Apple Is Overhauling Siri as Part of Major iOS27 Changes

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1:49Daily Podcast with Carol Masser and Tim Stenevek on Bloomberg Radio. I'm always so jealous of the Bloomberg Businessweek anchors, Tim and Carol. We're filling in for them. I'm Matt Miller. This is Alexis Christophorus. Because they get to talk to Mark Gurman. I feel like every day he comes on this program. He never comes on my show, which is Bloomberg Open Interest. Could have changed that. Weekdays from 9 to 11. Mark Gurman joins us now. He knows everything and more about Apple. And Mark, I loved your preview of what they're going to finally do with Siri. I guess there's a dynamic island on my phone that's going to be somehow useful here.

2:27Can you explain to us how Apple is going to bring AI into the iPhone? So Apple is finally going to take AI seriously. They're going to embed the technology across the new iOS being introduced in June and being released in September. And the centerpiece of that is an overhauled version of Siri. The underlying models have been developed by Google's Gemini team, so you know they work well. Obviously, Gemini has been hugely successful for Google over the past several months, and they're very competitive with ChatGPT and Claude at this point after being a little bit behind initially. Other new features as part of this new Siri, the ability to tap into your personal data.

3:09So you can ask it to look up text messages you've had in the past. What song did Matt email me? You can tell it to look through your calendar and book calendar appointments for you through third-party applications. So it's going to be a much upgraded voice assistant doing the things that we've wanted it to do for the last 15 years that it's been unable to do. They're also going to be competing with Perplexity by launching their own AI-powered web search engine within the new Siri. and they're also revamping the user interface of Siri, which is our story this morning, indicating that there's a new animation when you launch the voice assistant and there's a new system-wide chatbot.

3:52So they're integrating a conversational AI agent throughout the operating system. So this is bringing AI to the masses in a way that Apple didn't originally anticipate. They pushed back heavily on chatbots, but a billion people who use ChatGPT couldn't be wrong. Right. They realize we better jump on that bandwagon. Mark, were these images that Apple released just images? Were you able to get your hands on any of this tech? Are they there yet for you to sort of demo it? Apple doesn't announce the new features until June 8th. That's the Worldwide Developers Conference. These were not images provided by Apple.

4:30These are illustrations that we created. So you actually did this work and trying to some extent to forecast what we get on June 8th. I wonder about the access that Apple's AI is going to have because I've noticed, at least for me, one of the biggest problems with ChatGP or GPT or Gemini or Claude is that they never have access as agents to go into different websites and do stuff for me. If I'm using my iPhone, I'm usually using it to browse Bring a Trailer or Car Gurus or Auto Trader. And there's no way for ChatGPT to retrieve things from that because they don't have the API clearance or whatever it is.

5:16That's a great point. Is Siri going to be able to do that? Yes, because Apple has been working on a series of APIs for this new Siri that, if developers want, will be able to tap in deeply into it. So it could integrate, if Google wanted, with the YouTube app. Obviously, this is going to integrate very nicely with the built-in web browser or third-party web browsers who would like on iOS, iPadOS, and macOS. So the advantage that Apple has is they have the app ecosystem around them, and they have the ability to plug into any third-party AI agent they'd like as well, and they have all the user data.

5:53So all your user data for context is provided into that system. Mark, beyond Siri and AI, I know they're going to come out with a new iOS system, a new operating system. What can we expect from that? And there was that controversial liquid glass design they came out with. What can we expect there? Well, this new Siri that we're discussing and the new AI features, things like AI photo editing, those are actually part of this new operating system. So the new operating systems features is the new Siri and the new AI enhancements. There's a few other bells and whistles there. There's a new camera app in iOS 27 that's fully customizable.

6:33There's also things like the ability to create your own custom wallet pass. So if you go to a gym or a sporting event or a movie or whatnot, and they don't have support for the Apple Wallet app, you'll be able to take what they do offer as an app or a QR code or a physical card and convert that into a digital pass within the Apple Wallet app. In terms of the payments I make, some of the many payments I make are to these chatbot creators, right? I pay$20 a month to OpenAI. I pay, I don't know how much, but something to Anthropic for Claude. Am I going to still have to do that when I use these things through Siri?

7:11Is Siri going to have its own subscription that I'm going to have to sign up for? From the get-go, I don't anticipate there being a Siri subscription for this chatbot. This is going to be a feature as part of owning an iPhone or an Apple device. If Apple were to come out and start charging for something, after it was delayed for two years and Siri has the bad reputation that it has, I guess that would be a colossal mistake and a PR nightmare. So I don't foresee them doing that. Eventually, this stuff may need to be charged for because of how expensive it is to operate. But you got to build up some goodwill with the customer base before you can start charging for it.

7:56Just like what Chad GPT and Claude did, right? Like these things were free initially. People got used to it. They got hooked to it and they had to start paying for it. if they wanted more premium features. But given the position Apple's in, it would be, I couldn't even think of the word to describe how big of a failure and an issue that would be. So eventually, yes, but from the get-go, no. Now, in terms of these other chatbots, you'll be able to subscribe to them, Claude, ChatGPT, Gemini, you name it, through iOS and operate those through Siri using a new API. And so you'll still operate your subscription the way you do today.

8:32All right, Mark, great having you on the program. I hope you can join me on open interest at some point, although I know it's early for you on the West Coast. Mark Gurman there is Bloomberg's managing editor for global consumer tech. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

8:52So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM. If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility.

9:30But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention, and independent agents who focus on relationships, not transactions. The Cincinnati Insurance Companies. Let them make your bad day better. Find an agent at c-i-n-f-i-n dot com.

10:24this app or watch us live on YouTube. Joining us now is Zscaler's CEO, Jay Chowdhury. He's founder and CEO, and he joins us from the company's headquarters there in San Jose. Jay, thanks so much for being with us. I do want to note the stock, yes, was down 28 % yesterday, but it is coming back a little bit here today. It's up now about 6%. It seems like Wall Street got sort of tripped up by the feeling that new customer additions is going to be muted next year. Is that fair to say? So, Alexis, first of all, thank you for having me. If you look at the numbers we deliver, there's a very good quarter.

11:02Revenue up 25 percent. ARR up 25 percent. We crossed$3.5 billion ARR market. Our operating margin is record high, 23 percent. Yes. So, I think that the market thinking that our new logo acquisition is slowing down was misunderstood. Our CFO made a comment that basically implied that we want to accelerate the growth of new logo. We already accelerated the growth of upsell. So the comment was taken in wrong context. We are adding new logos. We are adding upsell. Our customers are doing very well. Our track record is very good. So what kind of average revenue growth do you expect? The ARR seemed to be one of the concerns of the street.

11:55I thought 16 % to 17 % sounded pretty strong, but you've got 25 % now. Is the forecast a little bit weaker than what we're currently seeing? So as a CEO, I have always big aspirations. But when it comes to giving guidance, we want to be disciplined, we want to be prudent. But if you look at the track record of Zscaler, we always met or exceeded the expectations and the guidance. So we're very bullish because the market opportunity is big. Cyber has never been in a stronger position from needing solutions point of view. In fact, mythos has further added fuel to the fire. I feel like this is another COVID moment in the world of cyber because mythos like models are finding security vulnerabilities at a record speed.

12:48The solution is not just keep on patching them. The solution is zero trust architecture that Zscaler pioneered to phase out the legacy firewalls and VPN technology. So when customers are talking to us they're asking for more and more zero-trust solutions. So we're pretty bullish about the future of the company. But shouldn't you be, I mean, especially with the tailwind of AI, with the kind of accelerating growth that we're seeing now, I would expect your average recurring revenue expectations for 2027 to be far higher than one quarter in 2026. So this guidance was given as preliminary guidance for the fiscal year that starts on August 1.

13:34This is early stage. To some degree, we kept in mind that we had a couple of sales leadership changes that impacted the guidance we gave. But as we pass through and get ready for fiscal 27, we'll be giving more refined guidance to our market. Jay, are there any plans to dive deeper into identity security for AI agents in your suite of, in your portfolio suite right now? Because it's something that our analysts at Bloomberg Intelligence sort of called out as perhaps limiting larger order closings for you. Actually, identity plays an important role. It's a starting point. If you think about the rollout of AI agents, what's holding enterprises back is the assurance that these agents will only be able to do things that they're allowed to do.

14:30We see so many situations where agents are going rogue. Today a user is the weakest link. Tomorrow from cyber point of view an agent will be the weakest link. And these are more dangerous because they act in milliseconds. They take no break, no weekends, no sleep. And what you really need to enforce policy is a zero-trust exchange, a policy engine that says agent A can talk to agent B, agent A can talk to certain applications. We are the exchange by default. We have done it for users, we've done it for workloads, so we are best positioned. I do not think identity is the factor that's holding us back.

15:12Our view is that we should not be building identity for agents. I want to take identity from companies who help you build agents. Microsoft is a great partner for us. Google, AWS, all these parties help you build agents. We take identity from them as being the Switzerland, and we connect right party to right party. Every enterprise is waiting for a solution like this. We'll be launching it next month at our annual user conference. So you don't have or plan to develop an identity security solution for AI agents? I do not need to build identity solution myself. You need to work with partners with the right partners for us.

15:55And that's how we have done in the past. Take for example, Zero Trusts are users. We actually are the dominant player in this space. We work with Microsoft, Okta and others to take identity, validate the policy and connect right things to right things. We think our strategy is the right strategy. You don't try to build everything. You build things that are core to you, and then you integrate with other partners using APIs. So if the fundamentals of the company, as you say, Jay, are solid, why there appears to be a disconnect with traders? Why do you think that is? I think they aren't fully understanding it.

16:35If you think about the need for cyber with Mito's, without Mito's, AI security coming in, And that's what we have been delivering. If you look at our numbers, very good numbers all along. And our goal is to make sure we keep on innovating our solutions, taking our customers. Over 45 % of Fortune 500 companies, they depend upon us. Lots of government agencies are working with us. So we'll keep on building and delivering, and I think the market will catch up. I want to ask about the effect of the stock price. How is it operating in a year where the stock has dropped from, you know, last year, if you hired someone new, they're used to the stock in the 300s.

17:20And this year, it's more around 150. So it's basically halved. How does that affect the way you operate? Look, stock will go up and down. Sure, it impacts some employees and how much equity they have. But overall, we have seen that for any large company, stocks have gone up and down from time to time. If you build great solutions, if you solve customers' problems, the market comes back over time. We have seen that before. I believe we'll be fine. Who are you partnering with in terms of identity AI agents? Because you said that while you're not building it out yourself, you're looking to partners to do that.

18:04Who are those partners for you? So, every provider, every software provider who allows you to build agents, builds identity along with that. We started working with Microsoft and became part of the EntraID program, which is being built for agents, number one provider. Other providers, folks like Snowflake, Google, AWS, they're all building agents and they provide identity. Combination of the two allows us to enforce policy that is the best strategy. Imagine trying to compete with all these hyperscalers to say that I want to build identity. Partnering for identity is the best thing, and that's what we do.

18:47And we have a number of those relationships in place. All right, Jay, I understand what you're saying there. And I guess it's important for you that investors get it as well. Jay Chowdhury there, he is the CEO. of Zscaler. This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130. Kevin Tynan joins us right now, director of research at the Presidio Group out of Princeton. Kevin, this has been a car so controversial.

19:30It's pushed Ferrari up into the top 10 most talked about companies for every day this week on the Bloomberg Terminal. Let me just first get your take on the Luce. Look, it depends what seat you're sitting in, right? If you're an enthusiast, you probably don't love it. If you're in the C-suite, the CEO, the CFO, it's a compliance vehicle that's going to hit certain targets that will allow you to do other things. And you make it questionable in terms of styling so that it accidentally doesn't sell too many, because chances are it's unprofitable for you, at least up front, even at that price. Well, Porsche and Lamborghini, didn't they pull back on their plans for EV?

20:16Porsche, not enough and not soon enough. There you go, said by Matt Miller. But so what does it make sense what's happening here? I mean, is now the right time for Ferrari to be doing this? You know, look, you have, especially Europe globally, you have emissions reduction targets, you have fuel economy standards. And if you're Ferrari and you're looking to grow volume globally, at some point you have to address the emissions and the fuel economy issues, right? So you do that with a compliance vehicle. This is not really that different than Nissan Leaf in the early stages or Chevrolet Bolt, right?

20:55You have a company who needs to hit some regulatory target with the product. You want to lose as little money as possible with it. So you sort of rein in the production numbers of it, sell it in California where you can hit your corporate average fuel economy target. And if you're GM, that frees you up to sell all the Silverados you want all over the country. So from that perspective, it's not about what it looks like or how many they can sell. It's about losing as little money as possible while hitting a regulatory goal. And this will do that. And everybody's talking about Ferrari. Right. And there's a huge distinction, Kevin.

21:34Those of us of a certain age may think of this still as an arm of fiat, right? or FCA or now Stellantis, but it's been divorced from that parent company for many years now. And when you talk about Lamborghini or Porsche, when you talk about Chevrolet or GMC, they're all part of these huge global car makers that do have those compliance vehicles already. And it's not going to hit the image of Corvette if you don't like the Blazer. By the way, I love the Chevy Blazer SS. So that's the difference, right? Ferrari is a standalone company that only makes and sells like 13 ,000 cars a year. Correct. And Rolls-Royce is another example, right?

22:18So you do Spectre. It's a hit, it's not a hit, it's good looking, it's not, but you also have the coverage of BMW and Mini there to have those compliance vehicles. So it becomes less important. But I think, especially for European manufacturers, And if you go back to the diesel emission scandal, which obviously was not Ferrari specifically, but that was such a black eye that none of the European manufacturers want to miss those emission reductions targets. And not only that, they're expensive, right, if you don't get to the target. So this to me is, you know, I joke, it's an intern in a cubicle comes running out and says, we've sold enough.

23:02Stop. We've hit the target. Now let's go sell what really makes us money. And again, from an enthusiast, you and I, car guys, we look at it and say, that thing is ugly. It's not of the Ferrari bloodlines that we know. It's not styling like Pinaferina that we used to know. But that's not the point in this. This is the P &L statement. This is, does it make more sense to miss the target and pay the fine or just produce a product that we can sell a couple hundred of and everybody's happy, at least in the C-suite and we move on? I'll say at the risk of my reputation, Kevin, I actually love the design of this car, especially the interior.

23:43Like, I want to get in it. But to me, this is much better as an Apple car by Ferrari than a Ferrari car by Apple. And that's the problem for me. It just doesn't fit with the rest. Having said that, the Puro Sang is a fire-breathing V12 that also has computer at every wheel. Like, has Ferrari gone too far into the age of technology with the former CEO of ST Microelectronics away from its roots as an internal combustion engine maker? Yeah, and look, I think you have to keep up to a degree on the technology, right? It's just the price of entry in this automotive market. You know, automakers are valued on that ability.

24:34And if you look across the board at other automakers, it's not about bending metal and selling vehicles. It's about being profitable and it's about where you are in that technology cycle. Are you at least keeping up? You know, and I think this is a lot of that. You know, and if you think about it, even with Luce, if they told you, hey, Matt, buy one of these and we'll get you one of those, you do it. Right. Even if you didn't love the styling of it. So they hit their target and they still have the products that are legit Ferrari or what people think of as legitimate Ferraris. So to me, you have to separate the enthusiast mindset from a company doing business as an automaker where the purpose is to be profitable, not necessarily to put a car in every driveway or make everybody happy with what you do with styling and technology.

25:25Certainly not for$650 ,000. But I know, Matt, you like the look of this. But guys, I got to tell you, I'd rather take a, what is it, the 1 ,000-mile race in Italy happening June 9th. The Mille Miglia. Mille Miglia, yeah. Those are the vintage racing cars that are going to hit the road up there throughout Italy. And that's sort of more my style. Yeah. You could take an old Ferrari on that race, but probably not this one. You'd be banned. You might be thrown out of the country. If you're driving this EV. It is about power, though. And I guess the car does have the power. It doesn't power doesn't matter when it gets to EVs.

25:58I mean, Mercedes just put out an EV with more power than this for less than half the price. Kevin, I wish we had more time with you. I hope to talk to you on podcast soon. That podcast is Hot Pursuit with Han Elliott. We do mention Kevin a lot. We have had him on in the past, but we need to get him back on. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

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