and what's he like i mean i mean he seems like he's he's very youthful and like it seems like he is very different than the way tim cook tim cook was kind of this figurehead soft-spoken doesn't really say much turnus seems like he's like chomping at the bit to like kind of make his mark on this company

Yeah, you know, Ternus is an engineer.

He's been with the company 25 years.

And Tim Cook was there, has been there a little bit longer, because Tim Cook came there in 97, I believe.

But yeah, they're very different guys, because Tim Cook was sort of a supply chain guy, business genius, I would say, really helped expand the company and the products around the world, ensured that they always had supply to meet demand.

and helped expand it to all these different categories, including health and make services bigger than ever.

But, you know, John Ternus has been very close to the development of a lot of products over the last quarter of a century, and he really understands them deeply.

And what is your impression of the Duo? I mean, do you think that Apple hit it out of the park here?

So you asked ChatGPT, we don't know for sure yet, but what rendering did it give you of what this might look like?

So basically, I fed the same prompt to both Gemini and ChatGPT, which was based on some rumors about what we're thinking is going to happen, a donut-shaped device that has movable parts, cameras, sensors, palm-sized donut shape.

Honestly, I got some very good renders of some interesting looking devices.

I mean, imagine a donut that was made out of technology.

That's kind of how it looks, but it's going to be so much more than that.

I mean, they're talking about, because you'll notice like, you know, in the render, and this is purposeful, it kind of is in segments because OpenAI is apparently making something that will move to indicate that it's sort of listening or reacting to you in addition to the lights that would be built in.

Yeah, I know.

I.

Yeah

... you know, I track Apple pretty closely.

Um, and they make most of their money from selling you iPhones, but the fastest growing part of their business is services.

Services are subscriptions, basically.

You're paying for iCloud.

You're paying for Fitness+.

You're paying for News+.

Yeah, let's talk about that.

Just to back up for a second, when was the first moment you all realized subscriptions had moved beyond Netflix and Spotify and into something bigger, almost the default way companies want to sell us things?

Every business has realized the power of subscription, knowing that you have incoming money every month, every year, which is much more powerful than selling a single device or a single product.

You know, software was always kind of considered like you didn't actually own it.

You were licensing it, but you still paid once.

And then they started to realize, well, what if you actually did pay a continuing subscription fee like with Adobe? But even, you know, just you buy a camera for the outside of your house and you're like, wow, that's a really cool feature.

Oh, you want that feature? You got to pay monthly for it.

Right.

Yeah, you're nodding your head, Lance.

And Lance, I think it'd be great to hear from you what their sort of setup is, especially now they have verbally confirmed, even if they only mentioned them once in the whole show, about this partnership with Google's Gemini.

Yeah.

So, um, we actually got a really cool deeper dive into that architecture right after the keynote with, um, sat in a big room with, uh, Federighi and a bunch of the, the, you know, the, the heads of engineering, both software and head of AI.

Tim Cook was sitting right in front of me, as was John Ternus, uh, watching intently because it's a, it's a pretty complex thing.

But one of the big takeaways here is it really answered the question of what is Google's involvement here, and it sort of added the thing of, oh, yes, and NVIDIA's involved too.

So it takes a village to build the, the AI that you actually need, right? And for the models, uh, it is a real collaboration between, uh, Apple and Google.

They absolutely, uh, you know, there's this, this image that they put up, this schematic that they put up on the screen of all these new models that they have, both a large model that's local and then a series of models that are in the private compute cloud.

So what's your experience been so far?

Is AI an existential threat to humanity?

No, I don't think it is.

Um, but I really understand the concern.

We are living in unprecedented times.

The development of AI, um, is unlike any kind of technology I've seen before.

I think it's a speed that is causing this concern.

Um, you know, the, the line between danger and disruption is so close, and sometimes one can look like the other.

And quick-

Mm

... every single one of our systems will be on Apple Silicon." And I actually doubted it.

I was like, "Come on." I think when I stopped doubting is when I tested the MacBook Air with the M1 chip, and I was like, "What is this? What have they done here? This is, this is so over-delivering at every level." And then I kind of knew, oh wow.

Because quite honestly, a lot of sort of mobile level, you know, what Intel was supposed to deliver to us, which ke- they kept promising, you know, s- mobile-ready chips that would give us power and battery life, and they just couldn't do it.

Could not do it.

Um-I think Qualcomm, um, deserves some credit for maybe sort of like being the sort of canary in the coal mine saying, "Hey, you know what? This is actually possible." But Apple having the strength and the power and the, the, the, the team to actually pull it off, and the products.

Because, you know, for Qualcomm it's like wrangling cats, right? They're working with the sort of Windows ecosystem and, and all of these different partners.

... breakthrough product space for you?