, that does it for this edition of Bloomberg Tech. We got more.
- [45:02]
C
Yeah, stay with us throughout the news day. For more on Apple special coverage later today. Very focused on pricing. Bring in the tariffs in the political story and as the people just talked about. Huge factor is trade ins from New York from Cupertino.
- [45:17]
A
Keep all eyes on Apple, one of the most valuable companies in the world. This is Bloomberg Tech. These days I can help you adopt better time management, but it can't stop colleagues booking meetings during lunch. But how about being able to easily adopt industrial AI to streamline your business? Siemens Xcelerator helps you find the right AI providers and easily understand what they offer so you can use modular solutions to quickly scale up and grow your business. That's AI for real from the global market leader in industrial AI, Siemens. Learn more on USA.siemens.com AI Hiscock Small Business Insurance Knows there is no business like your business. Across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for protection. Find flexible coverage that adapts to the needs of your small business with a fast, easy online'@hiscox.com that's his c o x.com there's no business like small business. Hiscox Small Business Insurance Fall is the time to plan ahead and ensure your brand shows up in ways that matter. 4imprint offers promotional products built for real business impact. From premium apparel and drinkwear to bags and high tech, you'll find thousands of options to fit your strategy and budget. With quality options at every price point and with their 360 degree guarantee, you can be four imprint certain your order will be done right on time. Explore more@4imprint.com for Imprint For Certain.