WWDC Dispatch: Apple Refines in a Reinvention Era

0:00Apple just held its WWDC developer event, little AI light, big operating system changes, and plenty more to discuss. We're here in Apple Park in Cupertino with the Steve Jobs Theater right behind me. I'm just going to get off this stage for a moment, find some quiet, and talk to you about what we saw today. Welcome to Big Technology Podcast Special Edition, coming to you from the parking lot now, outside of Apple's WWDC conference. We're going to do a short solo podcast the same way that I did it last year, although with a very different type of setting here, right outside of Apple Park. Last year, if you recall, was the big Apple intelligence reveal.

0:42And this year, a much more subdued event. It was quiet at WWDC this year. That is the word I would use to describe it. And an event that focused largely on operating system design, which we're going to get to in a bit. But to preface, I just want to talk a little bit about what I see as two different modes of tech company operation. You have invention mode and refinement mode. And this might be familiar to some people who've read Always Day One. But basically, the big tech companies have been able to be so successful because after periods of refinement, they've always went to invention or reinvention mode.

1:22Think about Amazon. Amazon has been in reinvention mode basically throughout its history. It started as a bookstore, online bookstore. It became a first party marketplace. then it transitioned to a third-party marketplace, became a device maker with the Kindle, cloud hosting service with AWS, voice computing with Alexa. Microsoft started as a desktop operating system, then became a cloud hosting company with Azure. While these legacy businesses like Windows are still important, the growth and the optimism around these companies are in the latest reinventions. Azure, of course, is driving Microsoft's$3.5 trillion valuation today.

1:58Apple, of course, also no stranger to reinvention. Started as a desktop computer, then became a portable music player, even though those desktops were important. But the iPod really solidified the second generation of Apple. And then, of course, the mobile phone, the smartphone, which cannibalized the iPod, but became the flagship product of the company today. Then there's areas of reaffinement, making the iPhone thinner and more powerful after the company invented the iPhone as one of those. for Amazon, improving the Kindle has been an era of refinement. And you also have areas of refinement in software, not just hardware.

2:37For instance, Meta, making Instagram better with new formats and algorithms beyond simply thinking about that square image has been what's led Instagram to become what it is today. So, eras of invention and eras of refinement today at Apple Park WWDC25. This was a refinement event. We didn't see the reinvention talk like we saw with the Apple intelligence rollout last year. We saw a tremendous amount of focus on refining the existing product. And that starts with the iOS liquid glass design motif. So iOS or all the operating systems within the Apple product suite will now have more transparent, translucent, and glossy elements.

3:23For instance, when you play a movie, instead of those controls showing up and superseding the movie, you're going to start to be able to see through the controls in some way. They'll be a little translucent. It's very nifty. It's beautiful design elements. There's also 3D design elements as you change and move the screen. So images that pop out of the phone. But these are really beautiful changes. Beautiful changes. It's going to make the iPhone and Apple devices more delightful to use. And that's important because they were already the most delightful devices to use in tech. And that's just my opinion.

4:01They also had current experiences that they improved. So funny when you think about refinement, like why not refine the phone call? And Apple did. They refined the phone call with a new feature called hold assist. when you are put on hold and that hold music is going, Apple will now basically kind of hold the call for you. And when a representative or somebody else picks up, they'll alert you and you can pick up the phone. Why not refine text messages? And Apple did that. Now there's going to be a new basket for unknown senders. So hopefully you won't have your text message inbox filled with spam messages.

4:39There's also going to be live captions in FaceTime or live translations in FaceTime. So you're FaceTiming somebody and they're speaking a different language. You can see what they're saying in real time with live translated captions. And there'll also be live translations in phone calls. So an era of refinement or actually an event of refinement in an era of reinvention. That's what we saw from Apple today. The context is super important. And Apple last year with the Apple Intelligence event told us that it believes that the moment of reinvention has arrived and that artificial intelligence would dominate the operating system.

5:16That is consistent with what's going on throughout the entire tech ecosystem where you have companies like Google reinventing in a big way with AI and Amazon with Alexa Plus. Now, we've seen a rise of AI companies all over the place, but there's this broader, bigger idea that only a few companies can really execute on. And that is the idea or the vision of a contextually aware assistant that knows everything that you're up to and can help you get things done in a much more efficient and easier way and make sense of your life. You know, Amazon's Lexa Plus demo was all about this, but just to bring it back to Apple, last year Apple told us that that was something they could build.

6:01With the Apple intelligence, I won't call it a rollout, but the preview, because it was all effectively video and none of it was working. They showed us what they want to be able to do for us. That is, for instance, being able to search your email and tell you when your flight is or help you connect that flight information with maps and let you know when you have to get to the airport. Now, everybody wants to build this. Nobody has built this. But this is something that, again, only a few companies can build. Apple can build it. Google can build it. Maybe Amazon can build it. Perplexity isn't going to build this, right?

6:40It's got to come from somebody big that has access to all your information and something, hopefully, that you trust. And that's where Apple is. But again, we saw after a year promising that, they decided to return to this era of, or this moment or this motif, shall we say, of refinement and put that off. Now, we all know why that is. They tried to build this. They weren't successful over the past year. It's not just them. Amazon also tried to build this over the past year. They announced Alexa Plus in February, and it isn't out yet, at least not broadly. And Google, we know, has made some improvements on the product front.

7:19But we still use traditional search. We still use traditional Android, really. It's not an AI operating system. But the point is that this will come, as I try to fight the sun here, this will come. And when it comes, it's going to come fast. And you better be ready as a company. And that's why it's a threat for Apple, but it's also an opportunity. Because Apple, again, if it gets this right, this will help its services business. It will help its devices business. It will help everything. If you have an assistant that is that useful, people are going to gravitate to it. And so it was very interesting that this year that vision of an assistant from Apple disappeared.

8:02To me, this made the event pretty underwhelming. And it showed the gap between Apple and the other AI leaders. Now, I think it's important to have some perspective here. Because we're also talking in the context of what will happen to devices. And there is an idea that the screen is going to fade away and we'll be left with the assistant inside. Johnny Ive, of course, who is doing this multi, who sold his IO device company to OpenAI for billions of dollars or 6.5 billion somewhere in that neighborhood. He's called the iPhone a legacy device. This is the guy that designed the iPhone. So there's this idea that screens are going to go away.

8:40Personally, I don't think we're going to see the end of screens anytime soon, which makes this a pressing challenge for Apple, but not a sort of potentially fatal challenge for Apple. If you think about what we need screens for, we need them for work. We need them to look at photos, watch videos, take FaceTime calls. If anything, today Apple talked a lot about the primacy of the screen and we didn't really even see anything about the AirPods updates. So, or if we did, it was a minor footnote. So Apple, obviously the device maker, the designer, doesn't think that screens are going away and I don't either.

9:18But there is a sense of urgency here. This is a changing technology world. Every big tech company has told us that. Apple told us that last year. Amazon's told us that this year. Google, of course, has been banging the drum for a long time. Sometimes with updates that are so similar, you wonder what's changed from year to year. But inside that company, they are working on building it. Meta has told us that with the primacy of Lama. And of course, there's been some challenges there. But the company believes that the next social interaction is going to be talking with chatbots. And that's sort of the mood with which I leave Apple.

9:55Company is still right around$3 trillion, but it's lost the lead as the most valuable company in the world to NVIDIA and Microsoft, which are each about$500 billion more valuable than Apple. Now, the one positive note you can say, thinking about today, company certainly didn't overpromise, and that means it won't underdeliver. I was just on CNBC and one of the panelists there had basically said, look, it's so low. So now it's time to buy. Can't go any further down. But again, in a moment of transforming technology, it's not where you want to be. So a stark difference this year's WWDC versus last year's WWDC.

10:35The screen will survive. Apple has refined the operating system through which many billions of people or 2 billion people plus use those screens. But ultimately, if you think a wave of AI is coming, and I certainly do, and it will take time and Apple has time to catch up, but status quo and refinement is the best way to get left behind. It's all about reinvention. And any new wave of technology, desktop to mobile, for instance, requires a determination to reinvent, a determination to make mistakes, learn from them, and ultimately build into that next generation of technology. So again, on this show, we talk a ton about when is AGI coming?

11:21You know, are we going to have devices without screens? First and foremost, AI will probably change a lot of things about the way that we use those screens even before AGI if we ever get there. And that is the context through which I view this year's WWDC. Underwhelming era of reinvention, but ultimately still some time for Apple to make this work. All right. I have plenty of questions that I want to ask. M.G. Siegler of Spyglass. He will be on this Wednesday. I'll drop that 6 a.m. Eastern time. We're going to talk plenty about Apple AI screens or not screens. And also this new paper from Apple talking about how reasoning models don't actually reason.

12:03So please stay tuned. If you're here on Spotify or YouTube, thank you for watching. If you're listening, thank you for listening. And we'll see you next time on Big Technology Podcast.