Apple Unveils Budget-Friendly iPhone & Congestion Pricing Gets Axed?

0:00Tuesday on NBC, Jimmy Fallon and Bozma St John host the highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best idea win! On Brand with Jimmy Fallon. Series premiere Tuesday on NBC.

0:32Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Trump wants to scrap New York City's congestion pricing plan, but can he? Then Apple added a new cheap iPhone to its lineup, but it's what's under the hood that has investors excited. It's Thursday, February 20th. Let's ride.

0:56Good morning. If it were 2009, our Facebook wall would be pouring in with messages from randos because it is our birthday. Morning Brew Daily is turning to today. On our first episode way back in 2023, some topics we covered were meta-charging for verification, Biden taking a train trip, and ice cover on the Great Lakes, a real scintillating debut from your boys. Thank you so much to all the OGs who've been listening since that first episode, and to everyone who has hopped on the bandwagon since. It is a real privilege to be able to do this for two years now. And Toby, I'm pretty excited about being, too.

1:33Lots of key milestones to hit. We should be able to say at least two words together, walk up a few stairs without help, and eat from a spoon. Time flies when you're saying let's ride. I will spare you all my rendition of Happy Birthday. Instead, just pass along how thankful Neil and I and the whole team is for you guys. From the literal day wonders who comment on every YouTube video to our brand new listeners, you all are what make MBD MBD. Now let's go and party. And by party, I mean, tell you about today's sponsor, which is LinkedIn ads. Neil and I were golfing the other day. Yes, in February.

2:11And we saw this guy on the range. He was just firing balls out left and right. Wouldn't even stop to aim. Just swing, swing, swing, swing. Made the whole round a disaster because he wouldn't even look at where he was hitting the ball on the course. It was ready, fire, aim. It's the exact wrong way to golf and the exact wrong way to run ad campaigns. Just like taking a moment to center yourself before a golf swing will lead to better outcomes, using LinkedIn ads to target your audience by industry, company, and role will prevent ad waste and get your company in front of the right people. Man, I am still mad at that dude for ruining a lovely February round.

2:45If you're interested in testing out LinkedIn ads, LinkedIn will give you a$100 credit on your next campaign. Just go to LinkedIn.com slash MBD. That's LinkedIn.com slash MBD. Terms and conditions apply only on LinkedIn ads. This episode is brought to you by State Farm. Checking off the boxes on your to-do list is a great feeling. And when it comes to checking off coverage, a State Farm agent can help you choose an option that's right for you. Whether you prefer talking in person, on the phone, or using the award-winning app, it's nice knowing you have help finding coverage that best fits your needs.

3:21Like a good neighbor, State Farm is there. Long live the king. That's what President Trump declared when he announced that he was killing congestion pricing in New York City. Yesterday, his transportation department rescinded its approval of the city's new tolling system, which would bar New York's Metropolitan Transportation Authority from collecting tolls. Transportation Secretary Sean Duffy called the plan a slap in the face to working class Americans and small business owners, echoing critics who called it a tax on drivers. It's been about a month and a half since New York's first of its kind congestion pricing plan went into effect, which charges most vehicles$9 to enter the core of Manhattan at peak times.

4:04The goal was to clean up the air, reduce car traffic in busy areas, and fund$15 billion worth of transit projects. And so far, it seemed to have been working. Drivers are saving about 20 to 30 minutes traveling into central Manhattan, while about 1.2 million fewer vehicles entered the area in January compared to a year earlier. But unlike the Newsies, Trump may have been too quick to declare himself king of New York. In a lawsuit against the Transportation Department, the MTA argued that the federal government does not have the authority to unilaterally kill congestion pricing and pledged to continue collecting tolls until a judge told it not to.

4:42In a statement, New York Cathy Hochul said, we are a nation of laws not ruled by a king. We'll see you in court. This has a long way to go before we have an outcome on either side. But let's dive deeper into the numbers on if it was working or not. In the first week of February, traffic inside the toll zone dropped about 10 % compared to the same time last year. There was on average about 50 ,000 less vehicles entering according to the MTA. So that is a big check in its corner. Also foot traffic, which is a good measure that businesses want to see to make sure that they're still getting enough people to come frequent their shops.

5:20That has improved since the tolls took effect as well. Through the end of January, 35.8 million pedestrians entered that major business district in the tolling zone. That's about 5 % more than the same period last year. And it's been really freaking cold in New York City too. So those are impacting numbers as well. But on the flip side, this toll had a lot of powerful opponents. One of them is actually the governor of New Jersey. He said you're basically just rerouting traffic into our neck of the woods. That traffic has to go somewhere. You're just putting it on our plate. So he has the ear of Trump as well.

5:55A lot of powerful people in New Jersey were not happy with this, which is why Trump kind of made it a campaign promise. This is him trying to execute on that campaign promise. And this may be the stiffest legal challenge that congestion pricing has had, but it is certainly not the first. It was hit with lawsuit after lawsuit by New Jersey and others. It survived all of those legal challenges, and it went into effect on January 5th. After years and years and years of planning, the chair and chief executive of the MTA said, look, we've been sued everywhere. We've been sued in every federal court and state court east of the Mississippi, and we're batting 1 ,000.

6:33We've won every single time. So we'll see how this court fight plays out against perhaps the most powerful opponent of all, the White House. One real issue with this, though, is that this plan was supposed to, if congestion pricing goes away, it will really hurt the MTA because they were expecting$1 billion in extra revenue. They were going to use it to fund all these improvements to the subway system. And they've already started borrowing against future toll revenue. So if that gets taken away, it really throws the MTA into limbo. It really puts their plans on, you know, giving a facelift to one of the, you know, most extensive transportation systems in a U.S.

7:14city, but also an aging transportation system. So I do think that they are watching nervously and saying, oh, no, we've already started cashing checks from this program. What happens if that income stream is taken away? This is history, what we're witnessing, because first of all, this is the first congestion pricing plan that has been implemented by any United States city. It exists in London and Stockholm and Singapore and other places around the globe. But this was the first experiment that happened in the United States. So that was unprecedented. And then what is also unprecedented is the reversal of such a large scale transportation project by the federal government.

7:51This hasn't happened before. If it sounds like a lot of whiplash, that's because you've never experienced something like this in U.S. history. So the magnitude of what is going on is a really big deal because many other cities are watching New York to see whether they want to implement their own congestion pricing plans around the country. Now it moves to court for another drawn out legal battle. Apple rolled out a budget-friendly new face to its lineup yesterday, the$599 iPhone 16e. It clocks in at 600 bucks cheaper than Apple's most souped up iPhone, but will run you$170 more than the iPhone SE it is replacing.

8:27What's the extra cash getting you? Say goodbye to the old home button that somehow your mom's phone still has and say hello to face ID. It also contains the same A18 chip as the iPhone 16, which is powerful enough to run Apple intelligence. And there's an updated USB-C charging port. But what has a lot of people excited is a small piece of tech under the hood. Inside the 16e is Apple's first ever in-house cellular chip, which represents the culmination of a years-long effort by Apple to make more of its technology itself to save having to pay billions of dollars to suppliers like Qualcomm. This launch also signals Apple's intention to push into the lower end of the smartphone market, typically dominated by rivals like Google and Samsung.

9:11So Neil, one little phone here, but a lot of implications. Sure. I mean, Apple's iPhones are in a bit of a slump right now. Sales fell about 1 % in the holiday quarter volume. The amount of actual phones that they're shipping is pretty stagnant. Everyone kind of has a phone. They're just upgrading. So at this point, it's selling about 230 million iPhones a year. And it's just that is a number that has not that is not going to budge in the near future. So what they need to do is raise prices to get more revenue. So this is one hundred seventy dollars more than the last iPhone SE version. It's still cheaper than its other models.

9:52But you're right. This is, I guess, the entry level model to get people hooked on the Apple ecosystem. And then maybe once they're fed up with their SE, they'll upgrade to a Pro or a Max or whatever they call it these days. That is the hope to get people, especially in international markets, into the Apple world, and then they'll continue to pay for upgrades later on. But let's talk about this in-house modem. This is sort of a test run for these chips that allow your phone to connect to cellular providers around the world. What they're doing is trying it out in this cheaper iPhone to see if they can roll it out to their entire suite.

10:31And the reason why they've been trying to do this is that Apple's been very reliant on Qualcomm for most of its history. But Qualcomm, you know, charges them one money to make the chips, but then also to they have to pay a royalty of like six to seven dollars on every single chip that every single iPhone that contains the chip. So over, you know, 230 million iPhones, that is billions of dollars we're talking about. So Apple has been slowly chipping away at figuring out how to make this one critical component. themselves. It's been a very long process. They hired a bunch of people from Intel's modem division.

11:04They hired some people from Qualcomm as well. It's a little contentious because they've been trying to keep Qualcomm happy while also trying to take away a major source of revenue from it. So this has been a project that's been ongoing. We've seen them do it with their actual chips that power the phone. Now they're trying to do it with their cellular chips as well. Let's talk about the marketing strategy. Basically, when Apple has released a product in the past, there's been a huge pageantry around it. They have a huge event. They do keynote and very buzzy marketing around product launches. This one, they just issued a press release and it went a little under the radar.

11:42They didn't hype up this modem at all, which I don't know if it's even possible to hype up a modem, but they didn't do it. And they kind of let this fly under the radar a bit. What do you think is behind that particular strategy? I mean, it's not necessarily that exciting of a project because it is just a more expensive entry-level version of their phone, and it doesn't come with a ton of bells and whistles. Most of the bells and whistles are actually stripped away. You're not gonna get those higher-end features that you come to expect. It doesn't have the dynamic island at the top. It doesn't have the MagSafe wireless charging.

12:16It only has one back camera. So if you make a big deal out of it, some people might say, wait, you're just releasing a less souped-up iPhone and why should I be excited about that? So I do think the reason why we're talking about it is because of the modem and what it represents for Apple going forward, but a modem is not exciting for consumers, which is why they didn't make a huge deal about it. Nikola Motors, an electric truck company that once had a market cap higher than Ford, filed for bankruptcy yesterday, completing its slow downhill roll towards the EV junkyard. This company's worth eulogizing, though, not for its contributions to the EV industry, but for its insane backstory.

12:52Nikola was founded by Trevor Milton amidst the green auto investment boom that characterized the early part of the COVID pandemic. It promised semi-trucks that would run on environmentally friendly hydrogen and a network of fueling stations along major interstate corridors to keep everything moving. When it went public via SPAC, it reported orders for 14 ,000 of its hydrogen fuel cell trucks. However, the famed short seller Hindenburg soon took notice and released a report that Nikola was likely overhyping its business. The report also made the sensationalist claim that in some of its promotional videos, Nikola rolled a truck down a hill and passed it off as moving under its own volition, which prosecutors found to be true.

13:34Needless to say, instead of ushering in a green revolution in trucking, Trevor Milton was convicted of securities fraud in 2022 for allegedly misleading investors. And Nikola is now a poster child for Mean Stock Froth and founder Megalomania. What a downfall, Neil. This was a mess of a company. They were on their fourth CEO in as many years. They were losing hundreds of thousands of dollars on every truck they sold, which they weren't selling many trucks at all, even despite ramping up production. It was a symbol of the excesses of the SPAC boom that we had in 2021 and the EV boom that has faltered from both macro conditions because higher interest rates, less demand for EVs than what was expected, but also missteps on the part of these individual companies that thinking that they could be the next Tesla and not realizing the capital that was required.

14:31And many EV companies have been accused of fraud and accounting shenanigans. And clearly this was a business model that didn't work for Nikola, but also many other EV startups in the space. Yeah, there was almost two factors that sunk Nikola. One was Trevor Milton was literally, you know, defrauding investors by. I remember when this happened, when their video of this truck, you know, steaming down the highway. Hindenburg kind of said, we found out that they can't actually drive these trucks. These trucks don't work. They are literally using gravity and passing it off as, you know, self-powered trucks.

15:04So that was this whole separate issue. But then there's also just normal startup problems. They are saying its current CEO cited the fact that it's really hard to find hydrogen and fuel cell parts because it's just not a big market. Also - And we should have thought about that. I know, but I think these are things that they thought they could just build or the industry would grow alongside. So yeah, some of it was just a miscalculation of that. All told, though, this was a money lighting on fire machine. It's lost$3.6 billion in capital. It's just been literally setting money on fire. And it joins that graveyard.

15:39I mean, the Fisker Motors of the world, the Lordstown Motors of the world, these companies that thought they were going to be Tesla and instead are just a cautionary tale. There are a few walking dead EV startups. One of them is Rivian. Their share price is about a tenth of where it was in late 2021. but they produce pretty well-regarded electric pickups and SUVs, so they're still kicking. And then Lucid Motors is another EV startup that is still around. It makes luxury electric cars and SUVs at the top end of the market. Just look at their share price this morning. It's down 95 % from their peak.

16:15Up next, hold on to your frontal lobes. It's Neil's numbers. Raise the runners. Raise the sails. Raise the sails. Captain, an unidentified ship is approaching. Over. Roger. Wait, is that an enterprise sales solution? Reach sales professionals, not professional sailors. With LinkedIn ads, you can target the right people by industry, job title, and more. Start converting your B2B audience today. Spend$250 on your first campaign and get a free$250 credit for the next one. Get started today at linkedin.com slash campaign. Terms and conditions apply. Eczema isn't always obvious, but it's real. and so is the relief from Evglyss.

16:56After an initial dosing phase, about four in 10 people taking Evglyss achieved itch relief and clear or almost clear skin at 16 weeks. And most of those people maintain skin that's still more clear at one year with monthly dosing. Evglyss, LibriKizumab, LBKZ, a 250 milligram per two milliliter injection is a prescription medicine used to treat adults and children 12 years of age and older who weigh at least 88 pounds or 40 kilograms with moderate to severe eczema. Also called atopic dermatitis that is not well controlled with prescription therapies used on the skin or topicals or who cannot use topical therapies.

17:25EPCLIS can be used with or without topical corticosteroids. Don't use if you're allergic to EPCLIS. Allergic reactions can occur that can be severe. Eye problems can occur. Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with EPCLIS. Before starting EPCLIS, tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about EPCLIS and visit ePCLIS.lily.com or call 1-800-LILY-RX or 1-800-545-5979. Welcome to Neil's Numbers, the segment where I share three stats from the week's news that will turn you into the most insufferable know-it-all.

17:58For my first number, how much has Doge, the Department of Government Efficiency, saved American taxpayers? It depends on who you ask. About a month into its effort to slash fraud and waste, Elon Musk's cost-cutting outfit says it saved$55 billion in federal spending. But look closer and things get a little more suspect. The Doge website itself only accounts for$16.6 billion of the$55 billion claimed to have been saved. And that$16 billion also comes with an asterisk because there is a major error. Doge mislabeled a contract as costing$8 billion, when in reality, that contract cost$8 million. So when you do all the math, the total savings generated by Doge amount to about$8.6 billion, a fraction of what had been broadcast.

18:45So how'd the M and the B get screwed up? In September 2022, D &G Support Services was awarded a contract to provide services for the Office of Diversity and Civil Rights within U.S. Immigration and Customs Enforcement, or ICE. The original value was listed at$8 billion, and it stayed that way for years until last month when it was adjusted to the correct amount of$8 million. It certainly was just an$8 million contract because ICE's entire budget is around$9 billion. So an$8 billion contract is just not feasible. Either way, as Bloomberg notes, this sus accounting raises questions about Doge's reliability and accountability.

19:23Yeah, this is the transparency side of Doge that, you know, they invited when they put this website up. If you want to show their work, people are going to start, you know, parsing through that work. And whether it was actually you could credit Doge and say, wait a second, they actually found a government contract that was mislabeled. That was soon changed right before, you know, the inauguration. What is clear, though, that$8 billion is certainly not even close to what this contract could possibly be worth. Also,$8 million is the upper bound on what you could hypothetically say you saved as well, because$2.5 million has already been spent on that$8 million contract.

19:58So it just shows that when you're going line by line and trying to cancel and add up these savings, you're going to run into some of these hurdles. Maybe it's a mislabeled contract. Maybe it is just an over-exaggeration. But I do think that they thought they found the perfect doge fodder here. And if you dig a little deeper, it wasn't the perfect doge fodder. And Elon Musk has said himself that some things will be incorrect and should be corrected. But when you're putting out false numbers consistently like this and overinflating your impact on, you know, this is the budget's trillions of dollars.

20:32And to say you found, you know, a couple few billion, you're, you know, you're going to lose trust with the public about your effort. My next number is three, which is how many companies control an estimated 70 to 80 percent of the fire truck manufacturing market. This stunning industry concentration reported by The New York Times was on full display during the L.A. fires last month when many firefighters who could have been deployed to the front lines were not able to get there because dozens of fire trucks were out of service, accumulating rust at the city maintenance yard. Los Angeles Fire Chief Kristen Crowley said that about 100 fire vehicles were out of service in January, which blunted their efforts to control the blazes.

21:14Fire leaders across the country say recent industry consolidation in fire truck manufacturing has caused higher prices and long delivery delays, impeding their ability to do their jobs. Tack on COVID, which caused major supply chain disruptions and worker shortages, and the situation at firehouses has become dire. auditors in Atlanta found that more than a third of the city's firefighting fleet was out of commission. Chicago firefighters held a satirical birthday party for a 30-year-old engine that had double its lifespan. Yeah, this is a interesting industry. One, because fire truck manufacturing is an incredibly bespoke process.

21:52Every single fire department wants their truck made to their specific specifications. And so therefore, it's not something that you can just mass produce like, a normal automobile. And then also it is a very consolidated industry. If you look at the top name there, it's called Rev Group. It controls 30 % of the fire market, but then you go down the list and three of the largest companies control around 70 % to 80 % of the market. And if you dig into those companies' financials, they have backlogs stretching in years and billions in dollars of orders, but there's just not a ton of rush to fulfill those orders because, again, it's not a very competitive marketplace.

22:29So a lot of these fire stations are looking around and they're making do with what they have. They're making do with 30-year-old fire trucks. They're throwing birthdays for these fire trucks because they are forced to because no new fire trucks are coming to replace their old ones. For my final number, a movie you've probably never heard of just surpassed Pixar's Inside Out 2 to become the highest grossing animated film of all time. Najah 2, a Chinese film about a monster fighting demonic child, has earned$1.7 billion since its debut over the Lunar New Year holiday, making it not only the number one animated film ever and not only the number one Chinese film ever, but also the eighth biggest film in history.

23:07It's an astonishing result for a homegrown Chinese movie, considering that N 'Zha 2 is the only film in the top 20 all-time box office list whose original language is not English. And even more remarkable, very few people internationally have seen it. Over 99 % of its box office income has come from mainland China, making it the biggest haul ever in a single country by$600 million. That was a lot of superlatives, but Najat 2's success is unprecedented, and it shows the power of the Chinese consumer market when things are clicking. There is a good chance that this will be the highest-grossing movie of 2025, depending on how Avatar 3 does later this year.

23:45This is a culmination of a trend that has really emerged over the past decade. If you go back to 2012, seven of the top ten releases in China were from Hollywood, were from American studios. But then you go back to last year, no American movie broke the list of the top 10 highest grossing movies in the China. And it really just speaks to the emergence of China's movie-making machine. They are one, improving in quality, and two, showing that it reflects wider societal issues as well. This is a movie that is based on a 16th century story from a Chinese culture. And so audiences, domestic audiences, are showing out in droves.

24:20One, just showing their national support for stories like this. And then two, just showing that these movies are good movies and they do draw in audiences in droves at this point. It's coming to America, too. You looked at the showtime to see it. It's pretty widely distributed within New York City. So we should give that a try. Let's bring to the finish with some final headlines. U.S. support for Ukraine in their war against Russia has never been more precarious. One day after President Trump blamed Ukraine for starting the war, when in fact Russia invaded Ukraine unprovoked, He laced into Ukraine's president, Vladimir Zelensky, calling him a dictator without elections and claimed he misused U.S.