The Rundown - Deep Dive: Wellness Check on Apple (Hardware, AI, China)

Episode Date: August 30, 2025

Apple is facing its biggest reality check in years. iPhone sales have stalled, the $3,500 Vision Pro flopped, and in the AI arms race, Apple is falling dangerously behind rivals. Add in China, where sales are slipping and supply chains are under pressure, and the cracks are impossible to ignore. This deep dive is a wellness check on Apple. Can the world’s most iconic tech giant stay healthy?This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not recommendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Public.com/disclosures⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.

Welcome back to the rundown for another weekend deep dive. Today, we're doing something a little different. We're going to do a wellness check on Apple. Apple used to feel like this invincible company. Their products were the best in the world. Millions of people would buy their stuff every September. And Apple had the title for the most valuable company in the world for years. These days, the numbers are still good on the surface, but the vibes are definitely different.

The iPhone's design feels a little stale. Their big new bet on the Vision Pro is flop. Syria is still a bunch line, and in the AI arms race, Apple is getting lap. Oh, and there's also the massive China problem. So today we're examining Apple across three critical areas. Their hardware pipeline, the AI strategy, and the China conundrum. And I'm going to tell you what I think the internal panic meter is for each of these categories. Apple haters, this one is for you.

All right, let's dive in. Let's start with Apple's hardware, because Apple hasn't had a new hit product, in a long time. I mean, sure, Apple sells more than 200 million iPhones every year, but Apple's iPhone revenue actually peaked back in 2022. These days, people are choosing to stick with their old iPhone for longer because the new iPhones just aren't that much different outside of slight bump and camera specs or a slightly better battery life. Like, if you compare my iPhone 16 pro to my old iPhone 13 pro, they look pretty much the exact same. Sure, the 16 pro is a little bit faster and takes slightly better pictures and it has an action camera

button and a camera control button that no one uses. Meanwhile, you've got companies like Samsung and Google and more that are coming out with foldable phones and flip phones. They're trying new form factors. Apple just isn't doing that. Apple is like that restaurant that opened up 15 years ago and when it first opened, it had the best food in town. And over the years, they continue to up their game and improve their food and try new

menu items. But then all of a sudden, they kind of stopped changing their menu. And their food is still good, but there are other restaurants that are offering something unique. That analogy kind of went too long, but hopefully you know what I mean. But it looks like Apple has heard all the haters, and over the next couple years, they're going to be showing off a ton of new products, including a redesigned iPhone. According to Bloomberg's Mark German, Apple is planning to show off their iPhone air at the iPhone event this year on September 9th. This iPhone is expected to be the thinnest iPhone ever made. Now, I'm not sure if that's going to move the needle much.

I feel like most people don't really want a thin phone. I'd rather have a thicker phone with better battery life. But at least they're trying something new. But next year it should be a big one because Apple is expected to finally release a foldable phone. That's probably going to cost like $2,000, if not more, but at least they're finally doing it. Meanwhile, Samsung's been releasing foldable phones for like nine years now. I've been playing around with this new Samsung foldable phone. It is so awesome.

So I'm really excited to see how Apple kind of enters the foldable game. And then in 2027, two years from now, Apple is planning to launch a. complete redesign of the iPhone to celebrate the 20th anniversary of the first iPhone. This new iPhone is expected to have a curved glass all the way around. Hopefully they have something more than just a curved glass for the 20th year iPhone. Now, zooming out, let's talk about other products outside of the iPhone. You know, Apple hasn't released a hit new product in a long time. Their last new product was the Vision Pro, which was a colossal disaster.

I feel like we don't talk enough about how much of a flop this thing was. According to estimates, Apple sold fewer than 500,000 units of the Vision Pro in its first year. Now, I want to give Apple some credit for trying with the Vision Pro. It was going to be a tough sell, $3,500 for a heavy, goofy-looking ski goggles that are uncomfortable to wear. Plus, many people aren't really into the VR thing. But the Vision Pro's flop was a reminder that Apple can't just slap their logo on any product and expect people to buy it. Now, Apple isn't given up on the Vision Pro just yet. they're working on a cheaper, lighter version of the Vision Pro, which is supposed to come out in

2027. I think if they were to release one for like a thousand bucks, and if it was much lighter, it could work, but I'm still not sure if people want to do the whole VR thing, you know? But beyond just the updated Vision Pro, there are rumors that Apple is cooking up a bunch of other exciting stuff. Bloomberg reported that Apple is working on a tabletop robot that resembles an iPad mounted on a movable limb. They're also working on some smart glasses, similar to Mehta's Rayban glasses, which I think could be a nice compliment to the iPhone. So it looks like Apple is cooking up some new stuff for the next couple years. And that's why I don't think that Apple is panicked over their product pipeline. On the panic meter, I'd say they're probably like a four out of 10,

maybe even a three out of 10. Now, some people are pointing to Open AI hiring Johnny Ive as a threat to Apple. Open AI is expected to be working on some sort of AI device. But I don't think Apple is too worried about that right now. They still see the iPhone as the main device that most people we're going to carry. But speaking of AI, it's a great transition to talk about Apple's next big problem. All right, so let's now talk about Apple's AI issues, because that's the topic that's getting the most attention these days. Apple's whole strategy around AI has just been bad from the beginning. For one, they were late to jump on the AI train. They launched Apple Intelligence just a year ago. Meanwhile, Chad GPT is coming up on its three-year anniversary. Now, I think people would have been

okay with Apple's late jump into AI if Apple intelligence was any good. Well, if it's, It was terrible from the very beginning. For one, Apple overpromised on how good Apple intelligence was going to be. They showed off all these features at WWDC in 2024. They had all these commercials as well. And many of those features are still missing today. And honestly, I don't really know anyone in my life that actually uses Apple Intelligence, except when they accidentally activated it by holding down the power button for too long.

So Apple intelligence has been Apple's latest flop. And the bigger issue here is that Apple doesn't really have a coherent AI strategy. and they're not making the investments into AI like their other big tech rivals. Meta, Google, Microsoft, and Amazon are planning to collectively spend nearly $400 billion in AI-related CAPEX over the next year. Apple's kind of upsetting this one out. Their AI CAPX is significantly less than the other tech giants. And because of Apple's lack of investment in AI, they're starting to lose talent.

In fact, Meta just spent this summer hiring top AI talent with nine-figure paydays. Some of those people were poached. from Apple. According to a report from Bloomberg, in just the last two months, six of Apple's AI engineers have jumped ship to Meta, including Frank Chu, who was a senior director at Apple running their model infrastructure. But the most damaging departure was probably Rooming Peng, who led Apple's foundation models team. Basically, he was the guy behind Apple Intelligence. No shade here, but like the way Apple Intelligence turned out, maybe him leaving wasn't that bad of a thing. Also, meta reportedly offered him a $200 million pay package.

Yeah, he was down to go work for Zuck. And I don't really blame him. But the thing is, money isn't a problem for Apple. They make a ton of money. In fact, they made around $94 billion in profits last year, and they're sitting on about $50 billion in cash. But this kind of goes back to Apple's culture. They've always been hesitant to spend big,

especially on acquisitions. In fact, the biggest deal that Apple has ever done was to buy beats for $3 billion, the headphone company. You compare that to deals from META. They spent 14 billion. billion dollars earlier this year to acquire nearly half of scale AI and hire away a bunch of their talent as well. And then you had Microsoft investing $14 billion into open AI. Now, over the last

few months, there have been rumors circulating of Apple potentially buying an AI startup like perplexity or mistral. But according to a report from the information this past week, there are some disagreements in Apple C-suite on whether they should go through with an acquisition. Some executives like Eddie Q, who is the head of services, has been pushing for an acquisition, but so far, Tim Cook hasn't been willing to pull the trigger. Instead, Bloomberg reports that Apple is now considering licensing Google's Gemini to power AI. As an iPhone user, I would love this because I think Gemini is a really strong model. But man, if you're Apple, that's got to be kind of embarrassing, you know? Like, how are you going to have another tech company power your AI assistant? I mean,

all jokes aside, Tim Cook might be right here. It's possible. possible that AI is in fact a bubble and spending billions of dollars to train AI models is a waste of money, especially when they can just license the model from OpenAI, Google, or Cloud. And maybe that's what Apple ultimately decides to do. They might just let the users decide which AI model ends up powering the iPhone. And I think that's why I don't think that Apple is panicked over AI. Like they have multiple options to move forward with. They can either acquire an AI company, they can start developing their own AI models internally,

or they can just license it. So I bet that their internal panic meter about AI is probably like a 5 out of 10, maybe 6 out of 10, but not higher than that. But don't get me wrong, it's not a good look that Apple intelligence is terrible and they over-promised all these features. But I think until people stop buying iPhones

because of a lack of AI features, I think Apple's going to be okay just waiting to make a move. And finally, let's talk about China, Apple's biggest headache, I think. China is a very important country for Apple. Not only is it Apple's second largest market making up 16% of its revenue, but it's also the heart of their manufacturing supply chain.

And the problem for Apple is both of those things are on shaky grounds right now. Let's start with Apple's market share in China. Over the last couple of years, Apple has been losing market share to domestic rivals like Huawei, Xiaomi, and Apo. In fact, for three straight quarters, iPhone sales in China declined double digits before rebounding slightly in Q2. And a part of this is because of what we talked about earlier, a lack of innovation from Apple. iPhones haven't looked any different in the past few years, just a boring piece of glass. If you compare that with some of the smartphones coming out of

China, I mean, it's next level stuff. I've seen videos of smartphone makers in China with like triple screen foldable phones and like a 70 megapixel camera. You add in the fact that Apple intelligence isn't even available in China due to regulatory restrictions, while Chinese smartphone makers are loaded up with AI features. Plus, Apple's phones aren't that cheap, so you can see why Apple's starting to lose market share in China. Now, we'll have to see if some of these new products that Apple is launching in the next 12 to 24 months resonate in China and if they can claw back some of that market share.

But to me, this is Apple's biggest weakness right now. See, Apple doesn't have ecosystem locking in China like they do here in the U.S. I know people make fun of the blue bubble green bubble thing, but it's real. If you're already in the Apple ecosystem, you're less likely to switch over to an Android. But that's not really the case in China. So without this sort of lock-in, I wouldn't be surprised if Apple continues to bleed market share in China. But that brings us to the second major concern for China,

which is the supply chain stuff. China is the backbone to Apple's supply chain. In fact, they have spent hundreds of billions of dollars building factories in China, training millions of workers in China via their partnership with Foxcon to churn out hundreds of millions of iPhones a year. It's actually pretty impressive if you think about it. But obviously, these days,

days, the geopolitical tension between the U.S. and China are tense, to say the least, and it's unpredictable. President Trump launched a trade war with China earlier this year, and he jacked up tariffs on Chinese imports to nearly 150%. Now, things have cooled off a bit on both sides, with tariffs on Chinese imports now being around 50-ish percent. But it highlights a major source of vulnerability for Apple. Their supply chain is overly dependent on China. And the problem is, they can't just shift production to another country like the U.S. overnight, even if they wanted to. The U.S. especially doesn't have the skill sets or talent pool of people required to manufacture iPhones at scale. Again, Apple sells 200 million iPhones a year. Now, for Apple's part, they've been

trying to move some production to other countries, especially to India. In fact, in Q2, India overtook China as the largest manufacturer of smartphones shipped to the U.S., accounting for 44%. That is a significant jump from 13% a year earlier. In fact, it's the first time ever that India was the top source of smartphones in the U.S. And what's crazy is that China wasn't even number two, Vietnam was. Now, this was all in an effort to not have to pay the crazy high tariffs on Chinese imports earlier this year. So Apple has their target set on India.

In fact, Apple's manufacturer Foxcon has expanded their footprint in India to five factories now. And this year is going to be the first time that all variations of the new iPhone, from the base model iPhone all the way up to the iPhone Pro Max are going to be made in India from day one. But it is worth noting that the iPhone in India is mostly being assembled. Most of the key parts are still being made in China because again, they're the only people that know how to make these parts. And then those parts get shipped over to India for final assembly. Also, I should point out that Trump just raised tariffs on Indian imports to 50%. So it's not much different than imports coming in from China anymore.

Now, Tim Cook has worked his magic already and gotten a tariff exemption from the president by promising to invest in U.S. manufacturing. He also gave the president a gold plate at the White House. So Apple isn't paying tariffs right now on all their imports from India or China. But I mean, this is Trump we're talking about. He's a wildcard. He could change his mind overnight and Apple could be stuck with paying these tariffs. So to me, the panic meter here is probably like an eight out of 10. Apple is overly reliant on one country for all their manufacturing. And they're having a hard time diversifying out of that. Add in the Trump wildcard factor, I think this probably keeps Tim Cook up at night sometimes because there's no easy solution and he has no control over

it either. So what's the takeaway after this wellness check on Apple? I'd say that Apple is in stable condition right now, but they're showing some concerning symptoms. The good news is that Apple remains incredibly profitable and they have tons of cash, but they are facing their biggest strategic challenges in decades across multiple fronts. For the first time in a long time, it feels like Apple isn't driving the conversation anymore when it comes to tech. It feels like they're playing ketchup. They're catching up the foldable phones. They're trying to play catch up on AI.

And they're also reacting to the massive geopolitical forces that they can't control. So I think that the next couple of years are going to be critical for Tim Cook. He needs to lock in and figure this out because I'm sure he doesn't want his legacy to be known as the Apple Vision pro guy. Well, all right, guys, that's it for today's weekend, deep dive.

Hope you guys enjoyed today's episode. If you did, you have like eight, extra seconds, consider giving us a five-star rating on Apple, Spotify, or every list to your podcast. And if you are listening or watching on Spotify or YouTube, let us know in the comments on what you thought about today's episode and what you think that Apple's conditions currently are. Are they ever going to be the most valuable company in the world again? It's an interesting debate because they're currently worth more than a trillion dollars less than video. So let us know in the comments and also tell us what topics you want us to

cover in future deep dive episodes. Thank you guys so much for listening and watching. shout out to Mike and Ghana for all the work behind the scenes and we'll see you guys back here tomorrow for the interview. Rosen lasagna, medium power, 15 minutes. Sounds like Ojo time.

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