Big Technology Podcast - Apple Mega-Episode W/ Daring Fireball's John Gruber: AI, Vision Pro, China, App Store & More

Episode Date: February 7, 2024

John Gruber is the author of Daring Fireball. He joins Big Technology Podcast for a mega episode on the state of Apple. We cover: 1) The company's vibe amid revenue declines 2) The impact of its services business 3) Its position in China 4) How AI might change the user interface of computing 5) Can Apple keep up with the changes if we move beyond the screen 6) Gruber's reaction to the Vision Pro 7) The stakes of Apple's Vision Pro bet 8) Apple conflict with Meta and who is getting the best of it 9) Is Apple too attached to its App Store fees 10) Who might succeed Tim Cook? This is the longest episode in Big Technology Podcast history. But also a masterclass from Gruber on the state of a company he's covered for two decades. Enjoy! --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Questions? Feedback? Write to: [e-mail]

Let's go deep inside Apple, looking at AI Vision Pro, the iPhone, China, and plenty more with the preeminent Apple Watcher of our time. Yes, our conversation with the Daring Fireball's John Gruber is coming up right after this. Welcome to Big Technology Podcast, a show for cool-headed, nuanced conversation of the tech world and beyond. Our guest today is John Gruber. He's the author of Daring Fireball, which has now been going for more than 20 years, I think 22 years. and he's also the host of the talk show, which you can find on your podcast app of choice. I am stoked for this conversation. I've been looking forward to it, and I'm so thrilled to welcome you here, John.

John, welcome to the show. Oh, I'm happy to be here, Alex. Great to have you. Let's start just broadly on the state of Apple. It's a very interesting moment for the company, don't you think? And this was kind of the note that I wrote down. It's a powerhouse company that just released a potentially revolutionary device, but it is also one that's in the midst of what will be five of six quarters with

new declines, problems in China, and many years until it sees the fruits of the Vision Pro, or at least what it wants to see from it. So what is the vibe around Apple these days? It's hard, you know, it's a good open-ended question. And I think, I think the answer is that any company that grows to super planet size, I don't know how else to describe it, but the sort of company that starts being talked about in antitrust terms. And we can come back to that in the way that actual antitrust laws seemingly don't apply to Apple. But in terms of their size and just the sheer amount of money that they make, right? I mean, that's the one score that we have that works across all industries. When a company reaches a sufficient size that it starts

getting scrutinized, I think they're all unique, right? Because they're, because they all get their own way. There's no path to becoming huge by following in the footsteps of somebody who came before. And I think the one thing that we've all, you know, you don't even have to be an expert or a close follower of Apple, but just a casual follower to know that something had to give with the growth based on iPhone sales. Because they've just run out of people on the planet who can afford an iPhone and might be interested in an iPhone who don't already have an iPhone. I mean, they've saturated the planet, really. And so it's, and you could sort of see that coming, right? You could just, you know, I don't know what the number is. I know in their recent quarterly

call, they said they have two point some billion devices in use. And I'm not quite sure what They count like do AirPods count as a separate device, whatever. But that's, you know, but you're running up against the number of people there are on a planet who might afford it. And what happens afterwards? Everybody knows investors want to see growth. And if the primary driver of growth is selling these iPhones, which are a wonderful business, you know, with 35 to 40 percent margins, $750 to $1,200 price tags for the big ones,

what happens when they can't sell anymore than they already are? I mean, they're still selling tons. They're still making lots of money from iPhones, but they can't seemingly grow it. And the only real growth they've had in recent years is sort of by raising the price ceiling on the Pro Max models, right? That they've sort of juiced revenue just by introducing more expensive models.

So that's my high-level take on where Apple is. right now. Apple's always had a good answer, though, for what comes next. I mean, they started off with, you know, the desktop. Then, of course, you know, moving into the iPod and laptops before reaching the iPhone. And it just does it feel, am I wrong in thinking now that there's no natural next after the iPhone? Yeah, that's how, and my other podcast dithering co-host, Ben Thompson and I are largely an agreement on this point. And I think it's overlooked that the phone, and, you know, we'll count Android phones in there with it, right? Because everybody's phone works like an iPhone today. Every, you know, in very broad strokes, every Android phone you can buy at a basic level

is a slab of glass about the same size with the same sort of touch-based interface, you know, very few buttons on the side. It's, it is sort of the end point of quote, quote personal computing. And it's sort of a waste of a term that we squandered personal computer on what we now call PCs back in 1980 or so. Because this is truly the more personal computer. It's on you all the time. I mean, what percentage of the day are you more than 25, 30 feet away from your phone,

right? Like, I guess for me, it's like when I take a shout. hour. I mean, for the most part, it's with me all the time. And I don't think, like one way of looking at the computing industry is that every five, six, seven, maybe we go closer to 10 years. There's some revolutionary new product, some step forward that drives lots of people to come into it. And you keep thinking something's going to come next that does the same thing, but even bigger than the last one. But I don't think that's ever going to happen with the phone. I think The phone is the biggest computer product there's ever going to be.

And I don't say that as a Luddite, and I'm not down on the future of technology, including Vision Pro and everything that hints at for the future. But it's almost like an inflection point where pre-phone, everything was moving towards being able to make one of these that you could just carry around with you everywhere you go, wireless with wireless internet it's a communication device and a personal computer and then everything that comes after has to sort of find a place but it's sort of a I think they're all niches right there's everything that come you know Apple Watch

AirPods these are all computing devices but they're not this is my interface to the entire world which is what the phone is and I just don't I think people who think something's going to come after the phone that does to the phone, what the phone did to PC laptops, which were sort of, you know, and remember Netbooks, that was sort of, oh, you know, PCs are getting smaller and more portable. Netbooks had nothing on the phone in terms of portability and, quite frankly, in terms of how much people enjoy using them. So I think that's the conundrum.

I don't think anything comes, things will come after the phone. Things are already coming after the phone. But I don't think any of those things will supplant the phones primacy in our lives for a very long time. So when you hit a plateau with phones or your kind of the velocity of growth hails off, which seems to be what's happening, you start to point to other things or try to find, at least in the near term, other ways to make up for that part of your business. And of course, that 2.2 billion device number that you cited, I think, was thrown out there by Apple to show, hey, like our sales might be on. It might be slowing right now, but we have a large install base and we're going to sell them services. Yeah. And that's, we never used to hear about Apple services.

Now we hear about them all the time. What's your perspective on the state of services? And do you think they have the runway to grow significantly if they need to make up for some of that lost momentum on iPhone sales? I, again, I think you don't have to be an expert. I think the obvious explanation is true. And you can just go back through these quarterly calls that Apple has with the analysts after each time they report their results and look for the ones where Tim Cook's prepared statements started mentioning services. And I don't know, I'm going to say like 2015, 2016, somewhere around there where it, and I think he was just being honest. This is an area of concentration for the company because we see this as a way to grow.

I think everybody recognizes the advantage that services through subscriptions are regular, and you don't see like a spike around the holiday quarter or something. People who sign up for services that they enjoy using and feel they're getting a good value for just tend to stay subscribed. And when you look at Apple's services revenue, there are no blips, right? It's just, or, you know, it's very nice growth. It's not, you know, it is growing steadily, but it's not growing at a very steep rate. It's growing at about the rate you would think is probably the fastest it could, and it doesn't dip.

But I also feel like it, and I think there were a lot of questions when Apple first started mentioning this as a path to future growth that, hey, Apple is no good at services, right? right, that was sort of a very common take, that Apple isn't good at things like syncing data between devices. Apple isn't good at XYZ when it comes to services compared to companies like Google or like Amazon with AWS, you know, which is literally called services. And I think like a lot of things, they've gotten good at services in a very quiet way just by chipping away at what they were bad at. And now, you don't really see people saying, wow, Apple is one of the best online services companies in the world, but you don't see people complaining about it either, right? Sinking, everything tends to work. I tend to actually, you know, my perspective is somebody who gets to

review a bunch of products throughout the year in addition to the ones I own sort of run headlong into this, right? Where I set up a couple of new iPhones every year. I set up new iPads. I set up MacBooks that I have just for testing. And from my perspective, the services for that type of stuff, the computer type stuff, calendar syncing, ICloud Drive syncing, you know, your files, the way Dropbox, you know, sort of a Dropbox alternative. All of that stuff works better than it ever has before. And I don't think they get a lot of credit for that. And then the other side of services is the sort of showboaty, you know, media services,

you know, Apple TV and Apple Music and stuff like that, where it's not really nerdy computer services providing APIs and Datasink. It's just give us $10 a month and we'll show you a bunch of movies and let you listen to music. and, you know, they're doing pretty good there. But I also feel like ultimately at this point, everybody has sort of baked that into their conception of the company, right? And don't they include App Store Commission as part of their service revenue? Well, and then what I always call the dark matter in their services revenue

is the acquisition costs for search. What's the actual term? It's like traffic acquisition or whatever they call it. The $8 billion that they pay to Google, right? No, no. Google pays them. Sorry, Google pays them. And even with these recent lawsuits, we still don't know exactly how much, but it's, you know,

the best guess based on, I think it was the Epic versus Google lawsuit where some of that came out somehow. But it's, you know, the best guess is somewhere around 20 billion and growing per year. So 20 billion dollars a year just comes from a check from Mountain View to Cupertino just to have Google as the default search. And it's, you know, again, it's, the deal is more complicated than make Google search the default and Safari on all devices. It's really about how much traffic being the default sends. But ultimately, it's $20 billion a year they get just because Google's the default search. And that's a big chunk of their services still. And what was the other

one you mentioned? Oh, the app store revenue. Right. Right. And that's, you know, that 18 to 20 billion is what PCMag is saying. But yeah, okay, let's talk about App Store Revenue. Yeah. It's obviously in people's minds because of the Digital Markets Act, the DMA in the EU. And it's a good business to be in, right, to own a platform and to be able to charge rent effectively, right? I mean, real estate has been a good business to be in since. the invention of capitalism centuries ago, right? It's a good place to be and that's effectively where they are. Right. And we're going to definitely come to that at the end because I have a bunch of questions for you about that, or not even at the end, but somewhere down the line. All right, I'm not

going to spend our whole time asking financial questions, but one more because I think it's important and Apple stock price does play a role in the way the company is perceived. I think in the way the company conducts itself. Do we see a different Apple if the stock price is stagnant? I mean, we just had Microsoft Pass it as the most valuable company on the public markets. So are we going to see the same confident, you know, like looked at in high regard, Apple the way that we have for so long if its stock price stagnates or even declines if investors don't like the fact that revenue isn't growing? I really don't know. And I don't think, I don't think it's wrong for you to be asking financial questions of me of this because I do think that they you know and and here this question

directly relates to what what are users going to see if this happens if Apple starts feeling pressure like that um and I don't know I don't think we do I really don't you know I don't know how to predict that and and how how resilient can Apple be if investors are angry at them It's been a very long time since investors had anything but praise to say for Apple. Somewhere around 2013 or so, about two years after Steve Jobs died, there was a sort of conventional wisdom that I didn't hold it. I don't even know if a majority of people held it, but there were a significant chunk of people, both in the tech media and the investor world, who sort of had a, see, we told you, Apple is an Apple without Steve Jobs, right? And Tim Cook is not Steve Jobs.

This company is going to lose their shirt to Samsung, you know, and that there was, Samsung was having a very good period of phone sales. I think it was also around the time where Apple sort of got caught flat-footed on having big-ass phones available, which turned out to, you know, be inordinate. popular with with customers. And that year, I think it was WWDC 2013. It wasn't the iPhone. It was sort of one of the nichiest of niche products Apple makes, the Mac Pro, the one that looked like a little wastebasket, was introduced at WWDC. And that's when Phil Schiller introducing it throughout the line, can't innovate any more my ass. Yes, remember that one. Right? And it was sort of

you know, a moment of, I think, you know, it got a lot of laughs, but I honestly think it was a very honest moment for the company where, you know, a little bit of their frustration at the conventional wisdom that they can't innovate without Steve Jobs kind of leaked out publicly. And ever since then, you know, I would say the people who were down on Apple at the time, you know, have a lot of crow to eat at the moment. You know, they've, every way you can a match you can measure the company is way bigger and more successful than it was 10 years ago way more and they're also way more steady right there's just they just don't have any they what are the scandals that they've had in the last 10 years right you'd have to go to something

like the the butterfly keyboards on the macbooks for that you know the keyboards that where the keys got stuck and people didn't like how clicky they were for two or three years that's not really a scandal, right? And the truth is there's MacBook sales kind of sailed through that whole crappy keyboard period unabated, right? And so it's been really good. Whereas when Jobs was the CEO, it was a function of the size of the company and how tumultuous just the times were, right? And a product like the iPod debuted and it was small and then it got huge. And then within six years of being introduced, it was obviated by the iPhone, right? And new products are coming. Old products are going away. They had scandals like that stock backdating scandal. Remember

that with the employee's stock options? Right. And jobs okayed sort of a backdate this and it was of questionable legality. Things like that don't happen under Tim Cook, right? He is much more disciplined, right? I don't think Steve Jobs was undisciplined per se, but I think Steve Jobs was impulsive in certain ways that Tim Cook is not. So what happens if the stock stagnates or even declines? I don't know. How resilient are they? And I kind of feel like at this point, I don't see that happening in the next couple of years, right? And then you start running into I forget exactly how old Tim Cook is. I think he's like 62, 63. You know, even if he stays as CEO. 63, yeah. Yeah. So even if he stays and he, you know, Karas Swisher asked him on stage, I think, within the last year, do you see yourself still being CEO in 10 years? And he didn't give a yes or no answer. But 10 years seemed like, you know, the outer limits. I mean, he'd be 72, 73 years old. That's, right. Then you just have to wait to.

a few years and can run for president and everything will be fine. Right. But I can also see where he would want to hand Apple off to his successor in good shape, both on technical grounds with the product lineup, but also on very good grounds. And perhaps even more importantly, right? I think Apple can weather technical hiccups better on their own than whether angry investors pressure. Right. So not a scandal, but let's talk about this because it may get there at some point.

Apple's dependence on China. So first of all, we know that Apple has used suppliers that have questionable labor practices out there, I think even potentially tied to coerced labor in Xinjiang. we know that they are they have some data centers out there that with practices safety practices i don't think they would be okay with in the united states and then also they're they're really reliant on china right i think 20% of their iPhone sales come from china those are shrinking and there might be facing a moment where chinese consumers decide that they want Huawei phones and

and not the iPhone so i'm curious how you think they handle china because on one hand they're so intricately tied there. And on the other hand, like, it seems like it might go against some of Apple's values. And, like, they might end up, like, losing some share because they've made it such a key pillar of their business, the so-called China overhang. I, I, I, there's ways to make all of those separate issues tie together. But they're also, you know, it's kind of worth peeling on part one by one. Yeah, let's do it. I think on the labor practices that is, well, I guess it all comes down to the fact.

I guess the root of why China is so central to this is that China is that China is literally the only place in the world where Apple can make the iPhone at the scale that they need to make it right now. Right. So if something happened, a war, whatever, natural disaster, whatever happened. And China's border were sealed from the rest of the world. Or, you know, there's no way out. It would be, it would be a calamity for iPhone sales because they simply could not make. There's, there's no way to shift production to India and Brazil and wherever else, Vietnam, wherever else they can make some of their products. They just can't. Nobody else has the same. scale that China has to produce a billion iPhones a year or however, whatever the number is. And that's an uncomfortable truth. And part of the reason why only China can produce these products, manufacture, assemble them at that scale is the size of China itself. It's the most populous country in the world. And it's, you know, a growing segment of Chinese citizens have the financial means to buy things like $1,000 iPhones. So like you said, it's, I don't know, 20% of sales, something like that.

But it does seem like the Chinese market is one thing that's unusual about it is it does seem way more fickle to trends. iPhone sales go up and down in China in a way that they don't seem to fluctuate anywhere else in the world. And it's Ben Thompson, you know, who lives in Taiwan and I think has a much better sense of Chinese culture than I do really does think that it comes down to Chinese customers and Chinese culture having no like here in America I know it comes up a lot with the vision pro and a vision pro being 35 to 4 300 to 4,000 and people are saying you know like I would feel self-conscious using

this on an airplane I don't want people to know I have a $4,000 headset on my face you know strangers you know Like if I'm working in a coffee shop or working on an airplane or something like that, people feel self-conscious about signs of showing their wealth like that. Whereas in China, that's that is not, that's not an issue. People, you know, flaunt their wealth if they have it. And being able to show that you have the new iPhone, right? Like it's whatever the look, the colors or whatever of this year's latest new iPhone seems to really make sales go up in China.

and when Apple has years where the iPhone, whatever this year's model number is, really kind of looks like the last year or maybe the last two years of iPhones, it really seems to hurt sales in China. So it's a unique market for Apple to market to, but the two things seem to be related, right, where because Apple needs China to manufacture, they need them. They absolutely require them. I think it limits their options for what they can do at the consumer level of the market, right? So you mentioned the data center thing. So because of Chinese law that, I don't know, some five, six, seven years ago, at some point, China passed a law that effectively says if you run an online service that has the data of Chinese citizens, the physical infrastructure of your server, farm needs to be on the Chinese mainland. It, you know, so there's no, you know, the actual data somewhere, you know, every,

everything you do online, ultimate is getting written to a hard disk on some server. Those servers need to be in China. And therefore, subject to Chinese law for things like, oh, if they, you know, the police come to investigate and, you know, you're, it's obviously very different in a communist dictatorship than in a Western liberal democracy. what were Apple's options there? Did Apple have an option not to comply? People who criticize Apple for building those servers,

I think and think that Apple should have just put their foot down and said, you know, and people love to hold it against Apple that Apple repeatedly, Tim Cook personally, repeatedly, doesn't. I don't know that you can count them. how many times he said the phrase Apple believes privacy is a human right. Well, guess what? China has really bad human rights across the board. I mean, that's just the uncomfortable truth of it, right?

So it's not necessarily at odds to comply with Chinese law in a way that is detrimental to the privacy of people when the only other option is not to be in business at all. There was no option on the table for Apple to say to China, we'll pass on that. law and we'll keep all of our iCloud servers outside mainland china and still offer the iCloud service to chinese customers that that was not an option right they there's no way that was going to fly so the real choice was comply with the law and build out these server farms and i get you know apple doesn't own them they've contracted with some chinese company i think that's actually part of the law too that that not only did the servers have to be on chinese land they have to be owned by a

Chinese company. So Apple has effectively an entirely separate mirror iCloud infrastructure that's all in China. And then there's the iCloud that has the same features, but is outside China. Their only choice was to build it out and offer, you know, have an entire, you know, go through all the expense and complication of having a second Chinese only iCloud and then offering iCloud to all of their Chinese, let's face it, mostly iFlech. phone customers, but, you know, also Macs and iPads. Or I guess maybe try to sell iPhones and iPads and Macs without ICloud service in China? I don't see how that would work. I think that services that are sort of built into your phone are so central to the experience of using a phone.

You know, it used to be that the only service you really cared about was getting your phone to ring when people called your number or send a text message to your phone number. You know, the service came from your carrier. But if you think about how much stuff you expect just to work when you take your new phone out of the box and, you know, what do you do? You type in your ICloud password. Or if you buy an Android phone, you type in your Google account password. And then all of a sudden, all of your bookmarks and your contacts and your calendars

and the apps you've had from previous phones come in and install. I don't see how they could reasonably compete in the Chinese market without a service component to the phone. So then the only other option would be to stop selling phones in China. Those are the only three options. And they chose the one that would keep selling the most phones in China. Now, there was a moment after there were some slowdowns in China because of all the COVID issues that happened sort of after our COVID wave that Apple started to think about

other countries that it could manufacture the iPhone in. I think India is one of them. Yep. India, Brazil. I think it's coming. And I do think they're, you know, and again, this is something they just can't talk about publicly because of their reliance on China and the sort of, you know, another aspect of Chinese culture is this sort of taking things personally. You know, like, Tim Cook can't really say anything negative about the Chinese regime. It's, it's politically taboo, you know. I mean, he's been in a tough pace politically here in the U.S. too, right? I mean, he was, you know, featured at a bunch of those roundtable discussions when Trump was president and, you know, with the famous Tim Apple. Tim Apple, right? You know, he sort of

needs to be, you know, Apple needs to be above the fray for stuff like that. but I so you're he's never going to say publicly we need to disentangle ourselves from China but privately he must be thinking that right there was I forget when he said it but Steve Jobs was still alive and it was sort of I don't know that Steve Jobs thought I think he knew that Tim Cook would be his successor as CEO whether Steve Jobs succumb to cancer or not you know that this guy I, you know, he seemed to have a really, he, Steve Jobs is complete trust. And while Steve Jobs was still alive, they started introducing Tim Cook, like on these analysts calls, more so than product events, right?

Like, you didn't really see Tim Cook coming out and demoing products while Steve Jobs was still alive. But, you know, he began having a higher profile. And in one of those events, he read sort of a, Tim Cook did, a prepared statement. And Horace Deju of Asimco.com has a post. If you just Google the Cook Doctrine, you'll find Horace DeJew's quote of this. But paraphrasing it, it's, you know,

it's sort of like Tim Cook's view of Apple's core beliefs. And one of them is that Apple needs to own and control the core technologies behind their products. Paraphrasing. It's probably pretty close. But one of those core technologies, I mean, I think you could broaden that, though, to say that Apple doesn't want to depend on anybody else other than itself, right? That's the truth.

And that's the lesson Apple learned the hard way in the early decades of the company's history, right? Where they used to rely on other companies to supply their chips for them. You know, in the very early years of the Mac, it was Motorola, and then those Motorola chips fell behind. And then it was IBM and Motorola who combined to make the power PC chips. And for a while, they were faster than PC chips. And Apple advertised the hell out of it. Remember those bunny suit ads? You know, they made hay out of the fact that for a couple of years, a power PC Macintosh

performed better than an Intel Windows PC. But those were always very fleeting. And for the long run, you know, betting against Intel was a losing problem. opposition. And I think that's more or less why they, they effectively threw in the towel for a while and just said, you know what, we're just going to go to Intel with the Mac. And we're never going to be ahead of the competition because we're just using the exact same Intel chips that Dell and HP and every other PC maker can get. But we're also never going to fall behind. And when they'd fall behind in those years on chips, it was out of their control because they weren't IBM and Motorola who was actually designing and manufacturing and having these chips. They were sort of at their mercy. And so it has to be, it has to be, you have to think of actually assembling and manufacturing the products that they make is a core part of what Apple does. And the truth is it's not entirely in their control. They can't just switch supplying countries from India to China to Brazil to Vietnam or wherever else they

might be able to make things. They can't just shift them based on the best deal they can get for the iPhone 16 or the iPhone 17. Maybe they're already making plans for that. Right now, it all has to go through China. And I think for years, they've been subtly chipping away at that. And India seems like the most likely place to pick up most of the slack simply, and again, much like China. It's incredibly, it's a lot of people, a lot. And therefore, whatever the percentage of highly skilled technical labor there is whatever percentage of young Indians who have those skills to work at a Foxcon assembly plant multiply that percentage by how many people there are in India and it's a lot of people right and and it gives them also gives

them an advantage where India is a growing market where they're selling phones and then they you know, save money on import tariffs or taxes or whatever, you know. But I think it is so difficult and the infrastructure that China has is of such unfathomable scale to people like me and you. Like you hear about these Foxcon factory cities and you can look at, you know, I know there have been news articles that have like satellite pictures of them. They're just so big. and then you find out that's just one of several that they're using to make the iPhone 15. It just boggles the mind how big it is

and nobody else can duplicate it. Definitely. Also, India isn't exactly free of political challenges. Exactly. Well, who is, really? Right. Exactly. Right. So we talked in the beginning about the big what's next question. And there's what's next that Apple may or may not want to come quickly, but is going to be there. We just heard Tim Cook. talk about artificial intelligence for the first time. And I think an analyst one kind of nuts.

And they were very happy when they heard Tim Cook mention AI on the earnings call, thinking that like you say AI and your valuation adds a trillion dollars overnight. But there is some platform risk there, right, for Apple because, and I think you just book about this on a terrific tech meme right home podcast. But if you move the interaction layer with computing away from maybe not away or, yeah, I'll just say it away from the phone and two LLMs or two voice assistants that are going to be smart and understand how to interact with apps. The value of the iPhone sort of depreciates a little bit unless you nail that and it could potentially go to competitors like, for instance, the rabbit. So, John, I'm very curious like what you think.

Is AI necessarily a benefit for Apple? And how do you think the company is going to try to harness this stuff? I think I'm I've been following I mean my my college degree is in computer science and AI has been a term of art in computer science since before I was born I mean it has been you know go back Stanley Kubrick made 2001 in 1967 68

and they were projecting you know and I don't think they were that far off right the year 2001 was ambitious for a computer you could just have a conversation with, but clearly that's the way things were going, right? And we're kind of reaching now is when we're finally kind of reaching that moment where you can have at least a brief conversation with an AI construct. And you can even do it by voice, right? Speak to it with your actual human voice,

have it understand you in a reasonable amount of time, and then speak an answer back that doesn't sound all that computery, right? I mean, so where is it going to? How much smarter is it going to get? I think that's very hard to predict. And but it's clearly a thing. And I'm not quite sure what to compare it to. But I guess just to circle back to one of your earlier questions, I guess that's my

that's my best guess as to what's next after the phone is just ambient universal conversational assistance from something you know i think that the the movie her by spike jones the walking is that i think it was walking phoenix who starred in right uh i think so too uh yeah definitely uh i think that his relationship to the Scarlett Johansson voiced AI assistant is remarkably prescient, especially for how long ago at this point that movie came out. I think that movie is about 10 plus years old. So it was before the current AI moment, but that interaction model is coming. And that, I don't know, though, that that's a product, right? Like, so I'm not, I'm not second guessing my early.

earlier answer that no single product is going to supplant the iPhone or phones in general. But I think that the overall method that people interact with computers and computing services is going to move past the current, take out a piece of glass and poke at it with your finger and slide to a more conversational, ambient, and a true assistant, a mental, a mental construct who knows you and who you feel is sort of, you know, I know it sounds weird, but like you sort of feel as your trusted friend, somebody, something with a personality, not just, you know, say what you want about all of the voice assistants right now, Siri, Google assistant, the Alexa, none of them really have a personality, right?

Nobody's fooled by that. It's a neat parlor trick at first. Like if you, you know, the first time you tried playing with an Alexa device, it's like, hey, is kind of cool, but you don't really think it's a personality. It becomes very clear that it's just text strings being voiced. You wanted to talk the least as possible. Like, stop talking. So Apple has to be involved with this somewhere, because I think inevitably this is going to infuse all of our products, all of our interactions with computers. But I do think, I think where investors and business people are wrong. is the trendiness of it, right?

It sort of feels like for a lot of people, what AI is, and I think we're still in this AI-driven moment right now in February of 2024, but it really feels like it's just replaced the craze over cryptocurrency from three or four years ago, right? Where, you know, three or four years ago, the new thing was this cryptocurrency, and it feels like a lot of the people who are the most excited that Tim Cook even talked about AI at all were the same sort of people who were sort of hoping that Apple would issue their own Apple crypto coin or something like that three or four years ago and were mad

that they didn't. But I think the difference is that that really was a fad and mostly a scam and AI is for real. And I think Apple has to be there. But I don't, you know, where that comes, I think will be very, very subtle step by step as we get there. But doesn't their first swing at it, the HomePod has not gone quite well. So I do wonder if this is a thing that Apple can do well. And I think it's because, like, you know, they don't have good computer scientists there. But some of the values that you need to bring to this, if you think about it. You have to be open, being able to work with third-party companies, like some of the best voice computing or some of the best, I don't know what we're going to call it, ambient

computing. Networks will have connections to, you know, all different apps and not privilege Apple services. You just have to let people use what they want. And that was a big problem with the home pod. So I know you have them. I think you like them. But I am curious if you think that their culture and their mode of operating lens themselves to be successful in this area. I think I am a odd, unusually big fan of home pods and I own more of them than I can count. Yeah, I loved your vision pro review where you talk about how the Vision Pro box is like two home pod boxes. By the way, you go, by the way, I own more than most. So yeah, well, the problem is It's an aside, but the problem is that when the original home pods were discontinued and the only home pods Apple was selling were the minis, and they weren't commenting on whether the home pod was ever going to come back again. And I had no inside information. You might think, oh, John Gruber probably knew that they were going to come. I did not know. And so my concern was that if my home pods died, I wouldn't have them anymore. So I bought like a couple of extras. And I had,

I had to buy a couple of extras in both black and white because I don't get to decorate the house. Right. So there are places where I have black ones in my office, but the ones we have in our kitchen and our living room are white because they match the decor. But I had to buy extras in both. But then it turned out that that was a waste of money because they did come out with the home pod too, which is a better home pod. And so now I've got these home pod ones that are in the box and I don't know what to do with them. Except use them as a scale measuring device to show how big the boxes of the Vision Pro. I think, though, my fandom of the HomePod's is not indicative. I think Apple didn't have a clear enough vision of what the HomePod was for. And you bringing it up in the context of AI and virtual assistance, I think is how most people saw HomePod. trying to fit in, whereas I think Apple's vision, and the reason I like it, is it's really more of an AV product. It's more like something that you might buy from Bangan Oliveson or Bose or

something like that. It's just a really good sounding pair of speakers for $600 that really, really sounds uncannily good for $6 or $700 and can fill a room with spatial audio, not just stereo audio, but spatial audio that you really can't believe it's just two speakers in front of you. And that's not how they marketed it really at all as an entertainment speaker system. Because the interaction layer is Siri. And that sort of immediately brings you into this is something that's supposed to be an agent or AI related. And from my understanding, and I'm kind of curious to I am curious to get your take on this. So I wonder, I mean, Apple's culture keeps everybody on different project teams in silos. But if you're AI scientists, you know, can't talk to each other,

how far can you actually advance in this world that's going to be important, that we both agree will be important? I mean, that's what happened. There were people who, you know, were working on face ID. They couldn't speak with the HomePod team. And that might have held them back on the AI front. So what do you think is going on on that front? And is that going to be a long-term issue for Apple as it gets into AI? I think what they, it is true that, the company is largely, almost entirely siloed. And I don't think that, and I think Apple sees that as a source of strength of the company, that it's on the whole overall, this is, I think they feel like the way the company is structured is integral to the company's success and their future success.

Let experts be experts. Right. But what needs to happen is when they, build and they're like we can build blank a major new thing we we're we're this close we're you know a couple of years away from being able to do something truly revolutionary let's make this happen let's put somebody in charge of it somebody you know and the the term in apple is what to directly respond directly responsible individual in other words this is the person who one person needs to do, we need to get chips that can put footage from the camera on the front of a visor into the 4K displays inside the visor in front of your eyeballs in 12 milliseconds or less because anything more is going to make people feel nauseated. Somebody isn't in charge of making that happen.

And when those projects get the attention at the highest levels of the company, then they can draw from the whole company and bring people in. Well, we need, we need AI, you know, we need some of the people, we need the AI to be able to do X, Y, and Z, bring them in. We need, uh, obviously like with Vision Pro, a huge part of it, really is just the camera technology, right? So all of the camera experts from the iPhone team, I'm sure that they, they brought them in as early as they could and said, okay, you're our best people at reducing noise, doing stuff in real time with absolutely no perceptible delay. We need to do all of this. Here's what we need to do in 12 milliseconds or less. And they could say, well, that's impossible right now. Well, let's bring our best camera people in to make it happen,

right? That's what they need to happen. And I think like HomePod is a perfect example of a product that never really achieve that level of, hey, this is the most important thing on Tim Cook's mind right now. and bringing in the best teams from across the company to do it. Fascinating. Maybe it will. I mean, if he's talking about AI now, maybe that's a place where that does happen. Well, here's, here, I'll say this. And I should probably write something very specific about it.

But Tim Cook is often surprisingly forthcoming. Like a couple of years before they came out with the watch, there were rumors that they might be working on a watch or something, you know, people thought maybe it would be more like a Fitbit. fitness sensor type thing. And in some onstage interview, Tim Cook simply said, the wrist is an interesting place. Oh my God. And we have an, we have an interest in, you know, it's just an interesting part of your body. And, you know, so we're certainly looking at that. I think he's, he's, when people have asked him about their seemingly ill-fated car project, Project Titan, what Tim Cook

often talks about is autonomy. And he'll say autonomy is of it is definitely an area of interest to Apple. I, I feel like it's, it's still, right now as you and I are speaking, it still seems fantastical that, that we would have Star Wars quality robots in our home, like a C3PO or an R2D2 type droid that lives in our house and can go, you know, fold your laundry and go get you a beverage from the refrigerator without you getting off the couch or answer the door when, you know, FedEx comes with a package. That's going to happen, though, right? I don't know if that's a 10-year thing or 20-year thing. I mean, 20 years is so far in a future, but that it feels certain that that's going to happen sometime soon. And that is

autonomy, right? And I feel like, and also that is personal computing, right? So having some sort of robot that you can just talk to and that can do things in your house. I mean, you know, we've got Roombas, we've got, you know, we're taking little little baby steps in that direction where we've got vacuum cleaners that can self navigate around one floor of your house, you know, you know, no chance whatsoever of going up or down even a single step. but you know baby steps that's coming and i can definitely see apple being you know with their their reputation for privacy their reputation for designing things that people find pleasing to look at pleasing to use you know being good at designing user interfaces right just at the broadest term

talking to c3PO is a user interface. And I could see that being ultimately what comes out of Project Titan, not a car that you actually drive around and buy instead of buying a Tesla or a GM or whatever, a Honda or whatever other brand. Wow, because we just saw a bunch of stories come out about Apple's plan with the self-driving car. We have a Washington Post story that came out actually 15 minutes ago. Folks were recording on, oh, I didn't see that. On Tuesdays, as Apple quietly, has tripled its testing of autonomous cars. And there's a Bloomberg story that says that they want the EV to debut in 2028,

but have basically given up on full autonomy. I'm sure you've seen it where they've, they initially had a steering wheel in, then they took a steering wheel out of the car. Right. I guess now it's back in, which is part of the reason why there've been all these delays. What do you think?

So, okay, I definitely could see them getting into personal, like personal robots. This seems like it might still be on the EV. Yeah, you know, and I've, it's the worst kept secret in Apple history because so many people have worked there and they've churned through so many executives. And at least at the executive level, people like Mark German at Bloomberg can just follow along by looking at LinkedIn profiles. And oh, here's a guy who used to work at Ford and then he worked at Apple for six years. years and now he's left and he works at General Motors or something like that. That's happened to an awful lot of people who've come through Apple from the car industry. And there have been reports, you know, resets and new people coming in. And now Kevin Lynch is apparently the guy

who's been in charge of Apple Watch software since its inception is apparently leading the software side of it. So I don't think they've given up on it. I know that they're, you know, and we know we just, we actually know even as secretive as they are. We know that they've filed for many permits or whatever you want to call it to be test driving cars on streets and stuff like that. But I still don't know. You know, it just seems so, it's so weird.

I would actually find them making an R2D2 so much less, so much easier to imagine than them selling their own brand of car. Even though I don't think it's off the table, I think they might, but I think it's just so, it's such an unusual product, right, for Apple to be making. Definitely. I've heard it. And I, the other thing, too, is I know, and I don't know which way to bet, you know, it's often, there's so many things that were deemed impossible. I mean, there were people who thought no computer would ever pass the Turing test. The Turing test is Alan Turing's, you know, here's one level of AI is can you have a text chat and not be able to tell that it's a human, or a AI construct, right? ChatGBT, BT, et cetera, clearly passed the touring test. Definitely. There were people who thought that was impossible, though, and it would never, ever happen. I do know, I know people who've, including people who've worked at Apple on Project Titan, who firmly believe that there's never going to be full self-driving cars. Never. It's impossible.

And that it's not so much that they think it's impossible in the abstract. Like, if you, bought up a Hawaiian island and you bought all the roads and now you own the roads and you can say human driven cars are now illegal and the only cars allowed on the roads on this island are self-driving cars that follow these protocols so that they can communicate with each other wirelessly. That I think we could probably get to very, very closely, right? We could probably do that now and just put put things in the road sensors for the cars to detect it's the fact that to get from where we are today where all the cars are driven by human beings and introducing computer driven cars that is incompatible like you just you know there are a lot of people who think that's

impossible but there's obviously a lot of people who think it is possible including people who think we're tantalizingly close but everybody I've talked to who's who's actually working worked on the problem is way more pessimistic than Elon Musk to name one prominent example of an optimist. Yeah, I spent a good chunk of the summer out in San Francisco and spent time in Waymo's and cruises and was saying, all right, everybody, this is really close. And then obviously we saw what happened with Cruz. So we talked about Apple's interest in the wrist. We can't have a conversation and not talk about its interest in the face or the eyes. I don't know. what you would, what body part we would talk about.

But the Vision Pro, obviously, major new product. I tried it out over the weekend. I was really impressed by it. It was way better than I expected and I had high expectations, although a little bit too expensive. But the, I mean, I had a bunch of questions. We asked Joanna Stern on Friday whether this was for early adopters or or everybody, and it seems like it will be for those early adopters for a while.

But I'm also curious, I'd love to ask you, what is the scale of the bet that Apple is making here? Because I've been struggling to figure that one out. Is this like a massive bet by Apple? Is it kind of a bet the farm bet? Or is it totally fine if it completely flops and goes to nothing? I feel like if it flops and comes to nothing, the problem isn't that they needed it to be a success financially

and that they needed to recoup. however many billions they spent developing it. And, oh, you know, they didn't bet the company on the research and development for this product. The Project Titan, just to go back to it, they've spent way more billions of dollars trying and to this date failing to build a car than they put into this, which is now on the market and they're actually selling it. So if it flops, if it's ultimately deemed a flop, then the problem isn't that they needed it to be. a hit financially. I think the problem is it's like a dead canary in the coal mine where it's a sign that Apple's leadership has lost their innate sense of, oh, this is good. Right. That is more important. That's the thing that makes Apple, Apple, is a sort of institutional sense of taste, right?

And it's very true. It's so obviously true. And startups, in our industry can move so fast because the nature of software is so flexible that it's obviously true that every single one of these big companies that we would call big tech is the company itself is infused with the personality of their founders every single one i mean you which one can you would you even argue first is is the least true about i would say at this point maybe Google, but that's simply because Larry and Sergei have sort of stepped aside, right? They're not there anymore. I would argue Amazon actually shifting away from retail, but... Maybe, right? And it sort of coincides with Bezos stepping aside and letting Andy Jassy take over. But Bezos,

you know, through, you know, until recently, Amazon was very Jeff Bezos-e, very much. Right. I mean, just the goofy design of their homepage, right? It's like arguably, clearly, clearly, Clearly the two most successful websites, I think, of all time, are Amazon.com and Google.com, right? And they couldn't be more different. Google.com is a logo, a text box, two buttons. Exactly. And the Amazon.com homepage has always had 187 buttons in text fields. I mean, going back to when they only sold books, it was too complicated. And that's Jeff Bezos. I think that, wait, what was the question? Where I got something? The magnitude of the bet of the vision. All right.

The magnitude. And I think that part of the way that Steve Jobs infused Apple with his personality is that it's a company with good taste at an institutional level. And including the refinements for, okay, here's the thing we're going to. going to come out with in September. Let's get every single little thing right down to the little piece of tape with an orange arrow that tells you how to open the cardboard box that it comes in, make it as nice as possible. And then in a bigger sense, what should we be doing three years from now? What is our sense of what would be a good product? And Apple, I think, thinks that the reason Vision Pro is out right now is because they see this at the highest levels of the company as

this is a good product right now. For whatever the obvious flaws of this first generation model are, it still is good enough to make right now. It's not a developer kit. It's not only for nerds. You have to be a little bit of an enthusiast, right? Everybody always is, you know, that's the way adoption curves work. I mean, the original iPhone wasn't really a mass market product until, I don't know, iPhone 4 or 4S maybe. You know, it took a couple years. Even though all sorts of people who eventually bought iPhones and wouldn't go back, if you could have given them an iPhone and convince them to spend $800 or whatever the cost was in 2007 on the first one, they would have been happy with it. They just didn't buy it because they're not,

they're thinking $800 for a phone. I don't care how cool it looks, even though I think that looks really cool. I'm not spending $800 on a phone. And that's a very normal thing for a normal person to think. And I think that's clearly how most people think about this headset. Like, hey, this looks cool. Everybody says it looks amazing when you put it on

and you start watching movies or these 3D immersion experiences. But I'm not spending $4,000 on this thing. Forget it. That's very normal. But I do think that they think it is fundamentally, this is a great idea and a great product. And if it does flop, it's a sign that they've lost that ability. And what do you think? I, I, I, I, I, even though I've spent more time with it than any, you know, anybody outside Apple, right? You know, I've had for a couple weeks. I've had it

like two weeks, I guess. Um, and a bunch of demos from June until I got the review unit. I think they're right and I do think though there's still a sort of they might be wrong about the reasons in a way that they were with the watch right when they first came out with Apple Watch they had some of the things that they thought in the very first demos you know like putting two fingers on it to share your pulse with a loved one yeah uh sort of using it as an intimate form of communication never really they don't even talk i don't they don't even have those features anymore um i think some of this it's it's it's still up up in the air what people are going to find most useful in it but i think fundamentally it's clearly a good product it really is

it there's just no other way to watch movies like this you know as an entertainment device alone it might be worth $3,000 or $4,000. And then everything else is sort of extra after that. Right. So I'll first of all say that the spatial video, that stuff blew me away, watching some of those videos. But my note on it was very similar, which is that this is an entertainment device.

That's what I came away thinking. Yeah. And I almost feel like maybe they are a little embarrassed to present it that way, you know, or that they feel. feel not embarrassed, but that they kind of feel like, well, we're Apple and we make serious computing platforms. And so the spatial computing, this is the next metaphor for productivity. Just the things, you know, some of the most polished apps that are available for Vision Pro right now are just the basics of productivity, mail, safari, messages, notes, or the calendar

is actually just the iPad app. But, but those sorts of. of things doing it in this spatial environment. I feel like they feel like we're Apple, we need to push the push, push that message as opposed to pushing it as something that's more akin to just an entertainment device from Sony or something like that. Right. Which is where I think it shines the brightest. So I saw a bit of a documentary where somebody was like tightroping across like a chasm. It must have been Arizona or something like that. And it just I, my heart's like, felt like it was stopping when I watched Free Solo 2D, but it was nothing compared to being up there

on that tightrope with this person. I don't know what the name of it is. I have a mild fear of heights, you know, but I don't like looking at people in movies doing things near the edge. There's one of the Mission Impossible, I think it might be Mission Impossible too, opens with Tom Cruise rock climbing, you know,

in the movie ostensibly without any kind of protective gear on and he's holding on by it. It, it, it, it, it, it, it, it, it, it, it, it laughs at me, uh, because every time we've watched that movie, I just say, here, feel my hands. And my hands get sweaty just watching it. Yeah. It makes my palms just pool with sweat. Yeah. It's next level. Like, not for me, tight rope walking. I don't, I don't, I wouldn't want a tight rope walk 10 feet up in the air, let alone. Right. a mountain yeah it's it's incredible and it really does the other one too and I've had a couple friends say it did did yeah that I mean that was pretty cool but the the real life being up their real life was the thing that really did it for me but the dinosaur thing was amazing also but the the dinosaur thing there's a part and it's dynamic right and I'm not quite sure how dynamic it is I have gone yeah butterfly it lands right on your finger but when the when the big

I don't know if it's a velociraptor or whatever it is, but it's a big, scary, obvious, carnivorous dinosaur turns its attention to you and the head comes out and it's close enough for you. It's within arm's length in your mind. I flinch. I can't help but flinch. And I've had that demo. I got that demo in June. I've done it again now that I have the unit at home. I know it's fake. I know it's not going to bite me. But there's a part of my brain, like, a lizard, you know, no pun intended, a lizard part of my brain that cannot help but flinch. And it cannot help but start sweating my palms when I look down and I see that I'm at the edge of a cliff in front of this tightrope walker. It's too, it's so real. It's pretty amazing. I mean, for listeners out there, you kind of look at this square screen of, you know, these dinosaurs out in the field. And then one kind of turns its attention to you and walks out of the screen to you and you're like what is happening here also i have to say they have so dinosaurs apparently they were four-legged creatures but they're they must have been in the process of evolving away from

their like little hands and you never really understand how funny those tiny hands are until you see him in the vision pro and most hilarious appendage i've ever seen on an animal it really is it's very comical it's like why are they there why didn't they just evolve to not even have them yeah i don't know pick their nose or something so you you tweeted that it wasn't a tweet you you You posted on Daring Fireball, this quote from Paul Graham, which I thought was very interesting, where he said that if you don't have people making fun of your first edition of the product, you ship too late. And it's definitely, I understand that Apple said that this was, Apple felt that this was a product

that was good and worth shipping. But there's one part of this rollout that I'm very curious to hear your perspective on, because we have had people like walk out with Apple products, like on. their wrists and in their ears and in their hands as a status symbol. And we've, and it generally it might look a little, I don't know, we took us a moment with AirPods, but generally we get there. iPhone for sure, you have the newest iPhone like it's, you put it on the table to show your status. But the people walking around cities going through crosswalks, driving the cyber truck, sitting on the subway, what do you make of the fact that the people that have worn this

thing out in public just look silly? well and especially after you've demoed it because you know if you've used it that it is not a walkabout device it doesn't project windows a fixed distance in front of your face like you know so that as you're walking this contextual information in your virtual world remains five feet in front of you no it's fixed in space so if you get up and walk you walk right through the window and the wind stays behind you and you can turn around and look at the back of the window it's right there so these people who are walking you know i've seen most of the footage you have including the guy driving cyber truck which that was obviously someone who was like we're going to make some content here there's no way that that was like someone being like oh there's a person wearing the vision pro in a cyber truck let me spontaneously videotape this right because why else would you have been film although i guess if you thought holy shit there's a cyber truck and you think you're just

filming the cybers truck and then you get the vision pro on that's a jackpot yeah i would like to think that that happened serendipitously you know i think it probably was fixed but my god imagine if you just thought oh my god there's the first cyber truck i ever saw on the road let's get a footage of it and then as you go by you see that the guy driving it is wearing a vision bro well i will say if you bought a cyber truck you're likely that you likely to buy a vision pro as well so yeah so i i don't i think people are just looking for attention because it's really not it's not meant to be useful when you're in motion right you know it really isn't that the wind there's there's nothing you can do i mean i guess you could be listening to a podcast but it's the stupidest way to listen to a podcast you know imaginable

but you couldn't even be watching like a youtube video because the window would stay behind you and i actually think that's by design it's it's a safety thing it's not meant to be something you use when you're walking around um so i you know, but I will get used to it. It is, I'm, I guess it's my just nerdy personality, where I'm, I've always been a little less, I mean, I have my vanities, you know, and I, I know what, you know, as often as many people feel self-conscious, but I don't feel self-conscious with technology. I never thought AirPods were weird. And I know, I know people did. But I always thought, right. right from the very first AirPod, I was like, these look exactly like the white earbuds we've been wearing for 15 or 16 years, except you cut the cables off. So you're taking away from what's there. But I know so many people who thought, I'm not going out in public with these AirPods. I'll look weird. Yeah, we were out there at the, I was with BuzzFeed at the time, and we were

out there while they were, you know, unveiled them and gave us a chance to make a video about it. And I ran around their, like, demo room, the hands-on area with the two AirPods in my ears, and they didn't fall out. And then I was like, all right, I'm sold. I couldn't imagine that staying in, but they did. I remember being a kid, though, and when Sony Walkman, walkman, I guess we pluralize it, when the Sony Walkman was new, there was sort of the same sort of thing. Like, oh, my God, you look like such a tool on the subway with these orange Nerfball headphones in your ears. And, you know, we get used to it. Covering your eyes is obviously a different level, though, than covering your ears with headphones in public.

Because it's not even just humans, it's all primates. And in fact, many mammals, eye contact is so super, it's just something we've evolved to read at all times. There's a great, great documentary on Netflix called Chimp Empire. It's like a four-part documentary. It's one of the best nature documentaries I've ever seen. But it's absolutely amazing how these chimpanzees communicate with each other just by eye contact. So, like, they're all just chilling around in a, you know, in the forest. Nothing's really going on.

And if one of the chimps just looks up into a tree, all the other chimps will look up and say, oh, what's he looking at? Because, you know, maybe it's like an enemy or something like that. It's all part of human nature to just want to make eye contact. and, you know, it's why Arnold Schwarzenegger wore sunglasses in The Terminator, right? It's like it dehumanized him. It makes you look like a badass when you have sunglasses on. So it's a weird product to be wearing out in public.

I guess what I'm getting at with this question is, are we going to see a similar backlash to these things like that we did to the Google Glass? Like, they're like, you know, we saw the Google Glass turn into the glass hole device. Is that a similar risk here? I don't think so. And I think part of it is that Google Glass broke some ground 10, 10, 11, 12 years ago whenever it was and sort of broke the ice on it. But I really think that the glass hole term came not because of the product, but because of the sort of people who wore Google Glass at the time. Like, did you ever try Google Glass? Yes. It was useless. I mean, it was such a gimmick.

I mean, if you, if I were touring Google's labs and they said, hey, here's a thing one of our guys came up with, you know, just not as meant to be a product, but like as a proof of technology, I would have been like, oh, that's pretty cool. I could see where this might be something in 10 years. It didn't seem like something you would actually have any reason to use in real life. And therefore, the people who chose to use it and be ostentat. about it. I think by nature tended to be the sort of people who, you know, you might call a glass hole without the GL. Yeah. That's true. Yeah, it's a perfect, very interesting insight on

the glass. So speaking of, you know, headset wars or glass battles, we have this very interesting rivalry that's developed in recent years between Tim Cook and Mark Zuckerberg. I think just to But just to begin with, I wrote about this in big technology recently. My perspective is that Cook may have helped Mark Zuckerberg, maybe more than any CEO in the world. He's released the Vision Pro, which immediately legitimizes everything Zuckerberg has been doing with reality labs. His ad embargo has really hampered competitors like Snapchat, for instance, and a lot of that ad money has gone to meta. and by keeping Apple messages only on iPhones. He's sort of opened up this area in this era of rich messaging

for somebody else to come in and be the cross-platform messaging app, and that's been WhatsApp. So I'm just kind of curious, like, do you think Apple is aware of how much they're helping meta? And what's your perspective on this battle? I love that column of yours. and I really just all the point

your highlights there I agree with all of them and I think we're actually seeing this I remember I didn't link to it yet from Daring Fireball but I just saw something that WhatsApp usage in the United States is on the upswing and I think in particular

that's a really keen example I know IMessage has been in the news lately with the what was it beeper that was like an unapproved backdoor way of getting iMessage on Android phones without Apple's permission and then they figured out how they were, you know, what paths they were taking and close those paths off. But it, you know,

it generated controversy in terms of, hey, I think people on Android should be allowed to use iMessage. You know, it's almost like a right, even though it is a proprietary network that Apple uses as a value ad for their products. But I think, I think, I think, think it's more interesting to think that Apple ultimately in the long run being open to everybody is the way that a messaging platform should work you know just by definition and that Apple it's just taking a very long time to see that Apple made a mistake by not putting iMessage on Android for free 10 years ago to just to bolster the network and that in the long run something like WhatsApp is eventually going to win out just because it is open.

And I think we might be seeing that. And again, to your point, who's the most likely beneficiary of this? I would definitely think it's WhatsApp in particular, which is a meta product. I don't think, I don't think Signal has a path to become, you know, the two or three billion user product that WhatsApp already is. And, you know, establishing headsets as a sort of a good use of research and development. I think it's unclear whether meta is going to be successful in that regard, but, you know, it certainly doesn't hurt to have to be in the same place where Apple's splashing new product is and to be able to say, we've been here for years putting billions of dollars into it.

I do think it's an interesting thing. And I think the other part of it is that as much antipathy as Apple might have culturally to META and that people at Apple tend not to like people at META, it seems like Tim Cook personally doesn't really care for Mark Zuckerberg. I mean, he's been as snippy in his commentary on Mark Zuckerberg as anybody I've ever heard Tim Cook talk about. I mean, he, you threw out that maybe Tim Cook would get into politics or something if he stepped aside from I don't think anybody would about age, but yeah, but I don't, you know, you can see it though in him. Right. It's it. If he, if he did, you wouldn't be flabbergasted, right? You wouldn't, I don't think he, I don't think he has any

aspirations to political office, but if he did, I would be surprised because I just would, I'm curious what his platform would be. Like to see him advocate for policies instead of products would shock me. But I don't know. I've, Donald Trump's been the president, so. Right. So, yeah, and again, and Trump did show, I mean, single-handedly showed that you can get involved in political office at the president level, right? I mean, I think you'd have to go back to Eisenhower to find somebody who was the president without holding any lesser office.

And even with Eisenhower, I would say that working your way through the ranks of the military is sort of political, right? that those are political skills. I can't imagine that Tim Cook would do anything short of the presidency, right? I mean, because I think he would see it's, if he wants to influence the world, it's easier to influence the world as the CEO of Apple than as a senator from California or the governor of California. I really do.

I think Tim Cook is more well known than Gavin Newsom for reasons. I think president or bust. But where I'm going with this, though, is that Tim Cook is maybe not so much a political, animal but he's very diplomatic right he is he is like by nature a diplomat and and all the stuff you and i just talked about with china he's very diplomatic his entire relationship with the trump administration for four years incredibly diplomatic um and for him to say things i forget what the question was but it was they asked him what he would do in Zuckerberg's position and he said i'd never be in that position uh he called regulation yeah but what was the position

Sorry, go ahead. But what was the issue at hand? It was Cambridge Analytica. It was, oh, that's it, Cambridge Analytica, right. And you also shut down Meta's internal apps. Right. Well, but they broke the rules, right? I mean, it wasn't like a tiki-tack violation.

Right, right. They were, you know, but I do think that if, if Apple had a better relationship with meta, that maybe they would have let that slide. Or at least a phone call. Hey, this is coming. Maybe that happened. I don't know. But I, I, I, I, I, but you're right, though, in terms of being flies on the wall like we are in the media, that was kind of telling.

And, and the backstory was, I think that was the thing with, uh, abusing the test flight betas to, to, to, to allow. Yeah, to push updates. And they, the meta had a product that they were, they were literally paying teenagers like 20 bucks a month. to install a VPN on their phones. Oh, yes. And, you know, the kids were like, oh, sure, I'll take 20 bucks a month for nothing. And the idea, though,

is that when you have a VPN on the phone, you could see every single thing the kid is doing because all of their network traffic goes through your VPN server. And that product was one of the reasons why they decided to buy WhatsApp for $25 billion or whatever, the ridiculous price tag.

I mean, not ridiculous, but very high price tag. It was because they had proof. They're like, holy crap, look at how many young people are using WhatsApp around the, world. They only knew that because of that. And so Apple saw this as, oh, but this is clearly in violation of the rules for what you're supposed to be doing here. So they revoked meta's developer certificate. And in the meantime, that broke all of their internal apps.

Like they have apps, internal apps where you can like, you know, use your phone to badge into buildings. And I think they said you could like, you know, at Meta, you can use your phone to buy lunch at the commissary. And so for like two days, people at Meta couldn't get. into the doors, they couldn't buy lunch. It was kind of spiteful. Yes. But on the, but Apple really isn't a spiteful company, right? That's part of Tim Cook's diplomatic nature. So if you ask him a question like that, he got snippy and gave that answer. But if he hadn't been asked, he never would have said anything. Right. Right. They never were going to jerk meta around with their developer certificates unprovoked. They weren't just, you know, they're not going to

just spitefully screw around with meta and their internal apps. Meta had to break a fairly serious rule for them to do that. And I think that's the more interesting part is I don't see Apple ever taking actual offensive action against meta, really. Maybe the closest they ever came was with the app tracking transparency. But again, your column really made the point. And Ben Thompson has said the same thing. He said it and I have to give, I hate it because I like to be the one on our podcast who's right more than the other person, but he called it at the beginning that it was going to be most beneficial to the very biggest companies, mostly meta and Google, because they're the only ones who could handle the complexity of it in a way that would let them

keep selling ads. And the truth is they're, you know, meta and Google have come out of the post app tracking transparency world in a stronger position than any other companies. Right. But I think internal to meta, even though I feel like the flip side of the coin is that inside meta, I don't think they are grateful for the fact that it's left them in a stronger position because I think they're cock sure enough of their own abilities that they, of course they were still going to be on top. We're meta.

We're the smartest ad tech people in the world. So you could throw anything at us and we're still going to be on top. They don't take it as a feather in the cap that they've come out of app tracking transparency more profitable than ever. I think they're just resentful that any other company made them do anything they didn't want to do. Definitely. And their revenue was down $10 billion in a year while they were figuring it out. So they're pissed. Yeah.

Let's get to it. Yeah. Go ahead. Well, and it just created the percentage. It just, it laid bare that they're dependent on these other platforms. Yeah. Oh, so just one story about that. For my book, I was in with Mark Zuckerberg talking about why you wanted to do virtual reality.

And it was very clear that, you know, he was holding up an Android phone and talking. And it was very clear. He's like, basically just like, we need the operating system. We don't, we want to do it differently. And lo and behold, then they changed the name to. meta. So there you go. Well, and I actually feel like that's where they're a little, I'm not so optimistic about their chance. Although what I think will probably inevitably happen is what happened with Android. Android before the iPhone was a very different product. It never

came to market, but you've seen the leaked images. They look like Blackberries. The prototype Android devices, it was more or less like an open source Blackberry platform with an actual physical keyboard and a much smaller sort of iPod size display above it. And then the iPhone came out and Google was like, oh, shit, this is the way phones should work. And then they adjusted. I kind of feel like that can happen with meta where I have a Quest 3. It is nothing like a Vision Pro in terms of being a computing platform. Don't even talk about the resolution of the screen, which you could say that's just a direct correlation to the cost. Not judging it on the technical merits of the quality of the screen or the quality of the sound, just the overall

concept for what is the computing world, what is the metaphor for computing is so primitive compared to the ambition of Vision Pro, where it's this total spatial computing environment, where you can have all these windows for everything. But now that Met has seen it, they can, you know, copying, following another company gets a bad rap. And the people who are sort of treat Apple like their favorite sports team get mad when Android copies features from iPhone. And Android clearly

copied more from iPhone than iPhone ever copied from Android. That's just the nature of it. But once an idea is out in a world, it's there for everybody and you can't take it back. Right. And so whatever good ideas Apple has brought to the world of these devices, meta now has those ideas. Yeah,

I mean, meta is the ultimate it, you know, copier. If you look at everything from reels to stories, I mean, the list goes on. And you could even see the shift in their marketing from Metaverse to this mixed reality world after the Vision Pro demo, like announcement came out. And it was very clear that Apple had ideas that influenced them within Menlo Park. Yeah, definitely. All right. And again, that's just the nature of how ideas spread. I mean, there's no, you know, Steve Jobs got mad about it and said they were going to go, what, thermonuclear on Android over ripping them off. But it's almost adorable that he was so mad about it because he should have, it's just his, it was his personality.

He should have known from every other innovation that Apple had ever had, that those, once those innovations are out there, other companies are going to borrow them. Yeah. Okay. Last topic. Apple charges these 30% fees in the app store. We talked about a bit of important part of their services revenue. They're also very insistent that folks do not steer from their apps into other places where they can basically get the pay for the services, but out of discount without that Apple tax. They're almost so insistent on this that it's, we talked about the antitrust things. They're starting to see legislation and pushback in places like Europe. And then Apple's response is basically like, all right, you don't want to play by our rules. Here's a new set of rules.

they also suck. So do you think it's a strategic error for them to be so insistent on, you know, those fees and those anti-steering rules to the point where, like, they're now, you know, back and forth in court with companies like Epic and incurring regulations in Europe? I mean, real estate, as you mentioned, is a good business, but is there a chance that this backfires? Oh, I think there definitely is.

And I've, I've been a, I think I've been. been very consistent for years in seeing, in particular, the anti-steering rules as a mistake. And one of the other rules of the App Store, and to me, which is on its face wrong, is that one of the rules of the App Store is that you, the app, I'll say you, second person, the developer of an app. You can't explain to your user the rules of the app store. There are rules of the app store that you're not allowed to put in your app as the rules. If you're not allowed to talk, if one of the rules is you can't talk about the rules, that's messed up. That to me is on its face, hit the red buzzer right there. Let's backtrack and figure this out because that's not a good

place to be. That's never good, right? I mean, we can laugh about Fight Club, you know, but that's a movie. Right. That's not, they're not running a business. Um, and so I think that if Apple had relaxed on this steering stuff years ago, it would have alleviated a lot of this pressure and left most of the money, you know, right where it was flowing through their processing that gives them this 30 slash 15% depending on whether it's a subscription that's a year older or whatever. But I think that they should have just openly let apps years ago just say, you know, like, and they call them reader apps now. But for the most part, it's like Netflix and stuff. But like you can get the Netflix app now. And Netflix years ago stopped going through Apple's payment processing. But if you're not signed into Netflix now, you go to download it to your iPhone and you launch Netflix. And it says go to Netflix.com slash sign up to create an account and sign up a thing. And I think they should have just let, I think they should let other apps do. I think they should just let anybody do that.

Even if it's a game, they should say, oh, if you want to buy a bag of $20 bag of gold coins for whatever game it is you're playing, where the coins give you hints or extra lives or whatever they do, and they don't want to pay Apple, I think they should just be able to have a dialogue that says go to our game developer company.com and sign up there or something like that. most people wouldn't do that. And I know so much of the money comes from games. Games are so lucrative. They're such a lucrative part of the app store. And they're impulse purchases. That's what games are. So I don't think that, you know, I think a rule that said if you process the payments in app, you have to use our system. But if you don't want to use our system, you can send people out of the app and have them go through your website. So why are they so in app? Why are they so stubborn about this? I mean, does it go back? to what we talked about in the beginning, which is that when the iPhone growth might plateau, you need something else and that might change the experience for the user? Maybe. I don't think that they can know for certain. Even Apple, you know, and I've talked to

people at Apple over the years. Like, they're not omniscient. They, you know, times when they come out with a product in multiple colors, they're often surprised. I've talked to people. I've talked to at Apple, like, oh, we had no idea, you know, that yellow was going to be super popular in Germany. And we had to rejigger our distribution around the world because for some reason, people in Germany love buying yellow IMAX or something like that. They didn't know. And they're, so do they know how much money they would lose if they loosened up on the steering? I don't think they do. I think that they have a guess. I, my, my thinking is that it is a sort of, it's like a cultural, internal belief in the company of Apple that they really, really believe

that they deserve it. They deserve, that they've built this amazing platform that is not like your Mac or Windows running on a PC, that they see it as a altogether higher level of platform that they've built iOS around and that it is it makes customers love it so much and they trust the the payments that go through Apple so much and that the process is so beneficial and that it's it's win-win for everybody you know that 70% that developers get to keep is way more money than they'd get if it was a hundred percent of a pre-Iphone era product because people are so much more willing to spend and that it's theirs it's apples they deserve it and it's you can't shake them off it I just don't think I really do think it is a sort of cultural

internal belief that they just really really it's it's like electrifying to them and I'm not saying it's every single person at Apple and I think the more you go towards just just engineers and designers and the just regular boots on the ground level employees at Apple, they're the ones who see things more like us on the outside. Like, why is the company so hell-bent on keeping every single penny from this thing? Right. The fascinating stuff. Okay, let's end on a fun one.

So when Tim Cook goes and decides that he wants to run for president, who's your odds on favorite for who succeeds him? That's a really tough question because I think if he were hit by the proverbial bus and just was incapacitated right now today. You know, let's say hopefully, you know, instead of being killed, you know, let's say he's in a, just in the hospital for a year and he's going to return, he's going to be fine. a year later. But who's going to run Apple right now? I think it would clearly be Jeff Williams, the COO, who is in the position Tim Cook was when Steve Jobs was the CEO. But that's like the

emergency hit by a bus scenario. I think it's pretty obvious it would be Jeff Williams. But on the other hand, Jeff Williams doesn't appear in like the quarterly conference calls the way Tim Cook does. seem like he's being groomed to take over because he's like the same age as Tim Cook. I think they're both, you know, they're within a year of each other. Jeff Williams might be 62 instead of 63, something like that. So if you think Tim Cook is going to retire around the age 68 or 69 or 70 or something like that, it seems unlikely to me that his designated preferred successor is one year younger than him. I mean, it's just, I don't, I don't think the math works out, unfortunately, for Jeff Williams, if he has aspirations for that. And so who's younger,

who, you know, like a decade or decade plus younger than Tim Cook, who could credibly take over his CEO? And I honestly don't know. When jobs left, they didn't go for a product person, right? Johnny Ive did not become the CEO. Phil Schiller did not become, the CEO. Craig Federigi did not become the CEO. It didn't come from the software side or the hardware product marketing side or from the design side. But I don't know that any of those men wanted to be CEO. I know Joanna Stern asked Craig Federigi whether it's possible and he, you know, he demurred. Is it possible, though, that they would, you know, that maybe, maybe it's not so much that they go for the operations side and that somebody like Jeff Williams or

what's his name, Sabil Khan. I think he's the senior vice president of operations. Are you looking at the... No, I should have that open. You know, if they come from the operations world, it might be Khan would be the most likely person. He's the one who, Sabi Khan. He's a parent, I don't know how old. he is either though he might be close to 60 he's the one who supposedly way back when when like they first who is tim cook now this you know the new man taking over apple CEO he's the one who apparently that that famous story where there was some kind of supply chain issue in china and they were having an operations meeting and they decided somebody needs to get over there right now and take care of

this issue at this factory and like five minutes later in the meeting tim cook turned to him to Khan and said, why are you still here? Because he was the one who was supposed to go. And he realized, oh, you didn't mean like after the meeting. You mean like I should be on my way to SFO. And he just said, okay, okay, I got it. And he said, all right, I'll see, I'll, you know, send you an email when I get to China and just stood up from the meeting headed right to SFO without packing anything other than like his MacBook and just figured he'd buy clothes in China or at the airport or something, right? So I guess he'd be on the list, but that's only. if there is internal to Apple some sort of idea that operations people are the that's the chain

to become CEO, maybe not. Maybe Tim Cook, it's not because he came from operations. Maybe it's because Steve Jobs saw something in him, which I think we all on the outside now see, right? That he does seem like a leader, you know, and, you know, we're talking only half in jest that he could right run for president perhaps you know who has that sort of charisma and and sort of leadership skills I don't know maybe it could be Federigi maybe it could be John turnus you know who's in charge of hardware engineering uh is a bit younger but I really don't know and whoever does know at Apple is a very short list I would guess I would guess nobody outside the board really exactly anything about there must be a document with

board that's the succession plan. And if that gets out, then that would be a fascinating scoop. Right. But off the top of my head, I would think Jeff Williams, if there was a hit-by-a-bus scenario, Eddie Q might be on that list. But again, he's, you know, close to 60. You know, all of these, so many people on Apple's leadership team are very close in age to Tim Cook. So it's kind of hard to pick somebody, you know, a decade plus younger. Yeah. John, you've been so generous with your time. I just want to shout out where people can find your stuff.

Daringfireball.net, day the ring, the podcast, and the talk show the podcast. Anything I'm missing? No, that's it. That's all they need to know. It's all good stuff. This has been so great. I learned so much and I appreciate you staying here for so long. John Gruber.

Thanks so much for being here with us. This is a short podcast. I know, I see you got some, what, three plus hour ones. That's amazing. I don't know how you do that. I don't know either. All right, everybody. Thank you so much for listening. We will be back on Friday with a show breaking down the news with Ron John Roy coming back to you Friday. And then next Wednesday, Arvin Srinivas, who's the CEO of Perplexity, is going to join me for a discussion of whether his company can actually challenge Google and redefine what AI can do for search. All right. Thanks for listening. We'll see you next time on Big Technology Podcast. That was a lot of fun. Amazing stuff. So great.

Thank you.