Apple Plans to Jack Up Prices & Europeans Love American Cheap Eats

0:29Marketers, tell us if this sounds familiar. I'm Neil Freiman. And I'm Toby Howell. Today, iPhone$1800. Apple is raising prices on tablets, computers, and phones. Then Midjourney is a company that generates AI images. Now it's moving into full body medical scans. It's Monday, June 22nd. Let's ride.

0:57Good morning and happy Monday. Keir Starmer has given his two weeks, or should I say two months. Just a few hours ago, the UK Prime Minister announced he will resign by September after facing rebellion within his own party. Pressure has been growing on Starmer to step aside after failing to kickstart the economy and scandals like appointing a friend of Jeffrey Epstein to be the ambassador to the US. The most likely successor to Starmer is Andy Burnham, the left-wing former mayor of Greater Manchester. But even if Burnham gets the position, I would not bank on him staying that long. Toby, this might be the job with the highest turnover in the world.

1:31Yeah, sixth leader in the last seven years. To put that in perspective, the Cleveland Browns have also burned through six head coaches in the last seven years. And how many quarterbacks? Right, so there you go, UK. You got the same organizational stability as the Browns. The average time in office of a UK prime minister since Brexit will be just two years, the shortest being Liz Truss at 49 days long. The longest is Boris Johnson, actually, at 1 ,140 days. Keir Starmer lasted 717. As for one of the reasons he stepped down, the New York Times called him one of the least popular prime ministers in modern British history.

2:09So that'll do it to you. And now a word from our sponsor, ServiceNow. Toby, pop quiz. No, no more quizzes, no more homework. I'm sick of it. The AI was supposed to handle the parts of work I hate, but it just describes the problems back to me generating more work. Which is why I was going to ask about ServiceNow's AI specialists. They aren't a tool. Think of them as digital teammates who can actually do the work. They can resolve cases, process requests, close loops without generating extra work for you. When you can truly delegate to AI, you can get back to the work only you can do, the work that requires a person with ideas and judgment and, you know, a pulse.

2:46To put AI to work for people, visit servicenow.com. That's servicenow.com. Apple is going to raise prices on its computers, tablets, and phones imminently. In a surprise announcement, CEO Tim Cook told The Wall Street Journal that upcoming price hikes are unavoidable. Quote, we're doing our best to mitigate the huge increases that are being passed to us. And we've been trying to shield our customers from the increases, but the situation has become unsustainable. And what situation is this? Memory and storage. Key ingredients in the tech gadgets you use every day, from phones to video game consoles.

3:19The problem is, there are also key ingredients for artificial intelligence. And AI giants have been hoarding all the memory supply to run their models, leaving peanuts to consumer electronics companies. Costs have surged as a result, with prices for memory and storage chips quadrupling. Cook says he has no choice but to start passing on those extra costs to consumers. Shows the scale of the problem. Historically, Apple does not raise prices without adding new features. But then again, we've never experienced this kind of commodity pricing in modern tech history. Tim Cook, who spent decades working in the tech supply chain, called it a 100-year flood.

3:52I've never seen anything like it in any area in over 40 years. Toby, my iPhone screen is cracked to pieces, but looks like I'll just have to live with it for now. Now, this Apple price hike is maybe the first vivid example of us consumers paying for the AI boom. And Apple is not used to this. They are not used to being second or third in line when it comes to their input costs because they spend tens of billions in dollars on these memory chips, on these storage. And usually they can use the fact that, hey, we're Apple. We have really big orders to push suppliers into giving them better deals.

4:26but their hands have been tied at this point because AI companies are also coming in and saying, hey, we will give you those multi-year contracts. We will give you these huge prepayments up front to get our hands on these chips. So suddenly Apple's like, gosh dang it, I'm not like the big fish in the pond anymore. There's a lot of fish in this pond and they all want memory chips. So that is a interesting position for them to be in because even Apple isn't safe from this and usually Apple's the safest when it comes to managing supply chains. Let's talk about what we're actually talking about here when it comes to memory in storage.

4:57So memory, this type of memory that everyone's clamoring for is called DRAM, which is Dynamic Random Access Memory. And then the storage is called NAND, N-A-N-D, which stands for just not and. And the Wall Street Journal had a good explanation, a good metaphor to kind of wrap your head around why these are important for both AI and for these consumer electronics companies like Apple. So their metaphor is that memory is a desk that holds all the, imagine you're in a 20th century office, just for a second, if you know what that was like. But the memory of the desk that holds all the papers a worker needs to perform a particular task at that moment.

5:33So that's DRAM memory is basically they're running the apps that you're currently using on your phone. Storage is the filing cabinet that holds everything else that you have in your office that you're maybe not using right at the moment, but you want to keep like photos and videos. So there are only a couple of companies out there. There's just three that make DRAM, the memory, and there's only five, which includes those three, that make NAND, and memory and storage is now at a premium because these companies just can't ramp up production to match the insatiable demand. I mean, those companies that you mentioned, Micron shares are up over 800 % since its memory gold rush started.

6:07SK Hynix, which is a Korean company, their shares are up 800 % as well. SanDisk, which we've talked about on this show before, which you think makes the little tiny USB drives that go into your computer, those shares are up 4 ,600 % because all of this memory's in such demand. But you mentioned that maybe this is the first time we're really seeing the impacts of the AI boom on consumer electronics. But if you're not an Applehead, you've been feeling it for a while. Microsoft raised their Surface tablet prices. Nintendo raised their Switch 2 prices by$50 based off this memory crunch. The PS5 Pro jumped from$750 to$900.

6:44Basically, anything that requires these input costs are going to go up in price as well. So it's not just Apple. It is pretty much anything with an on-off button that requires it to remember anything is getting more expensive. What price hacks are we looking at? Well, we don't actually know yet. Apple hasn't announced it, but analysts have speculated. It looks like they're going to, first of all, boost the price of Macs and the iPad for sure. And then when it comes to the iPhone, it looks like they're going to possibly, according to analysts, jack up the price by$100 for the iPhone Pro and the iPhone Pro Max.

7:21And then the iPhone 18 Pro, which is coming this fall, they're going to announce it. The Wall Street Journal speculates that it could come with a price tag of$1 ,300. Moving on, Silicon Valley has spent the last few years trying to smush AI into everything, and now it's coming for the spa. This past week, the AI image generation company MidJourney announced a very strange pivot from AI images to AI health. The new division is called MidJourney Medical and is set to open a futuristic wellness center by 2027 with a unique take on medical imaging. Rather than a claustrophobic MRI tube or an expensive CT scan, customers will descend into a water-filled tank and pass through rings of underwater sensors.

8:04The scanners use ultrasound technology, sort of like a dolphin uses echolocation, to produce a full-body 3D image, insides and all, in about a minute. Proponents say the technology could eventually make full-body imaging as routine as getting a massage. Critics say it could also make anxiety and false positives more routine too. Plus, it remains to be seen if AI algorithms and unproven technology can produce truly medical-grade results. The pitch goes beyond the medical though, since you're already wet after a scan. The company's first flagship location in San Francisco's Union Square will also come with hot tubs, saunas, and cold plunges and be open 24 hours a day.

8:41Neil, I am not above climbing into a fish tank to figure out what's wrong with my quad that I pulled in a co-ed soccer game last week. I'm going to ship you out to San Francisco because we got to get this thing fixed ahead of a couple big sporting events we have coming up this summer. What I find very interesting about this is actually it's the first instance of maybe a company pivoting away from AI. We had all birds pivot to AI and any any number of companies saying that they do AI stuff now. But this is mid journey, which makes AI images that you've no doubt seen online saying, OK, we're just getting into the medical device business.

9:13And David Holtz, who's the CEO, said they're not currently using any AI in the scanner. So it's an interesting business pivot because often when a company makes a pivot or extends into new areas, they use technology or know-how that they have to make one product to make another product. And MidJourney is just completely doing a 180 here and just saying we're going to make spas. The pros and cons of this are numerous on both sides. So the pros are obviously if whole body scans can become cheap, if they can become fast, if they don't have to involve radiation or the awful experience of being in an MRI machine, why not scan everyone regularly?

9:50You could catch cancers earlier. You could spot disease symptoms before they appear. You could turn it into a preventative medical environment, which a lot of people have been trying to do for a while now. But people on the doctor side of the argument, if you will, say that more detection doesn't necessarily mean better outcomes. The medical industry has repeatedly shown that finding more abnormalities doesn't necessarily lead to better outcomes. The classic example is South Korea absolutely had this thyroid cancer screening boom where diagnosis surged roughly 15-fold, but thyroid cancer mortality barely changed.

10:26And what actually just happened is you have more biopsies, you have more anxiety, you have more people going in to check out this lump or this bump that aren't necessarily things that needed to be checked in on. So that's kind of both sides of it is that just because you can make medical imaging a lot cheaper and faster doesn't necessarily mean it's going to lead to better patient outcomes. Well, maybe the biggest breakthrough here or the biggest concept breakthrough is putting a pairing a doctor's office, so to speak, with a spa. So these dual purpose retail locations and the communications from Mid Journey and its proponents have really hammered the fact that they want to make this a super pleasant place to go to.

11:06David Holtz, the CEO, said, I don't want to feel like I'm going to a doctor's office. I want to feel like I'm going somewhere that's nice. And they had this idea that basically you're going to get wet anyway by going into their underwater scanning device. I might as well just, hey, put some bass and put a spa in there. He said you're going to have to get wet, but there are a lot of nice situations to get wet, which, you know, I'm always saying. But maybe you'll maybe you'll see other instances of retail locations that maybe don't offer the sexiest service, whether it's the DMV or a bank sort of operate.

11:36I don't know, maybe a cafe on their premises or you see EV charging stations do this as well with a dual purpose. So maybe others will take the baton. Wait, what are they going to add to the DMV? They're going to add a spot on the DMV? They could add anything to the DMV. How about some coffee and cookies? I'm really just not sure this could exist anywhere outside of San Francisco, though, because it is combining just so many very SF things, AI, longevity, wellness, biohacking, charging people a lot of money probably for things that they don't necessarily need. That is the perfect nexus of everything that is San Francisco.

12:10So will this work in Detroit? Who knows? But if you, again, like zooming out again, a 60-second body scan is something that is actually revolutionary in a lot of spaces. So maybe it is a widespread thing. The CEO said, I want to have 50 ,000 of these things up and running by 2030 or so. So he has very large ambitions here. And the big question is, will it fulfill the medical aspirations that it's seeking out? Okay, welcome to Winners of the Weekend, the segment where Toby and I picked two things that had a little more fan support than Wyndham Clark. I won the pre-show game of tag, so you're it and I get to go first.

12:46My winner is Creators, who've replaced the Don Draper type as the new power brokers in the world of advertising. Starting today, all your marketer friends will be in Cannes Lions, the annual advertising soiree taking place this week on the south coast of France. But while the mountains of oysters and leaders of champagne haven't changed since years past, the advertising world has. Thanks to the rise of Instagram, YouTube, and TikTok, individual creators now rival agency bigwigs at the top of the marketing food chain. According to Insider, more than 250 creators are expected to be in Cannes, including Caller Daddy, host Alex Cooper, TikTok stars like Keith Lee, and YouTubers including Eleanor Neal and Colin and Samir.

13:24Their presence and prominent role at the festival reflects the transformation of how brands speak to audiences. Nearly nine in 10 established U.S. companies will invest in influencer marketing this year, up from less than 40 % a decade ago, eMarketer estimates, adding that influencer marketing spend will rise to$12.4 billion this year. Bain partner Shweta Bardwaj told Insider that creators have upended marketing strategy, moving from the margins to the epicenter. Many of the CMOs I talked to say the marketing of yesterday was us talking about our brand, She said the marketing of today is consumers talking about our brands and our role as CMOs is to enable that conversation as authentically as possible.

14:03Toby, as an influencer yourself, are you feeling a little FOMO? Well, there's two no duh moments here for me. The first no duh is, yeah, obviously no duh. I'd like to be there, Neil. It's the south of France in the summer. But then the second no duh is that, of course, creators should be a bigger conversation of the advertising industry right now. It almost feels like boomery to say is like, hey, you know what the new thing in marketing is? What if we gave money to these creators to talk about our brand? But it is kind of a big shift for this rather slow-moving industry sometimes. And I think Dar Mann, who has a massive YouTube channel, you've definitely seen his shorts around, he put it well is that creators receive constant audience feedback and understand what drives engagement.

14:44And he says he criticized the traditional advertising timeline where you have decks, you have months of meetings, and then you go through approval process. Imagine somebody who's posting every single day on social media. They are way more read up on what is actually playing with audiences right now than any sort of marketing deck could hope to do. So that's my no-dumb moment. It's like, yes, creators know what's going on. They're more tapped in. And of course, companies should lean on their expertise more so than the other way around. Right. Because companies, I mean, what's happening, Ken, is a lot of networking and speeches and all and all that but there's deals being worked out as well but at the same time i think what companies want from creators is just like to learn from them they don't want to necessarily hire alex earl or they don't want to hire other youtubers for their uh for their particular campaign they may want that but more more so than that they just want to look at their own campaigns through a more creator friendly lens because clearly creator creators know social media more than these huge brands like png or mcdonald's so i think they just want some face time with them to just kind of learn.

15:45And I had this experience. We were at Davos in February, and I was at this marketing advertising dinner. And there were a couple of YouTubers and Instagram people there. And there were a bunch of CMOs at huge companies. And all of those people wanted to know is from the creators, like, just tell me everything. They were so desperate to learn. I think that's what's going to happen at camp. Yeah, it has definitely moved from, can you just make a TikTok for us about our product to sitting down at dinners with them and saying, do you want to have an advisory role in our company? Do you want to do a more strategic partnership?

16:18Do you want to be involved in the process of building this campaign from the ground up, not just coming in and slapping a hashtag sponsored post in at the end? That's probably been the biggest shift as the creator economy has matured over the last couple of years or so, is that it's not just a single post. It's about longer campaigns, longer relationships, and just being more involved from the ground up in the ideation process and the execution of an advertising campaign. All right, we're going to take a quick break and come back with my winner of the weekend.

16:51Toby, what's one thing spreading faster than AI? Matcha. I mean, that stuff is everywhere. No, well, yes, that too. But I meant AI risk. More AI tools mean more opportunities for something to go wrong. And most security programs weren't built for AI's pace of growth. Enter Vanta. They're an agentic trust platform used by over 16 ,000 fast-moving companies to help ensure they're always audit-ready. Get$1 ,000 of Vanta today by going to Vanta.com slash Morning Brew. That's V-A-N-T-A.com slash Morning Brew. The worst part of cycling to work is walking up to the office in boring workout clothes. I know.

17:31It always adds a little awkwardness to the first few minutes of the day. But thanks to Viore, you don't have to sacrifice style for comfort. From your weekly grocery shop to your evening commute and happy hour, Viore's products keep you comfortable and stylish. They've got everything from fitness essentials to loungewear and travel-ready layers, so you're ready for whatever the day brings. Get 20 % off your first order at viore.com slash mbdaily. That's viore.com slash mbdaily. Exclusions apply. Visit the website for full terms and conditions. Study. And play. Come together on a Windows 11 PC.

18:08And for a limited time, college students get the best of both worlds. Get the Unreal College Deal. Everything you need to study and play with select Windows 11 PCs. Eligible students get a year of Microsoft 365 Premium and a year of Xbox Game Pass Ultimate with a custom color Xbox wireless controller. Learn more at windows.com slash student offer. While supplies last, ends June 30th. Terms at aka.ms slash college PC. My winner of the weekend is Alexis de Tocqueville because tourists in town for the World Cup are doing the Frenchman proud and how wholeheartedly they are embracing America. While FIFA brought the world to America, America has returned the favor by bringing the world Buc-ee's and Rance dressing.

18:50For months leading up to the start of the tournament, no one was quite sure what would happen when millions of soccer fans descended on the United States for a World Cup. The answer apparently is that they would become obsessed with anything that embodies ordinary America. Buc-ee's has become a tourist attraction with the Texas-based mega gas station chain drawing crowds of foreign visitors. One British fan posted enthusiastically about driving a Ram pickup truck while listening to country music, living out his American road trip fantasy. Rance dressing has become such a popular souvenir that the TSA recently reminded travelers, you can't transport bottles larger than 3.4 ounces in your carry-on.

19:28In short, it's the exact kind of exposure countries splash out billions of dollars on mega events to try and drum up. Millions of people are seeing America not through political headlines, but through Boston getting out-drinked by Scottish fans, Ecuadorians housing Philly cheesesteaks, and Japanese filling up on bottomless chips in salsa. Neil, it is soft power like you dream about. It has been a perhaps unexpected win for the USA considering the negative feelings surrounding the event in the lead-up. Yeah, if you haven't been to the United States and you live in a foreign country, the way that you have viewed American culture is probably through movies because that's one of the biggest cultural exports of the United States.

20:07And then they're coming to the United States and they're saying, actually, like this is exactly like it is in the movies. I'm driving on a huge highway with huge trucks. There's cowboy boots and cowboy hats. If I'm in Texas, there's fast food everywhere. There's beautiful spots like the Florida Keys and the Everglades. So you have a Japanese tourist named Sato saying it felt like the quintessential America, the kind you see in movies wherever I went. And food is definitely kind of the unifying theme here because a lot of fans spent a lot of money on getting to the tournament. You know, tickets, flights, hotels, that is where all the money is going.

20:44So they're left with like, what do I eat? And there are a lot of options. There are a lot of options. America excels at, you know, cheap eats. And so, you know, we've seen cheesesteaks be embraced. New York pizza slices have been like a godsend for some of these people watching games. And they go to the Times Square like$1.50 for a slice of pizza. That's great. Chick-fil-A, bodegas, street tacos, hot dogs. These are all like one guy was marveling about Shake Shack and just saying, wow, it's pretty dang good burger. Actually, he was marveled about Shake Shack. Me too. He was actually from France.

21:13He's like, actually, it wasn't as good as I was expecting. but it is very funny that food has emerged as kind of this this thing that a lot of these europeans are losing their mind out and actually everyone from all parts of the world are losing their mind out because you you you don't want to spend money on like nice meals you want to spend money on like the cheap things that embody america speaking of the things that united states says well it is a fast food pioneer it was in paris a few years ago we had talked about it on the show actually crispy cream was opening its first location in france and there was lines out the door for this one donut chain that's kind of everywhere in the United States.

21:48My favorite quote might be about the Cheesecake Factory. So Sammy Bell of the UK went to Florida to root for England, and she told the Washington Post that she was at the Cheesecake Factory, and she said, we've said it was probably one of the best meals we've had in terms of just the variety, which you were talking about no-duh moments. I mean, for the United States, people listening, we're like, yeah, obviously it's known for its massive menus, but for people coming here, It's kind of a novelty. It is funny, though, because culturally, this has been a massive success for the U.S., especially that it's like the 250th anniversary.

22:19You could not have, you know, asked for a better embracing of American culture. But financially, it still hasn't quite been the windfall. We have reported on this a lot is that hotel rates have actually fallen in some cities. International travel numbers have come in a little bit weaker than expected, which, again, you wouldn't see just from based off of social media. But the hotel industry is not exactly saying we got the boon times that we thought we were going to get here. So maybe economically it hasn't lived up to the cultural win that this tournament has been for the United States. It's Monday, so here's what you need to know to stay ahead in the week ahead.

22:54All eyes are on Bergenstock, Switzerland, where the U.S. and Iran are negotiating a permanent end to the war that began in late February. While a temporary deal has been signed that reopened the Strait of Hormuz, the U.S. delegation led by Vice President J.D. Vance will tackle much thornier topics like the future of Iran's nuclear program and sanctions relief. A key wedge point in the talks will be Lebanon, where Iranian proxy Hezbollah and Israel continue to exchange fire. Yesterday, President Trump threatened to strike Iran again if they didn't stop Hezbollah from, quote, causing trouble. Let's get a little straight update, too.

23:25So the top line number shows traffic through the Strait of Hormuz has recovered slightly. 21 ships transited on Saturday, which isn't bad. But what is bad is that number dwindled to 12 ships yesterday. Plus, according to an analysis from Windward, the current traffic profile of these ships is dark sanctioned Iranian linked ships who travel with their automatic identification systems off. So even though there are more ships going through the strait, it still feels closer to that blockaded strait rather than a truly open one. Moving to Western Europe, things are about to get historically toasty as a brutal heat wave bears down.

24:02It's expected to be one of the worst in the continent's history. Today and tomorrow, France could see temps of 113 degrees, London 102, Berlin 100, and Amsterdam 93. Famously, Europe does not have nearly as many air conditioners as in the U.S., so we hope you all stay cool. And that is Fahrenheit temperatures, we should add, because we're talking about Europe. So here's how you know it's serious, though. The French government has banned public drinking in certain quote red alert zones with the worst of the heat to try to allow medics to concentrate on taking care of the most vulnerable not you know people who are over served outside so spain italy germany france stay safe over there everyone returning to the returning to the world cup the group stage wraps up with games all this week before the round of 32 kicks off on sunday after convincing wins in their first two matches the u.s has already clinched their group.