00:00All right, Mark, this is a huge passing of the baton. Talk to us about this moment. How do you
00:05see it? This is a major change for Apple. In some ways, it's a bigger change than the transition
00:12from Steve Jobs to Tim Cook. When Tim Cook had taken over from Jobs in 2011, obviously that was
00:20a blockbuster with Jobs being the company's visionary and product creator. But Cook had
00:25already served as interim CEO three times by the time he took over full-time as CEO, right? And it
00:33was more sudden, so he was sort of thrown into that. Jobs, obviously, unfortunately, wasn't around.
00:39Cook is now going to be around, and this is going to make things a little bit more interesting.
00:43It'll be fascinating to see how quickly Ternus is able to reshape Apple in his own image.
00:48So Tim Cook was a supply chain genius. He was COO before he became CEO, and what he was able
00:54to do
00:54is really perfect how Apple sourced the materials for its various products. What is John Ternus's
01:02genius? What area has he kind of perfected that he brings to the table?
01:08So remember when you had an iPhone, I don't know, 5, 10, 15 years ago, and you would drop it,
01:14and it would shatter immediately?
01:15Yes.
01:16Or get a giant dent, and the glass would be everywhere. When was the last time you dropped
01:20your iPhone, and the thing broke into a million pieces? Can you remember? Probably not.
01:25It hasn't.
01:26I've been dropping it quite a bit, but it stays intact.
01:29The case gets dented a little bit, but that's about it, right?
01:32Yeah.
01:33So that's the hallmark of John Ternus. What he's done is he's made Apple's products a lot more
01:38reliable, using better materials, better processes to make them longer lasting, right? And so Ternus is
01:45going to continue with hardware innovation. They didn't necessarily replace him with a new hardware
01:51chief. They elevated Johnny Sruji, who was running the hardware technologies group. But Ternus is
01:57still going to be setting the agenda when it comes to Apple product development, and heavily involved
02:01with that as CEO. I mean, he told employees that Tim Cook told him the best thing he can do
02:06is pick
02:06his spots, and those spots should be where he could add the most value. And he believes adding the most
02:11value will be through hardware engineering and product development and conception. And he's
02:16going to leave a lot of the nitty gritty stuff, right? The operations side, procurement, supply
02:21chain, legal, government affairs, services, software to his lieutenants on the executive
02:26team, leaning on them pretty heavily, as Cook did in many areas.
02:30So stocks have been going up. Apple stock has been going up. It seems like investors are excited
02:34about this change, but it also seems like this is a pretty pivotal moment for Apple. There are
02:39new, very splashy products online. Scarlett and I were just talking about the foldable
02:43iPhone that everyone's kind of anticipating. Is this a very high stakes moment? Or do you think
02:48this is a pretty safe transition?
02:51Oh, I mean, I think it's both. I think it's a safe transition, but it's also high stakes in that
02:55they need to get these new products right. They've been working on this major new product roadmap for
02:59half a decade, and it's time to start seeing the fruit of that. And we will, starting with the
03:04folding phone next Wednesday, the 18 Pro and Pro Max, minor changes, new colors, better cameras,
03:10faster processors, watches, you know, new silicon, new features and what have you related to fitness
03:17tracking and heart rates. But the bombshell is going to be that foldable iPhone. And then that
03:21big new smart home device will be coming this year as well. Facial recognition, you walk up to it,
03:27knows who you are, and it'll preload all your content, basically like an Alexa Echo show on
03:33steroids, but with all your Apple stuff. So people are pretty psyched for that, too.
03:37So I guess one knock against Tim Cook was that he probably did not move the needle enough for Apple
03:43and AI. Apple kind of lagged behind its peers. And in some ways, that might have worked out for the
03:47better as well, given that Apple didn't have to spend hundreds of billions of dollars the way that
03:53its big tech peers did. What does John Ternus bring to the table when it comes to AI development,
03:59AI innovation? Nothing. I look at this, it's so funny, like in the NBA, sometimes, or in sports
04:06in general, a team will fire a coach because they didn't like their performance in one regard or
04:12another. Then they'll elevate the assistant coach and he'll become the new head coach. And it's like,
04:17dude, you were there the whole time, right? Where was your impact? And it's like, there's always a hope
04:21that you bring in someone new who was already there, and you're going to see a major, major
04:25change. I think job number one for Ternus is making those shifts related to AI and making it a bigger
04:31priority. But he's been there the whole time, too. And the guy running AI now has been there the whole
04:36time, too, right? That's their software chief, Craig Federighi. And so the big changes to AI
04:40leadership there happened already last year when Cook fired the head of AI, John Giandrea,
04:45and put in the head of the Vision Pro as the head of Siri. And so I'm not expecting anything
04:50majorly different under Ternus from AI in the short term than Cook did, because if those changes were
04:57going to happen, they would already be in motion. And I'm not seeing that. But again, these things
05:02take time. And so we'll see what happens. But I don't think the shift from Cook to Ternus represents
05:08some major earthquake of changes that are going to happen imminently.
05:11Does Apple need to get into AI? I mean, I'm not sure, can it afford to not do that,
05:16but also maybe it's in a different space? It's a little unclear. I think once we see the
05:22IPOs of OpenAI and Anthropic happen, I think once we see how good these models get, you know,
05:28I was talking to someone yesterday. And where OpenAI and Cloud are heading is not just them
05:34providing models, but these being models that could build their own models that can build their own
05:38models. So things are about to get pretty scary here. And so it could be nice for Apple to take
05:43a
05:43stance against this. But it feels like it's something they fell into backwards. So we'll
05:47see what happens. I'm not expecting some sort of Apple AI revolution.
05:51Well, didn't OpenAI hire Johnny Ive and are building out their own hardware for their AI
05:56offerings? So if anything, OpenAI and perhaps Anthropic are moving into Apple space.
06:02Can't speak to Anthropic. I don't know if they're doing that. But in terms of OpenAI, yes. And Apple is
06:07suing them to a very large degree. And they keep throwing pot shots at each other. And so we'll
06:15see what happens there. You know, OpenAI put out a filing overnight that basically said that they
06:19can't get anyone from Apple anymore because everyone from Apple is too scared to come to OpenAI now,
06:24thinking they're going to be sued too. And so we'll see how this shakes out.
06:27Mark, do you get a review copy of this foldable phone when it comes out?
06:32Absolutely not. I'm going to have to buy my own. But my colleague, Chris Welch, hopefully we'll get
06:38a review unit.
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