1 00:00:00,020 --> 00:00:05,380 Josh: Yesterday, the most successful CEO in the history of technology announced that he's stepping down. 2 00:00:05,540 --> 00:00:10,580 Josh: Tim Cook, 15 years at Apple, saw the stock go up 2,000%, introduced the Apple 3 00:00:10,580 --> 00:00:14,920 Josh: iWatch, the AirPods, and also led Apple to be the first $4 trillion company, 4 00:00:15,100 --> 00:00:16,760 Josh: announced that he's resigning. 5 00:00:16,900 --> 00:00:20,720 Josh: On paper, he's the greatest operator CEO on earth. 6 00:00:20,920 --> 00:00:25,940 Josh: So why did he resign? It's because he couldn't solve the one biggest problem that mattered to Apple. 7 00:00:26,330 --> 00:00:29,330 Josh: The AI race. Apple is losing pretty badly. 8 00:00:29,470 --> 00:00:32,990 Josh: They're the only trillion-dollar company in the Mac 7 that is paying a competitor, 9 00:00:33,130 --> 00:00:37,790 Josh: Google, $1 billion just to license their AI model because they couldn't build their own. 10 00:00:38,010 --> 00:00:40,190 Josh: Their chief AI officer quit. 11 00:00:40,430 --> 00:00:43,930 Josh: Johnny Ive, the head of their design firm, left to join OpenAI. 12 00:00:44,230 --> 00:00:47,230 Josh: And there's a host of other failures. But the new guy that they picked, 13 00:00:47,410 --> 00:00:52,950 Josh: John Turnus, 51-year-old hardware expert, he has over 25 years' experience engineering 14 00:00:52,950 --> 00:00:56,930 Josh: all of Apple's devices is the new guy to take the helm and he might be the answer 15 00:00:56,930 --> 00:01:01,150 Josh: to building the next device that Apple uses to replace the iPhone. 16 00:01:01,470 --> 00:01:06,550 Josh: I think that Tim Cook's replacement is simultaneously an admission of Apple's 17 00:01:06,550 --> 00:01:10,770 Josh: failure to win the AI race, but also the key to them winning the next stage. 18 00:01:11,210 --> 00:01:15,110 Ejaaz: Yeah, well, moment for Tim Cook's tenure because, oh my God, what a run he's had. 19 00:01:15,290 --> 00:01:20,270 Ejaaz: Yes. This is a 20 times gain on Apple stock since he took control of the company 20 00:01:20,270 --> 00:01:23,650 Ejaaz: 15 years ago. For reference, when Tim Cook became CEO of Apple, 21 00:01:24,010 --> 00:01:26,050 Ejaaz: Apple was releasing the iPhone 4. 22 00:01:26,450 --> 00:01:30,310 Ejaaz: Some of you listening may not even be old enough to remember that. It was a long time ago. 23 00:01:30,630 --> 00:01:34,510 Ejaaz: We went from the iPhone 4 to the 17 Pro, which we are now at now. 24 00:01:34,630 --> 00:01:40,630 Ejaaz: And over that time, Tim Cook has really just done an unbelievable job on stewarding 25 00:01:40,630 --> 00:01:46,670 Ejaaz: the ship of Apple 4s into a place where it is profitable, it is sustainable, and it is larger. 26 00:01:46,670 --> 00:01:51,270 Ejaaz: Now, if we compare the two 10 years, Steve Jobs took it from zero to 350 billion. 27 00:01:51,490 --> 00:01:55,890 Ejaaz: Tim Cook took it from 350 billion to 3.7 trillion. One is a 14,000% gain, 28 00:01:55,990 --> 00:01:58,990 Ejaaz: but the other is a thousand percent in a market that is much more difficult 29 00:01:58,990 --> 00:02:01,250 Ejaaz: to kind of navigate through. 30 00:02:01,430 --> 00:02:04,490 Ejaaz: And the reason is because Tim Cook is a good operator. 31 00:02:04,710 --> 00:02:07,950 Ejaaz: He's great at running businesses, whereas Steve Jobs was the visionary who was 32 00:02:07,950 --> 00:02:08,910 Ejaaz: great at creating products. 33 00:02:09,070 --> 00:02:14,330 Ejaaz: And I think what we see with the Apple story today and their decision to move over to John Ternus. 34 00:02:14,640 --> 00:02:17,900 Ejaaz: Is a swing of the pendulum back to where we were. 35 00:02:18,320 --> 00:02:21,860 Ejaaz: Tim Cook created a huge services business. That's what we have Apple TV for. 36 00:02:22,040 --> 00:02:25,640 Ejaaz: ICloud became really large. Business that actually generates a lot of cash came 37 00:02:25,640 --> 00:02:28,760 Ejaaz: from him. A lot of the products remain mostly unchanged. 38 00:02:28,980 --> 00:02:32,380 Ejaaz: I mean, if you look at this lineup of things that came from Tim Cook, 39 00:02:32,600 --> 00:02:39,420 Ejaaz: we have AirTags, Apple Watch, AirPods, the Mac Studio, mostly iterations on 40 00:02:39,420 --> 00:02:42,100 Ejaaz: previous products, not a whole lot of net new things. 41 00:02:42,100 --> 00:02:47,520 Ejaaz: In fact the vision pro was actually steve's last great idea um so that finally 42 00:02:47,520 --> 00:02:51,380 Ejaaz: came to life a long time ago but the services industry in the top right of this 43 00:02:51,380 --> 00:02:55,220 Ejaaz: graphic that we're seeing is the big win for tim and it's this really exciting 44 00:02:55,710 --> 00:02:59,830 Ejaaz: change in one of the world's most valuable companies, starting with this new guy, John Ternus. 45 00:03:00,150 --> 00:03:03,850 Josh: Yeah. So who is this Ternus guy? Because it's not exactly a name that's been 46 00:03:03,850 --> 00:03:09,410 Josh: floated around the technology headlines. He's kind of been like living in the VP exec shadows. 47 00:03:09,970 --> 00:03:14,570 Josh: Well, he is the hardware expert and the guy behind the engineering of every 48 00:03:14,570 --> 00:03:18,990 Josh: single Apple device that you have seen, heard or used yourself over the last 49 00:03:18,990 --> 00:03:24,190 Josh: 25 years. But he was also working in hardware before that. He has over 30 years experience. 50 00:03:24,450 --> 00:03:28,650 Josh: He was early on the VR trend, which is why Apple was so enthusiastic to hire him. 51 00:03:28,750 --> 00:03:32,450 Josh: So he knows the depths of every single device, how it's built, 52 00:03:32,470 --> 00:03:34,490 Josh: and why it was built in that particular way. 53 00:03:34,610 --> 00:03:38,190 Josh: He, every device that you use has his art or his stamp on it. 54 00:03:38,390 --> 00:03:41,410 Josh: But John Ternus is an impressive guy for a few other reasons as well. 55 00:03:41,490 --> 00:03:45,370 Josh: There was a recent interview that I watched with him on where people would describe 56 00:03:45,370 --> 00:03:49,590 Josh: him as a good replacement for Tim Cook because he's very likable, 57 00:03:49,830 --> 00:03:52,010 Josh: but also kind of fierce behind the shadows. 58 00:03:52,010 --> 00:03:55,410 Josh: And the reason why that's good is he inspires a lot of loyalty in the teams 59 00:03:55,410 --> 00:04:00,390 Josh: that he works with, and he's the bet from the exec board to be the man that 60 00:04:00,390 --> 00:04:02,850 Josh: leads Apple into the next era of devices. 61 00:04:02,990 --> 00:04:06,690 Josh: And you might have seen rumors about three new Apple AI devices that they're 62 00:04:06,690 --> 00:04:07,730 Josh: going to announce later this year. 63 00:04:07,930 --> 00:04:11,690 Josh: We'll get more on that later. But Ternus will be the man that is engineering behind that. 64 00:04:11,810 --> 00:04:15,150 Josh: And the reason why it's important and I think significant that Ternus is stepping 65 00:04:15,150 --> 00:04:17,750 Josh: up right now at this particular point, it's not a coincidence, 66 00:04:17,950 --> 00:04:21,750 Josh: is because Apple knows that, in my opinion, the iPhone is stretched. 67 00:04:21,990 --> 00:04:24,950 Josh: We've had like a million different versions and the services businesses worked 68 00:04:24,950 --> 00:04:28,570 Josh: so well for Apple right now, but they need a new model, a new approach. 69 00:04:28,830 --> 00:04:32,270 Josh: And Apple's moat has always been hardware. It's not just software. 70 00:04:32,430 --> 00:04:35,990 Josh: It's because everyone has one of these or an Apple Watch or a suite of different devices. 71 00:04:36,450 --> 00:04:40,710 Josh: And Ternus needs to figure out or be the answer to what the AI device of the 72 00:04:40,710 --> 00:04:42,970 Josh: next generation or next couple of generations is going to be. 73 00:04:43,130 --> 00:04:46,230 Ejaaz: This guy rocks. I think we're going back to the hardware roots of Apple. 74 00:04:46,350 --> 00:04:51,710 Ejaaz: If you have been a owner of Apple stock, you love Tim Cook. If you have been a 75 00:04:52,550 --> 00:04:55,450 Ejaaz: like a lover of the Apple hardware products, you have probably, 76 00:04:55,450 --> 00:04:57,710 Ejaaz: you felt there's a lot left to be desired. 77 00:04:57,770 --> 00:05:00,630 Ejaaz: And I think John is going to fill that desire as it relates to the products, 78 00:05:00,810 --> 00:05:01,970 Ejaaz: just through his hardware nature. 79 00:05:02,110 --> 00:05:05,930 Ejaaz: I mean, he is a hardware guy through and through. He's only had two jobs in his entire career. 80 00:05:06,150 --> 00:05:12,170 Ejaaz: One was building VR headsets. One was at Apple, where he has remained for the last 25 years of time. 81 00:05:12,310 --> 00:05:15,530 Ejaaz: So he's really a guy that started from the bottom, worked his way to the top, 82 00:05:15,630 --> 00:05:20,790 Ejaaz: and is now appointed as the hardware CEO of one of the largest companies in the world. 83 00:05:20,790 --> 00:05:25,430 Josh: Can I just point something out, Josh? I just pulled up his LinkedIn yesterday. 84 00:05:25,810 --> 00:05:31,490 Josh: This did not have a profile picture and everyone kind of like exposed him for 85 00:05:31,490 --> 00:05:34,590 Josh: that on social media. It looks like since he's updated it. 86 00:05:35,150 --> 00:05:39,050 Josh: But yeah, like he only has two job postings in his experience. So VP and engineer. 87 00:05:39,490 --> 00:05:44,130 Ejaaz: That's it. Yeah. And since joining in 2001, I mean, his first product he ever 88 00:05:44,130 --> 00:05:47,170 Ejaaz: launched was the Apple Cinema display. Most people probably don't even remember that. 89 00:05:47,370 --> 00:05:51,350 Ejaaz: But also since then, he is responsible for a laundry list of items, 90 00:05:51,710 --> 00:05:53,890 Ejaaz: including but not limited to the iPad, 91 00:05:54,450 --> 00:05:59,330 Ejaaz: every AirPod generation, the redesigned MacBook Pro, the redesigned iMac Pro, 92 00:05:59,790 --> 00:06:02,490 Ejaaz: all of the hardware for iPhone over the last six years. 93 00:06:02,990 --> 00:06:06,250 Ejaaz: Anything that is hardware and that is physical that you've touched over the 94 00:06:06,250 --> 00:06:10,010 Ejaaz: last five, six years, he has been the one that has shepherded it and led that forward. 95 00:06:10,190 --> 00:06:13,190 Ejaaz: It's to be noted that there are changes that have been happening already. 96 00:06:13,410 --> 00:06:16,890 Ejaaz: We have the MacBook Neo, which we never had before, which is a low cost laptop 97 00:06:16,890 --> 00:06:20,810 Ejaaz: that you can go and buy for $600. We have the iPhone Fold coming later this year. 98 00:06:20,910 --> 00:06:23,970 Ejaaz: That is a drastic pivot from anything that the iPhone has ever done. 99 00:06:24,010 --> 00:06:25,150 Ejaaz: So we're already starting to 100 00:06:25,150 --> 00:06:28,130 Ejaaz: see some of the risks that they're willing to take on the hardware front. 101 00:06:28,410 --> 00:06:32,390 Ejaaz: And that's just the beginning. I assume this extends out to the AI hardware 102 00:06:32,390 --> 00:06:36,230 Ejaaz: too that there are rumors of, which we'll get into, but he is the hardware guy 103 00:06:36,230 --> 00:06:37,690 Ejaaz: through and through. And I'm just so excited for... 104 00:06:38,470 --> 00:06:44,130 Ejaaz: This new paradigm, this new pendulum swing back from the business to the product. 105 00:06:44,890 --> 00:06:47,450 Josh: I want to play devil's advocate with you for a second, Josh. 106 00:06:47,990 --> 00:06:52,570 Josh: He's an amazing hardware guy, but as you probably know, the CEO position requires 107 00:06:52,570 --> 00:06:53,930 Josh: so many other skills, right? 108 00:06:53,950 --> 00:06:57,510 Josh: You need to be operational and you need to understand every single core part of the business. 109 00:06:57,850 --> 00:07:00,290 Josh: That's why Tim Cook came in and he was the right guy at the right time, 110 00:07:00,370 --> 00:07:03,170 Josh: right? He built out the services business because he saw that we had the hardware 111 00:07:03,170 --> 00:07:05,590 Josh: mode. We need to tack on products on top of that. 112 00:07:06,550 --> 00:07:11,970 Josh: I don't know if John Ternus has proved himself in his history or tenure at Apple 113 00:07:11,970 --> 00:07:13,450 Josh: so far as to whether he can do that. 114 00:07:13,610 --> 00:07:16,850 Josh: He's definitely the hardware expert, but it looks like he's going to be hiring 115 00:07:16,850 --> 00:07:19,190 Josh: a really strong team around him, right? 116 00:07:19,850 --> 00:07:22,730 Josh: Ternus, the CEO, and then you've got Shrooji as the chief hardware officer. 117 00:07:23,250 --> 00:07:26,990 Ejaaz: Yeah. So I think this was the board that did this, who just kind of did some 118 00:07:26,990 --> 00:07:29,030 Ejaaz: reshuffling of all the positions of Apple. 119 00:07:29,170 --> 00:07:32,650 Ejaaz: The most noteworthy is Johnny Shrooji, which is a name most people probably 120 00:07:32,650 --> 00:07:36,630 Ejaaz: haven't heard of, who has been promoted to Apple's chief hardware officer while 121 00:07:36,630 --> 00:07:38,630 Ejaaz: John goes up to become the CEO. 122 00:07:39,130 --> 00:07:43,070 Ejaaz: Now, Johnny, not to be confused with John, if you've ever watched the presentations 123 00:07:43,070 --> 00:07:47,690 Ejaaz: of Apple events, he's the guy that's down in the lab where he's talking about 124 00:07:47,690 --> 00:07:49,710 Ejaaz: chips and processors and all of that stuff. 125 00:07:49,830 --> 00:07:53,950 Ejaaz: He's the guy that is responsible with John Ternus for building probably the 126 00:07:53,950 --> 00:07:57,710 Ejaaz: best hardware that Apple has built in the last decade, the M series chips. 127 00:07:58,310 --> 00:08:02,930 Ejaaz: Those are incredible. He is the chip guy. He is the lead architect of those 128 00:08:02,930 --> 00:08:06,530 Ejaaz: chips and that's not limited to the m series ship that's a a series ships that 129 00:08:06,530 --> 00:08:11,270 Ejaaz: are in your iphones that is the wireless modems that is the wireless connectivity any sort of 130 00:08:11,870 --> 00:08:14,830 Ejaaz: chip responsible for your iphone getting incrementally better every year 131 00:08:14,830 --> 00:08:17,970 Ejaaz: he is responsible for this and when 132 00:08:17,970 --> 00:08:21,350 Ejaaz: i think about the best parts about apple over the last five years and 133 00:08:21,350 --> 00:08:24,170 Ejaaz: i track down the source of where they came from a lot 134 00:08:24,170 --> 00:08:27,570 Ejaaz: of that comes from john and johnny and it's it's a really exciting new dynamic 135 00:08:27,570 --> 00:08:32,370 Ejaaz: where there is now this all-star cast who has built pretty incredible things 136 00:08:32,370 --> 00:08:36,270 Ejaaz: at the helm and with the ability to make the decision to continue to push the 137 00:08:36,270 --> 00:08:39,850 Ejaaz: envelope as it relates to hardware and at the end of the day like apple really 138 00:08:39,850 --> 00:08:43,650 Ejaaz: is the sum of its products and when its products are excellent, the company does well. 139 00:08:43,790 --> 00:08:48,870 Ejaaz: And I'm really hopeful that this will usher in that new paradigm of hardware in the AI era. 140 00:08:48,990 --> 00:08:51,730 Ejaaz: I mean, we've already seen this with how popular Mac minis are and Mac studios 141 00:08:51,730 --> 00:08:55,990 Ejaaz: are, and I'm sure they won't be scared to lean into that even more in these 142 00:08:55,990 --> 00:08:57,350 Ejaaz: next generations of products and chips. 143 00:08:57,630 --> 00:09:00,250 Josh: Yeah, and it's not just a fad either, right? 144 00:09:00,350 --> 00:09:04,650 Josh: These like chips and hardware mode that Apple has really puts them ahead of 145 00:09:04,650 --> 00:09:06,390 Josh: the competition in a very meaningful way. 146 00:09:06,510 --> 00:09:10,690 Josh: So for example, like with these M1 chips, we recorded this on a previous episode, 147 00:09:10,690 --> 00:09:15,070 Josh: it is the only hardware or consumer-facing hardware alone that allows you to 148 00:09:15,070 --> 00:09:18,250 Josh: run frontier AI models locally on your device. 149 00:09:18,470 --> 00:09:21,410 Josh: And what that unlocks is, you know, it can't be understated. 150 00:09:21,530 --> 00:09:25,230 Josh: You can run AI models personally on your own data without exposing it to, 151 00:09:25,310 --> 00:09:28,710 Josh: you know, anyone. It's cheaper, it's quicker, and overall quite better. 152 00:09:28,870 --> 00:09:32,450 Josh: And Apple over the last couple of years has really been leaning into locally, 153 00:09:32,730 --> 00:09:34,070 Josh: privately run AI models. 154 00:09:34,190 --> 00:09:36,670 Josh: They're going to do something similar with Siri where they privately inference 155 00:09:36,670 --> 00:09:38,590 Josh: and train off of Google's model. 156 00:09:38,770 --> 00:09:42,110 Josh: And with that $1 billion deal, which we're about to get to. But the point is, 157 00:09:42,430 --> 00:09:47,190 Josh: Apple's hardware is superior, and it's because of people like Ternus and Sruji 158 00:09:47,190 --> 00:09:49,590 Josh: and the entire team, and the exec team recognizes that. 159 00:09:50,180 --> 00:09:54,240 Josh: Another thing that I forgot to mention earlier is Turner seems to be like the 160 00:09:54,240 --> 00:09:56,440 Josh: youngest board member of Apple. 161 00:09:56,620 --> 00:10:01,060 Josh: Like typically it ranges between like 55 to like 65 and ahead. 162 00:10:01,260 --> 00:10:04,000 Josh: He's 50 years old, 51 years old. So he's going to be the youngest. 163 00:10:04,180 --> 00:10:05,320 Josh: It's some fresh young blood, but 164 00:10:05,320 --> 00:10:09,200 Josh: he has a really good understanding and instinct as to what Apple wants. 165 00:10:09,280 --> 00:10:13,080 Josh: He's observed and watched him cook, build up the services business. 166 00:10:13,340 --> 00:10:16,740 Josh: He also observed Steve Jobs and knows of his tenure. You know, 167 00:10:16,800 --> 00:10:20,720 Josh: so he's kind of like, I kind of like to think of him as like the hybrid of both of these people. 168 00:10:20,840 --> 00:10:23,100 Josh: So I'm getting really bullish about it. 169 00:10:23,380 --> 00:10:26,200 Ejaaz: There's some unknown lore that happens around these transitions that I'm not 170 00:10:26,200 --> 00:10:27,220 Ejaaz: sure everyone's familiar with. 171 00:10:27,620 --> 00:10:33,360 Ejaaz: In the case of Tim Cook, when Steve Jobs asked him to be CEO and Tim found out that Steve was sick, 172 00:10:33,540 --> 00:10:38,980 Ejaaz: he actually offered to donate a portion of his liver to Steve when he found 173 00:10:38,980 --> 00:10:42,540 Ejaaz: out that he had pancreatic cancer because they had the same blood type, 174 00:10:42,700 --> 00:10:43,960 Ejaaz: which I found really interesting. 175 00:10:43,960 --> 00:10:49,520 Ejaaz: There was this true, unrelenting commitment to, I guess, at that time, just helping a friend. 176 00:10:49,940 --> 00:10:54,320 Ejaaz: Steve didn't accept it, but it's a fun story that not a lot of people know that 177 00:10:54,320 --> 00:10:57,500 Ejaaz: shows the level of, I guess, gratitude and... 178 00:10:58,310 --> 00:11:03,230 Ejaaz: Just i don't know teamwork that they have together what do you i wonder if john 179 00:11:03,230 --> 00:11:05,050 Josh: Made sacrifices yeah did he. 180 00:11:05,050 --> 00:11:10,110 Ejaaz: Make a blood sacrifice perhaps an organ like some blood maybe he's tim's blood 181 00:11:10,110 --> 00:11:14,970 Ejaaz: baby we're unsure but it is it just it's just funny just to know some of the backstory in the lore 182 00:11:14,970 --> 00:11:19,630 Josh: The point is i guess it like is is loyalty is pretty fierce at apple and you 183 00:11:19,630 --> 00:11:22,610 Josh: know you've got each other's back and you kind of want collectively for everyone 184 00:11:22,610 --> 00:11:27,170 Josh: to win in fact uh we have the uh community letter from from tim here which basically 185 00:11:27,170 --> 00:11:28,370 Josh: announced that he's stepping down. 186 00:11:28,610 --> 00:11:31,610 Josh: And he goes on to say, John cares so much about who we are at Apple, 187 00:11:31,690 --> 00:11:33,270 Josh: what we do at Apple, who we reach at Apple. 188 00:11:33,350 --> 00:11:36,810 Josh: And he has the heart and character to lead with extraordinary integrity. 189 00:11:36,810 --> 00:11:41,090 Josh: And he goes on to explain why exactly John is the perfect fit over like two entire paragraphs. 190 00:11:41,290 --> 00:11:45,810 Josh: So there's a lot of camaraderie around Apple, but also they're not banding together 191 00:11:45,810 --> 00:11:49,130 Josh: for no reason, right? They're not making these decisions for no reason, Josh. 192 00:11:49,330 --> 00:11:54,050 Josh: There's been a series of what I would personally describe as failures or maybe 193 00:11:54,050 --> 00:11:56,470 Josh: unintentional successes. 194 00:11:56,470 --> 00:11:59,570 Josh: And I'll explain that a little later for apple within 195 00:11:59,570 --> 00:12:03,990 Josh: the ai race now it's the most important technology revolution um and they've 196 00:12:03,990 --> 00:12:07,390 Josh: just watched their competitors completely drive by them um their competitors 197 00:12:07,390 --> 00:12:12,310 Josh: have built up now frontier world leading models uh they tried to you know broker 198 00:12:12,310 --> 00:12:16,050 Josh: a deal early on with anthropic anthropic said no so apple was kind of like shot 199 00:12:16,050 --> 00:12:18,910 Josh: in the foot they lost their ai chief they lost johnny i the design guy. 200 00:12:19,560 --> 00:12:23,200 Josh: Any possible team that they could have used to build a frontier AI model, 201 00:12:23,480 --> 00:12:26,560 Josh: they kind of like lost them or bled them throughout the last couple of years. 202 00:12:26,880 --> 00:12:30,240 Josh: And so the question remains is, what is Apple's move next? 203 00:12:30,440 --> 00:12:33,780 Josh: One of the major announcements that gave us a bit of signal into this was, 204 00:12:33,940 --> 00:12:37,780 Josh: I believe this was like last year, Apple announced that they're striking a $1 205 00:12:37,780 --> 00:12:42,220 Josh: billion deal with Google specifically to license their Gemini model. 206 00:12:42,400 --> 00:12:45,300 Josh: And the reason why they're doing this is they're going to feed that Gemini model 207 00:12:45,300 --> 00:12:49,300 Josh: into their personal assistant known as Siri. By the way, for those of you who 208 00:12:49,300 --> 00:12:52,320 Josh: use Apple who don't know what Siri is, it's that assistant that you just turned 209 00:12:52,320 --> 00:12:55,060 Josh: off as soon as you got the Apple device because it was so, so bad. 210 00:12:55,460 --> 00:12:58,760 Josh: And since then, Apple has been announcing new AI features for Siri that will 211 00:12:58,760 --> 00:13:02,520 Josh: make it smarter, more intuitive, and do things for you on your own devices. 212 00:13:02,800 --> 00:13:05,980 Josh: Since then, they've been delaying it. It's over like, what's it, 213 00:13:06,060 --> 00:13:07,940 Josh: two and a half years now? And they delayed it again. 214 00:13:08,220 --> 00:13:11,200 Josh: We're meant to hear an announcement on the new Siri later this year. 215 00:13:11,440 --> 00:13:14,920 Josh: But the point is, they're plugging in competitors, they're paying competitors 216 00:13:14,920 --> 00:13:20,480 Josh: for the privilege of getting access to AI, which leaves them quite vulnerable, you would think. 217 00:13:20,620 --> 00:13:24,080 Josh: But now that I kind of reframed this structure, I actually think it might be 218 00:13:24,080 --> 00:13:28,120 Josh: an advantage for Apple and specifically John Ternus right now because he realized, 219 00:13:28,220 --> 00:13:32,340 Josh: or we, or rather I realized, you don't need to own the model layer. 220 00:13:32,480 --> 00:13:34,040 Josh: You can own the distribution layer. 221 00:13:34,200 --> 00:13:37,960 Josh: And the only way that you do that is knowing that every human will eventually need a device. 222 00:13:38,060 --> 00:13:41,080 Josh: OpenAI is currently working on their own device, but guess who has 3 billion 223 00:13:41,080 --> 00:13:44,400 Josh: active devices live right now that they can turn on AI features tomorrow? 224 00:13:44,820 --> 00:13:48,220 Josh: Apple. So it sounds like a genius move think john tennis is going to focus on this. 225 00:13:48,220 --> 00:13:51,480 Ejaaz: Yeah it's the unique advantage of apple they have the hardware lock-in 226 00:13:51,480 --> 00:13:54,100 Ejaaz: they have all the best products in the world they have them distributed to hundreds 227 00:13:54,100 --> 00:13:59,120 Ejaaz: of millions of people in the world and thanks to the work of johnny who is the 228 00:13:59,120 --> 00:14:04,280 Ejaaz: chip master they're all capable of running pretty solid models locally on device 229 00:14:04,280 --> 00:14:08,660 Ejaaz: and there was this huge slip up that happened at wwdc two years ago where they 230 00:14:08,660 --> 00:14:11,260 Ejaaz: announced apple intelligence and it was just complete and utter failure 231 00:14:12,470 --> 00:14:15,310 Ejaaz: Isn't to say that they're out of the race by any 232 00:14:15,310 --> 00:14:18,610 Ejaaz: means because they own the most difficult stack of 233 00:14:18,610 --> 00:14:21,610 Ejaaz: this layer of the stack being the hardware when you 234 00:14:21,610 --> 00:14:24,850 Ejaaz: look at all the other frontier ai labs nobody has the capability of 235 00:14:24,850 --> 00:14:27,950 Ejaaz: manufacturing great hardware at scale and you 236 00:14:27,950 --> 00:14:30,990 Ejaaz: mentioned johnny ivy's working with open ai he he left 237 00:14:30,990 --> 00:14:34,050 Ejaaz: apple far before that to start love from um but 238 00:14:34,050 --> 00:14:37,350 Ejaaz: then they acquired his company and now he's working with them um he 239 00:14:37,350 --> 00:14:40,070 Ejaaz: is going to design the thing but he's not the guy who's 240 00:14:40,070 --> 00:14:42,870 Ejaaz: going to get that manufactured at scale and as we 241 00:14:42,870 --> 00:14:45,850 Ejaaz: look at these charts in as it relates to progress in ai 242 00:14:45,850 --> 00:14:48,550 Ejaaz: they are vertical lines they're moving so quickly but the 243 00:14:48,550 --> 00:14:51,450 Ejaaz: limiting factor like we always mention is the physical 244 00:14:51,450 --> 00:14:54,170 Ejaaz: manifestation of that it's moving around the atoms in the world to 245 00:14:54,170 --> 00:14:56,910 Ejaaz: build the products that get into people's hands that can actually use it 246 00:14:56,910 --> 00:15:00,110 Ejaaz: and it's incredibly difficult and apple is 247 00:15:00,110 --> 00:15:02,770 Ejaaz: coming from the harder side of the spectrum if you view it 248 00:15:02,770 --> 00:15:05,770 Ejaaz: as a spectrum on software to hardware what's more effective 249 00:15:05,770 --> 00:15:08,710 Ejaaz: and what's harder to use well software has a lot more leverage but it's a lot easier 250 00:15:08,710 --> 00:15:11,650 Ejaaz: to make and iterate on and that's why we see every company copying everyone 251 00:15:11,650 --> 00:15:14,390 Ejaaz: else it's the hardware part that's difficult we see it with the data 252 00:15:14,390 --> 00:15:17,290 Ejaaz: centers how difficult it is to roll that out and then we see it with the hardware how 253 00:15:17,290 --> 00:15:20,270 Ejaaz: difficult it is to make incredible products like the iphone there's no one else 254 00:15:20,270 --> 00:15:23,890 Ejaaz: who's done it like that and that is a huge advantage that john is going to certainly 255 00:15:23,890 --> 00:15:27,750 Ejaaz: lean into and give them that edge when it comes to edge compute now will they 256 00:15:27,750 --> 00:15:31,670 Ejaaz: be able to roll out their own proprietary versions that are good we don't know 257 00:15:31,670 --> 00:15:36,790 Ejaaz: i think they're hedging that in a very smart way with google and using gemini locally on device, 258 00:15:37,110 --> 00:15:38,850 Ejaaz: but if they do figure it out, 259 00:15:39,440 --> 00:15:43,320 Ejaaz: If they do roll out what they promised Apple Intelligence and Siri were to be 260 00:15:43,320 --> 00:15:47,220 Ejaaz: at this year's WWDC in June, then I think we have something really exciting. 261 00:15:47,380 --> 00:15:52,140 Ejaaz: And you'll note that the transition period for John from Tim happens in September. 262 00:15:52,340 --> 00:15:57,860 Ejaaz: So there's still a six-month window or so in which Tim Cook is going to be CEO, 263 00:15:58,040 --> 00:15:59,280 Ejaaz: and there's this transition period. 264 00:15:59,400 --> 00:16:04,340 Ejaaz: And only once the new iPhone release comes along in September will John take 265 00:16:04,340 --> 00:16:06,940 Ejaaz: the stage for that event and become the proper CEO. 266 00:16:07,120 --> 00:16:10,660 Ejaaz: So we're in the transition period. I expect to see a very strong pivot towards 267 00:16:10,660 --> 00:16:14,540 Ejaaz: hardware and in a really exciting way, man. I would love to get some good new products. 268 00:16:14,720 --> 00:16:21,260 Josh: Yeah, same. And if we choose to believe the main leaker of Apple News, 269 00:16:21,380 --> 00:16:27,920 Josh: Mark Gurman, he posted a few months ago that Apple's ramping up to work on a trio of AI wearables, 270 00:16:28,180 --> 00:16:33,180 Josh: specifically new smart glasses and AirPods with cameras on them and a pendant 271 00:16:33,180 --> 00:16:37,040 Josh: that you can wear around your neck or leave kind of like ambiently around your 272 00:16:37,040 --> 00:16:38,520 Josh: house and it can pick up information. 273 00:16:38,700 --> 00:16:42,520 Josh: Of course, the point of these three devices is to see what you see, 274 00:16:42,740 --> 00:16:47,420 Josh: hear what you hear, and also observe what you observe and feed all of this data 275 00:16:47,420 --> 00:16:49,680 Josh: presumably into an AI model. 276 00:16:50,390 --> 00:16:53,250 Josh: I'm guessing in this case, Gemini, a proprietary version of it, 277 00:16:53,410 --> 00:16:58,370 Josh: and then recursively use that to build a smarter personal assistant called Siri 278 00:16:58,370 --> 00:17:02,910 Josh: that can not only inform you of different things, but predict things that you 279 00:17:02,910 --> 00:17:04,370 Josh: want and also do things for you. 280 00:17:04,470 --> 00:17:07,630 Josh: Plugged into every single app that you own on your iPhone or device, 281 00:17:07,870 --> 00:17:09,490 Josh: seamlessly connect to all context. 282 00:17:09,710 --> 00:17:13,450 Josh: It's a really exciting vision. It is very hard to pull off that vision. 283 00:17:13,570 --> 00:17:17,430 Josh: You see, OpenAI has been delaying a lot of their device releases. 284 00:17:17,870 --> 00:17:22,690 Josh: I think their current puck-like device has been pushed back until early next 285 00:17:22,690 --> 00:17:26,450 Josh: year because of supply chain issues. But that's Apple's advantage. 286 00:17:26,650 --> 00:17:31,190 Josh: They already have dominance or monopoly on consumer hardware supply chains. 287 00:17:31,310 --> 00:17:34,470 Josh: In fact, there was a story recently where apparently they've been buying up 288 00:17:34,470 --> 00:17:38,110 Josh: all the memory available, DRAM, just so that they can make sure that they can 289 00:17:38,110 --> 00:17:40,510 Josh: keep putting out their products on the shelf. 290 00:17:40,910 --> 00:17:45,530 Josh: So for example, MacBook Neo, it sold out. They were able to release 10 million 291 00:17:45,530 --> 00:17:47,050 Josh: more units for people to buy. 292 00:17:47,290 --> 00:17:51,390 Josh: Whereas Microsoft had to pull products from the shelves just because Apple had 293 00:17:51,390 --> 00:17:52,130 Josh: bought up all the memory. 294 00:17:52,270 --> 00:17:55,990 Josh: And so it was pricing it too hard for consumers to for Microsoft to sell to their consumers. 295 00:17:56,130 --> 00:18:01,770 Josh: So the point is, Apple has the scale that no other company does to build the 296 00:18:01,770 --> 00:18:02,950 Josh: winning device product. 297 00:18:03,230 --> 00:18:08,450 Josh: Now, the counter to this is Apple is typically waited for the product to form 298 00:18:08,450 --> 00:18:10,490 Josh: itself, like they waited for the cell phone to be a thing. 299 00:18:12,750 --> 00:18:18,330 Josh: And then hasn't been the case just yet. We haven't seen a new groundbreaking AI device just yet. 300 00:18:18,450 --> 00:18:22,890 Josh: So they might have to be the frontier here. And Apple hasn't done that before, unless I'm wrong. 301 00:18:23,250 --> 00:18:25,450 Josh: So I'm excited to see what happens. 302 00:18:25,730 --> 00:18:28,930 Ejaaz: And they don't even necessarily need a dedicated hardware device for AI. 303 00:18:29,090 --> 00:18:30,810 Ejaaz: The iPhone is very sufficient for now. 304 00:18:31,050 --> 00:18:34,950 Ejaaz: And when you think about like, I was just thinking as you're talking about this, 305 00:18:35,310 --> 00:18:38,690 Ejaaz: Claude Mythos, the new Anthropic model, that's going to be 306 00:18:39,270 --> 00:18:43,450 Ejaaz: compress down to the size that can run on a mobile device in the next 12 to 18 months. 307 00:18:43,610 --> 00:18:47,310 Ejaaz: And when you're able to compress models that intelligent down to a size that 308 00:18:47,310 --> 00:18:50,810 Ejaaz: can run locally on your laptop or your iPhone, is that enough? 309 00:18:51,110 --> 00:18:55,610 Ejaaz: Like, I think that probably is where the iPhone 20, which is their 28th year 310 00:18:55,610 --> 00:19:00,530 Ejaaz: anniversary, if it's capable of running a mythos level model locally on device, 311 00:19:00,690 --> 00:19:02,150 Ejaaz: how much more do you really need? 312 00:19:02,530 --> 00:19:06,350 Ejaaz: And I think that's like a good question to ask as it relates to their competitors 313 00:19:06,350 --> 00:19:08,770 Ejaaz: who are spending so much money on this frontier intelligence, 314 00:19:09,050 --> 00:19:11,150 Ejaaz: because the average person does not need more than that. 315 00:19:11,450 --> 00:19:14,910 Ejaaz: And if it can accomplish and achieve all the tasks running on your local suite 316 00:19:14,910 --> 00:19:18,070 Ejaaz: of devices that you know and love, that's a huge advantage that no one else really has. 317 00:19:18,530 --> 00:19:21,530 Josh: Yeah, I mean, that's the bet that Meta is taking, right? They released their 318 00:19:21,530 --> 00:19:24,110 Josh: new model, what's it, two weeks ago called MuseSpark. 319 00:19:24,270 --> 00:19:27,930 Josh: And it wasn't like a frontier model on like coding or reasoning versus anthropic 320 00:19:27,930 --> 00:19:32,250 Josh: and open AI kind of sucked. But it was really good at data driven actions. 321 00:19:32,690 --> 00:19:35,770 Josh: And guess what Meta has a lot of data. So they like built 322 00:19:35,770 --> 00:19:39,830 Josh: a model specifically for their users of facebook instagram whatsapp or whatever 323 00:19:39,830 --> 00:19:42,930 Josh: to build specific features that people actually care about you don't actually 324 00:19:42,930 --> 00:19:46,910 Josh: need a huge model or the biggest model you just need a model that works for 325 00:19:46,910 --> 00:19:49,710 Josh: your users and can unlock new use cases for you and apple's probably going to 326 00:19:49,710 --> 00:19:53,310 Josh: do the same thing i think they'll probably play in both parks to be honest that's my guess yeah. 327 00:19:53,520 --> 00:19:56,120 Ejaaz: Yeah, the problem is, though, is like Meta's hardware sucks. 328 00:19:56,560 --> 00:19:59,460 Ejaaz: So they have no actual hardware for it. No one has hardware. 329 00:19:59,620 --> 00:20:02,060 Ejaaz: And that's the hard thing about it is like hardware is really hard. 330 00:20:02,160 --> 00:20:05,000 Ejaaz: And people are building the software stack, but have no place to put it. 331 00:20:05,140 --> 00:20:08,600 Ejaaz: They don't have consumers that are holding their devices in their hands. 332 00:20:08,720 --> 00:20:11,340 Ejaaz: They're currently holding Apple devices. We're talking to you on a MacBook. 333 00:20:11,520 --> 00:20:15,520 Ejaaz: We're calling our friends on an iPhone. And Apple owns that hardware stack. 334 00:20:15,660 --> 00:20:17,520 Ejaaz: And oh, my gosh, they have a really good opportunity. 335 00:20:17,700 --> 00:20:20,040 Ejaaz: And they have the cash balance because Tim Cook has handed off, 336 00:20:20,140 --> 00:20:24,820 Ejaaz: what, $150 billion in cash to John to go and do what he pleases with it. 337 00:20:24,940 --> 00:20:30,980 Ejaaz: So it's a really exciting paradigm shift to go from the Steve Jobs innovative era, 338 00:20:31,560 --> 00:20:37,800 Ejaaz: visionary era, kind of a jerk to Tim Cook being the pacifist who has generated 339 00:20:37,800 --> 00:20:40,200 Ejaaz: a tremendous amount of money just by turning it into a great business. 340 00:20:40,780 --> 00:20:44,520 Ejaaz: Back to John Ternus. We're unsure of the sentiment. We don't know if he's, he seems like a nice guy. 341 00:20:45,020 --> 00:20:48,660 Ejaaz: But back to John, who is a product guy who is kind of hell-bent on building 342 00:20:48,660 --> 00:20:52,640 Ejaaz: great hardware for this next generation of intelligence. 343 00:20:53,020 --> 00:20:55,980 Ejaaz: And I think it's really exciting. Apple's in a really good position now, 344 00:20:55,980 --> 00:20:59,000 Ejaaz: and it should be an interesting year to see how this transition goes. 345 00:20:59,540 --> 00:21:03,680 Josh: So I believe that's it for the episode. That is the complete end-to-end breakdown 346 00:21:03,680 --> 00:21:06,960 Josh: of Tim Cook's reign and the new guy, John Ternus, coming in. 347 00:21:07,340 --> 00:21:13,360 Josh: I personally think this is a very good move for Apple, and I'm excited to see what they build. 348 00:21:13,580 --> 00:21:15,800 Josh: Obviously, it's going to hurt. It's going to suck. There'll be a lot of speculation 349 00:21:15,800 --> 00:21:19,020 Josh: as to whether John Ternus is the right guy for the job we will find out after 350 00:21:19,020 --> 00:21:22,340 Josh: september i guess and i'm sure he'll be working closely with tim cook until 351 00:21:22,340 --> 00:21:26,720 Josh: then but uh unless there's anything else josh any final thoughts i. 352 00:21:26,720 --> 00:21:30,860 Ejaaz: Would encourage everybody to go and read the letter that tim cook wrote to the 353 00:21:30,860 --> 00:21:35,520 Ejaaz: apple community it was so great it made me emotional it was really well written 354 00:21:35,520 --> 00:21:38,100 Ejaaz: and it's i think it does a great job of summarizing 355 00:21:38,800 --> 00:21:41,600 Ejaaz: the journey that he's had with the company and the changes and 356 00:21:41,600 --> 00:21:44,260 Ejaaz: the impact that it's had on the world and it was 357 00:21:44,260 --> 00:21:47,160 Ejaaz: really heartwarming so if you do anything today go read the community letter 358 00:21:47,160 --> 00:21:50,600 Ejaaz: from tim it'll make you feel good about about a company like apple existing 359 00:21:50,600 --> 00:21:54,540 Ejaaz: and the journey that they've been on with all of us participating in it so that 360 00:21:54,540 --> 00:21:58,000 Ejaaz: is the only ask for the day other than that thank you for watching we got a 361 00:21:58,000 --> 00:22:01,380 Ejaaz: lot more coming this week there's a lot of good good topics open ai has a presentation 362 00:22:01,380 --> 00:22:03,620 Ejaaz: coming up there's a lot of new news that's going to be coming down the line 363 00:22:03,620 --> 00:22:06,080 Ejaaz: this week. So we will be here to cover it all as always. 364 00:22:06,560 --> 00:22:10,120 Josh: Yeah. So thanks everyone for listening. Whatever platform that you're on, 365 00:22:10,260 --> 00:22:13,280 Josh: by the way, the daily reminder, it helps us out massively. 366 00:22:13,600 --> 00:22:15,100 Josh: If you aren't subscribed to 367 00:22:15,100 --> 00:22:18,120 Josh: click that subscribe button, we'll give us a rating or leave us a comment. 368 00:22:18,280 --> 00:22:21,760 Josh: It helps us out. It gives us feedback as to what kind of content you guys enjoy. 369 00:22:22,360 --> 00:22:26,200 Josh: We know that there's a lot of you, so welcome. And yeah, we'll see you on the 370 00:22:26,200 --> 00:22:29,460 Josh: next episode, probably tomorrow, probably about OpenAI. See you soon.