Tech Brew Ride Home - Thu. 03/20 – Is Apple In Its “Vista” Era?

Episode Date: March 20, 2025

SoftBank acquires a chip making startup. Nvidia says it hasn’t been approached to help save Intel. OpenAI announces another expensive AI tier. Apple TV+ is losing more than a billion dollars a year. And do Apple’s recent stumbles indicate their where Microsoft was in the Windows Vista era? Sponsors: Incogni.com/ridehome and code ridehome Links: SoftBank Seals $6.5 Billion Deal for Chip Designer Ampere (Bloomberg) Nvidia CEO says company has not been asked to buy a stake in Intel (Reuters) Nvidia to spend hundreds of billions on US supply chain, says chief (FT) A First Look at How Apple’s C1 Modem Performs With Early Adopters (Ookla) OpenAI’s o1-pro is the company’s most expensive AI model yet (TechCrunch) Apple Streaming Losses Top $1 Billion a Year (The Information) Apple innovation and execution (Benedict Evans) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme right home for Thursday, March 20th, 2025. I'm Brian McCullough today. SoftBank acquires a chip-making startup. InVIDIA says it hasn't been approached to help save Intel. OpenAI announces another expensive AI tier. Apple TV Plus is losing more than a billion dollars a year. And do Apple's recent stumbles indicate there where Microsoft was in the Windows Vista era? Here's what you miss today in the world of tech. SoftBank is acquiring Amper computing for $6.5 billion in cash, with Oracle and Carlisle selling their previous stakes as part of the deal, which is expected to close in the second half of this year.

This is worth noting because it is part of the whole AI chips land grab slash gold rush, quoting Bloomberg. The deal for Amper, whose early backers included Oracle and private equity firm Carlisle, adds to a wave of chip companies looking to capitalize on a spending boom in artificial. intelligence. Ampere makes processors for data center machinery, including technology used by chip designer Arm Holdings, which is majority owned by SoftBank. Ampier, founded by former Intel executive Renee James, was valued at more than $8 billion in a proposed minority investment by Japan SoftBank in 2021. Bloomberg News reported at the time. The chips market has grown more competitive since then, with several large tech companies rushing to develop the same kinds

of products that Ampeer makes. In acquiring Amper, SoftBank is getting access to one of the a few large design teams for the types of advanced chips used in data centers that isn't already part of another company. It's doing that as demand for those chips explodes amid runaway spending on AI infrastructure. SoftBank also is looking for a way to increase its ability to capture some of that spending with advanced product offerings it doesn't already have, even through ARM. Amper is one of a group of companies that tried to use ARM technology, which dominates in mobile phones to create a niche in the lucrative data center chip business. Most of these have failed or and acquired. Ampeer's acquisition by SoftBank keeps that push alive. The company has touted its

chips as being much more power-efficient at a time when the massive drain on resources of large data centers is making them increasingly difficult to build and run. Arm itself is looking to move from being a provider of a layer of technology to a seller of more complete solutions that can fetch a higher price. For Ampeer, the migration to being part of a larger company will give it access to resources and possibly a larger set of customers that will make the economics of chip design work, end quote. Related news, at least industry-wise, Jensen Wong says Nvidia has not been approached about purchasing a stake in Intel, following a report about a consortium with TSM to operate Intel's factories. Quoting Reuters, nobody's invited us to a consortium, Wong said, nobody invited me,

maybe other people are involved, but I don't know. There might be a party. I wasn't invited. Reuters earlier this month reported that TSM had approached NVIDIA Broadcom and advanced microdevices about taking stakes in a joint venture that would operate Intel's factories. Other media had previously reported that Intel, with backing from U.S. President Donald Trump, was considering a plan to separate its manufacturing operations and turn over control of them to a consortium that would include TSM, end quote. Jensen also said, Nvidia will spend several hundred billion dollars on U.S.-made chips and electronics over four years as it should, supply chains amid U.S. tariff threats, quoting the FT. Overall, we will produce over the course of the next four years, probably half a trillion

dollars' worth of electronics in total. Jensen Wang, NVIDIA's chief executive and co-founder, told the Financial Times, and I think we can easily see ourselves manufacturing several hundred billion of it here in the U.S. In a wide-ranging interview, Wang said the leading artificial intelligence chipmaker was now able to manufacture its latest systems in the U.S. through suppliers such as Taiwan Semiconductor Manufacturing Company and Foxcon, and that he saw a growing competitive threat from Huawei in China. This week at NVIDIA's annual developers conference, Wang unveiled the next generation of its AI chip Vera Rubin,

outlining his plan to build clusters of millions of interconnected chips in giant data centers that will require a vast power supply. Wong said he believed the Trump administration could accelerate the development of America's AI industry, having the support of an administration who cares about the success of this industry, and not allowing energy to be an obstacle is a phenomenal result for AI in the U.S., he said. NVIDIA's latest Blackwell systems are now being produced in the U.S., said Wong. TSM investing in the U.S. provides for a substantial step-up in our supply chain resilience, end quote. This is interesting.

An analysis from Ucla found that AT&T and Verizon speed test users saw higher median download speeds on the iPhone 16E and its new C1 modem than the iPhone 16 did. but weirdly T-Mobile users saw the opposite. Quote, iPhone 16E users on T-Mobile's network experienced median download speeds of 264.71 MbPS, which is at least 47% faster than iPhone 16E users on Verizon's network that experienced median download speeds of 140.77 MbPS. The download speed performance for iPhone 16E users on AT&T's network was 226.9 mbps closer to that of T-Mobile users.

However, when comparing median download speeds for T-Mobile users with the iPhone 16E to T-Mobile users with the iPhone 16 device, the iPhone 16 outperform the iPhone 16E by at least 24%. The iPhone 16E's underperformance in median download speed compared to the iPhone 16 on T-Mobile's network is most likely due to the fact that T-Mobile is the only U.S. carrier to have a nationwide commercialized 5G standalone network, and one of the few operators globally to deploy significant spectrum depth and advanced features like carrier aggregation on the new 5G architecture. The C1 modem's more limited capabilities on 5GSA networks compared to the Qualcomm modem in the iPhone 16 may be a key factor contributing to the larger performance gap between device models

observed on T-Mobile's network in early testing, end quote. OpenAI has launched O1 Pro, which uses more compute than O1, for consistently better responses, according to them. This is available to select developers for $150 per 1 million or around 750,000 words of input and $600 per 1 million output tokens, quoting TechCrunch. That's twice the price of OpenAIs, GPT 4.5 for input, and 10x the price of regular O1. OpenAI is betting that O1P improved performance will convince developers to pay those princely sums. Yet yearly impressions of O1 Pro, which has been available in OpenAI's AI-powered chatbot platform chat chapti for chat GPT pro subscribers since December, weren't incredibly positive. The model struggled with Sudoku

puzzles users found and was tripped up by simple optical illusion jokes. Furthermore, certain OpenAI internal benchmarks from late last year showed that O1 Pro performed only slightly better than the standard O1 on coding and math problems. It did answer those problems more reliably, however, the benchmarks found, end quote. Sources are telling the information that Apple TV Plus is losing more than a billion dollars a year, even as its subscriptions grew to around 45 million last year. One source says Apple has spent more than $5 billion on content since its 2019 launch. Quote, Apple shows no sign that it's getting cold feat about the streaming media business. By some measures, the company has found

success with Apple TV. The service currently has one of the buzzing. shows in television, Severance, and in 2022, it won a Best Picture Oscar at the Academy Awards for Coda. But the audience for Apple TV Plus remains relatively small. Media measurement firm Nielsen regularly reports that Apple TV Plus compromises less than 1% of total viewing each month of streaming services on connected televisions in the U.S. By contrast, Netflix and Amazon represented 8.2% and 3.5% of total viewing in February, respectively. Apple TV Plus offers only a fraction of the content available on services from Netflix and Amazon, whose varied catalogs cater to wider audiences. That was in part by design. Apple has focused on making expensive prestige programming in the

same vein as HBO did in the past. Still, some analysts said Apple hasn't done much to differentiate its service from other offerings. Apple has a reputation of being a disruptor with its hardware and app store, but I don't see its core value here, said Horace Dedu, founder at market analyst's firm Asimco. Picking winners and losers is not what the company is. is known for, end quote. Apple's overall corporate profits are so vast. It reported $93.7 billion in net income in its last fiscal year that it can easily absorb the losses from its streaming service, but they show that the company still hasn't figured out how to crack the entertainment industry, despite Apple executives boasts ahead of the services launch, that it wouldn't be like other

streaming options. Despite Apple TV Plus's losses, services overall have become a juggernaut for Apple due to the strong performance of several other businesses, most notably ICloud Plus, the App Store and Search Advertising, according to multiple former Apple employees involved in its services business, and a review of Apple's corporate filings. The success of those three products explains why Apple's services revenue rose 13% to more than $96 billion in its most recent fiscal year. The category is Apple's fastest growing and most profitable, with gross margins topping 75% compared to just under 40% for its hardware, its executives have said. The financial picture of Apple services outside the category's handful of profit gushers is less rosy, however. Growth in Apple music, for example, has

stalled. While some former Apple employees say the service, which launched in 2015, surpassed a milestone of 100 million subscribers on both paid and free trials last year, they also say it's only marginally profitable with a single-digit percentage gross margin because it pays artists and labels more than 70% of its revenues. Eddie Q has previously, told some colleagues he doesn't believe the service will ever reach 100 million paying subscribers. Meanwhile, sales of digital books from Apple's iTunes store have also been shrinking, and services such as Apple News Plus, Fitness Plus, and Apple Arcade, premium news, exercise and gaming services struggle with low usage and profits a person with

direct knowledge of the matter said. Apple Arcade, for example, had only 2 million users in its first year after it launched in 2019, with roughly 25% of them on free trials, according to one person with direct knowledge of the figures. Apple News Plus, meanwhile, suffers from low engagement with monthly active users in the low single digits, another person said. Most Apple users don't sign up directly for the three services, instead getting them through Apple One, a bundling subscription, former Apple employees say. Many of those who sign up for Apple One do so primarily because of iCloud Plus, which provides additional online storage for their photos and files, the employees said. Without Apple One, some services such as Apple Arcade and Fitness Plus likely wouldn't be profitable, the people said.

Apple Books and News Plus, for example, had layoffs last year because of their weak performance, according to other people with direct knowledge of the matter, end quote. Man, don't take away my Apple News Plus. I've gotten addicted to that, especially for the purposes of this show. Finally today, speaking of Apple, someone that I used to quote from all the time, long-time listeners will know, is Benedict Evans. Earlier this week, Benedict posted a piece that I found pretty interesting. Basically, he's piling on what others have been saying about Apple, there. Stumble with the Vision Pro, followed by falling flat on its face with AI, suggests the company may be slipping into a vista-like drift of poor execution. Quote,

The Vision Pro shipped as promised and works as advertised, but it's also too heavy and bulky and far too expensive to be a viable mass market consumer product. Hugo Barra called it an over-engineered developer kit. You could also call it an experiment or a preview or a concept. Lots of serious people think that some combination of glass and headsets could be the next universal device after smartphones, and Apple should certainly be working on that, but no one thinks the hardware is ready to deliver that today, and the Apple we know doesn't ship things that aren't ready. It ships MVPs that get better later, sure, and the original iPhone and watch were MVP's, but the original iPhone also was the best phone I'd ever

owned, even with no 3G and no app store. It wasn't a concept, it wasn't a vision of the future, It was the future. The Vision Pro is a concept or a demo, and Apple doesn't ship demos. Why did it ship the Vision Pro? What did it achieve? It didn't sell in meaningful volume because it couldn't, and it didn't lead to much developer activity either because no one bought it. A lot of people, even at Apple, are puzzled. The new Siri that's been delayed this week is the mirror image of this. Last summer, Apple told a very clear, coherent, compelling story of how it would combine the software framework it's already built with the personal data in apps spread across your phones and the capabilities of LLMs to produce a new kind of personal assistant. This was the Eats of Apple, taking a new

primary technology and proposing a way to make it useful for everyone else. The hero demo at WWDC was, when is mom's flight landing, what's our launch plan, how long will it take us to get there from the airport? With your iPhone synthesizing data from across apps and services to answer real-world questions posed in a way that computers could not answer before. This is your iPhone knowing who your mother is, finding the flight in all the various threads of comms in the last few weeks, knowing that it needs to find a flight in the near future and showing you what you need. Stepping back, I'm unsure how much of a disaster it is for Apple to ship what it described

last summer in 2026 or 2027, and in the meantime, push out a flow of more achievable individual features. On one hand, it's not as though anyone else has what Apple described working yet, even Google. On the other hand, a year is a long time given the speed of AI progress right now, especially given the ferocity of competition that Apple faces in China and the waves of new features that OEMs there are pushing. And Apple Intelligence certainly isn't going to drive a super cycle of iPhone upgrades anytime soon. Indeed, a better iPhone feature by itself was never going to drive fundamentally different growth for Apple,

but failures like Humane and Rabbit point to what else Apple or others might do with this technology once it works. The rumored new home smart screen device is probably a lot less appealing without this, and the AR glasses would need this too, except that those really are years away. However, it clearly is a problem that the Apple execution machine broke badly enough for Apple to spend an hour at WWDC and a bunch of TV commercials talking about vaporware that it didn't appear to understand was vaporware. The decision to launch the Vision Pro looks like a related failure. It's a big problem that this is late, but it's an equally big problem that Apple thought it

was almost ready. And the failure of Siri 2 is by far the most dramatic instance of a growing trend for Apple to launch stuff late. The software release cycle used to be a metronome. Announcement at WWDC in the summer, OS release in September with everything you'd seen. There were plenty of delays and failed projects under the hood and centers of notorious dysfunction, Apple Music say, and Apple has always had a tendency to appear to forget about products for years. Most Apple Watch faces don't support the key new feature in the new Apple Watch, but public promises were always kept. Now that seems to be slipping. Is this a symptom of a vista-like drift into systemically poor execution? End quote. Nothing more for you today. Talk to you tomorrow.