Bloomberg Tech Live From Apple's WWDC Event

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1:11Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech. I'm Caroline Hyde in New York. And I'm Ed Ludlow, live in Cupertino from Apple. It's the company's biggest product launch event of the year. And we're waiting for the next generation of iPhones, smartwatches and much more, Karen. And let's just talk about what Apple is already pricing in from a market valuation perspective, Ed. I'm looking at Apple off by six tenths percent as perhaps we bought the news into this unveil. Usually stock does sink after a product launch.

1:48And this one is the iPhone 17, Ed. But let's look at it on a longer term basis. This company has added$430 billion in market capitalization since the end of July alone. We have really rallied. Not enough to bring it green in a year-to-date perspective, though, Ed, but that's because we continue to worry about trade and so many other overhangs. The way I think about it, world's third most valuable company, half of revenue is iPhone. Apple's biggest product launch of the year is today, and the company which has fallen behind in the generative AI race will focus on hardware, show off the new iPhone 17 range.

2:24Let's bring in Bloomberg's global consumer tech managing editor, Mark Gurman. The basics, 17 base model through Pro and Pro Max, and in the middle, a 17 Air per your reporting. Explain the features that come with the 17 Air, Mark, but also why does that matter? The 17 Air, that's going to be the big deal today. This is a slimmed down phone on paper. It's a third thinner than the other new iPhones that you're going to see today. And this is an entirely new industrial design. It's something brand new for the company. They have not done an Air phone to this point. Obviously, there's the MacBook Air, there's the iPad Air, and now there's going to be the iPhone Air.

3:03This is going to be a pricey phone, not as pricey as the Pro models, but it's going to be quite expensive, right? somewhere between$900 and around$1 ,000, give or take. It's going to only have one camera. It's going to have drastically less battery life than the Pro models, but this is going to be exciting. It's going to get people really interested in the phones this year. It's going to help draw people to Apple stores. It's going to give Apple a way to have a big marketing push going to the holiday season. But in my view, as I've written, the most popular phones will still remain the Pro phones, and those Pro phones will also still be of the most practical new iPhones because of the better battery life performance in cameras.

3:43A lot of this, as you told us yesterday, is sort of a warm-up act to a foldable phone, having to make it as slim as possible and redesigning that camera. Tell us about some of the health perks that we're going to be getting. You've got a whole new lineup of smartwatches. We've also got AirPods really lifting their game. So the AirPods Pro 3, that is going to be a health-centric upgrade. Last year, they added hearing health features. This year, they're adding heart health features So you're going to have a heart rate monitor in the AirPods for the first time. This is interesting for people who want to work out with their earbuds, which obviously is an extraordinarily common use case.

4:18But people who don't have Apple Watches, right? The Apple Watch, right? If you're like me, you have an Apple Watch. It has a heart rate monitor on there. But the total addressable market, because of the price and the more ubiquitous nature of the earbuds category, will bring heart rate to more Apple customers. and if you're an Android user, right, you might find that to be an easier way to get into the Apple ecosystem as well through the AirPods. So definitely a big upgrade there. The smartwatches, you're going to see the biggest overhaul to the Apple Watch lineup in three years. So you're going to see updates to the SE, which is their low cost sub$300 watch.

4:53You're going to see a Series 11 minor after the big Series 10 overhaul last year. And then a pretty big update, the biggest update ever to the Apple Watch Ultra, slightly bigger screen, 5G red cap, so faster internet connectivity. Big thing, satellite capabilities. So if you are on the go in a mountain range without cellular connectivity and you don't have your phone with satellite, now your watch, the Ultra Watch will have it. Apple is going squarely today after Fitbit and Garmin. Mark, pricing is going to be a story either way, right? Either Apple raises prices, passes it onto the consumer, or they don't.

5:28They eat that cost, largely relating to tariffs. And then the carriers come in with trade-in deals. What do we know about those three factors? Yeah, so the pricing is interesting. You're right. Either way, it's going to be noteworthy. It's interesting because Samsung and Google both recently rolled out new phones, and they did not increase their prices. So the precedent is not set there for Apple to raise the prices, even though they do have the air cover of tariffs. If they do raise prices, they're not really going to get into it. But if they did, my bet would be they explain it away as this is the first redesign, major camera upgrades, new processors, whatever, whatever, whatever.

6:03They're not going to blame Trump in tariffs because, as we all know, that is a no-no with this administration. In terms of carrier deals, I am expecting an extraordinary amount of trade-in specials and deals from all the major carriers in the U.S. Apple has been working the last several months with these carriers to ensure that there are major deals in place. To me, that implies there will be some tweaks to the pricing strategy, and this could be positioned as a way to offset any of those changes. BlueMix, Mark Gurman, who will be with us on the network for coverage throughout the day. Thank you very much.

6:36Let's get more. Carolina Milianese, President and Principal Analyst at Creative Strategies. You have a Galaxy S25 Edge handset. It is the Samsung slim, thin phone. It is a segment. So you've got Mark's reporting there on a 17 Air. again why does it matter for samsung it was clearly a stepping stone to a much thinner fold seven they didn't put a lot of marketing behind the product to your point is a segment it's not consumers are screaming for thinner phones but we also haven't seen much difference in design for a long time you know all the phones kind of look the same the thing that changes the most is the back where the camera is so it'd be interesting to see if the rumors are right that apple is changing that part of the phone because it's going to be very obvious that you have a new model of your iPhone.

7:27But yes, the thinner phone is something that vendors seem to be doing to lead their way to a foldable, which would make me wrong about Apple doing a foldable iPad before a foldable iPhone, which was always my theory. Your theory on foldable, though, is one that we listen to because eventually we do anticipate a foldable phone from Apple, but they lag there behind competition. And of course, everyone says they lag behind on generative AI. Does that matter to a consumer? I don't think that consumers are going into a store asking for AI. And I think what plays in Apple's favor, although they don't have a ton of time, is the fact that there's the assurance that when they're ready, the software will come with all the phones that you already have.

8:14So So if consumers are drawn to this year's models because of the change in hardware design, they know, they have peace of mind in going in and buying now, knowing that when Apple intelligence redesign will happen, they will have access to it. Carolina, what do we know from third-party data from consumer trends about what happened after iPhone 16 launch, particularly on Pro? you heard Mark explain that whatever happens with pricing, the carriers will come out and say, trade in your handset. Lots of people get really frustrated, particularly in the USA, where they say, I only just got a 16 Pro.

8:52Is there going to be enough in the capability to drive me, even with a trade-in, to upgrade? Yes, last year's upgrade from the carriers were very aggressive. The trade-in pricing was really good for consumers. I think, as always, you have a segment of the market that is going to hold on to their phone no matter what. Where it really makes a difference is the early adopters that will get that bump. Usually, the hardware redesign really drives a lot of upgrades. And I think that between what we've seen as rumor colors and then the thin design, people will get into the store. Whether or not they'll decide to buy, we'll see, depending on pricing, as you just discussed with Mark.

9:32May I ask in a quick fire round, how many iPhone events have you been to? Oh, my God, since 2007. seven so a long time we always say this is the biggest event for apple in the year i put it back to basics iphone is more than half of revenue but this idea of a 17 generation with a thin an air thrown in the middle where do you think that ranks in the history of the sort of storied apple launches i think is to me if it's true that this is a stepping stone to foldable is a moment that is going to redefine the next generation it'll be interesting to see how much they get into the architecture of the actual device, what have they changed, how they are redesigned.

10:11Making something thin is really hard when it comes to the phone, from battery size to not compromise your battery life, which was the biggest drawback for Samsung. And then the camera and the camera capability. You cannot have the same camera set as you do on a Pro Max. So how do you reinvent your camera to make sure that there's no compromise for people that care? Carolina, talk to us about caring on wearables. How important are the new iterations of AirPods, of the watches going to be for you? I think they're really important. And there is a reason why Apple always does these three products together, because it is the trifecta of what Beam Mobile is.

10:53I do think that the heart rate monitoring on the AirPods, if true, is going to be really interesting for Apple. There are people who don't want to wear a watch or people that cannot afford to add that to their list of products that they own. And so having AirPods allowing you to work out and do what you need, you will see, my guess, is a strong upgrade from regular AirPods to AirPods Pro. And so nice revenue uptake for Apple. What about to the bottom line? What about pushing up the price points of these? it'll be interesting to see if they're pushing up the price point I agree totally with Mark that they cannot blame it on tariff if they do there is the precedent of both Google and Samsung not raising prices so it'll be really hard for them to do that I also do think that there are moments where they want to make sure that their install base upgrades to the latest devices so that they have the latest chipset.

11:54That, at the end of the day, is what is going to matter for Apple intelligence and AI in general. Carolina, when you're sat in the Steve Jobs theater, what is the one thing, the absolute focus for you in that moment that you're tracking? I'm still looking at how Apple brings everything together so that consumers stay tied to the ecosystem. That is going to be their biggest ticket to winning when it comes to AI. Carolina Milanesi, president, principal analyst at Creative Strategies. She's going to be back Back on Bloomberg again after Apple's keynote this afternoon. So stay tuned. Meanwhile, coming up, Europe's AI infrastructure company, Nebius, soaring after it said it would provide Microsoft access to GPU infrastructure capacity.

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13:48NVIDIA NVIDIA plans to offer a new product design to make certain types of AI work more efficient, such as video generation and software creation. The product, called Rubin CPX, will debut at the end of 2026 and will be offered in the form of cards that can be incorporated into existing server computer designs or used in discrete computers that can operate separately alongside other hardware in data centers. Elsewhere in AI, a massive infrastructure deal between Microsoft and Europe's Nebius, worth as much as$19.4 billion. NeoCloud Nebius, recently spun off from Russia's tech giant Yandex, will provide compute to Microsoft from a data center in New Jersey.

14:28Let's get out to Bloomberg's Matt Day, who covers Microsoft for us. Matt, let's start with what Microsoft gets out of this cloud arrangement. So they get access to a whole bunch of NVIDIA GPUs that Nebius is set to receive and fire up in New Jersey. They also get some optionality, right? They've been spending a ton of money on their own data center construction. They've also been throwing some to partners. This is maybe a way for them to grow that portfolio without so much of the risk if they'd been buying all the stuff themselves. Meanwhile, Nebius really making its name in NeoCloud, offering extraordinary storied business where it spun out of Yandex.

15:05of course, post Russia's invasion of Ukraine, the CEO backs away and now has this new European-based juggernaut that's all things AI. Yeah, out of nowhere, right? And it's a huge vote of confidence in the Yandex brass and some of the staffers who left Russia to set up this rebranded holding company. They're quite a bet on a name that just didn't have a whole lot going for it here a couple of years ago. Matt, you've got to get back to your desk because in the time you've been in the seat, some news from Microsoft, a change in RTO policy. Do you have the details? Yeah, it looks like three days a week, starting in Puget Sound, rolling out later to the rest of the U.S.

15:42and then abroad. Microsoft had been a pretty lax hand on this, sort of recommending two days a week, but it really varied by team. Some teams hadn't RTO'd at all, so it looks like they're kind of following some of the folks like Amazon who have taken a harder line on getting folks back into the office. I mean, it doesn't seem to have set them back in terms of market evaluation in terms of performance thus far, Matt. But how much is there the fierce talent wars upon Microsoft weighing as well as some of the other names that we think about? Oh, for sure. And I think for some who would argue that Microsoft's previous range was working well, it's been a recruiting advantage for them, right?

16:14Particularly here in Seattle, where both Microsoft and Amazon are based. You know, you could say, hey, listen, if you don't want to have to commute to the office five days a week, Microsoft's your bet. A little bit less advantage there, but they still are, you know, relatively flexible by big tech standards. Bloomberg's Matt Day, all things Microsoft and Nebius. We appreciate it. Look, let's talk about the Dutch chipmaking equipment company ASML now. It's investing$1.5 billion in France's Mistral AI. This is a pretty unusual move. It's going to allow ASML to incorporate Mistral's generative AI services in its own machinery and operations.

16:43It makes ASML the largest shareholder in Mistral with an 11 % stake. Bloomberg's Benoit Bartolo is here for more from Paris. It is the pinup generative AI business, Mistral for France. ASML coming in, taking such a stake, what does it mean for the French government? It's obviously super important to French and I would say to European tech, because now Mistral is probably the only European tech startup that's doing language models, AI language models, and that has a full suite of products, also doing computing here. So it's definitely key, And key is also the fact that it's a European tech giant, ASML, investing in Mistral.

17:31Mistral previously got backing from U.S. venture funds. People were doubting that they could continue to grow and raise capital with European backers. And this is the case now. And it's important for Mistral because obviously we've got these giants like OpenAI and X, etc. doing the leading language models now, but there are European companies choosing to cut deals with Mistral because they're European and they see it as a sovereignty or strategic independence issue to make this contract. And it's important for them for this reason. So it's extremely key for that reason, yeah. Benoit, ASML participated in that broader funding round valuing Mistral at almost 12 billion euros that's the finance part but there's a technology story here too, right?

18:29What is it that each company is partnering on in the technology sense? So in a way they are on both ends of the AI value chain, right? ASML is really at the top of the value chain really doing these very powerful and sophisticated machines. The only one in the world to do these machines, allowing chip makers to do very advanced chips. They have NVIDIA. They are powering NVIDIA, for example. And Mistral is really, at the end, selling AI products. So Mistral, for example, he's a customer of NVIDIA because they've got data centers that they're building in Europe to train their models. so what they say of this deal it's a bit of a surprising deal in a way but what they say on ISML sides is that it's going to be for them a way to incorporate AI into the whole company and ISML is going to use Mistral AI to improve the scanning of data, to improve its core products to improve efficiency so that's what they're telling for now but it's going to be interesting to follow what they're going to do.

19:42And they might use other AI companies, but they choose Mistral and they choose to back this company. Well, it immediately made everyone think maybe ASML eventually wants to buy it. But there was pushback from the CEO on that. Yeah, he said they don't want to incorporate every technology they use. They don't want to integrate that into their company. So it looks like a pushback for sure. The founders of Mistral and employees. Mistral sales, they still have the majority of the company. So for sure, it doesn't seem to be on the guard. It's already a very sizable investment for ASML because they haven't done that kind of venture deals before.

20:28So it's already something unusual for them in a way to do. Bloomberg's Benoit Bertolo in Paris. Thank you very much.

20:40a tech association funded by the likes of apple and google and other major tech companies well it's launching a new initiative to strengthen the frayed relationship between democrats and silicon valley all ahead of the 2026 midterm elections and bloomberg's emily birnbaum who covers corporate lobbying for us has that story look support for the trump administration it has spiked among tech executives so what does the chamber of progress hope to achieve here Yes, they say that that movement, that rightward shift in Silicon Valley is in part due to a reaction to the Biden administration's policies, which were much more skeptical and critical of big tech and AI companies.

21:19So they say we're here to do some relationship counseling. You know, Silicon Valley was once associated with Democrats. They want to bring us back to that more, you know, Obama tech friendly era. Emily, I'm live here at Apple Park in Cupertino and in the story we note that Apple is one of a number of technology companies helping to fund this association in the last week we've seen Tim Cook at the table with the president discussing the almost quid pro quo of investing in America in return for sort of policy relief I gave you that backdrop because I just want to understand who's involved here on the company side and the democratic side away from the association itself Yeah, the association has hired a Democrat who has relationships with tech companies.

22:09So that's Dave Vorland from the Department of Defense. And when I asked which company specifically signed off on this, you know, Democratic project held under the Chamber of Progress, they said they couldn't say specifically, but they pointed to their members. They said their members have, you know, they are also interested in looking ahead to a potentially more democratically controlled Washington. And they want to start thinking about what it's going to look like when Trump is no longer in power. Emily, it's going to be quite a major reset because you just go back to the previous administration and how CEO after CEO really felt that they were either being investigated or being fined.

22:54What's the next steps to rectify it? Well, you know, different people have different opinions on this. It's contested, you know, it's contested within the Democratic Party if this is something to fix. But, you know, if you're a chamber of progress, if you're a tech friendly Democrat, then I think first steps would be at least hearing out industry more. There was kind of a blanket policy in the Biden administration not to even speak to tech on issues that might impact them for fear of corporate capture. I think it would also be, you know, not having as strong M &A policies and things like that.

23:31Bloomberg's Emily Birnbaum, thank you very much.

23:38Welcome back to Bloomberg Tech. I'm Caroline Hyde in New York. And I'm Ed Ludlow live in Cupertino from Apple. It is iPhone day. I think it's worth thinking about the stock, Harrow, right? It's normal not just to see the stock treading water in advance of the presentation, but for it to be a sell the news kind of event overall. Year to date, the stock's down almost 6%. But since the end of July, Apple's had a big rally. Some of the political issues behind it, some of the tariff questions partly put to bed, but not completely. And now the overhang is what happens with AI. We don't expect anything from that today.

24:13I'm also thinking about what historically happens on iPhone day. Yes, sell the news, but in the 30-day or 60-day period afterwards, we do sometimes see that stock rally where the handset of that generation has had a warm reception with the consumer. We're in the fiscal fourth quarter. We're entering the holiday period of fiscal first quarter. That's why we're here, tracking the third most valuable company in the world and the latest handsets. What are you looking at? We're looking at another stock that's rallied hard going into today, Oracle. Its earnings are out after the bell. Bloomberg Intelligence senior software analyst Anurag Rana writing that solid recent results from Microsoft and CoreWeave.

24:48They bode well for Oracle's own cloud infrastructure business when it reports earnings. Anurag joins us now for more. The key question is whether the news is going to be strong enough to vindicate the run-up in the stock. What strength do you want on fundamentals, Anurag? Yeah, I think that is absolutely right. We really have a lot of that's already baked into expectations going in. But the big question is going to be how much capital expenditures I have to go up in order to take care of these backlog that is going to be extremely strong when Oracle reports tonight. You know, what kind of funding they need?