Power Lunch - All About Apple, and Service Charge? 6/5/23

Episode Date: June 5, 2023

Apple’s big WWDC event is underway. We’ll get live reports from Cupertino throughout the show as any news develops.Plus, America is having a heated debate about a controversial topic: tipping. Are we paying for service, or subsidizing workers’ salaries? We’ll debate. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Good Monday afternoon, everybody, and welcome to Power Lunch alongside Contessa Brewer. I'm Tyler Mathis, and glad you could be with us today. We are continuing to watch Apple's big event, the Worldwide Developers Conference out in California, and we're going to get reports from Cupertino throughout the program as any news develops. Plus, a heated debate on which many people have strong opinions, tipping culture. Where you seem to go lately, someone turns the screen and asks whether you would like to give a tip 15%, 20% more. Are we paying now for service or subsidizing workers' salaries? That's the question at the heart of a increasingly hot debate, Contessa.

Or is it a test of what a scrooge you really are? Let's get a check on the markets here. The Dow lower after Friday's big rally. You can see we're off more than 100 points now, down a third of a percent. The S&P 500 still stuck in the green up a tenth of a percent, and you've got the NASDAQ composite up a third of a percent. News is coming out of Apple that we're watching. That stock, this $3 trillion mark.

market cap level. It first hit that milestone early in 2022, and it looks like we're headed back there. We're also watching shares of Coinbase, the stock down more than 10% after the SEC filed charges against Binance for securities violations. And shares of Bolero are jumping today. It looks like investors have some optimism to spare. Steeple is adding the company to its select list, saying the company's tie up with lucky strike was massively overlooked by investors. investors. Tyler, you see what I did there? I get it. Spare. It was a strike. It was a 10. It was a 10 count right there. Let's get to Steve Kovac in Cupertino outside the Apple event. What have we heard so far, Steve? Yeah, Tyler, so no headset yet. That's probably coming in just a few minutes. So right now, we got an update on the Mac business.

Most importantly, Tyler, they have Apple has transitioned fully away from Intel. The last model of the Mac still running Intel chips has now been replaced with a new chip called the M2 Ultra. That's just a really fancy way of saying. It's a super powerful chip, and Apple no longer needs Intel to power its Macs. Also, in the Mac front, we have Mac OS Sonoma. That's the new software likely coming this fall for all MacBooks and Mac desktops. And some new cool features there, including a lot of video conferencing stuff that other apps like Zoom can kind of tie into, some augmented reality features. One thing I saw, for example, you give a thumbs-up gesture,

and you'll get a little reaction on the screen like the, confetti falling over and things like that. And then iOS 17. That's the new software for iPads and iPhones, of course, and a lot of interesting personalization features. And now, Tyler, I know going into this, everyone is asking, what about AI? Not necessarily a chat GPT-like service coming out of Apple yet,

but what they did do is they are using AI and predictive text to make that keyboard predictive text a lot better, Tyler. In other words, where I start typing a word and it finishes it for me? Exactly. And they're going to start using the same transformer technology that uses, that ChatGBTGPT uses, for example, a lot of that similar technology is now going to be powering your keyboard, so you can't predict what you're going to say next. What you have just described, Steve, may be really, really important. It may be particularly important to Apple fans. It may be really important to geeks and nerds. But is it really

important to the average customer? In other words, is the new chip going to be that revolutionary? Is a new operating system going to be that amazing to me? Is my experience going to be that much better? It's not going to change drastically. And this is what we've seen out of iOS for the last several years. ITERative updates. For example, IMessage is going to get a lot of cool updates for different reactions and sending emojis and things like that. But all of this, Tyler, builds lock-in. It keeps you stuck in the Apple ecosystem. IMessage especially. I would just note, they opened up a lot of the iOS 17 presentation with iMessage, because that's such a sticking point that keeps people on the iPhone. It's almost like they're building their own social network.

So as we talk about competition with meta on the headset front, they're also competing with meta on the social networking front through iMessage as well. All right, Steve, thanks very much. Let's shift our focus now to the stock that hit a fresh new high today, trading at 182 a share, up more than 40% this year. But will Apple's push into mixed reality, perhaps AI, catapulted again beyond that $3 trillion bogey? Joining us now, Dan Ives, managing director at Wed Bush Securities. It seems like it is only a matter of time before that happens. It's, what, $13 away or $14 away now per share from that number? It's the golden install base, which is why, you know, we continue to view going into this year.

Three trillion was going to hit again. And you're actually now, this is just another flex-to-muscle moment for Apple. When you look at this product cycle, and I believe with iPhone 15, it's really a mini super cycle that we go into. Because you have 250 million iPhones that have an upgrade in four years. And that can- They have not upgrade. And that, the golden install base of Cupertino is what differentiates it. And I think what you're really starting to see here in terms of cook, this is an apple on the offensive, not defensive. And I think when you could AR VR, that really just tip of the iceberg to a broader AI strategy that goes to the developers.

And in my opinion, some of the parts, the services business alone is worth $1.3 trillion. I don't believe the stock stops here. I think this is one. We're just getting started relative to where we see it. So here's my question. If services are that important and becoming more important, how does this ARVR, how does a new chip, how does an emoji and predictive text bring you back to more services? It's a great question. Look, a lot of times cook and Apple, they're playing chess.

Others are playing checkers. And I think what you're really trying to do here is developers into that ecosystem build more apps, more games, more on fitness, more in health. And what this is further doing is just more revenue from the consumer on the services side. That's going to be $100 billion of annual revenue as you go into next 18 months. And I think that that's a big part of the re-rating that we've seen in Apple for the last two, three years. So let's go back to this. Their core product is the iPhone. That's their big moneymaker, right?

You said there are, what did you say? How many million? There's a 250 million iPhones that are 1.2 billion have not up to $14. Two of those are in my house. Two of them belong to you. I think one belongs to me. What's going to make me make that leap to say, okay, I'm ready now to spend X hundred, X,000 because my iPhone's functioning just fine.

I don't break it. The screen's still there. It's working fine. It takes pictures. What's going to get me to spend that money to jump to the iPhone 15? And that's the question that Cook and Kupertino, they ask every day, what's ultimately the catalyst. I think if you look,

the chip, in my opinion, is the most undervalued innovation that's ever happened in Apple. Because they've essentially... Their chip. Their M2 chip is the best out there. And ultimately, they've beat Intel at their own game.

You look at the speed of the technology in terms of what we see with iPhone 15. You look at the photography. You look at what I believe it's going to be integrated AI that's further into the ecosystem, battery technology, and really more and more

from a carrier, perspective, it's incentivizing from a cost perspective, do the trade-ins. We just want you further into that ecosystem. And that's why, despite the macro, despite a coming ahead, they're back against the wall in December, when I think you had a lot of the bears coming out of their caves. Now they're in hibernation move with the stock about to hit $3 trillion. And this is just another flex-to-mussels moment for Apple. If you're not already an owner of Apple stock, is this still a good place to get in? I view it continued as a table-pounder. because my opinion, this is just starting the next leg from a services perspective, as well as a mini super cycle.

And you could argue on a sum of the parts. This is a three and a half trillion dollar valuation or more. And that's always been our contention. So let's go to the AR, VR, VR, what ours, whatever, reality thing. There are numbers out there that make these headsets that they seem to be ready, poised to introduce today, really, really an expensive item, a $2,000 to $3,000, who's going to do, who's going to buy that? Who's going to want that?

So I think the initial... And how big a product, at that price point, how big a product does that imply this can be? Sure. So the initial needs are going to be so expensive, how they ever going to sell so many of these first. This is just the first iteration. We think coming out of the gate, 150,000 units from what we're seeing out of our Asia

checks would be the initial units. But ultimately, the nizier. next iterations, just like the watch, just with AirPods, then you start to go into the millions because price points are going to come down, $1,500. But who they're focused on right here, it's not me and you, it's developers. Developers right now, there is a game of thrones going on for developers, Google, Microsoft, because of the AI ecosystem. So what Apple and what Cook is really talking to developers today is ARVR, this is just going to be

the first set, another platform to build on from a gaming ecosystem. fitness and others. And they're really trying to, I mean, compete with Microsoft and meta and others for these developers and their talents, yeah? That's exactly, because right now, any developer, this is not hype, not, you know, crypto-type. It's all about AI because, in my opinion, it's the biggest transformation I've seen technology in the last 30 years. So Apple is not going to be on the outside looking in with the strongest developer community out there. They're talking developers here, and it goes back for the first time in really eight, nine years. Now you have a new product

announcement. And remember, go back to AirPods. It's a fantasy that they're going to do 10 million per year units. Two years later, they did 100 million units. So it just goes back to Apple continues to be, in my opinion, just an unparalleled install base that flexes their muscle yet again despite the macro. And their products, I have to say, are operate as close to seamlessly as I think anybody's in the world does today. It's the gold standard. Yeah. And that's why, Many of us say, oh, they've been working on ARVR seven years. How come they didn't release it? They don't release things till it's perfection.

And that's why you're looking at what's going to be, again, a $3 trillion market. Dan, it's great to have you in studio with us. Thank you so much as we continue to watch it. We'll bring you news as we get it out of California. As Apple shares have now hit a new all-time high, they're dragging or lifting the broader markets higher as well. The S&P 500 hitting a new nine-month high today. get to Mike Santoli with a closer look at the setup for the markets. Hi, Mike. Hi, Contessa. Yeah, pretty familiar pattern here. You have Apple, along with Microsoft, a couple of other very large

stocks insulating the S&P 500 from a pullback. Remember, Friday, a very strong day across the board. Financials, energy, small caps, very big gains. Those are actually settling back a little bit, but because of the strength in those mega caps, the fact that a majority of shares are down on the day is not reflected in the market cap weighted S&P 500. I will note the high for the day, the S&P was 429, I think, 0.28. So somebody was waiting at 4,300 to say we're not getting through here on the first attempt, but still looks like a pretty good breakout. Only last August did we trade above the 4300 mark, just really for a few days.

Now, take a look at Apple relative to another recently red-hot part of this market, semiconductors. And you see, actually, Apple kind of surpassing semis right now, semiconductors in a little bit of a pullback after this very strong run. My observation over the years is when Apple's outperformance over the broader market or tech in general gets to an extreme, sometimes the market is kind of running out of fuel. So maybe keep an eye on that, maybe a culmination moment with this excitement over the developers conference, at least in the short term for Apple getting to this threshold. Now, take a look at energy. Another story we haven't talked about a lot, last year's huge winter, crude oil.

And this goes back a couple of years. The 65 to 70-ish area has been important for quite. a while. Take a look all the way back into 2021. So it's held here a few times. Maybe this is the bottom end of the range. Clearly a big round trip around the Ukraine war. But here so far holding, even though today's gains don't look like a whole lot on this chart. Probably good news for the inflation picture, if not for the oil producers. Mike, thank you for that. Appreciate it. Coming up, the port and a storm, West Coast ports being disrupted after a breakdown in wage negotiation. Jane Wells is live at the port of Long Beach.

Looking for the ripple effects. Hi, Jane. Hi, Contessa. Yeah, the largest terminal at this port today told truckers don't even bother coming in as the talks drag on. And yet we've also learned that a popular alternative route for shippers outside the West Coast is facing its own challenges. We'll have that week about. All right, we're watching continuing disruptions and the West Coast parts after a breakdown in wage negotiations led to a union worker no show Friday, it could have ripple effects across the economy. Jane Wells joins us

live now with more. What are you seeing today, Jane? Well, Contessa, two terminals here at the Port of Long Beach told truckers this morning don't even bother showing up, including the TTI terminal behind me. That's the largest here. But as you look over there, they got three ships there. And the one on the right, dock workers are working that ship. So they have enough labor for one ship. And it is possible that they'll open it up for truckers later this afternoon. Now it is the latest development since Friday when the port of Oakland shut down due to a lack of dock workers. That's the video you're seeing. Shippers claim there were no shows at other ports up and down the west coast where 22,000 dock workers have been working without a new contract for nearly a year. Here in Long Beach today,

it's not clear if the work action was planned or if terminals were just being proactive. Neither side will say next door at the port of Los Angeles. We are. told that business is usual today. This is all happening though as cargo volumes are dropping every single month this year at the major ports, in part because shippers have been rerouting away from the West Coast to get away from whatever may happen here. But as contentious as negotiations may be,

let's go down memory lane. It's not as bad as the battle days of 24, 2015 seen here when a long slowdown along the West Coast cost the economy billions of dollars or even 2002 when dock workers were locked out for 10 days and President Bush had to intervene. The Biden administration is monitoring the situation. But here's an interesting twist to that strategy of redirecting traffic away from the West Coast. The Panama Canal guys is now limiting how heavy ships can be going

through the canal because of drought and El Niño, the water levels are down. So that may be a less attractive alternative now. Oh, yeah. And what about consumers? Like, are we going to start seeing an impact because the stuff we want to buy isn't actually showing up to be put on trucks? Well, there are some delays. CNBC has learned maybe up to two weeks right now. And those delays cost money, which will probably be passed along to you. But most interesting to me, I'm hearing that in Hawaii folks are stocking up at toilet paper at Costco because they're concerned that goods coming from here might not get delivered there, though we are told that is not a reasonable concern at this point. When do goods for the holiday season start to arrive and could this

affect that? Pretty soon, Tyler. We're already getting back to school. Some holiday will happen after that. The ports will tell you that the disruptions so far are really minor, but if they continue to build and if negotiations don't go anywhere, we may see some more major action. Again, nothing compared to what we saw back in 2014, 2015. Can I just show you guys one thing real quick? Yeah. I've never seen it before. It's new here. See that yellow crane? At the bottom of that crane, that black thing, that is a space X booster, which, you know, was landed on one of those floating platforms to be reused, and they bring it back here, at least to be stored for now. I've never seen that here before. I just, I don't know. I thought I'd point that out. This is the

advantage of live television. Very cool. And Jane, Wells. Yes. Thank you, Jane. That was awesome. You're welcome. Thank you. All righty, further ahead. Technology tipping the scales. Most people are happy to tip, but new payment technologies are letting more businesses ask consumers to give a little more, even in industry's not seen as tipworthy. And it's leading to some fatigue and a big debate. Plus, a policy change. Last week, we discussed State Farm's. Big move in California, no longer offering new policy sales because of wild, fire risks and other things. And now another big provider, you know the name, doing the same. We'll be right back. I'll be right back to Power Launch, everybody. Let's get a quick check on the

bond market with Rick Santelli in Chicago. Rick. Hi, Tyler. Indeed. Prior to about 10 o'clock Eastern, interest rates were higher across the treasury curve. Two through 30s, but something happened at 10 o'clock Eastern to alter that, you can clearly see now we're very close to unchanged across the entire curve. And what was it? It was data. Whether it was S&P Global or ISM, the data was on the weak side. So look at the ISM prices paid. Three-year low at 56.2. And the employment gauge dips under 50 at 49.2 to find a lower level of employment on that index. You have to go back to June of 22. And the response was swift. Look at a two-year no yield. Look at the way it dropped. Now, granted, it has recovered, but as I said earlier at 449, we're hovering basically

unchanged. And Fed Fund futures. If you recall, we're hovering 55, 60 percent with regard to what would occur at the July meeting. Well, now the July meeting, as you see the July futures, they popped a bit on that 10 o'clock data. Now they've eased back just a smidge, but for all practical purposes, we're hovering right at that 50-50 mark. And for the June meeting, well, it's half that at 25%. So at least for now, and it changes every second with every trade. We're not looking for a hike in June and on July. It's a close call despite the stronger than expected job creation we had on Friday. Contessa, back to you. All right. Thank you very much. Rick, appreciate that. Will trading about to close for the day. Price is higher after Saudi Arabia

decides further to cut production. Pippa Stevens joins us with more on that. What are you saying? So this was really the surprise of the weekend. This was Saudi Arabia acting alone outside of the broader OPEC Plus group, and they decided to implement a $1 million barrel per day production cut beginning in July. They could be extended further out. And Saudi Arabia's energy minister called it a Saudi lollipop,

basically saying it's a Saudi lollipop, a lollip. Basically saying that it's a market sweetener, and of course comes after oil prices have been, not doing so well and heading lower. So then apart from that, OPEC and its allies also agreed over a very long and somewhat contentious meeting to ratify their April production cuts through the rest of next year. And so that does speak to some concerns around the demand side of things.

And remember, this is the third time that Saudi Arabia specifically has cut production since October. They cut in October, April, and now in July once again. So they really are the leader here in taking action even when some other members don't want to. The third thing that came out of that meeting was an adjustment of the quotas, with UAE getting more, a higher quota starting next year, while Angola and Nigeria have been given a lower quota. So we're seeing WTI right now at 7214, up half a percent following that news. Pippa, thank you for bringing it to us. All right, we're going to go back out to the Apple Developers Conference, which is underway in Cupertino. Let's get to Deirdre Bosa for the latest on what we're hearing. Hi, Deirdre.

Tyler, the moment that we have all been waiting for, Tim Cook, just came back on state. and he said his famous one more thing, and then he introduced the mixed reality headset that everyone here and beyond has been waiting for. It is called the Vision Pro. He says that it is a new kind of computer that augments using the most natural and intuitive tools.

He put it into context, the evolution of all the other Apple products we've seen. He said that in the same way, the Mac introduced us to personal computing and the iPhone introduced us to mobile computing. He says the Vision Pro will introduce us to spatial computing. It came along with a video, people in their living rooms with this device, and you can actually see the person's eyes through the device.

So it looks like it's some kind of tinting where you can see the eyes if you want to. You're looking at it right here on your screen. Now this is the video that we just saw that led to a lot of cheers behind me here at Apple Park. We're getting more details. It's showing people in their living rooms looking at a virtual or augmented reality screen. Steve Kovac is beside me. You might have heard him. You can't take his ears off of it because we're getting all of the things. these details in real time.

Exciting guys. Again, the same questions, though. Is Apple going to be able to do what meta and others have not been able to? That's the big question. And as I look at the stock price, it has ticked up, but it's been pretty steady throughout the entire presentation. Partly because a lot of this news may have been anticipated. I mean, we heard it was going to look like ski goggles.

Indeed, Deirdre, it looks like ski goggles. When you're listening to the developers cheering for it there, do you have any sense of what opportunities it gives them to design programs and apps and different immersive experiences. Well, that's essentially who this presentation is for, right? We don't have any details yet. We're not expecting to know necessarily how much this thing is going to cost. But the point of doing this, the WDC, is to tell the developers that it's ready for them to start building the apps. And there's some estimates that within a few years, the devices, the apps for this device could be up to one-third of the app store.

So there really is a huge opportunity here. And the idea, too, that Apple has built this huge ecosystem that developers have been building for in terms of the mobile platform for so long that that's going to carry over to this augmented reality or mixed reality device. So I'm sure the developers behind me are very excited, thinking about what they can do. As we see more of this come out, like you said,

a lot of this was anticipated. but we're listening, and I believe behind me, Tim Cook and his team are explaining exactly what it can do, how it will be different, and it's those details the developers are listening intently for. Yeah, Steve Kovac, and I know you're sitting there with Deirdre and Deidre, as well as Dan Ives, talked about this product as fundamentally directed at developers, and the proof will be what developers are able to develop for it and whether those products are enticing enough to individual consumers to pay the money. Is this really a product aimed at developers, not the general public? I think the vision, Tyler, is to eventually be for the general public.

Correct. Right now what we're seeing in these demos is basically apps, iPad apps, kind of surrounding you in this virtual space in front of you. So they're showing, you know, common apps like photos and movies and having this immersive experience. One of the shots they showed someone sitting on a couch and kind of kicking back and watching. scrolling through their photo library, even web browsing kind of in a window floating in front of you. Now, these are not new ideas, Tyler. We've seen this from meta. We've seen this from some of these other augmented reality headsets,

but it's going to really take the developers here and people here today to try this and see if it can kind of level up from what we've already seen before. I am seeing also, I would also kind of notice that instead of controllers, it looks like this thing is mostly controlled with hand gestures. and voice instead of a physical controller like we've seen from the likes of meta. I mean, that really pushes the ball forward as well. But I was just thinking that, you know, in terms of what Apple already offers, in terms of services, if you look at the fitness apps that you have,

you've got it up on a screen, but if you're doing yoga and you're trying to follow what's on the screen and you're doing down dog, it doesn't work. So it seems immediately obvious to me that for people who practice yoga a lot, wearing a headset where you're seeing the instructor makes a lot of sense. I imagine there's probably a lot of health applications that could come with this as well. What about the business utilities? I mean, are you hearing developers chatter at all about the way that it might be used for business, Steve? Yeah, that's something that this category has been talked about for a long time. Even, Contessa, remember Google Glass going that far back, talking about using this

augmented reality technology for business in the workplace. In fact, this is something meta really touted with the reality pro headset saying you can get work done in this virtual environment that surrounds you instead of having one screen, you can have many screens around you. And also to your point, fitness is another thing that people are talking about. I don't know how comfortable it might be

to exercise in a real way with a heavy, bulky headset around you. But we also got to talk about, like, we still don't know a lot about what this device is capable of. They're just now getting it out. So we haven't really heard the full pitch yet, Contessa, which is really going to be compelling because right now what we're seeing is just that more elevated version of what we've seen from competitors so far. You know, one thing that occurs to me, Deirdre, maybe I'll turn back to you, is that a lot of these devices, one of the things that occurs to me is that a lot of the devices that we have tend to advance the idea of isolation, social isolation. If I'm on my phone, I'm not talking to Contessa. I'm on my phone. If I'm using one of these VR devices, is there going to be a social aspect where I can communicate with or interact with other people? Imagine this, interacting with other human beings, as opposed to sitting there in my wonderfully immersive environment with my goggles. Well, that's why they're tinted, right, Tyler? I mean, they are showing off a feature where you can see the eye.

through it and that is probably speaking to exactly what you're asking about is the idea that this is so immersive and you can shut out the whole world around you I mean since we heard about this thing we knew that it was going to be mixed reality the keyword being mixed there so it's not going to be entirely virtual it's going to be augmented it's going to make use of the space around you as well as anything that the goggles or the headset can deliver to you I will say though Tyler I'm waiting and probably see would agree with me here we're waiting for the why right why do we need this and I think

Apple has to really articulate that. And there's been talking, you know, do they need a killer app? Because I think maybe that's where meta hasn't been able to break into the mainstream. We don't have a really compelling reason as to why we would wear these things. Certainly, there's cases in terms of gaming, even virtual meetings. And Apple talked about that a little earlier. But I think that if this is going to be a big platform shift, like Cook was saying with the PC and the mobile phone, I think we really need that compelling reason and him to tell us why we're going to be using this often.

Yeah, I think that's a really interesting point because I think back to many points in Apple's history where, and maybe this was particularly acute or true under Steve Jobs, where Apple seemed to know what we wanted before we knew we wanted it. Fair point? Yeah, that's exactly fair. And that was kind of his whole mantra. But look, this is going to be more of an experimental type thing, Tyler, than anything else. As far as a platform shift, this is not going to happen overnight. It's still dominated by the iPhone Apple sales are.

And this is, look, they spent a lot of time talking about iOS today because that is still their most important platform. But they do need those developers here, Tyler, in order to make the experiences in order to encourage people to buy one of these new headsets, the Apple Vision. Steve Kovac, dear Deerbosa, thank you both for joining us on that breaking news. Appreciate that. Let's go to the break, but of course it's that time of year when the networks across NBC news, shine a light on people who inspire America. This coming weekend, people like LeBron James, Eva Longoria, and others will be featured in a network special airing Saturday and Sunday. All this week, CNBC will showcase business leaders who inspire as well. Chabani's Hamde Ula Kaya, here now, the billionaire CEO on how it all started, and his advocacy for hiring refugees. When I started, the first goal was, can I keep this alive?

Can I pay the employee's salary? Can I pay for the farmers? When I called my lawyer, I said, I'm going to buy this factory. He tried to convince me how stupid this idea was, says you have no money. You basically don't have money. And you have no experience, right? Both of them were true. So I think the chance of succeeding in there are very, very small.

It wasn't until late 2008, early 2009. I realized that I had started something that people really wanted, and this has enormous amount of potential. By 2012, we exceeded billion of sales in that old factory. I think this is one of the most delicious food we have ever made A couple of years ago, we extended ourselves into oatmeal business and creamers, getting excited about coffee. Today, Chobani has over 2,000 people. We have two manufacturing sites.

For the first five, seven years, I was working with everyone shoulder to shoulder in the factory floor. Every single person has been crucially important of the success of Chobani. In 2016, I launched 10 partnership for refugees. refugees. We are over 300 global companies participated. Tenth team has done an amazing job looking at all the suppliers in that country. We basically have a very simple model. Higher refugees, train refugees, not because it's a good thing to do for humanity, it's really good for business. The minute refugee has a job, that's the minute they stop being a refugee. That's the minute they stand on

their own feet, that's the minute they provide to their family, that's the minute they become part of a new society and new community. And that's when the life starts. We became so passionate to grow this business into next dimension. It's not because we wanted to have more, but we wanted to do more. With that power, we can make a difference on people's life. And I always come back to this line. A cup of yogurt won't change the world, but how you make it might.

The move to electric vehicles already has shifted into high gear, and that's creating another big business around charging all those new batteries. Diana Oleg explains in her continuing series on climate startups, Diana. Well, Contessa, with EV adoption accelerating, so too is the need not just for charging stations, but for servicing all those charging stations. Unlike fixing an old gas pump, some companies are using smart technology to service and to learn from the stations in order to improve the systems. As with any new technology, the EV charging business is hitting some bumps.

In a recent survey, a quarter of EV driver, said they've had problems with faulty public charging stations. That's why maintenance companies like charge enterprises, smart charge America, and a California-based startup called Charger Help are expanding at lightning speed. It's been a little ridiculous, a little crazy. Camille Terry founded Charger Help barely three years ago and is now servicing EV charging stations across 17 states, working with partners such as Tritium and utilities like Duke Energy and Southern California Edison, she says her company has already touched over 10,000 stations. But it's not just about fixing them when there's a problem. You need to be able to understand how the station is behaving

in the field. You need to understand what issues may be happening in the car and the charging stations. Using proprietary technology, charger helps tracks information on how stations are being deployed and how they're working in order to improve reliability and to build more reliable and sustainable infrastructure. I think that that data set can be helpful to network providers, manufacturers, and even to governments. It's what attracted investors like Blue Bear Capital. Charger Help has data across network, across communication networks, across charger type, across

geographical location. All of these sort of components and issues and factors play a large role in determining why or how a charging station isn't working. In addition to Blue Bear, Charger Help is backed by energy impact partners, JFF Ventures, Exelon Foundation, Autodesk Foundation, and LA Clean Tech Incubator. Total funding so far, $21 million. Investors liken the company to the Valvalene or Jiffy Loop of the future, but it's the smart component that is so much in demand. The next frontier could be home charger repair, which would open up an enormous and, of course, expanding market, Contessa. You know, Diana,

you and I have been talking a lot about this intersection between real estate and housing and insurance premiums. We just got news about all state deciding not to write new property insurance and commercial policies on the heels last week of State Farm doing the same thing. And I'm looking at Verisc analysis that shows Riverside County, California. So California has wildfire risk. We know that. This would be considered the fourth most vulnerable to extreme wildfire risk in Riverside County. And yet new construction group. 22% in that county. Is there just this disconnect between what housing developers want, the housing needs,

and what the crisis and climate restrictions are? There's absolutely a disconnect, and you see it all up and down the East Coast on the water, where you see water levels rising and flood risk increasing. In fact, we just got the hurricane flood risk report last week from CoreLogic, which showed that while the same, almost the same number of homes, are at risk, the reconstruction value is up nearly 17% because of inflation, because of labor costs. And that's why you're seeing the insurers, like all state, pull out of California because they're looking at the same costs for reinsuring. And in addition to that, California has

actually had lower insurance premiums for homeowners, but higher reinsurance premiums, and the reinsurers are the ones who insure the insurance companies. And so the insurance companies are saying, look, we can't afford this because of those added costs. But yes, there is a housing shortage and people want to live where they will want to live. And we've been talking about this disconnect forever. Look at how much housing is going up on the coast of Florida. Yeah, Chub and AIG, by the way, left California years ago that tried to start drawing down their exposure. Diane, good to talk to you.

Thank you. Sure. More power lunch. Next. We got a few more updates from the Apple Worldwide Developers Conference. This time involving Disney. Steve Kovac has the detail. Steve.

Yeah, Tyler. Disney shares were at session low until we saw Bob. Iger take the stage and they hit a session high for the day. Disney is going to be a major part of the Vision Pro headset from Apple. Iger explaining that Disney Plus will be there on day one. It sounds like Disney has had exclusive access to the headset and they were able to create a lot of experiences. I saw Monday night football, for example. I saw some NBA content on there and of course Star Wars and Marvel and experiences around that. And the theme that's really developing here, Tyler, besides the, the, specific to Disney is this is clearly being positioned as a kickback, high-end entertainment device more than anything else. And Disney's presence here, of course, is exemplary of that, Tyler. All right, so I'm going to be able to get Disney Plus programming on this device. Is there any indication as to whether there will be other programming? I assume I'm going to be able to get Apple Plus television on it, right?

They did mention Apple. They did say Apple TV Plus, for example, will be part of it. And also, one part of the capabilities of this device is to change the experience. Instead of watching on a TV, you can actually create a virtual movie screen in your living room, even create a different surrounding environment. And they said it can make it feel like the screen you're watching is like 100 feet tall, Tyler. So it's supposed to be a different kind of movie watching experience. And it sounds like Disney's going to play a big part. 3D content as well, Tyler.

3D content. And what about the resolution of these screens? In other words, the picture clarity or vividness, et cetera, et cetera. What do we know about that? They haven't. In fact, they're talking about that right now, Tyler, so we don't have the exact specs and details on that. I know. You should run this show.

So they're going over that right now. So we'll get more clarity on exactly the specs and capabilities pretty soon here. More clarity. That's what we're going to get. This is when reporting gets in the way of reporting. That's right. Yeah. We're talking to you and you're trying to listen.

All right, Steve, we'll hear more about that. in a little bit. Thank you very much. Steve Covatt. Still to come, guilt tip. Has tipping gotten out of control, or are we just all, not all of us, but some of us are chiefsates? Let's just admit it now. We'll debate that when Power Lunch return. Welcome back to Power Lunch, everybody. The rise of technology and tablets from companies like Square have made it more convenient than ever now to tip, and consumers are feeling a little bit of heat. A lending tree survey shows 60% of Americans say they're tipping more because of technology, while 24% say they always feel pressure to tip when the option is presented.

And as consumers also face higher prices, many are questioning where the extra money is going when asked to tip itself checkout or with no service worker even being present. Just tip for the heck of it. Many feel they're supplementing low-wage businesses, the low-wages businesses are paying their workers. And they're not happy about it. For more on that survey, we bring in Matt Schultz, credit card analysts at Lending Tree. and to break down why these tipping prompts are suddenly everywhere, Rachel Wolfe of the Wall Street Journal. Matt, let me start with you.

What kinds of businesses, companies are now presenting the opportunity to tip that didn't before? Really, literally, almost any business you can think of, because of the proliferation of these point-of-sale tablets, it can be anywhere from a gas station minimar to a handyman to really, really anything you can think of. Rachel did a story a while back talking about how people are asking for tips at self-checkout kiosks. And with something like that, you can really see where people would say, okay, I like to be generous. I like to tip. But that may be a little bit too. I think I might draw the line, Rachel, at the self-checkout line where there might not be an

individual to help me. I'm doing the work. I'm bagging the things. In the bag that I've had. to bring to the place. They don't even give me the bag anymore. Now I'm getting angry about this, Rachel. I can see why you're not alone. It's not the only unexpected place where people are feeling like nobody's doing any work either. It's happening online to a hopper, a travel site. And those tips don't even go directly to workers. They say that they just go to support general operation. So it's really pushing at the limits of what a tip even is. Okay. So what you're saying is you go to order something online and what? It gives you a question about whether you want a tip? Take a baby formula retailer. It says that they will expedite the processing time from 24 to 12

hours. So theoretically, it's doing something. But when you're already spending so much and so much more than consumers were a year ago. People are really up in arms about it. They feel that tipping has reached a tipping point, and they're not wanting to subsidize these wages anymore. They think that it's an excuse for businesses to pay their workers less. Many labor advocates agree that it has gotten out of hand. Matt, I was really interested. One of the survey results from LendingTree was that 41% of the people who responded said they've actually changed their shopping behavior. because of the tipping expectation. Can you explain that?

Yeah, it's really kind of getting at what Rachel was talking about, where it all just seems a little bit too much. We're all perfectly fine with tipping wait staff and housekeeping at a hotel or a delivery guy, but when it comes to other situations where we are not even having any interaction with people, you can see where people would get upset like that. And people tend to feel powerless sometimes as it relates to dealing with businesses. So one way that they can flex a little bit is to vote with their feet and change where they spend their money. And some of that's going on for sure.

Rachel, let's talk a little bit about the etiquette of tipping. I'm often perplexed. Let's say I order food and there's a delivery person who brings the food to me. I'm happy to tip that individual, and I tip, I think, liberally, graciously, and so on and so forth. But let's say I go and pick up the food at a restaurant and a person has it in a bag there, and that's it. Should I tip in that case or not? This is where people are feeling so confused because they like to think of themselves as generous. They are generous.

And because they're encountering these prompts everywhere they go for every single service that's provided to them, whether or not they even think of it as a service, that's why they're getting so frustrated. So do you tip when you're picking up from a restaurant? Maybe some people do, but people are drawing new lines for themselves because it's become a question of affordability. It's not only one of etiquette anymore. It's really cutting into people. How does the staff know if there's, if, I mean, if I'm a staffer and I collect, or I look

at a chit on which a tip has been left, or I collect cash, a cash tip. I know exactly how much the tip is. How do the employees ever know how much tip money has come into that establishment? Or how much of them watch you? How much of the Uber tip that I add actually goes to the driver, Matt? I don't have a good feel for exactly how much that is.

I'm sure it varies by company. But what it really is about is that feeling of being forced because we all feel generous. And in the case that you were just talking about, about picking up takeout, one thing that you could look at it as is a bit of a relationship builder kind of thing. If it's a place that you're going to get takeout from regularly, you may want to tip a little more and get better service,

that sort of thing. But there are a whole lot of variables that go into it. I'm just curious what do you think the, Rachel, what do you think the hazard is for businesses that decide on an iPad to put the, do you want to tip here? Do you want to tip 20%, 25%, 30%, some of them, they just, they up the 10% isn't even an option? Businesses are starting to hear real pushback from their customers, especially in these traditionally untipped industries. I spoke to a plant store and one of the customers at this plant store and it's made her hesitate about whether she's going to go buy her fiddle leaf fig from

there again because she feels so guilty pressing no tip even when she's just gone and picked out the plant herself so as Matt was saying it really is people choosing their feet you know they are not back to the establishments rachel matt thank you both for joining us fascinating conversation i'd leave a 25% tip for both of them wouldn't you know let's tip on let's let's tip nothing on nothing thanks for watching power lunch Thank you.