Can John Ternus find Apple's next big thing?

24:19He's transitioning out of his role running the App Store. And you had a piece of reporting that suggests part of it is because John Ternus and Eddie Q want to extract even more money from developers. They want to keep that Apple tax high. They want to find more ways to have services revenue. And Schiller wasn't interested in that. Schiller famously has always thought that Apple was squeezing its developers too much. There's reporting, there's emails from some of these lawsuits. What's going on there? Yeah, it's very interesting. I mean, obviously, one part of it is that Schiller is 66. He wants to spend more time with his family, but for real, when it comes to him, he wants to do more philanthropy.

24:53He's been involved in all sorts of stuff in that regard. But at the same time, this is a new era for Apple. Eddie Q has a firm grip over all Apple services now, really for the first time in a while. And John Ternus, very close with Eddie Q. And they are looking at new ways to make more money on the App Store, whether that's additional advertising slots, whether there's additional subscription opportunities. Obviously, there's going to be a reinvention of the App Store coming in the next few years to make more use of AI and to fill in to Siri AI as well. And Phil Schiller, according to my reporting, believes regulators are still hot on Apple's trail.

25:31Developers are still unhappy with Apple. And as they go into this new generation, he wants to, you know, distance a little bit from it. But he still loves Apple, you know, more than anything. And he's still part of Apple here for the foreseeable future. And to be clear, there was no big blow up or anything between him and Eddie Q and Ternus or anything like that. Just with all these considerations, felt like a natural time for him to step off. And he's also stepping away from Apple events, right? So it's not just dropping the App Store, it's dropping his two remaining responsibilities, which was a lot, right?

26:00He was part of the Hotel California crew, but he had the most responsibility between the App Store and Apple events. Those are big things. And worth noting, he's not wrong with the regulators. There's still an outstanding Department of Justice antitrust case against Apple regarding the App Store and CarPlay and all this other stuff that was started under the Biden administration and has not gone away in the Trump administration. First of all, surprising that it hasn't gone away under the Trump administration, given the alliance between Donald Trump and Tim Cook. That has always been shocking to me.

26:29I thought that was going to get blown up a year ago. And then the other thing is nobody knows any of this more than Schiller because he's the one at the center of every meeting. He's the one doing the depositions. He's the one on the stand. So if anyone has the pulse of these governments and the pulse of developers, it's him. The Big Decoder trope is that the structure of a company is connected directly to its culture. If you tell me how your company is roughly organized, I can tell you where about 80 % of your problems are and the other 20 % of the magic. And every now and again, I get pushback on this from a CEO.

26:58He says, no, no, no, it doesn't matter. It's all about the people. And I feel like Apple is both, right? The structure of Apple has been the same for a long time. Steve Jobs used to call it the world's biggest startup. And then you just had these people who had been there forever. They're just the same cast of characters under Cook as they were under Jobs. And you could probably shuffle them any way you wanted, but it was the same people. That's right. And so, of course, the culture persisted. You're describing a wholesale turnover at the top. And then it also seems like there's some structure changes happening underneath John Ternus, right?

27:30Johnny Ive was the chief design officer of the company, which always felt to me like part of that Hotel California strategy. Oh, that was – He's gone now. That was its own – that was like Hotel Pupertino. I mean that was its own level. But they were afraid of him leaving because he was so tied to a jobs era and then they managed to work him out of the company. We can talk about opening it in a bit. Johnny Shrooji is the chief hardware officer now. that's not a title Apple has ever had before. That also feels like potentially a transition title of some time. Can we talk about Saruji for a minute?

27:59Right now, Saruji is the second most important person at Apple. He created Apple Silicon, which let's just face it, you cover the whole industry, I cover the whole industry. That's their key differentiator. That's what allows them to do different stuff. That's their competitive advantage. Letting this guy walk out the door would have been a nightmare scenario, especially right now. Last year, last fall, late summer, early fall, he goes to Tim Cook, tells him he's done. Okay? This is right when planning for Ternus taking over is kicking into high gear. Tim says, I need you to stick around as part of the transition and have you go elsewhere and have you go to NVIDIA or wherever he was thinking about going.

28:36Certainly not retiring. This guy's not ready to retire, I don't think. Here's what we'll do. When Ternus becomes CEO, we'll make you chief hardware officer. So you're going to keep your existing team and then you're going to get all the Ternus stuff. And then you'll undoubtedly be the second most important person at Apple. Suji agrees, takes a new pay package, I'm sure, and now is in that chief hardware officer role. I do not believe that is a long-term thing. I think that he's already back to wanting to transition to something new, transition out of Apple. He has really not a lot left to do, right?

29:14He conquered the Mac. Like, he dumped Intel. He dumped Qualcomm, right? What's left? This is a guy who wants new challenges and new things, and he's done it all at Apple, and there's no next thing to go after. They've really done it all. So it'll be interesting to see how quickly that happens, I think a year or two. And then when that happens, this recombination of the hardware engineering teams into one group, they're going to have to break that up again because there's no successor to Shrooji who has that industry clout and that leadership capability to be a singular hardware figurehead at the company.

29:48If you have managed to acquire Intel's disastrous modem business and fix it, what worlds left are there to conquer? Exactly. It was the hardest thing you could have possibly wanted to do, and he did it. Those modems are shipping in the new phones. And no complaints, right? Like if I were to place a bet with you two years ago, how is this Apple modem thing going to go? I would have guessed it's going to be a disaster. Well, they did have to slow down the Qualcomm modems to make their modems look good. There was some stuff in there for sure. But I'm talking about articles, people's about people's calls dropping, not being able to load web pages and whatnot, like all things considered pretty seamless.

30:27True. So this is the question that I'm really getting at is we're talking about a lot of new people and inside of it, a return to form in terms of just what that leadership page looks like. Right. There's no chief design officer who's a legend in his own right. You're saying soon there won't be a chief hardware officer who's a legend in his own right. The heads of design listed on that page, Alan Dye left and went to Meta. Now they're just vice presidents together. Not even SVPs of design, but they report to John Ternus. We're headed back towards a more functional Apple. They'd gotten to some kind of divisional structure as they try to keep all these powerful people.

31:01What do you think that's gonna do to the company? Or is that just gonna be more of the same? You know, it's so interesting. You look at the number of things and the amount of stuff that each of these reports to John Ternus has, it's a lot. And I also think you have a problem where there are vice presidents, so a tier below the SVPs, who want to grow. But you have these senior VPs who are going to be there forever, right? Like Eddie Q. He's been there for almost four decades. And you've had people under Eddie Q who've left to newer jobs and big things outside of the company because they wanted to replace Eddie internally, but they know that he's never leaving, right?

31:41They knew that he was going to stick around for a long time. And so you're losing good people at the VP level. So I think eventually you're going to see an additional layer. I think you're going to see this chief hardware officer idea become some new thing they're going to try. Like, for example, could they make Craig Federighi, who runs software, like chief software and AI officer or something at one point, and then elevate some of the people under him to that senior VP level, give them more responsibility, give them more money to keep more people around. So I think that leadership structure is going to be in flux for a while until they figure out how to do this.

32:17I mean, the old, old Apple, they had VPs, they had senior VPs, they had executive VPs. You can imagine they're going to play with these things in order to keep people because I think one of their biggest problems other than AI at this point is retention of key players. I actually would draw the connection between retention and AI. The not having that bench of younger people with new ideas or disruptive ideas, I think prevented them from seeing AI for what it was. That's a really good point. I think about what came to be known as the Cook Doctrine, where Tim Cook would often say, we want to own and control every foundational technology that goes into our phones.

32:50And this is really just a statement of Apple's own paranoia about being chained to Intel for a long time or whatever it might be. They couldn't see a way to owning and controlling AI because it's just massive investment. They had just blown a bunch of money trying to make a car, and they kind of missed it, right? They don't have a model of their own that it competes at the frontier. And so they've distilled Google's model. And this feels like a pretty big jump away from the Cook doctrine. Do you think they're going to have to compete in AI by making their own investments on the frontier? Or do you think they're happy where they are?

33:21It is one of the craziest things that I've ever heard is Greg and these other executives in these interviews over the last year saying that we never own search. We don't need to own AI. First of all, two completely different things. Second of all, to your point, they have spent so many tens of billions, hundreds of billions, and talking their mouths off of owning something as simple as a cellular modem. And when I say simple, I mean something as commoditized as a cellular modem. Spending billions to buy, trying to fix the Intel modem business. So you're willing to do that, to own something like a modem, but you're not willing to own AI?

33:58It's ridiculous. And they know that. That's why they tried to own their AI and build it from the ground up. They ran into a wall and they had no choice but to partner with Google and fixing up their models. The idea internally has always been that we are going to work with Google as a stopgap solution until we're able to do our own models from the ground up. Okay? Let's put that aside. At the same time, I've seen absolutely zero evidence that they're actually working on that plan A again. I've seen no evidence that they're hard at work on building fresh Apple-made models from the ground up. I've seen no evidence that they're running around to make big AI acquisitions.

34:40I've seen no evidence that they want to start throwing huge pay packages at AI researchers for meta, Google, Anthropic, and OpenAI. And so right now, it feels like we are at a standstill. It feels like they want to see how this Google deal and how working with third parties goes for the next several months. and then they'll make a decision if they want to go back to sort of building and competing with the other guys. I think they want to see how things play out. I think they want to see the Anthropic and OpenAI IPOs. I think now with all the news about AI safety, they want to see how this all plays out and maybe they'll make a decision in six months of where they want to go.

35:16But as of right now, I've seen no evidence that the transition of moving back to in-house stuff is happening. And to be fair, it's an advantage that there's no chance that Siri will kill us all. It simply is not capable enough to do it. fell backwards into that. It was not a strategy. Apple's current AI products was not the result of good work. It was the ultimate failing upwards. Let me ask you about that, because right next to that, I mentioned Johnny Ive. He's obviously working with Sam Altman. They're going to build some set of products at OpenAI. A lot of Apple designers have gone over to OpenAI.

35:51There's a very contentious lawsuit between the two companies. Apple accuses OpenAI of stealing internal information and product plans. OpenAI says, this is just the normal course of business. We're just having conversations and job interviews. We'll see how that plays out. The threat is that I will design the next class of products using natural language input as the next generation user interface, the same way that the multi-touch screen was the next generation user interface on the iPhone. And that will disrupt all the old paradigms. And I know that that's what he's thinking because when he made his very romantic launch video with Sam Altman, And he described the phone and the laptop as legacy devices, which I thought was a very powerful thing for him to say, given that he designed the paradigmatic examples of those things.

36:35And Apple makes the best legacy devices, and they don't want that to be their final chapter. They want to make the best new generation AI devices. And here we are, them trying to still continue to make the best legacy devices, but they really need both. So I see it two ways. One, Apple has to get ahead of the curve somehow, right? And if they don't have the frontier AI model, they can literally listen to anything you say and do anything you want. Then what are they going to make this device out of? And then on the other side, you have OpenAI. And if they don't have an Instagram app, everyone will still carry their iPhone with them.

37:13And then they will just use their iPhone because it has a big screen and potentially unfolds into an even bigger screen. And so they're kind of pointed at each other, each missing the thing the other one has. How do you think that gets resolved? Okay, so I think Apple is terrified of whatever OpenAI is building, and we can talk about that. It's a hockey puck-sized AI computer type of device that you talk to without a display or whatnot. I think Apple's terrified. In fact, the latest development in their lawsuit is Apple wants the court to show them and give them access to the upcoming device so they can analyze if it has any of their materials in it.

37:49So good luck to them on that one. At the same time, I do think Apple has the ability to fast follow anything OpenAI does. Like if OpenAI puts out some remarkable product and it gets to hit Steam, Apple's just going to copy this thing and follow pretty fast. Unlike the smart glasses where they're coming five years, you know, seven years after everyone else, I think if this donut or hockey puck thing is successful, Apple will follow them just immediately. I think the models are getting commoditized to a point where they can fast follow and have a very effective product. If Apple goes to Anthropic and says, you want to copy this open AI device, and obviously they're not going to give us their secret sauce and models, will you partner with us on this?

38:29Yes. If they come to Google, we need even better models. Will you partner on this? Yes. Right? Google has no legitimate hardware business that's going to be destroyed over partnering with Apple on hardware. Anthropic has no hardware business. Apple can get this done. So yes, they're afraid on one hand. On the other hand, I really don't think they need to be that worried because if it's a success, they can just copy it, which is, I guess, this is what they're accusing OpenAI of doing from the beginning anyways. In terms of the lawsuit, it is very clear that OpenAI employees have done some shady things.

39:02I'm surprised that the iPhone engineer or former iPhone engineer at the center of the lawsuit, this is the one who they've accused of taking material with him and sharing it with people and whatnot. I'm shocked that OpenAI has not cut bait on him and move forward. I think their fear is that they cut bait on this guy. Employees are going to revolt. How could we trust working at a company like this if you are going to get sued by Apple, even a company that big, and you're just going to cut bait on someone, right? So we'll see what happens. We'll see what happens. They've done shady things, but a lot of the stuff, like you said, is common business practice, stuff that Apple probably even does too.

39:34It's very notable to me that none of the filings in the case so far have any mention of Johnny Ive. And neither company wants to point out that Steve Jobs number two is at the center of all this because he's leading the design of this product. Do you think that's notable? I think it's by design. I think it's notable. And I even think the origin story of this lawsuit is Johnny Ive himself. I think Apple's point of view is that Johnny Ive was on Apple's payroll for half a decade or more post the Apple Watch. and during that time, basically destroyed the Apple design team from within and took everyone with him to build a competitor to the products that he developed at Apple, right?

40:20That is Apple's viewpoint. And I think there was a lot of anger towards Ive at the very center of this, particularly from Tim Cook and some of those other players there. I think Johnny Ive's perspective is that all the Apple products today, They are direct siblings of everything Johnny Ive developed there. Even the iPhone duo, you can see Johnny Ive's work in there, right? It's all part and parcel with Johnny Ive. I think that he believes that he created the product portfolio that's the basis of this$3,$4 trillion company. And he was tired after carrying that company post-Steve Jobs and very sad about Steve Jobs' death and wanted to move on.

41:02and that him and Tim Cook came to an agreement that he only needed to work at Apple for a few days a week, right? And so what? If he wants to eventually leave Apple and build something new and have people follow him, that's up to that. So I think it's two very different sides of the same story and you can side with whoever you want to side with. But I think it's really unfortunate that things did not work out for Apple and for Johnny Ive together in this instance. And I think he saw AI as the new core technology that he can develop something really cool around, just like the iPhone was developed around the cool technologies back then of the App Store and multi-touch and what have you.

41:40You know, it's really interesting about that, and this is a whole different podcast, is all of Ive's best products are designed around limitations, right? The iMac was designed around the limitation of the CRT display and so on and so forth. And AI doesn't have any limitations because it always just tells you it can do everything. And I'm just dying to know what he identifies as the limitation that makes the magic of the next i product like i said that's a whole different podcast but it's it's just on my mind as i think about what might he do to make this more than just a hockey puck that's listening all the time i'm psyched to play with it and to see it and i think this screenless idea is both a blessing and a curse i think that we're going to really see how effective ai is when we're using it without a screen and having it in the background but at the same time there are things about displays that are not replaceable with screenless devices.

42:29Gaming, massive market. Video conferencing, massive use case. Watching video, another massive market and use case. And I just don't know how OpenAI takes over the world with a device that can't video chat, can't do gaming, can't do video. And we've seen historically that being an iPhone companion, that just doesn't cut it.

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46:27Actually, you mentioned AirPods with a camera. AirPods are a success because they have a huge attach rate to iPhones. People buy iPhones. They buy an AirPod. people buy iPhones, they buy set AirPods. There you go. You got a huge business just out the gate. And then you lose them every six months. You break them, you got to buy new ones. So you mentioned that adding a camera to AirPods might turn them into a platform unto themselves that would obviously compete with some of these screenless devices or these AI native devices. How would that work? Okay, so these AirPods basically have the visual intelligence feature that you have on your iPhone.

46:58You could point at something, you can take action on it, you can get more information. It's built into the AirPods, it's no different. So like one use case is you're on your computer and you have your phone. I want to add something to my calendar. I just point my iPhone camera at my email and I say, add this to my calendar and it adds it to my calendar and parses all the links. The AirPods could do that for you now. You can tell your AirPods, when I get to the pasta aisle at Whole Foods, stop me, ping me when you see the tomato sauce I'm looking for and it'll do that. When you're walking around a city and you ask it to get directions to the nearest Walgreens, instead of telling you turn right in 40 feet, it'll say turn right by the black sedan parked at the corner.

47:45So using visual information to provide you context to help you throughout your day. It's a game changer, I think. And I think it's going to be a really sought after product. And I think that the changes we saw with the AirPods 5 at this Apple event, where now you're getting really solid ANC, even though it's not, you know, in a year with some pro features like the volume swipe at about 150 bucks, right? That's a really good product at a really good price. I think that's setting the stage for needing to make the AirPods Pro that much better. And that's where the cameras come in as that core differentiator.

48:21So this brings me to the last thing I want to talk to you about, which is Apple and privacy. The things you're describing out with AirPods are science fiction ideas that have been around forever. I tried Microsoft HoloLens 10 years ago, and they were doing augmented reality demos that are very much the things you're striving. They had me change spark plugs in an ATV. I will never forget doing this with their big silly glasses on my face. And the problem has been, one, the technology, right? It's very hard to shrink that technology and have the appropriate battery life. And then the other problem is, well, you've got a camera pointed at everything around you all the time, and people don't like that.

48:55I'm always joking that I think the killer app for Meta's glasses is facial recognition, right? If you just gave me a pair of glasses that would tell me everyone's names and faces at events, I would be the single greatest politician in world history. And the problem with that is that it requires a worldwide surveillance database of everyone taking each other's pictures all day long. And that is probably not an appropriate trade-off for me to be the greatest politician in the world. But I'm just letting you know, I think that product would be cool. For my personal benefit, the social cost would be too high.

49:22This is Apple's brand is privacy. And they're up against people calling the metaglasses pervert glasses. They're in a world where people hate flop cameras and all that surveillance that's happening online. They're doing watchOS 27 with an always on listening feature that just does transcripts. It doesn't record or store any audio. Still a surveillance device. I can't believe they, I'll be honest with you, I can't believe they did it. I can't believe they did it. Right. It's just listening and you can double click it and it'll show you a transcript to the last 15 seconds of what someone said to you without their permission.

49:50First of all, read the room. It doesn't even light up. No, I know. No, that's not true. It does light up. But read the room. I was told it doesn't light up. Okay, first of all, we can get into this, but I was not at the Apple event for obvious reasons, and I haven't been at one since 2019. So I did not - Well, you already know what's going to happen. Well, I didn't have the briefings, okay? But according to the literature on their website, when you're doing that feature, it lights up with a microphone icon when you do the live rewind. Maybe it doesn't light up for the Siri recaps. I don't think it does, the all-day listening.

50:18but like the last 15 second things, it supposedly shows a microphone. But, you know what? Is this podcast a video? Yeah. Okay. I'm wearing an Apple watch. Can you see anything on my screen? No. Right? It's crazy to me. So, I can't believe they did that because really, you're going to take a backlash like this and then do it again with a visual intelligence six, nine months from now? And then you're going to do it with a pair of smart glasses and you're going to walk into all of the other things and it feels like Apple knows that there's a next generation of user interfaces coming that is AI powered that requires an amount of ambient capture, whether that's just listening so you can talk to it or whether it's visual so you can see the world around you.

50:58And they haven't solved the social privacy aspect. There are white papers about how they might have solved the technical database privacy aspect, right? They've got private cloud compute and they're going to encrypt the data. They're not going to store this and that. And I don't think any of that's going to overcome the social privacy aspect. They didn't do a good job on articulating the social aspect of it at all. They could have showed more demos. They could have discussed it a bit deeper. They sort of just thrown go to it. I know they only have very limited time in the keynote, but I don't think they spent enough time breaking things down here.

51:31I quite frankly think they did not do a good job rolling this feature out. I ask myself, would I be comfortable using this feature? Yeah. But then I tell everyone around me the last week, hey, I've been recording you the whole time. They're going to freak out. and they're not going to trust Apple, right? So it's a really interesting one. I'm pretty shocked they did it. What is the net new Apple Watch buyers because of this feature? Like what is the bigger challenge, doing this feature or not doing this feature? And I think that doing this feature is a bigger drawback than not doing the feature.

52:06There's no, here, there is no cost of not doing something. Well, there is a cost if you think there's about to be a wave of AI devices that are doing always-on transcripts and meeting recordings, and OpenAI is going to do something. I mean, we have seen a wave of stuff. But we're not there yet, right? Like, this could have waited six months. Right, so you can just foreclose it, right? You can just, this is like Microsoft stuff. You're like, here's a preview of a feature. Don't even consider that stuff. Eventually, this will get good. And you've just foreclosed the competitor. Well, the other thing is, is they had nothing else for the watch, so they had to kind of just do something, right?

52:38This is the weakest Apple Watch update we've seen in a long time. and they're kind of lost what to do next. Now they're sort of recalibrating it. They're going to have a major watch revamp at the end of next year and so forth. But they had to do something. If it were me, I would have ripped off the Band-Aid at the same time with all the audio plus visual intelligence stuff next year. Do it all together. Tell a really coherent privacy story. But do you think that stuff is compatible with Apple's reputation for privacy? This is the real question I'm getting at is they might not have told the right story about the watch.

53:08They're going to have to tell the right story about AirPods with cameras in them in a world where people are shooting spray foam at flat cameras because they don't want them in their communities, right? There's a connection between these two ideas. And it doesn't seem like Apple knows how to tell that story. Well, clearly not because they haven't done it. But here's the story on the AirPods. They can't record actual video. They can't take actual pictures. They have an extremely low frame rate. I'm talking about a few frames per second. and the actual data that gets input into them. It's like, have you ever used a Roomba and you look at the app, kind of what does the Roomba see?

53:48It's like wireframes of the environment. Like it would not be able to tell you and me apart, right? It just would see two people. But then how can it do the brands of tomato sauce in the aisle? Well, in terms of non-people, it'd be able to do that. And it could read, it could read text. So it would be pretty heavily reliant on reading text and seeing color and whatnot. But like being able to differentiate two people, right, it would be very difficult for it. It's almost like it's like a fake reproduction of what's around you. I don't have a good explanation for it, but I'm sure, you know, if they wanted to, they'll give a good one.

54:27I'm not sure they're going to break it down. They might just say, just trust us, we're Apple. It's not taking pictures. It's not taking video. It doesn't know what it's saying to some extent. So we'll see how they play it. But I would have done all this stuff together, ripped off the Band-Aid and spent a lot of time focused on it. There was no need to do this audio intelligence feature at the end of 26 when you could have done it at the end of 27 with everything else. Unless you're just trying to slowly boil the frog, right? You're going to get people mad about this and then you're going to do the next one the next time.

54:53We'll see. It just seems like this next generation of devices involves some kind of ambient listening that we are not ready for as a society. Like people are really mad about meta glasses. They soiled the water for Apple and a lot of other companies. You know, Meta being the first mover on this created an industry-wide problem. And I think even though Apple has such a strong privacy stance, there's people who don't believe them. There's people who don't care what they have to say. There's people who are going to be angry about the Apple glasses and whatnot. And I think Apple, to some extent, is on such a high horse with its privacy message that it came away surprised that there would be some backlash to Apple doing this.

55:30they think, I believe, that people are overblowing it when it comes to Apple, right? And everyone should just be focused on Meta. And just because Meta has done a poor job protecting people's privacy doesn't mean we're going to. And so we'll see what happens. The one thing, when I talk to the folks there, they never make the connection between Apple and Meta in the sense that Meta's apps run on Apple's phones. People are mad about Meta and they still think the phones, Apple's phones are listening to them. And they can't quite make that connection because it undoes a lot of their own messaging.

56:06If you believe your iPhone is listening to you, that's not just Meta's problem. It is also Apple's problem. And they kind of have to actively ignore that relationship because otherwise everything else falls apart. And I think that's why there's this blind spot, right? If people's watches start generating transcripts, it's exactly the same relationship as my iPhone is listening to me. and that's why I saw an ad for a vacation that I only talked to my friend about. I'm curious what they're going to do. I have a feeling I'm just going to bulldoze their way through it. They're going to just try to tell a good story.

56:35They're going to do a ton of PR briefings about it. They're going to do a ton of white papers about it and get as nerdy and in-depth as they can on this stuff. And you know what they're going to do? They're going to throw out a lot of comparisons. And I even heard Ternish do this in one of the interviews and Apple's statement on some of these features. I could totally imagine them saying, why is it any different recording from smart glasses if you could just hold your phone up and record people, right? You know, by the way, it's very funny you just mentioned that because that is exactly what Mark Zuckerberg just said to our friend, Alex Heath.

57:02Oh, that's funny. He literally said, how is it different than a phone? Like, this is the industry's approach. And I think the answer is people are like, yeah, I can see you doing that. And I feel very comfortable telling you to stop. Like there's something different about that. Yeah. The other thing I didn't even realize is someone pointed this out to me the other day. It's like your Apple Watch has had the voice in their most app for, I don't know, eight years at this point. who stopped anyone from recording their whole day with the voice memos app on the Apple Watch anyways, right? This is just a more privacy-centric version of that.

57:31So Apple's solving a problem here. They're not creating one. So, you know, it just depends on how you look at these things. I think they'll bulldoze their way through it. It's going to be a problem, but I think they'll be fine. All right, last two before I let you get out of here. We've talked around the iPhone Duo a lot. We've mentioned it a lot. It's the thing that just came out. We haven't talked about it. What do you think? I think it's incredible. I think, and this is a bold take, I think foldables will become the new normal within a decade. If you look at the market share of smartphones, end of 2006, smartphones had like 6 % of the market.

58:02Now they have 85 % of the market. It went over 50 % of the market after five, six years. The iPhone itself was not the source of that, but the iPhone got everyone into the smartphone game. I think the iPhone Duo is going to do the same for the phone market. I think it's going to become the new normal. Even though they're a late mover to foldables? Yeah, I think the Apple brand is that strong. Really, I really do. I think the fit and finish, the software integration is going to get people really excited about this category. I think that Apple upgrade eventually, that's the releasing program, will expand internationally.

58:36I think that's going to get people in it. I think at some point they're going to stop advertising sticker prices and focus on the monthly prices. And they're going to get people locked into this thing. They're going to have a family of iPhone duos over time. You'll see every phone maker just transitioning, transitioning to foldables. Samsung, half the line is already foldables. Very soon, the candy bar style is going to become legacy. That's a big prediction, although I will say their iPhone handoff feature where you can move a number between phones seems to point to a feature where I, for example, have the folding phone for work and then a much smaller, lighter phone for the weekends with the family.

59:11You can see that vision taking shape only because it's not easy to port a number between devices just whenever you want, which I think is incredible. Last question. We've talked a lot about Apple, its culture, its set of products. What do you think its biggest challenges are in the new era under John Ternus? And what do you think its biggest opportunities are? I would say I think the biggest challenge and the biggest opportunity are the same thing. Ternus' Apple, the next three to five years is still Tim Cook's Apple, right? That's just the reality. He's gonna still be there in the background.

59:41He's still gonna loom large. And the product pipeline is still gonna be coming out of an era that started under Tim Cook. But in five years from now, they are going to need to start thinking of what actually replaces the iPhone as the next thing. We went from the Mac to iCloud to AI as the center. What is Apple's new thing after the phone? What is Apple's new thing after the current generation of AI? And Ternus's tenure as CEO, I think will go down as a success if he's able to find that next new centerpiece. It's about a few years before he needs to start clicking on that. but I'm talking about something that can be in development for five to 10 years.

1:00:20Tim Cook never had the opportunity to have his new centerpiece of the company. He never had the opportunity to put his stamp on products at the company for two reasons. Both things that he tried to do as his centerpiece both failed spectacularly. Obviously, the Vision Pro with the car, right? The car, that was Apple's multi-trillion dollar market cap opportunity, and they just blew it. Ternus will need to successfully hit that. You know, I'd actually put a third thing on that list. It was the very beginning of the Cook era, Jobs literally on his deathbed said he'd figured out TV and Cook had to spend however long pretending he knew what that meant because I don't think it had been solved.

1:01:04And so there was like this first wave of Apple's gonna redefine TV because like the last page of the Isaac's biography had that Jobs quote. They haven't even done a new Apple TV box in four years. That's a long time. It's funny because like you don't need one. It never occurs to me that I need to upgrade this thing. But maybe there's gonna be some AI feature that I can't live without. Well, Siri AI, they've been waiting for the Siri AI update. And this could be a whole other podcast, but Siri AI has been the gate to all of these new product categories. The AirPods were supposed to be out already, the Apple TV, the HomePod, the Smart Home Hub.

1:01:37All these devices were supposed to come out. It couldn't do any of them until Siri AI. Now, CRI is here. Floodgates are open. All right. Well, Mark, we're going to have to have you back on the show to talk about those floodgates and all these new products very soon. I can't believe you haven't been on until now. Thank you so much for being on Decoder. Yeah. And obviously, I'd love to have you on my new podcast, Power On Podcast, launching very shortly. So thanks in advance. Yeah, that'd be great. We'll be looking out for it. Thanks, man. I'd like to thank Mark Grimmman for taking the time to join me on Decoder.

1:02:07And thank you for listening. I hope you enjoyed it. To like let us know what you thought about this episode or really anything else at all, drop us a line. You can email us at decoderattheverge.com. We really do read all the emails. Or you can hit me up directly on Threads or Blue Sky. We're also on YouTube. You can watch full episodes at DecoderPod. We also have a TikTok and an Instagram. They're both at DecoderPod as well. They're a lot of fun. If you like Decoder, please share it with your friends and subscribe wherever you get your podcasts. Decoder is a production of The Verge and part of the Vox Media Podcast Network.

1:02:31Decoder's producers are Greg Ott, Kate Cox, and Nick Stat. This episode was edited by Eileen Felix. Our editorial director is Kevin McShane. The Decoder Music is by Breakmaster Cylinder. We'll see you next time.