Apple Kicks Off Terns Era with First Foldable Phone

26:24Bloomberg's Bronin Martin with what's going in corporate debt. Thank you very much. Coming up from Apple Park, Cupertino, IDCs, Nabila Popal, with the impact that a foldable iPhone could have in what is a nascent foldables market. We'll be right back. This is Bloomberg Tech.

26:43The people who seem to get more done than everyone else. They're not working longer hours or running on more caffeine. They've just stopped wasting time on the stuff that doesn't move work forward. Switching apps, re-explaining context, hunting for files. Those aren't small inefficiencies. They're hours wasted every week. Superhuman Go gives you those hours back. From the makers of Grammarly, Go is an AI assistant that sits inside every tab and tool you already use, always available and already aware of what you're working on. Ask it to draft something, summarize a long thread, pull up a file, or prep you for a meeting.

27:24Go handles it without you ever leaving the page you're on. This is what it looks like when AI actually fits into your work, instead of adding to it. It's like having a teammate whose only job is to help you be better at yours. Go keeps up so you can move forward. With Go working with you, you can show off what you do best. Superhuman Go. Find out more at superhuman.com. That's superhuman.com. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT Work. I'm Carol Masser. Has the AI moment arrived at corporate offices worldwide? Not yet. and it's perhaps several years away, according to one survey of corporate recruiters who circle the world's business schools each fall and spring.

28:10Bloomberg's Rob Mandelbaum notes that, according to the Graduate Management Admission Council, the skills recruiters sought most among 2026 graduates of business school master's programs, including MBAs, were communication, problem-solving, and adaptability, which changed little from last year. Training in artificial intelligence tools ranked in the bottom third of the skills list, but recruiters did say AI-specific training will be more important in five years. On that, recruiters rated current graduates as only somewhat prepared or less to work with AI tools and said business schools are not doing a good job of teaching AI skills.

28:47Bottom line, according to the survey, what most companies want when it comes to AI skills is for candidates to be able to automate routine work. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode. Available on Plus and Pro plans. Join Bloomberg for the Canadian Finance Conference, proudly sponsored by National Bank of Canada Capital Markets, on September 29th in New York. Hear from influential corporate and government leaders as they discuss the strategies shaping Canada's economic future.

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29:51Welcome back to Bloomberg Tech. Mike, let's get back to New York with Bloomberg's chief economic correspondent, Mike McKee, for an update from the Treasury and the buybacks and their impact on the markets. Hi, Mike. Hi, Ed. Well, we're having a significant impact on the markets, at least for the long-dated notes. The 10-year and 30-year, at this point, yields are much higher after the Treasury announced it would do$6 billion in buybacks in the 10 - to 20-year space. The administration apparently looking to bring down or at least control yields, And that goal is not being met at the moment. The latest development is that they have updated their buyback schedule going forward to show that future buybacks in the 10 to 20 year space will be four billion or greater.

30:37And that's what they originally said on August 18th when they announced this first buyback operation, that it would be doubled to at least four billion. And they come in at six so they could easily raise those in the future. But they're going to have to see how this all plays out and whether this sell-off in bonds continues, whether it sticks because of the market's concerns about the overall U.S. debt. It is a concern for the administration because the more yields rise, the more expensive it gets to pay for this, and the budget deficit gets bigger. Also, because it's the 10-year note yield, that's tied to mortgages.

31:16Its mortgage rates go up, and that's not very good for a White House that is trying to convince people to vote Republican in a midterm election. So, Ed, we'll keep an eye on this all day and see if we fade this. It's faded just a little bit, but it's still a big jump up and not what Treasury may have been expecting.

31:38Bloomberg's Mike McKee, thank you very much. There's a lot going on in the world of technology, in the world of AI, particularly when it comes to the equities market. at Bloomberg's Karin Reinecke joins us now. Karin, what you got? Thanks, Ed. Yep. Tech stocks are the biggest movers of the day today. Shares of Meta are particularly having a great run. The stock is having its best day in more than a month as Wall Street analysts are cheering its Muse AI agent. So this is something that people have been waiting for, looking really great here. Mizuho analysts are writing that the agent marks the start of a substantial product cycle that's not priced into shares.

32:16On the flip side, we're seeing some big AI stocks also weighing on the NASDAQ. It's down today. And some of the biggest decliners are Amazon, Alphabet, and actually Apple at this point. So it should be noted, Amazon and Alphabet also have AI agents. There could be some competition there. There's So the bond sale, as well as Alphabet's Google spending more than$15 billion in AI structure in Finland. And of course, we're all watching shares of Apple. Stock is actually seeing some selling pressure today heading into their event. Obviously, later in the afternoon, we're going to be watching here for the new foldable iPhone.

32:55Back to you, Ed. OK, Bloomberg's come, Reineke. Thank you very much. Apple's new foldable device is expected to come with a price tag of around$2 ,000. But despite that cost, a head start by rival phone makers, IDC predicts Apple's entrance will breathe new life into the foldable space. Nabila Popal, Senior Research Director, is with me. And I really want to dig into the data here. What's interesting, actually, is we saw the market for foldables, which is quite small, contract in the first half of this year. But if you zoom out for some clarity, you know, a billion smartphone units this year, it's foldables where we could see growth and Apple is responsible for it to your mind.

33:35Absolutely. I mean, we haven't been this excited for an Apple event in a long time. And, you know, with the foldable, as everyone's expecting to launch from Apple, it's going to reignite growth, right? And not just reignite growth in a overall smartphone market that's declining, but to a very high value segment, which currently is only under 2 % of the market. So we're expecting Apple already within the first four months of launch to capture 30 % share of, yes, this very small, but still very relevant foldable market. So Bloomberg's reporting is that the iPhone Duo is what it will be called. Goes on sale in October.

34:11Wall Street estimates vary, actually. Six million units, 10 million units in the December quarter. What does IDC think is possible? We are forecasting about 10 million units in the first 12 months of launch. So, I mean, we're really, you know, I think just given those numbers, And then by the end of next year, so Apple will capture about 40 percent share and just over 30 percent this year. So there is, you know, given the fact that the total foldable market is about 23 million this year, that's going to make up a huge portion. But more importantly, we're excited about to see how Apple brings more relevance to the category.

34:47What are the new elements that it brings to play? Because it's a very crowded market. Foldables have been around for eight years now and there's a ton of competition. So how is Apple really going to stand out and differentiate the product aside from its obviously brand value that it has? What does IDC feel is most important then for the product itself? What is it that Apple has to have got absolutely right when they show us this foldable later today? Well, considering it's going to be at a banging price of$2 ,000 or$2 ,500, right? We don't know where it's going to land. We're expecting on the higher end of that range.

35:20And the most important thing is going to be really the look and feel. It has to feel premium. They have to get the crease, right? It was rumored to be, you know, invisible. So let's see how they get. But I think more importantly, to make the product relevant or really impressive is how are they going to define and polish the user experience? Until now, consumers are really like, eh, you know, why do I really need a foldable and what can I do differently? So the seamless, you know, the Apple's really great about, you know, integrating new things in a very user-friendly way. So I'm excited to see how Apple brings, what it brings to the OS, right, in terms of the extra screen size and what can you really do with it.

36:02So I'm excited to see how Apple, I'm curious what Apple does about that. The luxury or premium segment is really interesting in the context of China. You were cited by Bloomberg's Mark Gurman in his latest piece, likening the potential of the foldable phone to what we see in the luxury bag space. Explain that bit to me. Right, the Birkin comment. The Birkin, yeah. Well, you know, last year, the orange of the 17 was so popular, and Chinese consumers were liking it to the Hermes orange, right? So I was saying, yes, despite this high price, I won't be surprised if the new iPhone foldable, you know, or Duo, whatever it ends up being called, ends up being like the new Birkin of smartphones, right?

36:44So high price, very luxurious, very limited. And so, you know, that's why I do think that it's going to be a blockbuster product. We have the IDC numbers and expectations both for China, for the foldable segment, but also just in general globally to the end of this decade. What's the pathway for foldables over the next few years and how big a driver is Apple of that growth? So, you know, the two largest markets for foldables are U.S. and China. China with over 60 percent share and U.S. with over 20 percent share. Now, Apple is almost 50 percent of the U.S. market. So right there, it tells you that Apple being the largest number one player in the US, for example, and now number two in China, it's going to, you know, launching a foldable device, it's going to really take momentum, add momentum to the category and increase the share of the foldable space.

37:37But more importantly, it's going to add a ton of value to, you know, Apple's proposition and revenue. Really quick. Is there anything else you're watching out for beyond the foldable? Yeah, I'm actually super excited to see what they do with the rumored red or burgundy or whatever color is going to be launched. I'm a big colors person last year. Yes, the orange was a big hit, but it wasn't my thing. So I am really excited to see where in that range they fall. And then, of course, the camera improvements with the Pros and Pro Max. The 18th generation, Avila Popal, Senior Research Director, IDC.

38:10Great to have you back on the show. Thank you. Thank you very much. So coming up, defense tech startup Covenant emerges from stealth with a long-range missile built to close the West Deep Precision strike gap. Covenant President Abbey Denberg joins us next. This is Bloomberg Tech.

38:30The people who seem to get more done than everyone else. They're not working longer hours or running on more caffeine. They've just stopped wasting time on the stuff that doesn't move work forward. Switching apps, re-explaining context, hunting for files. Those aren't small inefficiencies. They're hours wasted every week. Superhuman Go gives you those hours back. From the makers of Grammarly, Go is an AI assistant that sits inside every tab and tool you already use. Always available and already aware of what you're working on. Ask it to draft something, summarize a long thread, pull up a file, or prep you for a meeting.

39:11Go handles it without you ever leaving the page you're on. This is what it looks like when AI actually fits into your work, instead of adding to it. It's like having a teammate whose only job is to help you be better at yours. Go keeps up so you can move forward. With Go working with you, you can show off what you do best. Superhuman Go. Find out more at superhuman.com. That's superhuman.com. This is the Bloomberg Tech Minute, brought to you by ChatGPT. Now with ChatGPT Work, I'm Carol Masser. Has the AI moment arrived at corporate offices worldwide? Not yet, and it's perhaps several years away, according to one survey of corporate recruiters who circle the world's business schools each fall and spring.

39:57Bloomberg's Rob Mandelbaum notes that, according to the Graduate Management Admission Council, the skills recruiters sought most among 2026 graduates of business school master's programs, including MBAs, were communication, problem-solving, and adaptability, which changed little from last year. Training in artificial intelligence tools ranked in the bottom third of the skills list, but recruiters did say AI-specific training will be more important in five years. On that, recruiters rated current graduates as only somewhat prepared or less to work with AI tools, and said business schools are not doing a good job of teaching AI skills.

40:34Bottom line, according to the survey, what most companies want when it comes to AI skills is for candidates to be able to automate routine work. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode. Available on Plus and Pro Plans. Here are five reasons to subscribe to Bloomberg News Now. Number five, you get the latest news from around the world instantly. Number four, it saves you time. Your day's busy. Catching up takes just a few minutes. Three, it's available 24 hours a day whenever you need it.

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41:37An AI researcher has resigned from Anthropic and called on other staffers to rethink their work. In a post on X, Jacob Coxon cited his concern that the company and its top competitor, OpenAI, are acting irresponsibly in their all-out pursuit of a technology that possesses increasing safety concerns, saying, quote, they are racing straight to self-improving superintelligence and gambling with our lives. Bloomberg's senior tech editor, Mike Shepard, joins us with the details. This is kind of a two-parter as well, because after that initial post from the employee that had resigned, one of his colleagues, a current anthropic researcher, weighed in as well.

42:13yes and this all stands out really because we have heard for i don't know how long and you and i have talked about it from time to time all this doomer talk surrounding artificial intelligence and the speed at which it is being developed by all these companies and these calls have been dismissed somewhat by the industry to a point but now we're hearing the call coming from inside the house in a way. And it really is not only a warning to the public, it is also a warning to AI employees themselves. The poster who just resigned from Anthropic, Jacob Cox, really did tell his fellow researchers to think twice about what they're doing and whether they want to be associated with something that could potentially have such grave consequences.

42:58And we have heard this message from other employees within Silicon Valley who work in artificial intelligence in In July, there was that letter that was signed by 1 ,100 OpenAI, Anthropic, and other AI industry employees urging the industry to pace development of artificial intelligence so that they can reckon with some of the risks. But now we're in kind of a new phase of the game, the introduction last week of Astra, which some have hailed, including Jensen Wang, as what we would term AGI, the point at which the intelligence can outpace and outwork humans, that really puts us in a different territory.

43:37And that highlights what Jacob Coxon posted today. The specific line that everyone's talking about online on social media is the likelihood in the next decade that AI wipes out humanity. Could you just explain that bit very quickly, Shep? Well, one of the concerns is that AI really does have this ability now on a cybersecurity front, on a health development front, in all of these areas to potentially upend security as we know it. Waging cyber attacks that could disrupt the financial system en masse. Being used to develop bioweapons that really pose, as you put it and as the poster put it, an existential threat.

44:21Now, that is prompting some reflection here in Washington and a number of calls from politicians, including Senator Bernie Sanders, for steps to halt this and really to ban what he called superintelligence really as a protective measure. We're hearing a lot of that reaction today in response on Capitol Hill, but it is important to note that the Trump administration so far has really looked away from the safety question. The president himself last week saying in response to safety concerns that the priority really is continuing with AI development on Fedder because he sees it as essential to propelling the U.S.

44:57economy and also keeping pace against China in the race to dominate AI. It's Mike Shepard with the reporting. Thank you very much. Let's stay with private markets and startups. Andreessen Horowitz-backed startup Covenant is emerging from stealth after raising more than$250 million in three different funding rounds. The defense tech firm has already signed military contracts across the US and Europe and says it can make cheaper, heavy payload, long-range cruise missiles. Covenant president and chief growth officer, Abbey Denberg, is with us. Really interesting reading about Covenant. Let's start with the technology that you're working on.

45:34What is this most akin to in terms of what's already out there in the American defense industrial base? I'm joining you here from our production facility in Dallas, Texas. And behind me, you can see the Anthem, which is a low cost, long range cruise missile designed to fill the deep precision strike gap. And we talk about heavy payload and long range. There's not a lot of capability out there that can achieve that. And there is no capability that can achieve that today at the price and scale that we're offering.

46:09Abby, that looks to me all the way over here from Cupertino, but also from the description sounds to me very similar to a Tomahawk missile. Is that fair? What I can say is that Anthem is offering exquisite capability, but at an affordable price point. We as a nation have relied heavily on explicit capabilities that at the moment are not at an affordable price point and not being produced at scale. And we're eager to be able to bring affordable mass to strategic range.

46:43Abby's$250 million out the gate. That's a lot of money to come out of stealth. I go back to the note that it's three separate rounds that happened over time. But talk about the experience of raising those funds and coming out of stealth right now. Why this moment? I'll start with the rounds, because what I can say is we have an incredible cap table with investors who truly understand the deep precision strike gap today. We went to market for our seed round two years ago, and that was before deep precision strike was really talked about in the way that it is today. But we found investors that really understand the criticality of bringing affordable munitions into the marketplace.

47:26And we have been able to leverage that over the last two years to be able to build and develop the capability that you're seeing behind me today. And so when we think about that capital, it enables us to build a resilient, redundant supply chain and multiple production facilities in order to enable capability fielded as early as 2027.

47:49Abby, tell me about the team. What are the core competencies of those of you that are building Covenant right now? Where have you all come from? We have, and I'm sure many CEOs and presidents would say this, but we have the best engineering team in the world. We have been very intentional about bringing in only those that are really mission driven and focused. And the employee base is made up of reservists like myself, veterans and patriots who are so driven by this mission that we have worked tirelessly in order to deliver this capability. We went from ideation to a full scale operational prototype in 11 months at one day.

48:26And that stems from having missile engineers who've been doing this for 20 plus years. Our chief technology officer was the chief system engineer of Iron Dome. and we have engineers from across the globe that are working with us in order to bring forward a capability that executes.

48:47Let's go to what happens next. You've raised the money. You're joining us from the facility in Dallas. You're headquartered in Washington, D.C. What do you guys need to do to get going? We already talked about the contracts you have with both the U.S. but also Western allies. Where's your main focus right now with these funds? Our focus is to deliver. A lot of startups can deliver prototypes, and we've seen that. But the question is not, can new companies bring forward interesting technology? The question is, can they produce at scale? And that's what Covenant is about to do next. We are going to be delivering thousands of missiles.

49:23This production facility will be delivering 1 ,000 missiles next year and is designed to deliver 5 ,000 a year. The same is true of our production facility in Germany. And so what's next is delivery, because ultimately this is a deterrence capability. And the way that deterrence actually is effective is having munitions at the hands of our end users.

49:46Covenant President and Chief Growth Officer, Abby Denberg, the startup coming out of stealth with$250 million. Great to have you on the show. Thank you very much indeed. Now, coming up, a new iPhone and a new era for Apple. We're counting down to Apple's biggest, probably most consequential event in years, and it is all about a foldable iPhone. More to come. This is Bloomberg Tech.

50:27The curtain's about to go up on Apple's big event. So, what's coming and what's going to steal the show? Bloomberg Consumer Tech reporter Chris Welch is with me here at Apple Park Cupertino, and let's just be honest, foldable. And it has a name, according to Bloomberg's reporting. It's called the iPhone Duo, which is going to take some getting used to. Not the iPhone Fold, not the iPhone Ultra, but the iPhone Duo. I guess that, you know, you have a foldable, right? You are a user of a foldable. Duo represents that it has two modes. Our reporting is that when folded, it has one screen size. When unfolded, it has a different one.

50:58Explain. So it's got a very wide form factor when it's open. So that's great for watching movies or showing photos to your friends or stuff like e-books. So it's got a lot of great use cases. But when it's closed, it's kind of like a squat, short form factor, which people aren't really used to. So I think it's going to be like a learning curve once people get their hands on this phone. It's going to feel very different. We're starting to hear the cheers behind us of everyone that's javering at the Steve Jobs Theater. This market's really interesting. So IDC says there'll be a billion smartphone units shipped this year.

51:30Actually, foldables are very small. Yes. They're a very niche market. But there seems to be some hope, at least in our reporting, that Apple is going to give this segment a bit of a push. Yeah, for sure. I mean, Samsung kind of pioneered this category. They've been in it for years. They've also got Google, friends like Motorola, Huawei. They've been at this for a long, long time. But now Apple's here. You know, this is the first John Turner's keynote. No pressure. Here's our first ever folding iPhone. And so they're going to come into this market. And we're going to see, like, you know, how it looks, how they made it, the hinge, the crease.

52:00Will there be a crease? Have they solved the crease factor? That's been around forever. So there are so many challenges, but I think it's Apple. You know, it's going to have some kind of unique spin that's going to make it pretty special. Now, you and the team have detailed pretty clearly that this work's been going on behind the scenes at Apple for quite a long time. I guess they must be ready? You would think so. I mean, it's going to ship next month, apparently. So it's going to be somewhat of a wait. But they're ready. I mean, this has been like a several years long effort. So we're going to see what it looks like here.

52:31You know, it's got this. This feels like a big event. It's got that air of like a special day. This is not your typical iPhone event. So it's pretty exciting. You've done a few of these. Done a few of these. And you should be able to get your hands on what we think will be called iPhone Duo. What is it that you check for in the first instance with a folder? Just how it feels. How it opens. Is it like reassuring? Does it feel like, you know, high quality? Because people take these things to the beach. They take them all over the world. So it's got to be durable. It's got to work well. But this is Apple.

52:57So that's not going to be a huge concern for most people, I feel like. Chris and the team are going to be very busy today. We're about an hour from the keynote where we expect John Ternus, who became CEO on September 1st, to kick things off and the main event to be a foldable iPhone that Bloomberg reports will be called Duo. Bloomberg's Chris Welch. Thank you very much. Thank you so much, Ed. Indeed. That does it for this edition of Bloomberg Tech. Don't forget, check out the podcast. We had a lot of interesting conversations that looked at the foldable market more holistically. The forecasts for this year, what Apple's impact might be and also what the impact of a$2 ,000, maybe more than$2 ,000 handset will be in the foldable space.

53:36You can find the podcast on all the Bloomberg platforms and on Spotify, iHeart and on Apple. From Cupertino, from Apple Park, this is Bloomberg Tech.

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